COLUMBIA — When First Citizens Bank closed its branch in the small town of Whitmire — population 1,400 — the president of Palmetto Citizens Federal Credit Union called up the mayor and offered to open a location.
Mayor Billy Hollingsworth and two council members made the drive to Columbia to meet with bank executives.
“I liked what I heard, and I saw it as a good fit for the town of Whitmire,” Hollingsworth said.
It would give residents and businesses in the Newberry County town a local financial option. The mayor said he hoped the town might also do business there.
There was just one issue: South Carolina state law does not allow local governments to deposit taxpayer money in credit unions. They can only do business with traditional banks.The group asked Sen. Ronnie Cromer, R-Prosperity, to carve out an exception for the town through a clause in the state budget. Cromer’s district includes Whitmire, and he chairs the Senate banking committee. The group got its request. But what legislators approved didn’t help other towns that might want to do the same.
While the one-year budget rule doesn’t name Whitmire, the definition for towns that qualify for the exemption is so limited, it may apply to few other local governments.
Now, credit unions and local government leaders across South Carolina want to change state law to give all towns more banking options.
But the effort by the newly formed Palmetto Public Deposits Coalition will have officials with banks and credit unions butting heads — both sides arguing it’s a matter of fairness and the free market.
As more South Carolina banks are acquired and consolidated by national banking institutions, the coalition argues rural communities are left underserved.
“Convenience is the main thing,” Hollingsworth said.
The town of Whitmire takes in a good number of cash payments, and employees have to drive for more than an hour roundtrip to make a deposit.
Palmetto Citizens Federal Credit Union is in negotiations to buy and renovate a historic bank building on the town’s main street, said Robert Dozier, the credit union president.
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