New York CUs lobby for depository choice

LATHAM, N.Y. (5/8/08)--Representatives from New York credit unions and the New York State Credit Union League recently gathered in Albany, N.Y., to advocate for depository choice.

Robert Nemeroff, Melrose CU, Briarwood, talks about depository choice with New York State Rep. Herman "Denny" Farrell (D-Metropolitan). (Photos provided by the New York State Credit Union League)
Currently, commercial banks are the only banking institutions in New York state that are permitted to accept deposits from local and state governmental units.

"The law addressing municipal funds was enacted in 1909," said William J. Mellin, league president/CEO. "Credit unions did not exist in New York 100 years ago. Clearly it is time to fix this antiquated law and allow municipalities the depository options they are seeking."

Bills in the state Senate and/or the Assembly that would secure depository choice for credit unions include:

  • S.3664, sponsored by State Sen. Kevin Parker (D-Metropolitan) and A.6511, sponsored by State Rep. Carl Heastie (D-Metropolitan), would allow state and federal credit unions, savings and loans, and federal savings associations to accept municipal deposits;

  • S.4054, sponsored by State Sen. Hugh Farley, (R-Capital) and A.6856, sponsored by State Rep. Catherine Nolan, (D-Metropolitan), would allow state and federal credit unions and savings banks to accept municipal deposits; and

  • S.4071A, sponsored by State Sen. John Flanagan (R-Long Island) and A.7322A, sponsored by State Rep. Harvey Weisenberg (D-Long Island), contains a local option in which the local governing body would designate the financial institution by resolution. It also limits the amount that each depository financial institution can accept for deposit at $1 million per municipality.

The group of 16 credit union professionals met to review the pros and cons of each of the bills before heading to the State Capitol and legislative offices to visit 19 legislators, including bill sponsors and chairmen of key committees.

From left: Bruce Beaudette, Sunmark FCU, Schenectady; William J. Mellin, New York State Credit Union League; New York State Sen. Hugh Farley (R-Capital/Adirondack); Michael Castellana, SEFCU, Albany; and Tristam Coffin, Alternatives FCU, Ithaca.
During the meetings, the group reiterated how credit unions play a vital role in the state economy, how they are regularly approached by representatives from their local fire departments, libraries, schools and villages, and how--as required by current state law--they must turn away the business.

The group said municipalities facing tight budgets could see financial benefits from working with credit unions, and their taxpayer's funds would stay local, benefiting their communities.

After their visits, credit unions and lawmakers met for a legislative reception.

"As commercial banks deepen the credit crisis, government leaders need to explore more local, responsible and affordable financial services options," said Amy Kramer, league vice president, governmental affairs. "Our targeted visits provided the opportunity for New York credit unions to convince lawmakers that their communities and constituents would greatly benefit by allowing local government access to credit unions."

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