New York lawmakers dropped additional powers for credit unions from a bill they passed, for fear of opposition by banks.
The state Assembly and Senate in late June removed parts of the legislation that would have authorized credit unions to accept municipal deposits from local governments and act as their fiscal agents. Thrifts have been lobbying for years for the same rights, but only commercial banks now have such powers in the state.
A third provision, granting so-called "wild card" powers to the state banking department, would have permitted the superintendent to give state- chartered credit unions the same powers as federal credit unions. That clause was also eliminated.
New York has 46 state-chartered credit unions, compared with nearly 700 federal institutions. About 37 states have wild-card provisions that allow them to bring the powers of state-chartered credit unions into parity with those of federal credit unions.
Both houses passed the amended legislation, which Gov. George E. Pataki is expected to sign.
Officials of the New York State Credit Union League, which had proposed the original bill along with the state Banking Department, said they did not object to the deletion of the three provisions.
"The intent of our legislation was to make the operation of state- chartered credit unions more efficient," said Christopher J. Revere, legislative analyst for the league, which represents state- and federally chartered credit unions. "We wanted to move on, and not have the bill bogged down. ... We felt that we didn't compromise our primary objective."
The pared-down legislation would update codes governing credit unions, make state requirements conform to federal codes, and provide the same degree of flexibility to state credit union boards of directors that their federal counterparts have.
Mr. Revere said the league would continue to pursue the additional powers in the future, however.
Lawmakers decided to drop the provisions because they believed they would be unfair for the banking industry and would spark opposition, said Peter Edman, director of the state Senate Banks Committee. In fact, the state bankers association did lobby against the bill's provisions, but lawmakers already had reservations.
Bankers already complain that credit unions have an unfair advantage because they're not taxed.
And no wild-card provision exists for either banks or thrifts.
The idea of giving wild-card and municipal deposit powers to the credit unions and not to the banks or savings banks "would have been very problematic," Mr. Edman said. "Those provisions ... would easily have killed the bill."
