Prohibits state chartered banking institutions from investing in and providing financing for private prisons.
Summary
A04144 would add a new section to the Banking Law prohibiting state-chartered banking institutions from providing financing for, or investing in, the stocks, securities, or other obligations of entities that own or operate private correctional facilities for housing incarcerated individuals, where such facilities would be prohibited under Correction Law section 121 if located in New York. In practical terms, the bill seeks to cut off New York-chartered banks from supporting private prison companies through loans, investments, or similar financial arrangements.
The bill applies to contracts entered into, renewed, modified, or amended on or after its effective date, and it would take effect immediately. It defines “banking institution” by reference to existing Banking Law definitions, and its scope is tied to the state’s existing restrictions on private correctional facilities, extending those policy limits into the financial sector.
Impact
The bill would amend the Banking Law by creating a new prohibition on state-chartered banking institutions’ financial relationships with private prison operators. It would not directly regulate prisons themselves, but it would restrict banks, lenders, and investors chartered by New York from financing or holding securities in companies tied to private correctional facilities, thereby affecting capital access for those entities and potentially influencing institutional investment policies and compliance practices.
Sentiment
The available voting history suggests the bill has generally favorable support in committee, with the Assembly Banks Committee advancing it 18-9 and the Assembly Codes Committee advancing it 15-6. No transcript excerpts are available, but the committee margins indicate meaningful support alongside a substantial minority of opposition. Overall, the bill appears to align with a policy preference against private prisons and against public financial support for them.
Contention
The main point of contention is likely whether state-chartered banks should be barred from financing private prison operators at all, and whether the state should use banking regulation to advance that policy goal. Supporters are presumably focused on limiting New York financial involvement with private incarceration, while opponents may argue the bill overreaches into investment and lending decisions, could create compliance burdens, or may have broader effects on banking relationships and capital markets. The committee votes show that the issue is divisive, even though the bill has moved forward.
Provides that charges imposed by certain state chartered banking institutions in connection with a check or other written order drawn on insufficient funds shall not exceed the greater of five dollars or the pro rata share of such state chartered banking institution's total direct costs and charge-off losses for providing non-covered overdraft credit.
Financial institutions; creating the Fair Banking Act; prohibiting discrimination in provision of financial services against persons; civil action; effective date.