The state Senate Banks Committee on Thursday passed an important bill that would allow credit unions to participate in the Excelsior Linked Deposit Program. The legislation was introduced and sponsored by committee chairman Sen. James Sanders, D-Metropolitan, and is heading to the Senate floor for a vote.

Passage of the legislation, S.1461, authorizes credit unions to participate in the Excelsior Linked Deposit Program, and raises the limit on the amount permitted to be on deposits at any given time.

The Linked Deposit Program is an economic development initiative created to encourage and assist small businesses within New York to make investments and undertake eligible projects that will contribute to improving their productivity, performance and competitiveness by reducing the cost of capital through interest subsidies. Through the program, eligible businesses can obtain commercial loans from authorized financial institutions or the New York Business Development Corporation at an interest rate that is 2 or 3 percentage points lower than the prevailing rate on such loans, thereby making borrowing less expensive. Lenders are compensated with a deposit of state funds at comparably reduced rates.

The New York Credit Union Association strongly supports the legislation and has discussed the bill with lawmakers.

“Including credit unions in the Excelsior Linked Deposit Program would be a key victory for New York’s credit unions,” said Association VP of Governmental Affairs Kendra Rubin. “The Association urges New York credit union advocates to contact their legislators to encourage them to support the legislation.”

The Association will continue to work closely with lawmakers in the Legislature and advocate for the bill’s passage.