WASHINGTON – The government for the District of Columbia has become the latest to consider moving its deposits out of Bank of America in favor of a smaller, locally based institution, but has yet to indicate if that might include credit unions.
District Councilman Jack Evans has proposed a plan that would require the city’s CFP to move some city deposits out of large banks and into community banks – as long as the recipients agree to lend $2 to local businesses for every $1 of city deposits they receive. Evans said that keeping deposits in BofA has “no value” for the city.
Under Evans’ plan, deposits would only be available to banks that have at least five branches in the city, but no more than $5 billion of total assets. Participating banks must also be well capitalized. At least two local banks would qualify using those criteria. Credit unions have not been mentioned in initial discussions.
Two other cities have also made similar moves, pledging to move deposits into local credit unions: Portland, Ore. and Seattle.
