Senate Bill 1103, presented by Zach Forster on behalf of Idaho’s credit unions, would remove a statutory cap that limits credit unions’ ability to accept state deposits above the federally insured amount and would require collateralization for any uninsured portion of those deposits.

“For everything above and beyond the $250,000 would have to be collateralized, to protect those taxpayer dollars,” Forster said, describing a legislative change to align statute with existing practice. The sponsor said the bill reflects longstanding practice and updates a 1986 cap.

State Treasurer Julie Ellsworth testified in support and explained that after the 2008 financial crisis many states required collateralization of public deposits; she said Idaho had been one of eight states without a statutory requirement. “When I came in in 2019, I found out ... we are one of eight states that do not require collateralization,” Ellsworth said, adding that the treasurer’s office already collateralizes deposits in practice and supports changing code to reflect that practice.

Senator Burnt moved, and Senator Denhartaug seconded, that SB 1103 be sent to the Senate floor with a do-pass recommendation. The committee voice-voted in favor and the motion carried. The bill updates state law to permit collateralized credit-union deposits in excess of federal insurance and is intended to protect taxpayer funds while expanding state deposit options.