Credit Unions Applaud State Senate for Supporting Municipal Deposit Choice

The New York State Senate this week passed a budget resolution including support for municipal deposit choice, joining Governor David Paterson, New York City Mayor Michael Bloomberg, and local elected officials from across the state in support of the measure which allows local government entities such as cities, towns, counties, public schools, fire districts and public libraries the option of depositing public funds in local credit unions or community savings institutions.

The Credit Union Association of New York, representing 460 New York credit unions and 4.3 million credit union members, now asks the State Assembly to join the Senate and Governor in passing a win-win for State and local governments, as well as, local communities and taxpayers.

"I want to thank Senate Democratic Conference Leader John Sampson and members of the State Senate who have joined Gov. Paterson in supporting municipal deposit choice through their budget vote," said William J. Mellin, president/CEO of the Credit Union Association of New York. "Municipal deposit choice allows public funds to stay local, allows for more reinvestment in our communities, helps local governments increase revenue, and creates much-needed savings for New York taxpayers. In short, municipal deposit choice puts more public dollars back on Main Street."

Mellin continued, "We're hoping that Speaker Silver and the Assembly -- all of whom represent local governments, districts with credit unions, and thousands of credit union members – will do the right thing and support municipal deposit choice in the final budget."

While a majority of states including Connecticut and New Jersey allow municipal deposit choice, and the Federal Credit Union Act explicitly authorizes federal credit unions to accept local government deposits, commercial banks in New York State currently hold a strict monopoly on such deposits.

"In recent months, a variety of publications and organizations have been urging consumers to ditch their 'big banks' in favor of credit unions or community banks," said Mellin. "This broad support and shift from Wall Street to Main Street, confirms that the local credit unions' member-owner operating model works, and I'm confident that New York's local government entities, like more and more consumers and localities in other states, will soon be jumping on the credit union bandwagon as long as they are given the freedom to do so."

According to the Credit Union Association of New York, 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 available financial options local governments desperately need. Allowing credit unions to accept municipal deposits will only strengthen the communities they serve by offering competition and an alternative to commercial banks.

"Credit unions are not only community-based and play a significant role in our local communities, we also pay property taxes to those very same local governments which would benefit from municipal deposit choice, namely municipalities, libraries, fire districts and public schools," said Mellin.

"Credit unions are not only 100% locally-owned, and do pay tens of millions in taxes including local property taxes, but as not-for-profit financial cooperatives, we return all profits back to our members," continued Mellin. "Access to municipal deposits would allow credit unions to further reinvest in our local communities, via loans to local taxpayers and local small businesses, at a time when credit and borrowing opportunities are drying up for the very people and businesses who need it most."

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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