Ohio CUs Gird for Fight

Bolstered by requests from hard-pressed municipalities, Ohio credit unions are hopeful a new bill introduced in the state legislature to permit deposit of public funds in credit unions stands an improved chance of passage despite vigorous opposition by the banking lobby.The Ohio Credit Union League said it is already receiving support from school districts and township units for a bill introduced in the Ohio House two weeks ago and similar to a bill in 2004 that had been successfully blocked by the Ohio Bankers League, as the old Ohio Bankers Association is now known.The new House bill, sponsored by Rep. Tracy Maxwell Heard (D-Columbus) and now before the Financial Institutions, Real Estate, and Securities Committee would amend the state’s Uniform Depository Act to allow CU deposits.The league maintains the prohibition in the law injures “Ohio citizens, businesses and public entities.” Moreover, government entities have in recent months been seeking out CUs as they seek “to diversify their deposits because of concerns regarding deposit insurance at banks.”But the Ohio Bankers League, relying on the tax-exemption argument maintained that credit unions are already “getting a free ride by the state” and should not be given further advantages.“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,” said Michael Adelman, vice president of state government affairs for the Ohio Bankers League.The Ohio League maintains CUs want to serve needs of their communities and now the need is to provide favorable, competitive rates to struggling government entities.–[email protected]