New York's Banking Development Districts

An Effective Practice

Description

In 1998, New York enacted legislation to authorize the establishment of banking development districts (BDDs) across the state. The program offers incentives for mainstream financial institutions to locate in traditionally underserved communities. Incentives can include sales and property tax exemptions, real estate assistance, favorable Community Reinvestment Act consideration, job credits, and municipal deposits at below-market rates. The New York State Banking Department is responsible for approving and overseeing new BDD designations. To receive a BDD designation, banks need to partner with a local government entity and detail the programs and amenities they will bring to the community, such as extended hours of operation, multilingual staff, special products and services tailored to the community, workforce development programs, and financial education programs and outreach.

Goal / Mission

The goal of the program is to increase access to financial services for low-income families as well as stimulate economic development in distressed neighborhoods.

Results / Accomplishments

Currently, there are 24 BDDs. New York is the only state to have this type of program. According to the annual report, each BDD branch made an average of more than $6 million in loans and opened an average of 920 accounts in 2005. Most financial institutions also provided financial literacy training and introduced new services and products in 2005, including new automated teller machines, free application assistance for the federal Earned Income Tax Credit, and extended hours.

About this Promising Practice

Organization(s)
The New York State Banking Department
Primary Contact
New York State Banking Department
One State Street
New York, NY 10004-1417
(212) 709-3591
http://www.banking.state.ny.us./
Topics
Economy / Investment & Personal Finance
Economy / Economic Climate
Organization(s)
The New York State Banking Department
Source
Finance Project
Date of publication
Dec 2006
Date of implementation
1998
Location
New York