Requires 10% of the penalties imposed by the superintendent of financial services to be deposited in the community development financial institution fund.
Summary
S02327 would require that 10 percent of all penalties and fines imposed and collected by the Superintendent of Financial Services under the Banking Law and Insurance Law be deposited into the Community Development Financial Institution (CDFI) Fund. The bill amends Banking Law section 44 and Insurance Law section 109 to direct a fixed share of enforcement revenue to that fund, which supports community development lenders and related financing activity.
In practical terms, the measure creates a dedicated funding stream for the CDFI Fund by diverting a portion of regulatory penalties that would otherwise go to the state generally. The bill does not change the underlying authority of the Superintendent to impose penalties; it changes how a portion of those collections are allocated after they are received. The bill would take effect on September 1 following enactment.
Impact
The bill would amend two state statutes: Banking Law §44 and Insurance Law §109. Its legal effect is to earmark 10 percent of penalties collected under those provisions for deposit into the Community Development Financial Institution Fund established in the New York State Urban Development Corporation Act. This would reduce the share of penalty revenue available for general state use and increase dedicated support for CDFIs, which provide financing in underserved communities and for small businesses, housing, and neighborhood development.
Sentiment
The available voting history suggests the bill has received some support but not unanimous backing in the Senate Banks Committee, passing 5-2 in February 2025 and 4-2 in February 2026. That pattern indicates a generally favorable view of directing enforcement revenue toward community development, while also showing that some members remained unconvinced or preferred not to dedicate penalty revenue in this way. No committee transcript is available to show detailed debate.
Contention
The main point of contention is likely the diversion of penalty revenue from the state’s general coffers to a dedicated fund. Supporters would view the proposal as a targeted reinvestment in community lending and economic development, especially in underserved areas. Opponents may argue that fines and penalties should remain available for broader state budget priorities, or that earmarking a fixed percentage limits fiscal flexibility and creates a precedent for dedicating enforcement proceeds to specific programs. The split committee votes reflect that tension.
Same As
Requires 10% of the penalties imposed by the superintendent of financial services to be deposited in the community development financial institution fund.
Requires 10% of the penalties imposed by the superintendent of financial services to be deposited in the community development financial institution fund.
Requires 10% of the penalties imposed by the superintendent of financial services to be deposited in the community development financial institution fund.
Requires 10% of the penalties imposed by the superintendent of financial services to be deposited in the community development financial institution fund.
Provides that persons engaged in activity for which a license or other authorization from the superintendent of financial services is required under the banking law or financial services law will be subject to a civil penalty.
Provides that persons engaged in activity for which a license or other authorization from the superintendent of financial services is required under the banking law or financial services law will be subject to a civil penalty.