State Bills on CU Public Funds Score One Big Win, Two Losses
The jury is still out, but it so far has been a mixed bag for CUNA and state leagues when it comes to passing public funds legislation this year with one major victory in Oregon but defeats in New Mexico and Colorado.
The industry hopes were still high, however, that bills allowing CUs to accept municipal deposits can be enacted in New Jersey, New York and perhaps elsewhere during current legislative sessions.
In Oregon, the state's Democratic governor, Ted Kulongoski, is ready to sign a milestone industry bill enabling CUs for the first time to bid on municipal funds above $250,000. Once signed, the new law takes effect Jan. 1, 2013.
But in Colorado, a bill backed by the Credit Union Association of Colorado got stalled in a House committee, a victim of what legislative sources said were "higher priorities-like balancing the state budget."
The proposed Colorado bill had the backing of Colorado Counties Inc., a municipal governments group, as well as many rural agencies in bankless towns eager to link up with a CU. However, the press of economic concerns coupled with opposition from the banking lobby apparently shelved the bill, said CUAC, which pledged to resume its campaign for enabling legislation in the next session.
In Oregon, Pamela Leavitt, league senior vice president of governmental relations, said her trade group has asked for a signing ceremony, but it remains to be seen whether that will happen since many groups have asked for ceremonies on bills that were enacted during the special session of the legislature.
The new Oregon law, which easily passed both the House and Senate last month, would have taken effect in 2012 but was negotiated two years out "since we are now required to help set up a collaterized pool with the Treasurer's office plus there are staffing issues as well," Leavitt said. CUAO agreed to the delay as a supportive move, she said.
The outcome was uncertain in New Jersey and New York, but state trade groups claim they have made major traction in recent weeks with lawmakers eager to accommodate concerns of hard-pressed municipalities witnessing a disappearance of banks from some markets.