Depository Choice: Credit Unions as Public Depositories •Depository Choice. Commercial banks continue to enjoy a virtual monopoly over the deposit of state and local funds in Alabama. Credit unions receive deposit requests from municipalities such as fire departments, schools, libraries and other local units of government and are forced to turn them away. This legislation would allow state and local elected officials depository choice, and an opportunity to take advantage of local community-owned financial institutions whose members are part of the public they serve. Increased competition can only be good for all involved. •Municipalities would save. By allowing credit unions to accept municipal deposits, municipalities may receive better rates of return on their tax dollars. For elected leaders facing tight budgets, every dollar saved or earned counts. Credit unions, on average, pay out .25 to .50 basis points higher than banks on deposit accounts. If credit unions were allowed to work with your local governments to the same extent as commercial banks, they could increase the rate paid on deposits. •Community Investment. Credit Unions are just asking for the opportunity to be utilized as Qualified Public Depositories. As member-owned financial institutions, credit unions are looking for another opportunity to give back to their communities. Credit unions are not asking for any preferential treatment, just the ability to offer another option for the deposit of public funds and provide an opportunity to keep public funds within the community. •The Opposition? Commercial banks say that credit unions should not serve local government because they “don’t pay taxes.” Not true. Credit unions do pay tangible personal property taxes, real property taxes, and as employers, credit unions pay all employment taxes like any bank. Credit unions’ tax exemption lies in their not-for-profit structure, including cooperative ownership and volunteer leadership –not because of the types of services they provide. Credit unions are 100% locally-owned, and as not-for-profit financial cooperatives, they return all profits back to their members. Access to municipal deposits would allow credit unions to further reinvest in their local communities, via loans to members and local small businesses. •Bottom Line. There is no real reason, with regards to good public policy, that credit unions should continue being denied the ability to accept public deposits. School boards, county commissions, municipalities, and Alabama should all have the option of where they feel taxpayer money is being best utilized and where they can see the greatest return. All we are asking is to be on that list of options, to be available when our community comes to us and to continue serving the community as we always have.
Call These Members of the Alabama Legislature and Ask Them To Allow Credit Unions to Accept Public Deposits Senate Government Affairs Committee Ask these Senators to support SB 299 by Senator Bill Holtzclaw and give state, municipal, and local government agencies the option of putting their deposits in credit unions.
Sen. Jimmy Holley (R-Elba), Chair, 334-242-7845 Sen. Roger Bedford (D-Russellville), Vice-Chair, 334-242-7862 Sen. Scott Beason (R-Gardendale), 334-242-7794 Sen. Dick Brewbaker (R-Montgomery), 334-242-7895 Sen. Linda Coleman (D-Birmingham), 334-242-7864 Sen. Priscilla Dunn (D-Bessemer), 334-242-7864 Sen. Vivian Figures (D-Mobile), 334-242-7871 Sen. Arthur Orr (R-Decatur), 334-242-7891 Sen. Trip Pittman (R-Daphne), 334-242-7897 Sen. Paul Sanford (R-Huntsville), 334-242-7867 Sen. Bryan Taylor (R-Prattville), 334-242-7883
House Financial Services Committee Ask these House members to support HB 315 by Representative Mike Ball and give state, municipal, and local government agencies the option of putting their deposits in credit unions.
Rep. Steve Clouse (R-Ozark), Chair, 334-242-7717 Rep. Lesley Vance (R-Phenix City), Vice-Chair, 334-242-7687 Rep. Marcel Black (D-Tuscumbia), 334-242-7686 Rep. DuWayne Bridges (R-Valley), 334-242-7708 Rep. Blaine Galliher (R-Gadsden), 334-242-7674 Rep. Steve Hurst (R-Munford), 334-353-9215 Rep. Wes Long (R-Guntersville), 334-242-7511 Rep. Thad McClammy (D-Montgomery), 334-242-7780 Rep. Oliver Robinson (D-Birmingham), 334-242-7769
Published on Feb 15, 2012