Municipal Deposit Reform Enacted - FAQs
Credit unions receive requests from municipalities, school boards and other county and local public entities to bid on depository relationships. These requests have multiplied in recent years as municipalities try to save taxpayer dollars.
Unfortunately credit unions are unable to accommodate these requests. While permitted in nearly one-half of the states, credit unions are specifically precluded from becoming eligible depositories for New Jersey local government entities under the state's forty-year old Governmental Unit Depository Protection Act (GUDPA).
Credit union deposits were not federally insured when GUDPA was enacted in 1970. Today, credit union deposits are federally insured by the National Credit Union Share Insurance Fund (NCUSIF) and backed by the full faith and credit of the US government under identical terms and limits as bank deposits are insured by the FDIC.
Allowing local government entities to include credit unions among potential depositories will promote competition among providers of government banking services and save taxpayer dollars. Selecting a credit union as a depository will increase the likelihood that taxpayer dollars will be leant back to their respective communities and promote local economic development.
Legislation that would enable counties, school boards, municipalities, and other local government entities to utilize credit unions as depositories (A-1597) has been scheduled for consideration by the Assembly Financial Institutions & Insurance Committee on Thursday, June 16th at noon. NJCUL will testify in support of the legislation, and needs your support to continue to move this legislation forward. Click the links below for NJCUL President/CEO Paul Gentile's letter to credit unions and directions to the New Jersey Capitol Complex.
NJCUL President/CEO Paul Gentile's Letter to Credit Unions on the Municipal Deposits Legislation and the June 16th, 2011 Assembly Financial Institutions & Insurance Committee Hearing.
NJ Municipal Deposits (GUDPA) Reform Resources