Public Funds Bills Make Progress as Oregon Governor Enacts New Law
The campaign by CUNA and state leagues to win lawmaker support for the deposit of public funds in credit unions made important gains last week, highlighted by the Oregon governor signing a new enabling law that will take effect in two years.
Oregon now joins its neighbor, Washington State, in overcoming long-standing banker opposition to CU municipal deposits as league officials across the country claim that the souring sentiment against banks has provided new impetus to pass far-reaching public funds bills.
Still, there have been a string of defeats, including the likely death-knell of a bill last week in Minnesota that would have given preference to CUs and small banks over Wells Fargo and U.S. Bank for access to the billions in state agency funds.
A similar and strongly worded preference bill was easily turned aside in New Mexico after getting wide "Move Your Money" notice from the Huffington Post.
Meanwhile, in New York and New Jersey, state league officials were optimistic that their public funds bills were gaining traction as hard-pressed school districts and local agencies sought out CUs as new deposit sources despite opposition from banking trade groups. The Credit Union Association of New York said it was particularly encouraged by inclusion of an industry-backed bill in a state Senate budget resolution as well as a new endorsement by New York Mayor Michael Bloomberg and the New York City Council.
The Senate action, said CUANY, represents "a significant second hurdle we've crossed in making our case, and now we have to concentrate on the Assembly," said Amy Kramer, vice president of governmental affairs.
In Oregon, meanwhile, Gov. Ted Kulongoski at a special signing ceremony March 29, enacted a measure removing the current $250,000 limit on public fund deposits in CUs to take effect Jan. 1, 2013.
That bill, shepherded through both chambers by the Credit Union Association of Oregon during a shortened four-week February session, was heralded as "extending an additional choice for public entities to seek a fair and competitive rate of return on the people's money."
Pamela Leavitt, senior vice president-governmental affairs for CUAO, noted that the public funds issue has been worked on since 1981, and its enactment bolsters the trade group's resolve "to advance the credit union charter and to seek new avenues to serve local communities." Approximately 4,000 public agencies in Oregon receive public funds and require the services of banks and CUs to house them.
Elsewhere, attention in New Jersey was being focused on the state Assembly following reintroduction of an enabling bill in the state Senate by its president, Steve Sweeney. That bill would amend the Government Unit Depository Protection Act to permit counties, school boards, and municipalities to utilize CU's as depositories.