TALLAHASEE, Fla. (5/13/13)--Florida lawmakers should consider legislation to allow credit unions to accept public deposits from municipalities and public offices, Patrick La Pine, president/CEO of the League of Southeastern Credit Unions, wrote Friday in an op-ed in an Orlando, Fla., newspaper, the Sun-Sentinel.
Because such a measure was not considered in the 2013 Florida legislative session, limitations will continue on municipalities and prevent them "from seeking better, more competitive rates of returns for their investments, as well as from establishing a financial relationship with their local credit union, with which they may already have a personal relationship," La Pine wrote.
When credit unions in the state receive deposit requests from local government agencies, the credit unions must deny them because Florida law permits only commercial, for-profit banks to receive those funds, he added.
Banks posit a specious argument that because credit unions "don't pay taxes" the way banks do, they should not be allowed to serve local governments, La Pine wrote. That claim is false because credit unions do pay "tangible property taxes, real property taxes and all employment taxes like a bank," he added.
The reason credit unions are exempt from paying state and federal income taxes is because they have a not-for-profit structure and a mission of serving their communities, La Pine explained.
"Credit unions are 100% locally owned and return all profits back to their Florida membership in the form of lower fees, better interest rates and better returns on deposits. If this good measure to allow credit unions to accept public deposits is not given a fair consideration soon, it's the taxpayers who will continue to lose out," La Pine concluded.
To read the op-ed, use the link.
Several other states allow credit unions to accept public deposits or have considered or are considering legislation. They include California, Illinois, Missouri, New Jersey, New York, Oregon and Washington.