Ohio League Finalizing Public Funds Push
Ohio appears to be the next battleground for the credit union push to accept public funds with bills being readied in both chambers of the state legislature next week.
The Ohio Credit Union League said appeals from local school boards, municipal entities and economic development groups have triggered a renewed call for CU authority to enter the bidding process. The appeals have prompted the latest legislative campaign with co-sponsors being lined up in both the Ohio House and Senate, said the league.
The proposed legislation to be introduced would amend the Uniform Depository Act to allow Ohio CUs to accept deposits from public entities such as political divisions, counties, municipalities, schools, and townships.
As has been the recent pattern, the banking lobby has signaled its intent to block such legislation raising the tax exempt argument as well as opposition to broadening CU powers under the “uneven playing field” line, said John Kozlowski, the league’s general counsel.
The league has said its message to Ohio lawmakers will be about “expanding the choices of eligible depositories for public entities and keeping local deposits in the community, which will help create more opportunities for small businesses.”
The league said joint co-sponsors of the legislation include Sens. Scott Oelslager (R-North Canton) and Eric Kearney (D-Cincinnati). On the House side are: Reps. Terry Blair (R-Washington Township) and Tracy Maxwell Heard (D-Columbus).
In recent months state leagues have had various success in pursing municipal deposit powers with New Jersey enacting a bill last year clearing the way for 1,500 local governmental entities including libraries, community colleges, sewer authorities to include CUs for deposits.
Rules on funds allocation were being written this month by the New Jersey Department of Banking and Insurance under a process that is due to be completed in the second quarter.
Meanwhile, on a more negative note, a subcommittee in the Florida legislature rejected in a close vote moving a CU funds bill for further consideration following banker opposition.
But the Northwest Credit Union Association said this week its public funds bill in Washington State was making progress in the Senate receiving a positive recommendation following a hearing by the Senate Financial Institutions, Housing & Insurance Committee.
Senior Vice President and General Counsel Stacy Augustine told Washington lawmakers that “every year the association gets calls from one or more credit unions telling us that one of their public unit members has been forced to move its money to another financial institution—often a financial institution that’s less convenient for the government unit.”