Borrello votes against bank committee’s proposals
State Sen. George Borrello, R-Sunset Bay, has voted against three bills approved by the state Senate’s Banking Committee.
Borrello and his fellow Republicans on the committee voted against S.1589, which would establish a statewide Financial Literacy Commission; S.2088, which would allow greater oversight of unregulated mortgage providers; and S. 5433A, which would prohibit state-chartered banks from lending to private, for-profit prisons.
Republicans were unhappy with the statewide Financial Literacy Commission because the law didn’t include any Republican members. Republican Banking Committee members said if the bill was tweaked to include Republican membership on the commission they would be more likely to vote for it.
“We are Republicans, and while we have a majority of Republicans who are financially literate, I’m sure not all of our folks are financially literate,” said Sen. Thomas O’Mara, R-Elmira. “I agree with the concept of financial literacy but I do think there should be some minority legislative representation on this.”
James Sanders Jr., D-Brooklyn and committee chairperson, said he had no problem changing the bill to include Republicans and lamented that the bill’s shortcoming wasn’t brought up to him sooner.
“If you see a hole in it, get to me before,” Sanders said. “I’m not an ideologue. I’m really more of a pragmatist. I’m trying to see what we can do for all the people of New York.”
Republicans on the committee were less happy with the unregistered mortgage brokers legislation. S.2088 would allow the financial frauds and consumer protection unit of the Department of Financial Services to refer any instances of a person, partnership, association, corporation or other entity which is operating without being chartered, licensed or registered as required by state law to the state Attorney General or appropriate federal, state or local agency.
Democrats said there are concerns over mortgages that are predatory in nature, but because the mortgage providers aren’t licensed the state Department of Financial Services can’t take any action. Republicans said the law doesn’t go after the predatory lenders, but instead prosecutes those who do business with predatory mortgage lenders. Borrello, meanwhile, had concerns about how the law would affect commercial lending because any reference to residential mortgages in the law would be stricken.
“It originally was just residential mortgages,” Borrello said. “This is now now reaching into commercial mortgages, which was already covered I believe under article 190. and it’s kind of raising the thresholds there, which could make things a little more difficult. We don’t want predatory lenders, I am concerned about the impact on commercial.”
The final bill, S.5433, prohibits state-chartered banks from investing in and providing financing for private prisons. O’Mara wondered why the law was necessary because it was his understanding that there were no private prisons or jails in New York state, so the law would only affect state-chartered banks investing in projects outside of New York state. Sanders replied that there is a private prison in his Senate district, and that if there is one in his district it is likely there are more in New York state.
Borrello voted against the bill, saying it places too many limits on a bank’s ability to do business.
“State-chartered banks would be precluded from investing in something outside New York state,” Borrello said. “That would be too burdensome on the bank’s ability to do business, particularly when it’s something that’s not in the purview of the New York state Legislature in the sense it’s business outside of the state. We’re under state charter here and we want them to continue to do business here and this would be a hinderance in that sense.”