Boost Share Growth Through Public Deposits

Public deposits are an increasingly attractive way for credit unions to beef up share growth and help fund loans. More than a third of the states already allow credit unions to accept these types of deposits.


Public deposits are an increasingly attractive way for credit unions to beef up share growth and help fund loans in today’s changing financial environment.

Although not accessible to credit unions everywhere, more than a third of states already allow credit unions to accept such deposits. A number of other states currently are seeking to pass legislation that would allow credit unions to use such public funds.

These deposits include funds from state, county or municipal governments, and school and community college districts that are placed on deposit in an approved financial institution. For approved credit unions, public deposits can be credited into regular share, share draft, money market share and share certificates

The challenge of the growing loan demand and slowing share growth scenario of the past three years has made public deposits particularly appealing.

State Employees Credit Union of Michigan is active in the bidding for public deposit from the state. “The state divisions conduct a bidding process by checking with a few approved institutions,” said Chief Financial Officer Brian McVeigh.

His challenge with bidding on deposits is to remain competitive. “On occasion we might add a couple of basis points to our published share certificate rate, but we have not needed to add to our published rates for at least a year or two,” said McVeigh.

Each state that allows credit unions to participate in public deposits has different laws that pertain to limitations and collateralization. For example, Minnesota lawmakers recently passed legislation that allows credit unions to use time deposits at a corporate credit union for collateral.

Learn how your credit union can get involved and secure these funds as an additional source of deposits at our upcoming webinar: Public Unit Deposits-
Another Means to Grow Your Credit Union's Share Growth.




Sept. 27, 2004


  • I would be interested in participating in the Webinar if I knew that the state in which we do business was one of the 18 that currently allow this. Otherwise, I would not spend time on this at this time. Is Florida one of the states that allow CUs to accept these deposits? How can I find out? Thank you, Meredith Gibson Space Coast CU, Melbourne, FL