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News Now

CU System
NYC resolution favors municipal deposits for CUs
LATHAM, N.Y. (2/20/08)--A resolution introduced before the New York City Council calls for the state legislature to pass a measure allowing credit unions and other savings financial institutions to accept municipal deposits. Under current state law, only commercial banks can accept and secure deposits from municipal corporations, said the New York State Credit Union League. Queens Council member and Council Finance Committee Chair David Weprin (D) introduced the resolution and spoke in its support, emphasizing the need for elected officials statewide to seek depository choice. "There is no reason why a credit union shouldn't be a part of the competition for municipal deposits," he said. "If commercial banks can thrive as they have for years, why shouldn't a credit union reap the same benefits of this competition?" The resolution is similar to ones approved by the Albany, Syracuse and Ithaca Common Councils. "By retaining local money in our respective communities through municipal deposits, credit unions will be adding funds to the lending pool," said Alan Kaufman, CEO of Melrose CU, Briarwood. "In so doing, credit unions will be helping to reduce the cost of funds, making it possible to offer lower loan rates while creating more affordable loan products for our communities," he added. The resolution will be discussed soon at a public hearing of the City Council Finance Committee. Four municipal deposits bills have been launched in the state Assembly and three in the state Senate. The league said it would continue to work behind the scenes to introduce similar resolutions in other cities across the state as part of its strategy of securing visible support for municipal deposits from local elected officials and encouraging passage of the municipal deposit amendments to current banking law.


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