PORTLAND, Ore. – The Oregon Bankers Association has registered its opposition to Portland Mayor Sam Adams’ proposal to move more of the city’s funds to small banks and credit unions, telling the mayor credit unions were designed by Congress to serve consumers with “modest means,” not local governments or small businesses.
“Credit unions,” said the Oregon Bankers Association in its letter to the mayor, “were never meant to serve as public depositories. Rather, their primary mission and the reason for their tax exemption is to serve consumers, and especially those of modest means.”
“Credit unions should not further stray from their mission,” said the letter, signed by Linda Nevarro, president of the Oregon Bankers Association and the Independent Community Banks of Oregon. The banking lobbyist cites the “considerable risk, expense, expertise and staffing associated with creating and managing a shared-liability collateral pool to protect public funds.”
“How the public’s money is safeguarded and managed should be the paramount concern of the City of Portland when it comes to its banking relationships,” the banking lobbyist wrote.
Mayor Adams, motivated by the Occupy Portland campaign, is proposing to take some of the $7 million it has deposited in Wells Fargo and $30 million in Portland-based Umpqua Bank and distribute some of the money to local institutions. The mayor’s “responsible banking” resolution would change Portland’s current investment policy, which blocks investments in credit unions, and allow the city to immediately invest up to the federally insured amount of $250,000 in as many as 10 credit unions in 2012. Then, in 2013, it would allow the city to invest more than the current limit in at least one local credit union.
