TRENTON, N.J. (12/14/10)--New Jersey Assemblyman Fred Scalera (D-36), who introduced legislation to reform New Jersey’s 40-year-old municipal deposits law to allow local government entities to include credit unions when considering potential depositories, has resigned his legislative post to accept a position in the private sector, said the New Jersey Credit Union League. NJCUL said it is recruiting an additional prime sponsor for the legislation to replace Scalera (The Daily Exchange
Dec. 13). The legislation passed the state Senate in June. With two prime sponsors and eight co-sponsors, the Assembly bill remains actively pending consideration in the Financial Institutions and Insurance Committee despite Scalera’s departure, the league said. Diversifying deposits to credit unions from banks would reduce risk, said Paul Gentile, league president/CEO July 8). Allowing credit unions to accept the deposits would benefit local government entities in these ways, he said:
* Credit unions receiving the deposits would be more likely to make deposited funds available to local businesses and consumers. While banks reduced business lending by 15% in 2009, credit unions increased their small business lending by 11% last year. * Depositors get better interest rates from credit unions, which will benefit the taxpayer.
Liberalizing the deposit act would help the public realize that credit unions are full-function financial institutions that almost anyone can join, Gentile said.