By State Comptroller Thomas P. DiNapoli
Access to lower cost banking services is vital to establishing credit and building wealth. When New Yorkers rely on alternative financial services such as check cashers, they are not only pay more for basic financial transactions, but they miss out on an opportunity to put their hard earn money to work either through interest-bearing savings accounts or investment accounts.
Through our participation in the State’s Banking Development District Program (BDD), my office recently supported the establishment of a new Capital One Bank branch on First Avenue and 102nd Street in East Harlem.
Administered by the New York State Banking Department, the program encourages banks to open branches in areas with few banks. Branches designated as BDDs are entitled to receive $10 million in deposits from my office.
These deposits give the new branch new capital from which they can make small business and residential loans. Under the program’s requirements, a BDD branch is also required to tailor its banking products and services to the specific needs of the community.
For East Harlem residents, this means the new branch will be expanding its technical and small business assistance to neighborhood entrepreneurs. The branch is also working with local housing organizations to support homebuyer education programs and, in conjunction with the New York City Housing Authority and the nonprofit Coalition for Debtor Education, will offer seminars on important financial topics such as: credit, identity theft, budgeting, savings and online banking.
The BDD program has benefits for everyone involved. The state earns a fair, fixed-rate of return on its deposits, the bank is given capital enabling it to offer loan products and grow its business, and residents are given a new local bank branch with products and services designed with their needs in mind.
Currently 38 BDDs have been designated across the state, and we look forward to creating even more. A neighborhood bank branch is an important community resource that, above all else, helps its customers save money. With the economic challenges currently facing our state and nation, we need to save every dollar we can.
