Content being king and all, I’m constantly looking around the firm for articles written by our attorneys that I can shamelessly exploit here on TCUB. David Brown, one of our more prolific writers wrote this piece which I liked a lot. Of course when you read it you’ll see that it is entirely B-A-N-K related and, well, that’s not really the TCUB focus if you know what I mean.
But I honestly didn’t know what the story was down in Columbus on the issue for credit unions, so I called my friend John Kozlowski at the Ohio Credit Union League. John has actively lobbied to get a bill for credit unions on this issue and has testified before the Ohio Legislature to this effect. However, it didn’t happen this time. John told me that 22 states allow credit unions to hold public funds, but Ohio does not seem to be too quick to join them.
It’s unfortunate. I don’t see this as having any basis in terms risk to funds. John did point out to me that one things that banks can do that credit unions cannot is to take advantage of the CDARS system. CDARS splits Certificates of Deposit among many banks to take advantage of FDIC insurance while still getting certificate of deposit level returns. Credit Unions can put money into CDARS but they cannot be holders of CDARS funds. That is apparently a big deal, although perhaps not for the 22 states that do allow credit unions to hold public funds.
I suspect the only solution here is to try to raise more money for the League to continue to lobby the issue.