FEDERAL WAY, Wash. (3/12/12)--Washington Gov. Christine Gregoire signed Senate Bill 5913--known as the public funds bill--into law Wednesday. The bill allows public entities for the first time to deposit funds in any credit union in Washington up to the federal insurance maximum of $250,000, according to the Northwest Credit Union Association (NWCUA).
Washington Gov. Christine Gregoire, seated, signed the state's credit union public funds bill, Senate Bill 5913, into law Thursday afternoon. The bill allows public entities for the first time to deposit funds, up to $250,000, into any credit union in the state. (Photo provided by the Northwest Credit Union Association)
The new law goes into effect on June 8--60 days after the end of the regular 2011 legislative session (Anthem
"With the signing of this legislation, all Washington credit unions are now eligible to hold public funds up to the level of insurance--if they so choose," said Mark Minickiello, NWCUA vice president of legislative affairs. "While some may not see this as having a large effect, it is one more step toward allowing not-for-profit credit unions to offer the products and services their members want."
State law previously allowed state-chartered credit unions to be depositaries up to a maximum of $100,000. The bill's passage now allows federally chartered credit unions to act as depositaries and raises the maximum to $250,000 for all credit unions.
Other states have recently pursued similar legislation, NWCUA said. New Jersey enacted a law in 2011 allowing 1,500 local government entities, including libraries and community colleges, to deposit funds in credit unions, while the Florida legislature rejected a credit union public funds bill this year after the measure was met with heavy bank opposition.
Ohio and Alabama have been the latest states to make a push, and hearings on the subject in the Ohio House are anticipated after legislators return this week from a recess. The Ohio Credit Union League has been instrumental in the legislation's introduction and education efforts and said the movement now finds itself "in a war" against banks on issues such as supplemental capital and public funds, NWCUA said.
In Alabama, the League of Southeastern Credit Unions has companion bills being reviewed by the House Financial Services Committee and the Senate Banking Committee, and continues working with its members to advocate for the bills' passage, the association said.