Financial Services Superintendent Maria T. Vullo today announced that the Department of Financial Services (DFS) has approved two new Banking Development Districts (BDDs): Community District 4, encompassing Concourse Village, East Concourse, Highbridge, Mt. Eden and West Concourse in the Bronx, and portions of Community Districts 2, 3 and 8, comprising parts of Clinton Hill and Prospect Heights in Brooklyn. The approved districts, involving two state-chartered banks, Spring Bank and Ridgewood Savings Bank, will result in the expansion of access to retail banking services and products for unbanked and underbanked consumers, as well as small businesses, in the Bronx and Brooklyn. Brooklyn Borough President Eric L. Adams and Bronx Borough President Ruben Diaz Jr. and were co-applicants with Ridgewood Savings Bank in Brooklyn and Spring Bank in the Bronx for the new BDDs.
“Expanding access to banking services in underserved communities is a priority, and I am pleased that these two state-chartered banks have agreed to provide such important services to consumers and small businesses in low- and moderate-income neighborhoods,” said Financial Services Superintendent Maria T. Vullo.
“New Yorkers in underserved communities often have no choice but to turn to alternative, and sometimes illegal, financial services providers such as payday lenders. DFS will continue to protect all New Yorkers, and remains committed to fostering appropriate resources to help them meet their financial services needs.”
New York State’s Banking Development District program, administered by DFS, is designed to encourage the establishment of bank branches in areas across New York State where there is a demonstrated need for banking services. To encourage bank participation in the BDD program, $10 million in subsidized public deposits and other benefits are made available to banks that open or maintain a branch or improve products and services offered in an underserved community. Banks that successfully apply for a BDD designation are eligible to receive below-market-rate deposits from the state of New York. These deposits are intended to lower the financial risk that the branch may incur when opening in an underserved community.
Community District 4, the Bronx
The BDD designation in the Bronx’s Community District 4 – encompassing Concourse Village, East Concourse, Highbridge, Mt. Eden and West Concourse – will allow Spring Bank to increase its efforts to expand access to affordable banking products and services for residents and small businesses within Community District 4 through its existing branch at 69 East 167th Street. Examples of products include Spring Bank’s basic checking account, credit builder loan, small dollar loans such as the bank’s Borrow-and-Save and Employee Opportunity loans, and business lines of credit for larger businesses and, beginning soon, small businesses. The branch will also offer Assistive Technology and Childcare Provider loans. In addition, Spring Bank offers services such as lower-cost check cashing services compared to check cashers in the area, in-person bill pay, and remittances.
According to the U.S. Census Bureau, Community District 4’s population is 62% Hispanic/Latino, 31.6% African American and 1.9% white. The area has 0.52 bank and credit union branches per 10,000 people, compared with the national average of 4.4 per 10,000. Two-thirds of the district’s census tracts are low-income.
Spring Bank will partner with local organizations such as ARIVA, a community development and financial empowerment organization serving the district, to increase the community’s financial capabilities through workshops on financial education, one-on-one financial counseling, and free tax preparation services.
Spring Bank President Eric Pallas said: “We are proud to have worked with the Department of Financial Services and local community leaders on this effort to continue to expand Spring Bank’s mission of providing reliable, trustworthy financial services to Community District 4, and we are excited about the opportunity to contribute further to the overall financial health of the entire community.”
The Clinton Hill/Prospect Heights Area, Brooklyn
Significant revitalization in Clinton Hill and Prospect Heights, Brooklyn, has resulted in increased costs for residential and commercial space, causing the displacement of long-time residents and small businesses. In addition, the portions of Clinton Hill and Prospect Heights that form the BDD area are underserved and have no community banks. Through the BDD designation, Ridgewood Savings Bank has opened a branch at 1035 Fulton Street that will allow it to provide local access to affordable banking products and services for lower-income residents and small businesses, during the economic transformation of the community. The bank currently has one active BDD branch in Williamsbridge in the Bronx.
“Ridgewood Savings Bank is proud to bring our products and services to the Clinton Hill community. This Banking Development District will enable Ridgewood Savings Bank to bring much-needed financial services to low- and moderate-income residents and less financially secure small business owners so they can remain in the community, which is rapidly undergoing transformation,” said Ridgewood Savings Bank President and Chief Operating Officer Leonard Stekol. “It is the culmination of a partnership among DFS, elected officials, community leaders, local residents and small business owners, and we are proud to support members of the community through products and services tailored to their needs.”
According to the U.S. Census Bureau, the Clinton Hill/Prospect Heights area’s population is 41.8% African American, 35.5% white and 12.6% Hispanic/Latino. The area has 0.56 bank and credit union branches per 10,000 people, compared with the national average of 4.4 per 10,000, and poorer households are paying a greater share of their monthly incomes on housing expenses.
