OLYMPIA – A bill sponsored by Senator Marko Liias (D-Lynnwood) that would enable more partnerships between local governments and community-based credit unions throughout Washington received a public hearing in the Senate Business, Financial Services & Trade Committee today. [TVW LINK]
Under current law, community-based credit unions can partner with local governments in parts of the state, but not in the five largest counties (King, Pierce, Snohomish, Spokane, and Clark) in Washington.
SB 5106 would eliminate the population restriction, thereby allowing credit unions in all 39 counties to partner with public entities to expand financial services and choices.
“The pandemic has provided yet another reason to pass this legislation,” said Liias. “As we’ve seen, in the counties where this can be done, partnerships between local governments and credit unions can be instrumental in delivering assistance. Because of arbitrary population thresholds, credit unions in our larger counties can’t be part of helping distribute small business assistance with all the flexibility they need in this critical moment.”
SB 5106 would give local governments more community-based options for depositing their funds, possibly leading to paying lower fees, obtaining better interest rates, and seeing increased returns on investments for taxpayers. In addition, by leveraging new deposits from stable sources like local governments, community-based credit unions can expand the reach of their services as well.
The bill provides more opportunities for Washington taxpayer dollars to stay in state where these assets can be better used for local community needs. All public deposits in credit unions are in local institutions based in and serving Washington residents, while about 70% of Washington public deposits held by banks are with out-of-state financial institutions, according to the Northwest Credit Union Association.
“Credit unions continue to fill many of the gaps in the state, both in some of the 34 of the 39 counties that are already allowed, as well as the five major counties, as financial services shift and credit unions maintain their community presence and make sure people continue to have access to financial services,” said Joe Adamack, vice president of legislative affairs for Washington for the Northwest Credit Union Association, testifying in support of SB 5106.
“While this may be the shortest bill I’ve ever sponsored at just under six lines, it would have a big impact in my community and so many others,” said Liias. “Credit unions and local governments have common missions of serving their local communities, so these partnerships make a lot of sense.”
SB 5106 must be approved by the Senate Business, Financial Services & Trade Committee by February 15 to be eligible for continued consideration during the 2021 legislative session.
The session is scheduled to adjourn for the year on April 25.