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Credit union depository bill split committee after amendment adopted; banks and credit unions clash over tax and community impacts

INSURANCE & COMMERCE - SENATE · February 7, 2019
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Summary

SB257 would let federally insured credit unions serve as public depositories; the committee adopted an amendment addressing a reporting requirement but a later 'do pass' motion lacked a second and no final committee vote was taken. Testimony included claims that credit unions' tax status disadvantages banks and counterarguments that credit unions return value locally.

Senator Hammer presented Senate Bill 257 to permit federally insured credit unions to serve as depositories for public funds, saying the change would place credit unions "on parity with the banks" and give local governments more options. He opened with an ethics disclosure that he holds memberships and loans at credit unions and invited Suzanne Yashewski of the Arkansas Credit Union Association to explain the policy rationale.

Suzanne Yashewski, counsel for the Arkansas Credit Union Association, testified the bill modernizes statutory language that currently uses bank-specific terms (for example, references to FDIC insurance) and that federal law and the National Credit Union Share Insurance Fund…

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