The clash between banks and credit unions over public fund deposits took an unorthodox twist with community banks and CUs teaming up to pass, 65-0, a milestone bill in the New Mexico House.
The bill enables a possible switch of $2-5 billion of state funds into CUs and small banks.
If enacted, the municipal funds bill, in the works since last year and still subject to a Senate vote, would represent a setback to large national banks, like Bank of America and Wells Fargo, which have had a lock on such funds.
The altered view of New Mexico lawmakers in favoring local control of state funds, officials said, follows national mention of the New Mexico effort in the “Move Your Money” campaign of New York pundit Arianna Huffington in her online Huffington Post columns.
“I think Huffington gave this bill a little traction,” said Juan Fernandez, vice president of government affairs for the Credit Union Association of New Mexico, which has been cooperating with the New Mexico Bankers Association in pushing the bill. Though large banks are members of NMBA, its leadership has been dominated by small community banks, which like CUs seek the funds.
Sources said that despite the support for the bill, it still may face quiet opposition from the large bank lobby which may seek to stall or defeat the measure.