Washington State credit unions have scored a legislative victory in 2010 by winning the right to accept public funds starting in July of next year.
In March 12 ceremonies, Gov. Chris Gregoire signed an industry-sponsored bill opening up municipal fund deposits of state and local agencies to 70 Washington CUs, thereby adding them to the existing 105 public depositories.
In hailing the bill's passage, the Washington Credit Union League called the event an indirect outgrowth of the Huffington Post "Move Your Money" campaign since it "now brings more community-based banking choices."
These new options for public entities, said the league, "strengthens the safety of those public dollars by diversifying risk at a time of escalating bank failures."
The league also said that it had to overcome opposition from the banking lobby to gain passage of the bill and that passage is a testament to newfound public support for CUs coming "at a time when most of Washington's public funds are maintained in too-big-to-fail financial institutions."
The new law, which limits the deposits to $100,000 in any CU, takes effect July 1, 2011.
The league noted that according to State Treasurer Jim McIntire, 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.
The trade group also noted that the governor, McIntire and Lt. Gov. Brad Owen, are voting members of the Washington State Finance Committee, responsible for investing the funds. Also backing the bill, according to the league, was State Auditor Brian Sonntag.
The public funds enactment in Washington comes as CUNA and state leagues are striving to win lawmaker backing on similar bills in half a dozen other states with varying degrees of success.
A comparable bill in neighboring Oregon with a 2013 effective date is awaiting the signature of Gov. Ted Kulongoski and progress is being made in New York, New Jersey and Ohio. However, a much touted "Move Your Money" bill in New Mexico was killed along with one in Colorado, where CUs sought to show that new bankless towns in rural areas needed CU service.