The high stakes battle over allowing credit unions to accept municipal deposits has hit the New York State Legislature once again.
Banking committees in the state Assembly and the state Senate have approved legislation and sent the bills to the tax-related committees. Credit unions and banks have been fighting over the issue for several years and the legislation has stalled in the past.
New York Senate Banks Committee Chairman James Sanders, Jr., a Democrat, told his committee last week that the bill was intended to help financial institutions.
However, committee ranking Republican George Borrello was blunt in his opposition to the measure, saying that credit unions are becoming “serious financial institutions that aren’t paying taxes.” He added, “They should stay in their lane as far as who they serve.”
The Senate committee approved the bill, 6-4.
As in past years, lobbying has been fast and furious on both sides.
“This is a major legislative priority for the New York credit union movement and a key piece of the Association’s advocacy agenda,” the New York Credit Union Association wrote, in urging credit union officials to support the bill. “Let’s make sure the credit union voice is heard!”
The New York Bankers Association disagreed, saying that credit unions are tax exempt and exempt from Community Reinvestment Act requirements, posing unfair competition for community banks. “Simply put, allowing credit unions to take public deposits would devastate the community banks of New York, and could leave our cities and towns with less options for safe public deposits of our taxpayer money,” the association said.