Committee introduces RS 32240C1 to remove insured-deposit cap for state funds at credit unions with collateral requirement

Zach Forrester, representing Idaho credit unions, asked the Senate State Affairs Committee to print RS 32240C1, a reviser’s sheet that would amend the Idaho Credit Union Act by removing a decades-old cap that limited state deposits in credit unions to the federally insured amount and establishing a collateral requirement for uninsured deposits.

“For the first change, it removes a long standing cap that credit unions have had in place since 1986 that allows the Treasurer to deposit state funds in credit unions only up to the federally insured amount,” Forrester told the committee. He said the proposal would instead allow deposits above the insured limit provided the excess is collateralized in negotiation between the state treasurer and the credit union.

Committee members discussed the bill briefly. Senator Harris moved to introduce RS 32240C1 and send it to print; Senator Berndt (recorded as Burnt in the transcript) seconded. The committee voted by voice; the motion carried and committee staff will refer the measure to the Senate Commerce Committee for further consideration.

The RS text shared at the hearing would: remove the cap on state deposits at credit unions tied to federal deposit insurance limits, and require that any amount above insured limits be collateralized to protect taxpayer funds. No specific collateral mechanics or amounts were specified at the hearing.

The committee did not take a final vote on policy; printing the RS is a procedural step toward formal bill introduction and referral.