Washington State has now joined its southern neighbor, Oregon, in enacting legislation to deposit public funds in credit unions.
On Friday, Washington's Democratic governor, Chris Gregoire, signed an industry-backed bill adding state chartered CUs to the list of eligible public depositories effective July of next year.
In hailing the passage by the Washington legislature as another "Move Your Money" success, the Washington Credit Union League said the bill provides new choices for public entities and "strengthens the safety of those public dollars by diversifying risk at a time of escalating bank failures."
The league said the law effectively adds 70 Washington CUs to the list of 105 public depositories and brings with it more community-based banking choices.
Passage of the law, taking effect July 1, 2011, also comes "at a time when most of Washington's public funds are maintained in too-big-to-fail financial institutions," said the league.
According to the State Treasurer's most recent records, the 105 depositories hold $8, 5 billion and of these 14 are based outside of Washington and three-Bank of America, KeyBank and U.S. Bank-hold $5.8 billion or 67% of all Washington state public deposits, noted the league.
The governor, Lt. Gov. Brad Owen, State Treasurer Jim McIntire, all three of the voting members of the Washington State Finance Committee, supported the bill along with State Auditor Brian Sonntag, said the league.
A comparable bill was enacted last month by the Oregon legislature, but with a 2013 effective date. It now is awaiting the signature of Gov. Ted Kulongoski.