SALEM, Ore. Monday marked the first day that 10 Oregon credit unions could take public deposits larger than $250,000.
Before now, only banks could take more than $250,000 from state agencies, cities, schools and utility districts in Oregon. But in 2010 the Oregon Legislature authorized Oregon Treasurer Ted Wheeler to set up a similar collateralization program for credit unions.
“I am pleased that credit unions have worked with Treasury to create the necessary safeguards, which allow them to also keep government deposits,” said Wheeler.
The cities of Portland, Beaverton, Corvallis, Independence and Klamath Falls have pledged to deposit money in credit unions, Wheeler’s office said yesterday.
Credit unions participating in the program are Unitus Community CU, Pacific Crest FCU, OSU FCU, OnPoint Community CU, Advantis CU, MAPS CU, Northwest Community CU, Old West FU, Wauna FCU and Oregon Community CU. Credit unions were limited to holding no more than $250,000 of state government deposits, the maximum insured by NCUA. Banks can hold more than $250,000, but to do so they need to pool collateral with other banks. In the event a bank fails, the collateral is seized and sold by the state.
Under the new state program, credit unions must pledge property worth between 10% and 110% of the value of any uninsured public deposit. At the end of 2012, 27 banks in Oregon held public deposits totaling $1.6 billion, according to Wheeler’s office.
The new program comes as local governments look to place more deposits in local banks and credit unions. The City of Portland and Multnomah County recently have taken such steps.
