Public Funds Collateralization Pool Generating New Interest in Oregon

Beginning April 1, all of Oregon’s public entities—including city governments, schools and fire departments, among many others—will be able to deposit money in their local credit unions. This will allow public deposits to also serve as an investment in the community and will give public entities the same access to better rates and service that the state’s individual consumers have enjoyed for years.

The new law’s roots are in economic recovery. In 2010, in the wake of one of the worst financial crises in U.S. history, the Oregon Legislature passed a measure giving public entities the ability to choose where to deposit their funds.

“The law allows a school district to move its money from Wall Street back to Main Street, to the credit union that may already serve as the primary financial institution for the majority of the district’s employees,” said John Trull, director of regulatory advocacy for the Northwest Credit Union Association (NWCUA). “It lets funds be held by a credit union that answers to community members rather than by a bank answering to faceless stockholders and highly paid boards.”

Even before the credit union public funds program officially launches on April 1, the program is generating interest. In one case, a small-town bank branch is closing, leaving a credit union as the only financial institution in the area. The town had to move its deposits to a bank branch in a different city but would have preferred to begin working with its local credit union. The town has indicated that once the credit union can accept public funds, it intends to move to the credit union.

“It makes sense that local governments would want to keep their funds local,” Trull said, “in the not-for-profit financial institutions that they’ve trusted as consumers for years.”

Trull said that it has taken “a serious commitment to get this program up and running.” That commitment started with everyday citizens who wanted to see more local jobs created and who trust credit unions to do just that. Then cities like Portland, Beaverton, Klamath Falls and others heard the call to action and committed to moving a portion of their funds to local credit unions.

The Oregon Treasurer’s Office committed to creating a state-of-the-art program that ensures that public deposits are safe, secure, and fully collateralized by the credit unions. And finally, credit unions have invested in the program in order to make sure that the program was fully paid for at no cost to the taxpayer.

Nationally, public deposits are not a new line of business for credit unions. In fact, roughly half of U.S. states currently allow credit unions to accept public deposits. The Oregon Treasurer’s office has required credit unions to meet even stricter public depository requirements than for-profit banks, offering additional protections to members.

“This is an exciting moment for credit unions in Oregon,” said NWCUA President and CEO Troy Stang. “With public deposits, credit unions will be able to reinvest more in the communities they serve and give people on Main Street greater opportunities to succeed.”


The NWCUA Regulatory Advocacy team works with state and federal regulators to help reduce the regulatory burden on credit unions and protect the credit union movement. The Association encourages members to participate in the regulatory process. If you have any questions about these or any regulatory issues, please contact Director of Regulatory Advocacy John Trull at, or at 503.350.2209.

Posted in Advocacy News.