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Press Release
Banking Superintendent Richard H. Neiman Emphasizes Need for Financial Services Tailored to Meet the Needs of the Underserved
Changes to Banking Development District (BDD) Program Announced

May 4, 2010

New York, N.Y.:  Richard H. Neiman, Superintendent of Banks for New York State, today emphasized that there must be financial products available that are tailored to meet the needs of the underserved.  He underscored that affordable products and services are just as important as having access to traditional banking services, in a speech announcing the findings of a review of the 10-year-old Banking Development District (BDD) program.

The BDD program, originally designed to bring banking services to underbanked areas throughout New York State, will now be focusing on the suitability of the bank’s product offerings as well as the number of physical locations available. Neiman spoke about changes being made to the BDD program, based on feedback received during the review, as well as other efforts to promote suitable, affordable financial services.   His remarks were made at the annual Regional Interagency Committee (RIAC) breakfast at the NASDAQ MarketSite. 

“The current foreclosure crisis is partially a result of insufficient access to traditional credit. When banks are absent from a community, nonbanks or even predatory lenders may fill the vacuum,” said Neiman. “Lack of access is only part of the problem, however.  We also need innovative products and services tailored to the needs of currently unbanked or underbanked consumers.”

The BDD program was designed to fill the gaps in traditional credit by combining access to the right products and services with financial literacy and developing long-term customer relationships and greater opportunities for economic inclusion.  Now, based on the results of review of the 10-year-old program conducted over the past year, the Banking Department will be making a number of updates to the program, including requiring participating banks to provide financial education and requiring BDD applicants to provide detailed information on affordable products to be offered.

“I am proud of the achievements of our program as a whole, but we want to ensure that the BDD program continues to be a force for change.  Banks that open branches in underserved areas have the opportunity to receive below-market rate municipal deposits, but with that privilege comes the responsibility to partner with the community to meet local needs,” said Neiman.

The BDD program now has 38 designated districts.  It was created in 1997 to promote the establishment of new bank branches in communities with no or few bank branches and thereby stimulate the opening of bank accounts by the community residents. The first BDD bank branch opened in 1999.

The report detailing the findings of the BDD program review is available at http://www.dfs.ny.gov/banking/bddreview.pdf.

The annual RIAC breakfast is hosted by NHS of New York City, a leading provider of homeownership education and financial assistance for first-time low- and moderate-income home buyers. In the past year, NHS invested $185 million in New York City neighborhoods and provided education to more than 11,000 residents.

The New York State Banking Department is the regulator for all state-chartered banking institutions, virtually all of the United States offices of international banking institutions, all of the State’s mortgage brokers, mortgage bankers, check cashers, money transmitters and budget planners. The aggregate assets of the depository institutions supervised by the Banking Department are more than $2.4 trillion.

In addition to regulating banking institutions, the Banking Department is active in informing and educating all New Yorkers on banking matters. To contact the Banking Department, please call 1-877-BANK-NYS or visit our Web site at www.dfs.ny.gov.

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