The legislative battle in Ohio over credit unions receiving public funds is heating up this month with a House bill introduced last Friday drawing fire from the banking lobby.

The Ohio Credit Union League maintains the state's deepening recession has triggered a wave of requests from school, township and community municipalities approaching CUs for public fund deposits.

"There are plenty of good reasons for limiting credit union access to government funds when you consider that credit unions are already subsidized to the tune of $20 million since they pay no taxes," countered Michael Adelman, vice president of state government affairs for the Ohio Bankers League.

Adelman was commenting on a bill introduced by Rep. Tracy Maxwell Heard (D-Columbus), making CUs eligible depositories for government funds, and similar to an unsuccessful CU league attempt in 2004.

CU officials argue government entities have been seeking out CUs entities as they seek to diversify their deposits because of concerns regarding deposit insurance at banks.

"The credit unions want to serve their communities," said John Kozlowski, general counsel of the CU league.