NY A03262

Expands municipal deposit authority to include credit unions, savings banks, savings and loan associations, and federal savings associations, previously limited to traditional banks.

Establishes phased deposit limits for credit unions accepting municipal funds: $500,000 (2020), $1 million (2021), $2 million (2022), $3 million (2023), $4 million (2024), and $5 million (2025).

Requires credit unions accepting municipal deposits with average daily balances exceeding $300,000 to invest 0.35% of that average balance into community development activities (capped at $100,000 annually), prioritizing low-income communities and supporting minority/women-owned businesses, affordable housing, and financial literacy.

Directs the Department of Financial Services to study and report by January 1, 2025 on impacts of allowing these institutions to accept municipal deposits, analyzing changes in commercial bank deposits and growth in alternative institutions.

Increases the maximum state deposit limit in community banking institutions from $250 million to $300 million and requires annual reporting on the community bank deposit program; all provisions relating to municipal credit union deposits expire December 31, 2025.