Credit Union Association President/CEO Testifies in Support of Municipal Deposits for Credit Unions

• by Credit Union Association of New York

ALBANY, NY (01/25/2010)(readMedia)-- Credit Union Association of New York President/CEO William J. Mellin testified today at the Joint Legislative Hearings on the 2010-2011 Executive Budget Proposal. New York City Mayor Michael Bloomberg and other leaders from across the state also testified during what was the opening day of hearings that will continue through February 10.

During his testimony, Mellin implored legislators to support Governor Paterson's proposal to give local governments the option of placing their municipal deposits in credit unions. He also emphasized that final municipal depository choice legislation should be extended to all credit unions.

"Credit unions have the potential to help state and local officials in a way that doesn't cost state or local taxpayers a dime, but instead will save them money and increase the range of options available to elected officials throughout the state," testified Mellin. "By embracing the concept of municipal depository choice, the governor has provided to the legislature a cost-effective means of maximizing the tax dollars of New Yorkers and providing local governments much needed flexibility as they seek to save resources."

Mellin also noted that the Federal Credit Union Act explicitly authorizes federal credit unions to accept municipal deposits. The majority of states, including California, Connecticut and New Jersey already authorize their credit unions to accept these funds. Unfortunately, New York State law currently limits the financial institutions that can accept municipal deposits.

Addressing banking industry claims that credit unions are undeserving of municipal deposits authority because of their tax-exempt status, Mellin pointed out that credit unions do pay taxes, including property and payroll taxes saying, "As not-for-profits which reinvest earnings into its member-owners, credit unions do not derive corporate income and therefore do not pay corporate income tax."

"Ultimately, at a time when all taxpaying citizens have been forced to pay for the missteps of the banking industry, that same industry should not be opposing legislation that does nothing more than provide localities a further option in seeking to maximize taxpayer dollars," he added.

Mellin concluded his testimony by reiterating the vital role New York's 461 credit unions play in the state economy and how, as the last truly local financial institutions in the state, their deposits stay local and their lending is local, increasing reinvestment in the local economy.

The Credit Union Association of New York has served as the trade association for the state's credit unions for 92 years. New York credit unions have assets of more than $48 billion and 4.3 million members. To learn more about the Association, visit www.cuany.org.

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For William J. Mellin's testimony: https://www.cuany.org/access_files/publications/1-25-10_Final_GovBudgetTestimonyWJMmun.dep.pdf