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H 1078

An Act to allow municipalities to deposit in credit unions

194th Legislature (2025-2026) Introduced by Shirley Arriaga

Bill H 1078 allows Massachusetts municipalities to deposit public funds in credit unions, enhancing investment options and supporting local financial institutions.

Accompanied a study order, see H4712
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Bill Summary · H 1078

Summary of Bill H 1078: An Act to Allow Municipalities to Deposit in Credit Unions

Bill Information:
- Bill Number: H 1078
- Title: An Act to allow municipalities to deposit in credit unions
- Status: Accompanied a study order, see H4712
- Introduced: February 27, 2025
- Presented by: Representative Shirley B. Arriaga (8th Hampden)

Purpose and Intent

The primary purpose of Bill H 1078 is to authorize municipalities in the Commonwealth of Massachusetts to deposit public funds in credit unions. This legislation aims to expand the options available for municipalities to manage their financial resources, potentially enhancing their investment strategies and fostering relationships with local credit unions.

Key Provisions

The bill proposes several amendments to existing laws, specifically within the General Laws of Massachusetts:

  1. Amendments to Chapter 29, Section 34:

    • Allows municipalities to deposit funds in federal credit unions.
    • Updates language to include credit unions alongside federal savings banks and cooperative banks.

  2. Amendments to Chapter 44:

    • Section 54: Permits municipalities to invest in paid-up shares or deposits of credit unions and federal credit unions.
    • Section 55: Expands the definition of acceptable financial institutions for municipal investments to include credit unions.
    • Section 55A: Further clarifies that municipalities can invest in credit unions or federal credit unions.

  3. Amendment to Chapter 171, Section 29:

    • Allows credit unions to accept public funds, with a cap that limits the total public funds received to no more than 25% of the credit union's total assets.

Impact

  • Who is Affected:

    • Municipalities across Massachusetts will gain the ability to diversify their investment portfolios by including credit unions as viable options for depositing public funds.
    • Local credit unions will benefit from increased access to municipal funds, potentially enhancing their financial stability and community engagement.

  • Financial Implications:

    • The bill does not specify any direct financial allocations but allows municipalities to leverage credit unions for public fund management, which could lead to better interest rates or financial services.

Procedural Aspects

  • Legislative Timeline:
    • February 27, 2025: Bill introduced and referred to the committee on Financial Services.
    • April 8, 2025: A hearing is scheduled for April 15, 2025, from 10:00 AM to 1:00 PM in room A-2.
    • November 10, 2025: The bill was accompanied by a study order, indicating further examination of its implications.

Related Bills

  • HD 2979: This bill replaces the previous version and is related to the same legislative intent.

In summary, Bill H 1078 seeks to modernize the financial practices of municipalities in Massachusetts by allowing them to deposit funds in credit unions, thereby promoting local financial institutions and potentially improving municipal financial management.

Compiled from official sources — confirm details with the bill’s official record.

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