In a major, historic victory for New York’s credit unions, Gov. Kathy Hochul on Sunday signed into law legislation authorizing credit unions to participate in the state’s Excelsior Linked Deposit Program, effective immediately. The issue has been a key legislative priority for the New York Credit Union Association since the program was first introduced in 1997.
“New York credit union advocates worked assiduously and persistently on this issue over the course of more than two decades,” said William J. Mellin, Association president/CEO. “Now, after years of hard lobbying and advocacy efforts, this priority legislation has been signed into law. This is a massive victory for both credit unions and New York businesses.”
The Excelsior Linked Deposit Program was created in 1997 to assist small- and mid-size businesses in New York with expansions, modernizations, development and other investment projects. Through the program, eligible businesses can obtain commercial loans from authorized financial institutions at significantly reduced interest rates. Lenders are compensated with a deposit of state funds at comparably reduced rates.
Significantly, the new law authorizes New York state to deposit public funds in credit unions.
“As we have stated for years, this new law is a ‘win-win’ for credit unions and New York businesses alike,” said Mellin. “With credit unions now eligible to participate in the Excelsior Linked Deposit Program, New York businesses seeking to expand and evolve will have more access to affordable financial solutions. Similarly, credit unions will be able to deepen their relationships with businesses in their communities and provide them with even more services.”
The legislation, A-5459/S-191, was introduced by Assemblywoman Taylor Darling, a Democrat from Hempstead and a member of the Assembly Economic Development Committee; and Sen. James Sanders Jr., a Democrat from Queens and chairman of the Committee on Banks.
“This legislation is yet another sign of our commitment to boosting Main Street businesses and fostering New Yorkers’ unparalleled entrepreneurial spirit,” Hochul said in a statement.
With the state’s economic and employment fortunes resting on the success of small business, it is increasingly evident that small businesses must have greater access to capital through a wider range of lenders, she said.
“Since their inception, credit unions have filled an important niche in serving communities that are underserved by commercial banks,” Hochul said. “Over 700 credit unions across the state play an integral role in serving the financial needs of 3.5 million New Yorkers. Credit unions were created as a not- for-profit alternative to other financial institutions primarily because working-class individuals were being denied business through the ELDP which is a natural extension of the credit union mission.”
Mellin said: “On behalf of the New York credit union community, I send my sincere gratitude to Assemblywoman Darling, Sen. Sanders and Gov. Hochul for their leadership and ensuring this practical and pragmatic piece of legislation became law.”