Wisniewski, Spencer, Conners, Watson Coleman, Quijano Measure Will Create ‘Banking Development Districts’ To Push Institutions to Open Branches
Legislation Assembly members John Wisniewski, L. Grace Spencer, Jack Conners, Bonnie Watson Coleman and Annette Quijano sponsored to encourage banking institutions to open branches in underserved communities has been signed into law.
“Even with today’s focus on savings and sound personal financial management, many residents live in areas with no community bank and no access to professional financial advice,” said Wisniewski (D-Middlesex). “Encouraging banks to open the doors to financial security in traditionally underserved areas is key to giving more residents the tools they need to properly plan for their futures.”
The measure is part of the Legislature’s Back to Work NJ job creation and economic development initiative.
“Residents whose only choices in banking are either branches located far from their homes or a corner check-cashing store really have no choices at all,” said Spencer (D-Essex). “Promoting sound financial practices requires people to have a neighborhood bank they can trust.”
“This is a step toward stronger communities,” said Watson Coleman (D-Mercer). “Encouraging financial institutions to locate new branches in underserved communities can only help bring about positive changes that benefit everyone.”
“Access to financial security should be open to all New Jerseyans,” said Conners (D-Burlington/Camden). “This is a step toward making this smart policy a reality.”
“This is a bill that can benefit all New Jerseyans and businesses,” said Quijano (D-Union). “Encouraging business competition is always a good thing, especially in underserved areas of our state.”
The new law (A-1458) will create a “Banking Development District Program” to encourage the establishment of branches in areas where there is a demonstrated need for banking services.
A municipality, in conjunction with a bank, may submit an application to the commissioner for a banking development district within a specified geographic area. The commissioner shall issue a determination on the application within 60 days of receipt of the application.
A bank may submit an application to open a branch in the proposed banking development district, subject to all applicable federal and state laws, simultaneously with the submission of the application for the designation of a banking development district.
The state treasurer may select a bank in a district as a depository for public moneys or funds. Subject to an agreement between the state treasurer and the bank, state funds deposited in the bank may earn a fixed rate of interest which is at or below the bank’s posted rate for a mutually agreeable depository product for a mutually agreeable term.
The governing body of a municipality in which a banking development district has been designated by the commissioner may, by resolution, select a bank in the district as a depository for funds of the municipality, provided the bank shall be subject to the requirements for a public depository.
Subject to an agreement between the governing body of the municipality and the bank, funds of the municipality deposited in the bank may earn a fixed rate of interest which is at or below the bank’s posted rate for a mutually agreeable depository product for a mutually agreeable term.
The new law mirrors a similar program in New York state.