By Michael Colello, Director of Governmental Affairs
Earlier this month, I had the privilege to participate in a meeting hosted by the New York State Senate Banking Committee staff with representatives from the California State Treasurer’s Office, who gave a great presentation on their Time Deposit Program. Started in 1945, the Time Deposit Program allows California financial institutions (including state and federally chartered credit unions) to receive deposits from the state treasurer with the shared goal of stimulating local economies by investing in the communities they serve. Because credit unions are not-for-profit cooperatives, they are exempt from the Time Deposit Program CRA requirement.
Currently, New York does not allow deposits from the state comptroller or the commissioner of taxation and finance for credit unions. If California can make a public deposit program work with credit unions, there is no reason New York cannot do the same. There is currently a bill in the legislature that creates the “Credit Union Deposit Program” that encourages the state comptroller and the commissioner of taxation and finance to consider placing state funds into credit unions. This is a program the New York Credit Union Association has advocated for in recent years and it’s time to make it happen.
With the recent bank failures and much uncertainty in the market, why is the state not given the option to make a safe investment of their funds into credit unions? We are member-driven, not-for-profit cooperatives with volunteer boards and we deliver significant value back to our members and the communities we service year after year. Our members are teachers, police officers, fire fighters, state employees, nurses and other hard-working members of the community representing every neighborhood and every inch of this state. An investment in credit unions IS an investment in the community.
On June 26, 1934, President Franklin Delano Roosevelt (a New Yorker) signed the Federal Credit Union Act into law during the Great Depression. The mission of this act was to make credit available to Americans and promote thrift through a national system of nonprofit, cooperative credit unions. It’s time for the state to provide access to the credit union deposit program allowing us to continue fulfill our purpose and build up the communities we were created to serve.
Questions related our advocacy initiatives can be directed to Michael Colello at firstname.lastname@example.org or 518-469-7841.