Governor Gregoire to Sign Legislation Allowing Gov’t Deposits in Local Credit Unions
April 2, 2012
FOR IMMEDIATE RELEASE
February 29, 2012
Contact: David Bennett
FEDERAL WAY,WA—Washington’s government entities may soon have a local option for their public deposits that allows them to invest their tax dollars locally and support financial institutions that reinvest in their communities.
Senate Bill 5913, which allows public entities to deposit funds up to the insurance maximum of $250,000 in any not-for-profit credit union headquartered in Washington, passed overwhelmingly by the State House of Representatives last night on a vote of 80-16, with two members excused. Senate Bill 5913 now moves to Governor Gregoire, where it is expected that she will sign it into law. The legislation would take effect on June 8—90 days after the end of the session.
“Theses legislative changes in Oregon, and now Washington, rectify a near-monopoly on some aspects of our financial markets,” says Northwest Credit Union Association (NWCUA) CEO John Annaloro, referring also to a recent decision to allow Oregon credit unions to accept unlimited public funds. “All government-chartered financial institutions are now available to advance the communities of our region.”
The bill, a modernization act for Washington’s public funds laws, cruised through the Senate on a 43-2 vote February 9, where it was sponsored primarily by Senate Financial Services and Insurance Committee member Sen. Margarita Prentice (D-11), as well as the Committee’s Chairman, Sen. Steve Hobbs (D-44), and Sen. Don Benton (R-17). SB 5913 also received support from the state treasurer’s office and the city of Seattle.
The House in 2011 passed a bill that would have brought similar modernization to the state’s public funds laws, but it died in Senate committee. On the heels of the Nov. 5 Bank Transfer Day last year, however, the Seattle City Council unanimously adopted a responsible banking ordinance that called on the city to examine its banking and investment practices, a movement that is gradually gaining momentum around the nation.
“Hard work by the Senate, along with committed supporters and a general public disgust with big banks, negated any opposition to this bill,” says NWCUA Vice President of Legislative Affairs Mark Minickiello. “The momentum that carried over from November was palpable.”
In January, Assistant State Treasurer Wolfgang Opitz testified that the treasurer’s office supported SB 5913 as presented and saw specific benefit in bringing state and federal credit unions into the pool of possible depositaries.
The issue of public funds deposits was not centered on credit unions’ ability to accept public dollars. Rather, it is the state and local entity’s inability to deposit those dollars that was the core of the problem.
According to Minickiello, credit unions have always been allowed to accept public funds. The new law makes it legal for public entities to deposit those dollars in credit unions.
“For credit unions, this has always been a member-service issue,” testified Spokane Media Federal Credit Union President and NWCUA Vice Chairman Debie Keesee to a Senate committee earlier this year, adding that even though her credit union is the closest financial institution to the city of Millwood, Wash., it would be illegal for the city to deposit of any of the its public funds.
SB 5913 was opposed by banks.
The Northwest Credit Union Association is the not-for-profit trade association serving 168 credit unions in Oregon and Washington and their 4.1 million members. The NWCUA is the voice of the Northwest credit union movement, providing legislative, regulatory and public advocacy in addition to education, compliance, networking support and business solutions to its members. Learn more about credit unions at http://www.asmarterchoice.org.
Posted in Advocacy News.