ALBANY, N.Y. (3/30/10)--The New York City Council Thursday unanimously passed Resolution 17, which encourages the state legislature to allow municipalities to deposit public funds in credit unions.
“It is time for New York to allow the city to invest its money in community development financial institutions,” said Al Vann, chair of the council’s committee on community development. “While major commercial banks have decreased their 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,” he added. “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.” The Credit Union Association of New York applauded the resolution. The current law addressing municipal deposits was enacted in 1909 before credit unions existed, said William J. Mellin, association president. “We hope New York’s legislative body will do the right thing and support municipal depository choice in the final budget,” he said. New York Mayor Michael Bloomberg also issued a statement supporting Resolution 17. “Today’s city council resolution strengthens our message, and I applaud the members of the council for joining with us in this effort,” he said. “If Albany lifts the ban, our administration will fulfill the commitment I made in my recent State of the City speech by depositing $25 million in city funds in federally insured and regulated credit unions that pay the same interest rate as commercial banks. This will allow credit unions to increase the number of loans they issue to low-income families and small neighborhood businesses across the city.” Last week, the New York State Senate passed a municipal deposits bill.