The BDD designation allows Ridgewood to provide customized, affordable banking products and services, and work with the community – particularly its historic business tenants and long-time residents – as it adapts to the changing dynamics of the area and enable it to benefit from the economic revitalization taking place. Through its Low Balance Affordable Checking Account and School Banking program for student accounts, Ridgewood will provide banking services to expand access to banking to people who currently rely on check cashers.
The designation will also help the bank connect historic businesses to its small business transaction accounts, as well as to small business loan resources and organizations that promote business interests.
In addition, the bank will support and partner with local community groups, including IMPACCT Brooklyn, a community development organization, and provide financial education in the local community, particularly for less-affluent residents in the district, small business owners, potential homebuyers, college students, and seniors to protect against elder financial exploitation.
New York State Senator Jesse Hamilton, Chair, Senate Banks Committee, said: “The addition of these new Banking Development Districts in the Bronx and Brooklyn represents an important step towards financial services that meet the needs of all New Yorkers. I particularly welcome these new BDDs because economic inclusion and expanding access to financial services are key areas of my work as chairman of the Senate Banks Committee. I know my Prospect Heights neighbors will be pleased to see a BDD assuring increased access to financial services right in our community. I appreciate the Department of Financial Services continuing to emphasize the importance of affordable financial services in all New York communities.”
New York State Assemblyman Kenneth Zebrowski, Chair, Assembly Committee on Banks, said: “These new Banking Development Districts will greatly expand financial empowerment and access to affordable banking products in underserved and under banked areas in the Bronx and Brooklyn. These districts serve as a long-term commitment to providing lower-income residents and small businesses with financial services to improve their lives.”
Bronx Borough President Ruben Diaz Jr. said: “As our economy changes, we must ensure that all members of our community can keep up with the changing pace and are not unfairly excluded. The financial counseling and resources offered by the Banking Development District can make a world of difference to Bronx families and equip them with tools to buy a home, put their children through college or save for the future. I commend Governor Cuomo for this initiative and for all of his work to help our borough.”
Brooklyn Borough President Eric L. Adams said: “I am pleased to see the establishment of a new banking development district in Clinton Hill and Prospect Heights, the first such designation for our borough in nearly a decade. As the co-applicant on this project with Ridgewood Savings Bank, my administration was proud to work on this effort and garner approval for it through our Borough Board. Addressing the needs of unbanked and underbanked consumers and small businesses is an investment in holistic community growth. The popularity of Brooklyn’s brand must translate into prosperity for all Brooklynites, and I appreciate the Governor’s Office and DFS Superintendent Vullo’s partnership in helping us advance that mission through millions in subsidized public deposits and additional benefits that will improve local financial services.”
NYS Senator Gustavo Rivera (D-Bronx, 33rd Senate District) said: “Community District 4 has one of the highest levels of unbanked households in New York City. This new Banking Development District will bring low-cost financial resources, as well as financial education, where we need it the most. Ensuring our community has access to banking services and products will help spur economic development for both individuals and the overall neighborhood.”
NYS Assemblywoman Latoya Joyner (D-Bronx, 77th AD) said: “Access to credit is the lifeblood of our modern economy, and the opening of a Banking Development District in the Highbridge, East Concourse, Mt. Eden and West Concourse communities is an important economic development initiative that will benefit families throughout Community District 4 in the Bronx. “I thank the Department of Financial Services and Spring Bank for their commitment to our community.”
NYS Senator Velmanette Montgomery, (D-Brooklyn, 25th Senate District) said: “The new Banking Development District in Brooklyn will benefit thousands of residents of the borough as well as some of our most-treasured businesses and allow them to hold onto and improve what took them so long to achieve.
NYS Assemblyman Walter Mosely (D-Brooklyn, 57th AD) said: “People residing in underserved communities are often forced to rely on predatory financial services for their financial needs. Establishing and maintaining bank branches in these neighborhoods helps put a stop to unscrupulous practices and equals an investment in the community’s financial future.”
Bernell K. Grier, Executive Director of IMPACCT Brooklyn, said: “This Banking Development District is exactly what long-time members of the Prospect Heights and Clinton Hill communities need at such a critical point in their history – financial empowerment, not abandonment. The new district and community bank branch will help ensure that fewer people are left behind as the neighborhoods continue to undergo revitalization, and that Brooklyn remains vibrant and diverse.”
Irene Baldwin, Executive Director of ARIVA, said: “Expanding financial access and inclusion for New Yorkers who have the least amount of resources strengthens not only individuals and their families, but the whole community. The Banking Development District will provide a strong financial infrastructure where it is most-needed, and we are excited about the opportunities it will provide. We are proud to be a partner in continuing to help low-wealth New Yorkers receive quality financial services and build financial stability."