BEAVERTON, Ore. – The Oregon state Senate earlier this week passed a credit union public funds bill that removes the current $250,000 limitation on the amount of public fund deposits a credit union can receive.
The new law will be implemented in January 2013, according to the Credit Union Association of Oregon. State Senator Rick Metsger, a key supporter of Oregon credit unions and the bill, said, “As our communities work to rebuild and rethink how best to support local, sustainable growth, the ability for public entities to invest more funds into credit unions provides them with additional local options. Since credit unions by definition serve a local community, those public fund deposits will stay and be reinvested in that community through consumer and business loans as well as sustaining and creating jobs. It’s a positive cascade effect.”
Throughout the process of getting the bill through the Oregon legislature, the CU Association of Oregon and other supporters have emphasized the issue is extending the choice of public entities to seek a fair and competitive rate of return on “the people’s money.” Pamela Leavitt, SVP governmental affairs and public relations for CUAO, said credit unions had good reason to support the bill. “There are approximately 4,000 public agencies in Oregon that receive public funds and require the services of financial institutions to house those funds. For years, credit unions have been hearing from local public entities that they would like the option of choosing a credit union. This bill simply gives them that option.”
In response to critics who argued credit unions’ not-for-profit status should preclude them from receiving public funds, the CUAO reiterated that credit unions do pay the same share of federal, state and local taxes as any business, including real and personal property tax and employment taxes. The tax exemption, the trade group said, “only applies to corporate income tax because of the not-for-profit structure. As in any cooperative, credit union members pay taxes on their dividend.”
