In what is being described as a "disappointing" industry defeat, the New Mexico Senate Thursday killed a House-passed bill, which would have funneled some $5 billion in state funds into community banks and credit unions.
The measure, given national publicity as an outgrowth of the "Move Your Money" campaign of New York political pundit Arianna Huffington, failed to reach a Senate calendar for bill consideration.
The measure, sponsored by Rep. Brian Egolf, (D. Santa Fe), had earlier passed the New Mexico House on a surprising 65-0 vote but backers feared opposition from money center banks including Bank of America and Wells Fargo, who are current holders of state accounts.
Officials of the Credit Union Association of New Mexico said the "one very good thing" that grew out of action on the bill is the cooperation between small banks and CUs working on a common benefit.
Egolf, the New Mexico lawmaker joined by Democratic leaders, had been outspoken in pushing the bill after reading online about Huffington's anti-big bank "Move Your Money" campaign. The state's lieutenant governor, Diane Denish, had maintained the bill would keep taxpayer dollars in New Mexico and allow banks and CUs to serve rural areas. She also wrote to Federal Reserve Board Chairman Ben Bernanke that the measure, if enacted, would increase lending during a time when credit has been constricted.
