New York Fight Heats Up Over Public Funds
Skirmishing between credit unions and the banking lobby over public fund deposits began in earnest this week in the New York legislature with dueling press releases both supporting and attacking the concept amidst what CUs said was new urgency because of the economic crisis "caused by banking excesses."
The Credit Union Association of New York said bankers were engaging in "monopoly tactics" and denying municipalities critical choices for financial services by continuing to oppose the CU bid for public deposits.
The New York Bankers Association countered that tax-exempt CUs lack status to accept taxpayer dollars and so "only firms that pay taxes should be allowed" for that privilege.
"Banks are major contributors to the fiscal health of New York State, New York City and other municipalities through the income, sales, mortgage recording and other taxes they pay. Last year alone, the state's banks and thrifts paid more than $1 billion in income taxes to New York State," said the banker group.
The issue of deposits arose last week at budget hearings of both the Senate Finance Committee and Assembly Ways and Means.