Brentwood may land LI's first banking development district
A Brentwood Pathmark could soon be home to Long Island's lone banking development district.
The Islip Town Board announced plans recently to file a co-application with New York Community Bank to create the banking development district, a program born from a 1997 state law that provides financial incentives for banks to open branches in areas where there is a demonstrated need for their services.
"It's for a community that's underserved by banks," said Islip Councilman Steve Flotteron, who said he was approached by New York Community Bank, which was required to apply for the designation alongside a local municipality.
The state Department of Financial Services, which awards banking development district status, said none exists on Long Island. There are 18 districts in New York, 15 in New York City and three upstate, a department spokesman said.
Bank branches that earn the status from the state have to demonstrate that the direct community is home to many "unbanked" residents, underserved by local banks and who would stand to gain from financial literacy programs. Along with the designation comes $10 million in subsidized deposits.
"The biggest benefit is education," Flotteron said. In Brentwood, "there is a lack of banking in the area, there is some poverty and everything else, and there are some people from some countries where they may not trust the banks as much."
If approved, the banking development district would be created at the existing New York Community Bank branch in the Pathmark on Wicks Road, just north of Suffolk Avenue.
In its application, New York Community Bank cites the area's diverse demographics as a reason to create a banking development district.
"Since Brentwood has a large residential community, home ownership is an important feature that will be stressed by the BDD designation, hopefully converting many home renters into homeowners," the application reads.
NYCB has since the late 1990s operated a banking development district branch in Corona Heights, Queens, executive vice president Andrew Kaplan said.
"We chose Brentwood because it had a population we believed was underserved," Kaplan said in an email. "It had many similarities to the community in Corona Heights: A large non-English speaking immigrant population that may not have had access to banking services in the past and would benefit from financial education and resources."
A 10-year review of the program conducted in 2010 by the state banking department listed several criticisms, including the need for banking development district banks to provide more financial literacy programs, more outreach and longer hours of operation, but ultimately hailed the program as a success for "under-banked" New Yorkers.