Readying for a final push this fall to enact a Senate-passed bill on municipal deposits, the New Jersey Credit Union League was wasting no time this week in making a renewed pitch to allow CUs to receive the funds after a New York bank announced an exit from the market.
The league campaign was highlighted by the June 10 state Senate adoption of enabling legislation. The campaign comes as the state's top banking regulator, Thomas Considine, with no mention of CUs, suggested community banks should fill the void left by the departure of JPMorganChase. Chase, carrying a $500 million portfolio for 200 New Jersey municipal entities, said last week it wanted out of the market because of collateral concerns on a bank-run risk pool.
"Many New Jersey's credit unions are ready, willing and able to enter this market creating additional competition and increasing the likelihood deposits will be invested locally," said Paul Gentile, league president/CEO. "It makes no sense to continue to exclude credit unions under a forty-year old law passed before credit union deposits became federally insured."
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A spokesman for Considine, commissioner of the New Jersey Department of Banking & Insurance, said the regulator "will abide by what the legislature finally decides" but has not altered his position that community banks have muni priority considering tax exempt and CRA issues remain with CUs, a point vigorously refuted by the league. The New Jersey Assembly is expected to take up the Senate bill in September following the summer break.
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