New law opens Washington credit unions to unlimited public deposits

Washington Gov. Jay Inslee has signed into law a bill that will allow credit unions in the state to accept unlimited public deposits. The measure is expected to go into effect on July 25, according to the Northwest Credit Union Association, which serves credit unions in Washington, Oregon and Idaho.

Previously, municipalities could deposit unlimited funds in only 34 of the state’s 39 counties, and the new law will allow local governments across the state to deposit their money at a credit union. NWCUA noted that the bill is particularly important for municipalities in Clark, King, Pierce, Snohomish and Spokane counties, which are home to two-thirds of the state’s population.

“Credit unions of all sizes and from all areas of the state played a collective role in explaining to our legislators why this policy was important and also timely during a pandemic-focused virtual legislative session,” Joe Adamack, NWCUA’s vice president of legislative affairs for Washington, said in an online news announcement. “Like credit unions, local municipalities best know the needs of their community and by their structure, exist to be responsive to the needs of their community. By working with a credit union, local municipalities can earn better returns and pursue innovative partnerships that help everyone succeed.”

Only some states allow credit unions to accept public deposits, and the matter has frequently resulted in the industry butting heads with state-level banking trade groups. New York Gov. Andrew Cuomo signed legislation in late 2019 allowing credit unions there to accept public funds.

This isn’t the first major credit union legislation Inslee has signed in his time as governor. In the spring of 2019 he signed off on a package modernizing the state’s credit union statutes, one of many governors to do so in recent years.