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CUs will be designated public depository institutions after the Florida Governor signs the law

Several credit union leaders rally around Florida Governor Ron DeSantis as he signs HB 989 into law on Thursday, May 2, 2024.

Credit/LSCU

On Thursday, Florida Gov. Ron DeSantis signed historic legislation allowing credit unions to serve as public depository institutions, allowing credit unions to do business with certain public entities – an area once reserved only for banks.

According to the Governor's Office, House Bill 989 accomplishes the following:

  • Increases protection for customers of financial institutions operating in Florida from unwarranted account terminations and restrictions through a coordinated complaint and investigation process within the Office of Financial Regulation.
  • Removes Florida's exclusive preference to hold public funds in banks, particularly large out-of-state banks, by allowing community-based credit unions to hold public funds.
  • Allows the CFO to have a dedicated consumer intermediary to assist in dealing with the Federal Internal Revenue Service.

League of Southeastern Credit Unions (LSCU) officials praised the signing, calling it “a transformative step that opens new avenues for credit unions.”

Christopher Hodge, LSCU’s Senior Director of Governmental Affairs for Florida, said, “Many credit unions throughout Florida actively partner with public entities through various events and financial literacy training. This law now authorizes credit unions to accept deposits from some of the same public institutions that they do.” It is already an exciting time for credit unions in Florida as it opens up new opportunities for membership growth and community engagement – a true embodiment of the philosophy ” People help people”.

According to LSCU, HB 989 allows Florida credit unions to be designated as qualified public depository institutions with the following restrictions:

  • A total amount not exceeding 7% of the total funds held in the treasury.
  • An aggregate amount not exceeding 7% of all public deposits of a public university or college.
  • A credit union may not hold public deposits in excess of 10% of its institution's total assets.

President/CEO Larry Tobin of Orlando, Fla.-based FAIRWINDS Credit Union ($4.7 billion in assets, 229,803 members) said the signing of HB 989 was a “significant victory for Florida credit unions on multiple fronts.” .

Tobin said: “This expands the scope of potential sources of deposits from certain public institutions, including state universities. The potential increase in deposits not only strengthens our liquidity position, but also diversifies the funding base, thereby improving overall financial stability.”

Larry Tobin Larry Tobin

“By becoming a qualified public depositor, we can build even closer relationships with public entities, opening the doors to potential business opportunities and collaborations.”

Tobin continued, “FAIRWINDS, for example, has been a long-standing partner of the University of Central Florida on multiple fronts. Now we have even more opportunities to be your trusted financial partner.”

“This bill empowers credit unions in Florida to better serve our communities, strengthen our financial performance and contribute to the state’s economic growth.”

A number of credit union leaders from across the state were in attendance at Thursday's bill signing, including Richard Skaggs, president/CEO of the University of South Florida Federal Credit Union and chair-elect of the LSCU Board of Directors. He said, “Investing public funds in credit unions will keep a portion of Florida’s tax dollars here in the Sunshine State. Last year, my credit union returned $7 million to the University of South Florida to support its strategic initiatives. This. “The law will now allow the university to reinvest in its credit union at a higher rate of return.”

When asked what positive difference this legislation could make for credit unions across the country, Tobin said, “As more credit unions across the country are able to accept public deposits, this will only help the credit union industry as a whole continue to grow and strengthen.” .”

Credit unions can begin the application process to become qualified public depositors on July 1.

Anna Harden

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