N.Y. Banks and CUs Fight Over Public Funds
New York credit unions and banks stepped up their Albany skirmishes over deposit of public funds with each side issuing dueling press releases both supporting and attacking the concept. And CUs said there was new urgency to the issue because of the economic crisis "caused by banking excesses."
The Credit Union Association of New York charged 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 "only firms that pay taxes should be allowed" 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 municipal deposits arose recently at budget hearings of both the Senate Finance Committee and Assembly Ways and Means Committee. Before the hearings, CUANY issued a press statement citing banker tactics of "wasting valuable time" of lawmakers with a tired refrain that is out of sync with current economic conditions.