Bill > S03962

This bill establishes a municipal deposit program that expands the types of financial institutions eligible to receive and manage public funds beyond traditional banks to include savings banks, savings and loan associations, and credit unions. The bill modifies existing municipal law to define these financial institutions and create standardized rules for depositing and securing public funds. Specifically, the legislation allows local government governing boards to designate these institutions as depositories for public funds, permits redepositing of funds through placement programs, and requires that deposited funds be fully insured by federal deposit insurance (either FDIC or NCUA). The bill mandates that when public funds exceed federally insured limits, the financial institutions must pledge additional assets as security. Credit unions are now explicitly required to follow the same limitations and security requirements as other financial institutions when accepting public deposits. The changes aim to provide local governments with more flexibility in managing their funds while maintaining robust protections against potential financial losses. The new provisions will take effect 90 days after the bill becomes law, giving local governments and financial institutions time to adjust to the new regulations.

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https://www.nysenate.gov/legislation/bills/2025/S3962