Credit Union Association of NY Urges Support of Municipal Depository Choice

ALBANY, NY (06/25/2010)(readMedia)-- The Credit Union Association of New York State -- representing 451 New York credit unions and 4.4 million New York credit union members -- today called on the State Legislature to support a new compromise bill on municipal depository choice, which will give New York's local government entities more financial flexibility and help save critical tax dollars.

Municipal depository choice allows local government entities such as cities, towns, counties, school districts, fire districts, and public libraries the option of depositing tax dollars in local credit unions or community savings banks, along with commercial banks which currently have a monopoly on municipal tax deposits. The proposed flexibility for local government and free market approach will result in the best possible rates of return and lower fees for municipalities which could save New York taxpayers millions of dollars.

The compromise "same as" bills sponsored by Sen. Kevin Parker (S.8296-A) and Assemblyman Harvey Weisenberg (A.11538-A) are similar to previous versions but would now cap municipal deposits in credit unions at the federally insured limit of $250,000 per deposit.

"We support this compromise legislation which is a reasonable approach to ensuring local government leaders have a choice in where they are allowed to deposit our tax dollars and have a new way to find savings in these tight fiscal times," said William J. Mellin, President/CEO of the Credit Union Association of New York. "We want to thank Sen. Parker and Assemblyman Weisenberg for their continued support of municipal depository choice and their hard work on reaching this much-needed compromise."

Local government organizations throughout New York State continue to support municipal depository choice including the New York State Conference of Mayors and Municipal Officials (NYCOM), the Association of Towns of the State of New York, New York State Association of Counties (NYSAC), the Fireman's Association of New York (FASNY), the New York School Boards Association, and the New York Library Association (NYLA).

"We appreciate our local government association partners and the many state and local leaders who have stood with us in support of municipal depository choice from Gov. Paterson, Sen. Sampson and the State Senate Majority, to members of the State Assembly like Assemblymen Carl Heastie and David Weprin," said Mellin. "We also have support from prominent local government leaders like New York City Mayor Michael Bloomberg, New York City Department of Consumer Affairs Commissioner Jonathan Mintz, Albany County Executive Michael Breslin, City of Albany Mayor Jerry Jennings, and the New York City Council which passed a supporting resolution introduced by Councilman Albert Vann."

Credit unions play a significant role in communities throughout the State by investing locally and paying property taxes to those very same local governments that would benefit from municipal depository choice, namely municipalities, libraries, fire districts, and public schools.

Currently a majority of states, including neighboring Connecticut, allow municipal depository choice. Recently, the New Jersey State Senate overwhelmingly passed it with New Jersey Credit Union League President/CEO Paul Gentile saying, "This is an important day for credit unions and property taxpayers alike. While some tried to make this a bank vs. credit union issue, it's really about choice, competition and saving taxpayer dollars."

"Municipal depository choice is about reforming a nearly century old antiquated law, which fails to reflect current financial conditions or offer local governments the flexibility they need to manage declining revenues and growing deficits," said Mellin. "This much-needed reform allows local governments something they don't currently have - the freedom to deposit their tax dollars where they can save revenue, encourage more local investment, and create more opportunities for New Yorkers."

A 2006 study by former Assembly economic advisor Brian P. O'Connor indicated that by allowing credit unions to work with local governments, they could save taxpayers $18 to $24 million. Mellin said, "The savings for taxpayers is clear and significant and the time for municipal deposit reform is now."

Mellin concluded: "We're hoping State Legislators -- all of whom represent local governments, districts with credit unions, and thousands of credit union members -- will do the right thing and support municipal depository choice this year. And until they do, we're asking every New York taxpayer to call, email, or write their State Legislators and tell them to support our local governments, support our local communities, and support this reform."

The Credit Union Association of New York has served as the trade association for the state's credit unions for 93 years. New York credit unions have assets of more than $50 billion and 4.4 million members. To learn more about the Association, visit www.cuany.org.

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