COLUMBUS, Ohio (3/21/14)--Recent work by the Ohio Credit Union League to pass legislation that would allow credit unions to serve as public depositories and access loan programs through the Ohio Treasurer's office is being met with opposition from the state's bankers league, in addition to community bankers in the state (eLumination March 19).
The legislation, called HB 221: the Community Access and Local Government Choice Act, essentially would allow municipal or local governments to use credit unions to deposit and manage public funds.
"This legislation is about local government choice, not taxes, and members of the committee understand that," said Patrick Harris, league director of legislative affairs.
Banking representatives used an Ohio House State and Local Government Committee hearing last week to voice their disagreement with the legislation, explaining that they "find the attempt to authorize credit unions to gather public deposits very offensive."
Further, community bankers used terms such as "expansive fields of membership," "mission creep," and "unfair tax advantage" and referred to several credit unions by name, saying that they should be subject to equal taxation and regulatory oversight as banks and thrifts.
The opposition was countered, however, when committee members asked those testifying about the value credit unions have in local communities, market-share dominance by banks, and the small impact this bill would have on the banking industry's bottom line.
"We will continue to work with the committee and the full Ohio General Assembly to ensure they understand how important this bill is to local governments, which want to be able to choose which financial institutions they do business with," Harris said.