A bill that would give New York credit unions access to tens of millions of dollars in municipal deposits cleared the New York State Senate last week as part of a budget resolution, giving it momentum for a vote in the state Assembly.
The measure has support from both Gov. David Patterson and New York Mayor Michael Bloomberg, who has pledged to deposit $25 million of city funds into six community credit unions to support their lending if the bill becomes law. The bill would for the first time give local government entities such as cities, towns, counties, public schools, fire districts and public libraries the option of depositing public funds in local credit unions or community savings institutions.
New York is one of several states where credit unions are battling for the right to manage municipal deposits — still the sole privilege of banks in many states.