NY City Council Passes Resolution in Support of Municipal Depository Choice

Related Media

Al Vann, chair, Committee on Community Development, New York City Council

ALBANY, NY (03/26/2010)(readMedia)-- On March 25, the New York City Council unanimously passed Resolution 17, which encourages the state legislature to enact legislation amending all applicable state law to allow local government entities statewide, 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.

"It is time for New York State to allow the city to invest its money in community development financial institutions," said Council Member Al Vann, chair of the Council's Committee on Community Development. "While major commercial banks have decreased their amount of lending, local community development financial institutions have provided lending opportunities in neighborhoods throughout New York City. Many of these institutions have given a lifeline to New York City's small businesses that are struggling to find capital, while also offering individuals traditionally without bank accounts banking and financial services. Allowing these institutions to accept municipal deposits will only strengthen the communities they serve by offering competition and an alternative to commercial banks, whom often have no significant relationship to the communities they serve. With the passage of this resolution, the Council urges the State Legislature to adopt, and the Governor to sign, this much-needed change into law. Municipal deposit choice will improve the economic vitality of communities throughout New York City by strengthening the community development financial institutions that serve them."

"We're thrilled that the City Council continues to push for depository choice, and that they have passed Resolution 17," said William J. Mellin, president/CEO of the Credit Union Association of New York. "Credit unions are not only community-based and play a significant role in our local communities; they also pay property taxes to those very same local governments, which would benefit from municipal deposit choice. The current law addressing municipal deposits was enacted in 1909 before the existence of credit unions. We hope New York's legislative body will do the right thing and support municipal depository choice in the final budget."

By allowing municipalities to deposit with credit unions, legislators would ensure that monies stay local and working in their communities. Expanded depository choice would also add funds to a lending pool that has been somewhat scarce at big banks and increase revenues for cities and towns-in turn, creating savings for New York taxpayers. It would also enable credit unions to offer lower loan rates and create more affordable loan products for their communities.

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.

-30-