FITSForum: Competition Drives Growth Nationally, Why Not Locally?

https://www.fitsnews.com/2026/01/15/fitsforum-competition-drives-growth-nationally-why-not-locally/

Across the country, conservatives are recommitting to a simple truth: competitive markets deliver better outcomes. Whether the focus is tax relief, deregulation, or government efficiency, the principle is the same — when unnecessary barriers are removed and choice is expanded, taxpayers benefit.

South Carolina lawmakers recognized this reality last year when they tackled tort reform. As insurers exited the state and competition evaporated, costs skyrocketed for families, businesses, and local governments. The legislature acted not to pick winners, but to restore balance — because when competition disappears, prices rise and service suffers.

That same dynamic is now playing out in another critical area: banking.

Traditional banks continue to consolidate, and branches are closing across the Palmetto State. As physical access shrinks and competition declines, fewer institutions remain to serve local governments, often at higher cost and with fewer options. 

Conservatives understand this pattern well. When markets narrow, taxpayers pay the price.

Yet state law still restricts cities, counties, school districts, and other public entities from even considering credit unions as a place to deposit taxpayer dollars.

Updating South Carolina’s public deposits law to allow credit unions to accept public funds would give local governments a choice. No mandates. No preferences. Just the ability to decide — based on efficiency, returns, and service — where public funds are best managed.

State law, however, has not kept pace. Leadership in our neighboring red states, like Governor Ron DeSantis in Florida, has recognized the need to modernize public deposits policy, cutting red tape and expanding competition to deliver better outcomes for Florida taxpayers. Under Governor DeSantis, Florida acted. South Carolina should, too.

Modernizing this policy would not advantage credit unions over banks—it would simply level the playing field, introduce competition, and allow local governments to pursue better outcomes for taxpayers. And competition, as conservatives know, drives better outcomes.

I shared these realities directly with members of the Senate Banking and Insurance Subcommittee during a hearing on the issue — not only as chairman of the Palmetto Public Deposits Coalition, but as the former mayor of Aiken and former president of the Municipal Association of South Carolina (MASC). Local leaders aren’t asking for special treatment — only the flexibility to manage taxpayer dollars responsibly.

Over the past year, the Palmetto Public Deposits Coalition (PPDC), a group advocating for this commonsense reform, hosted regional roundtables in North Augusta and Greenville, bringing together mayors, council members, and county officials. In both communities, local leaders were genuinely surprised to learn they were prohibited from banking with credit unions, especially given the significant impact these institutions have on their communities. Many assumed they already had that option.

Those conversations created an opportunity to explain a straightforward principle: more options lead to competition, and competition leads to better outcomes for taxpayers. Higher returns on idle funds could allow a city to purchase essential equipment, such as a fire truck, without raising taxes or tapping its fund balance. Lower borrowing rates could reduce long-term costs and free up taxpayer dollars for public safety, infrastructure, or debt reduction. These aren’t abstract benefits — they’re practical, measurable savings.

That need will only grow as banking consolidation continues and branch access shrinks further across the state. When competition declines, costs rise, and service suffers. Conservatives recognize this dynamic in every other sector of the economy. Public finance should be no different.

As the legislative session begins, PPDC will continue working with lawmakers, MASC, and the South Carolina Association of Counties to ensure policymakers understand the real-world benefits of this reform. 

The question before the General Assembly is simple: should conservative principles of choice and competition apply to local governments, too?

If markets and competition drive better outcomes nationally, they should do so locally as well. This year, lawmakers have the opportunity to deliver true financial freedom to South Carolina’s communities.