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Senate committee hears dispute over bill letting volunteer fire departments use credit unions
Summary
A public hearing on SB232 drew firefighters and bankers to argue whether volunteer fire departments should be allowed to deposit public and privately raised funds at federally insured credit unions instead of banks; proponents said access and convenience are critical in rural areas, while banks warned of revenue loss and security concerns.
The Alabama Senate Banking and Insurance Committee held a public hearing on SB232, a bill that would allow volunteer fire departments and rescue squads to place funds with federally insured financial institutions, including credit unions insured by the National Credit Union Administration.
Sponsor Sen. Stewart told the committee the change is narrowly tailored to give volunteer departments more options and relieve practical burdens faced in rural communities. “This bill is aimed at helping rural Alabamians,” Stewart said, arguing credit unions are often more accessible in some areas and can help departments be “the best stewards of their funds.”
Lisa Tallwater, speaking as a volunteer firefighter, described an operational example she says illustrates the problem: a helmet needed immediate replacement but existing rules forced her department to do business in an adjacent town, delaying the purchase. “This helmet is the difference between a firefighter going home safe and a firefighter not,” she said, urging the committee to remove what she called an outdated restriction.
The Alabama Bankers Association’s Scott Laam countered that Alabama already has extensive bank coverage—he cited 1,347 bank branches statewide versus 548 credit-union locations—and warned that allowing public deposits to shift to tax‑exempt credit unions could reduce tax revenues that support local services. Laam also pointed to several large credit unions’ asset and income figures to underscore his concern about scale and tax treatment.
Mayor Joe Taylor, a longtime firefighter, and other proponent witnesses focused on practical benefits: closer institutions reduce time volunteers spend on administrative tasks and can improve the return on locally raised funds used for equipment and training. “We need flexibility when it matters,” Rich Lindsay, a proponent and local fire chief, said.
Opponents from the banking side stressed the SAFE program and existing mechanisms to secure public deposits and said banks deploy those deposits into local lending and municipal bond markets that benefit communities. Hope Johnson of Friend Bank warned that changes could “chip away at the integrity of a system that has protected and benefited people of Alabama for many years.”
Committee members acknowledged the tension between protecting public funds and addressing real access problems in bank deserts. Several senators asked whether a middle ground could be found that preserves security and oversight while expanding options for rural departments.
Sen. Stewart closed by urging lawmakers to keep an open mind and noted the committee would take the testimony under advisement; the hearing concluded without a vote. The committee did not schedule final action on SB232 at this meeting.
