South Carolina has long prided itself on being an economically competitive state, promoting a marketplace that values innovation and consumer choice. As the former mayor of Aiken, I spent years working to ensure our local community had access to the resources it needed to thrive and grow.
However, one issue that often goes unnoticed yet has significant ramifications is where our public funds — taxpayer dollars — are deposited. Public deposits are the funds government entities hold within financial institutions, including tax revenues, fees paid for government services and grants from federal or state government programs. These deposits financially support a variety of public services, including infrastructure projects, social programs, operations and emergency reserves.
Currently, South Carolina state law restricts public entities from depositing these funds into credit unions, limiting local governments’ financial options and ultimately hurting our local economies. A recent analysis showed that as much as 78% of all deposits in South Carolina were held in out-of-state banks in 2023. This is taxpayer money leaving our state and towns. We need it here to invest in our future.
It’s time for that dynamic to change.
By amending an outdated law, South Carolina could unlock a wealth of opportunities for economic growth, bringing a new era of prosperity and stability to local communities. Allowing public deposits at credit unions would create a true free market, where increased competition drives better returns on taxpayer dollars.
In many communities across South Carolina, banks are pulling up stakes and leaving. National banks have consolidated their presence, shutting down local branches in towns where they no longer see enough profit. Credit unions have stepped in to fill the gap and provide critical financial services in many of these areas. They are member-driven rather than shareholder-driven, which means they are inherently focused on serving their members — our friends, neighbors and small businesses.
Imagine what could be possible if our tax dollars stayed in the community, supporting local businesses, infrastructure projects and public services. Right now, communities across our state are missing out on the potential for more affordable loans and financial stability that credit unions could provide. In states like Washington, which allows public deposits in credit unions, local economies have benefited from increased access to capital and more competition in the financial market.
Additionally, introducing more competition into the public deposit market would only benefit taxpayers. This is not just a financial issue — it’s a matter of fairness and choice. Local governments should have the option to choose where they deposit public funds. By allowing credit unions to compete for public deposits, we create an environment that fosters better services and higher returns on taxpayer dollars.
In 2024, it’s hard to believe that our state still operates under such outdated regulations. The Palmetto State has the opportunity to make a real change that will benefit our communities for generations to come. It’s time for our state lawmakers to pass legislation allowing public deposits to be made in credit unions. This change is not just about financial services — it’s about keeping our taxpayer dollars in South Carolina, empowering local economies, and ensuring that communities across the state have the financial resources they need to thrive.
I urge our elected officials and community leaders to support this necessary legislative effort. Let’s give our residents and communities the financial freedom they deserve.
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