State league efforts to enable more credit unions to receivepublic deposits took a step forward this week with the MinnesotaCredit Union Network signing a pact with a Milwaukee vendor,American Deposit Management LLC, which helps broker, process anddeposit the funds.

Under a strategic partnership agreement with the Minnesota tradegroup, ADM said it has already started advising credit unions inthe state on optimum procedures to gain the deposits at favorablerates acceptable to school districts, city and county bodies, waterutilities and other entities. The firm said it provides fullFDIC/NCUA insurance through its network.

ADM, which already serves a nationwide clientele of banks with asmaller number of credit unions, said the Minnesota pact is anoteworthy expansion of its efforts as it seeks to reach creditunions in other states as a registered municipal adviser.

“We understand the current condition of the economy with manycredit unions flush with deposits but this kind of climate willchange and we are ready to help those smaller credit unions thatsimply may need the deposits right away to fund loans,” said KellyBrown, owner and managing partner of ADM, which has headquarters inMilwaukee and a satellite branch in the Twin Cities.

Brown acknowledged that her firm helped play a key role in thepassage by Minnesota lawmakers last April of the PublicDeposits Bill. The measure, which clarified the acceptance ofpublic funds by credit unions, passed both houses by overwhelmingmargins.

Brown said her firm services 500 financial institutions, 10% ofwhich are credit unions, also has received top vendor status fromthe Wisconsin Credit Union League.

“We are very indebted to the Wisconsin League for their expert work in helping credit unionson public funds and directing us to the Minnesota League to assistin lobbying that legislature” said Brown. The firm nowexpects to contact other leagues across the U.S. on similar depositplacement services.

In the current economic environment, she said fund safety trumpsrate among public agencies making deposits in financialinstitutions. That makes it all the more important that creditunions understand the basics of deposit solicitation andacceptance, she said.

In Wisconsin “five school districts lost millions in 2008 afterinvesting in risky funds,” she said, noting the negative politicalfallout has engendered more conservative attitudes by the agencieswhich might have shied from using credit unions.

“It was a public relations nightmare for them and scared thosepublic agencies about how they invest taxpayer moneys,” Brownsaid.

MnCUN said four of its credit unions currently used theservice: the $3.6 billion Wings Financial CU, Apple Valley; the$739 million TruStone Financial CU, Plymouth; the $244 millionRichfield-Bloomington CU, Richfield; and the $44 million StarChoice CU, Minneapolis.