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Committee sends bill to remove cap on state deposits at credit unions to the floor with due-pass recommendation
Summary
Senate Bill 1103 would remove a 1986 cap limiting credit unions’ ability to accept state deposits beyond federally insured amounts and require collateralization for uninsured deposits; the treasurer supported the measure and the committee recommended it pass.
The Senate State Affairs Committee voted to send Senate Bill 1103 to the Senate floor with a recommendation that it pass. The bill removes a cap, in place since 1986, that limits credit unions’ ability to accept state deposits above the federally insured amount and requires collateralization for any uninsured portion of those deposits.
Sponsor Zach Forster told the committee the measure aligns deposit practices for credit unions with long-standing practice and with bank rules that require collateral for amounts above the federal insurance limit (currently $250,000). Forster said the change would permit credit unions to accept additional state deposits as long as the uninsured portion is collateralized to protect taxpayer funds.
Treasurer Julie Ellsworth told the committee she supports the bill and said that when she took office in 2019 she learned several states require collateralization after the 2008 financial crisis; Idaho was among a minority that did not have a statutory requirement but the treasurer’s office has collateralized deposits in practice. “I am very excited about this bill because in practice, the treasurer's office always collateralizes. But we need to get that term in code,” Ellsworth said.
Senator Burt moved to send SB1103 to the floor with a do-pass recommendation; Senator Denhartauge seconded. The committee recorded a voice vote and the motion carried with no recorded opposition.
