<p>ARLINGTON, Va. – Whether Congress provides credit unions parity with banks in the protection and insurance of municipal deposits still remains to be seen, although CUNA and NAFCU are both optimistic this will happen eventually. But once that parity is achieved, that will not mark the end of that effort. The focus of the work will have to switch to the state legislatures to allow municipal, county and state governments to make these deposits in credit unions, and to allow state-chartered CUs to take the deposits. Brian Knight, director of state regulatory relations for NASCUS said it’s a dual-track issue. “The way many state ordinances are written, there are no guidelines allowing state-chartered credit unions to take municipal deposits, but others also specifically state they cannot take these types of deposits.” According to NASCUS, there are currently 10 states that do not permit their state-chartered CUs to take municipal deposits: Alaska, Florida, Kentucky, Maine, Nevada, Oregon, Pennsylvania, Virginia, and West Virginia. On the flip side, at least 25 states do allow SCCUs to take municipal deposits. Knight emphasized that state-chartered credit unions’ ability to accept municipal deposits is a “state policy decision, one that NASCUS would not see as its responsibility to lobby on.” Instead, he said, NASCUS see its role as providing supportive information. Knight emphasized that this doesn’t mean NASCUS sees its role as “standing in the background.” “In order to make an informed decision, you need to have all the information,” said Knight. “This is a state appropriate decision,” he said. “Even if all the state-chartered credit unions in a particular state agreed on whether they should be able to take municipal deposits, it would not be our role to come out on either side of the fence. That’s not our role.” The decision seems to not just lie with a respective state’s legislature, it’s also triggered by CUs’ interest in providing municipal deposit services. In some cases, for example Virginia, there hasn’t been much interest expressed by credit unions to be able to accept public deposits Rick Pillow, president/CEO, Virginia Credit Union League for example said while he is aware that the service is prevalent in other states, he hasn’t received any “strong feelings” from Virginia credit unions to take municipal deposits. Florida credit unions, though, have shown an increased interest in being able to accept public deposits, and Florida Credit Union League Director of Legislative Development Mark Landreth said the league “will probably” move to have a bill introduced in next year’s state legislature that would allow them to do so. Knight said state-chartered credit unions’ ability to accept municipal deposits is not only important as a parity issue, but it is also crucial to state-chartered credit unions being competitive in the financial services industry because the monies deposited are “a sound source of business,” he said, “and they allow a credit union to grow.” -</p> <p>[email protected]</p>

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