Depositing Public Funds in Local Banks

Date: 29 Mar 2010 | posted in: Banking | 0 Facebooktwittergoogle_plusredditpinterestmail

A growing number of states and cities are considering or enacting policies that move government bank accounts to small community banks and credit unions.

These bills have two primary motivations:

  • To withdraw public funds from big banks that have imposed high fees on customers and engaged in predatory mortgage lending, redlining, and other practices that destroy community wealth.
  • To channel public funds to the small banks and credit unions that are the primary source for small business loans and other productive local investments, which in turn create jobs and generate tax revenue.

Model State Legislation Outline Developed by SEIU

Large institutions, like universities and hospitals, can also move their funds:

Guidance on harnessing university deposits for community investment