MARLBOROUGH, Mass. (11/10/15)--A Nov. 6 article in the Boston Business Journal highlighted legislation that would allow Massachusetts credit unions to accept deposits from the state government and city and town governments.
Credit unions are keen to accept some of the roughly $7 billion in public deposits held by Massachusetts-based banks as well as billions possessed by out-of-state financial institutions, the article noted.
While banks are fighting the legislation, credit unions remind that they pay property taxes that benefit municipalities and that "banks are merely trying to refight a long-settled issue" about credit unions’ not-for-profit status.
“Cities and towns have approached credit unions about depositing funds with the institutions, only to be told it’s against the law,” Cooperative Credit Union Association President/CEO Paul Gentile told the Boston Business Journal.
Some mayors like to deposit money with each of the financial institutions in their city or town, but are unable to do so, Gentile explained, pointing out that billions of Massachusetts dollars are held by banks based out of state.
Twenty-five states currently allow for public deposits at credit unions.