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Kingstree News-State Senator Introduces Bill to Create Free Market for Public Deposits and Keep More Taxpayer Money in South Carolina

Kingstree News

State Senator Sean Bennett Introduced the South Carolina Financial Freedom Act in the S.C. Senate


Columbia, S.C. – State Senator Sean Bennett introduced the South Carolina Financial Freedom Act in the South Carolina Senate, marking a significant step toward providing the Palmetto State’s public entities greater financial freedom in managing taxpayer funds. The legislation, S.60, and its companion bill in the South Carolina House of Representatives, H.3221, empower local governments to deposit taxpayer dollars into credit unions, creating a free market that encourages competition and keeps more taxpayer money in South Carolina communities instead of out-of-state banks.


Under current state law, local governments can only deposit taxpayer funds into traditional banks. As of 2023, this outdated restriction has funneled more than 78% of all deposits in South Carolina into out-of-state banks. As banks continue to leave South Carolina and close branches in local communities across the state, taxpayers are at risk of more of their dollars leaving South Carolina for New York City and Chicago.


The effort to give local governments the financial freedom and flexibility to bank where they can deliver the highest rate of returns on taxpayer dollars is spearheaded by the Palmetto Public Deposits Coalition (PPDC). PPDC coalition supporters include the Municipal Association of South Carolina (MASC) and the Carolinas Credit Union League (CCUL).


“I am in favor of any state law that supports the free market by removing burdensome regulations on our cities and towns,” said Greg Habib, MASC Board President and Mayor of Goose Creek. “This legislation is a game-changer for our local governments, providing convenience to our communities without a traditional bank nearby.”


The South Carolina Association of Counties (SCAC) adopted an official policy position for 2025 in support of legislation allowing local governments to use credit unions for public deposits.


“Overall, local governments can benefit from flexibility in where they deposit their funds, and SCAC supports this legislation as a matter of policy because it is in the best interests of the counties we serve,” said SCAC President William E. Robinson, Chairman of Allendale County Council. “For public entities in communities that do not have a traditional bank, the ability to deposit funds in the local credit union is of significant value. This will provide another tool for our counties to operate effectively and serve as efficient stewards of taxpayer dollars.”


Recent surveys show that more than 65% of South Carolinians support allowing local governments to deposit funds into credit unions, particularly because these institutions provide the same deposit insurance protections as banks and the added benefit of higher interest rates on deposits.


“The South Carolina Association of Counties adopting an official policy position in support of this legislation strengthens our effort immensely,” said Rick Osbon, Chairman of PPDC and former Mayor of Aiken. “Local governments across the state are tired of big, New York banks having a monopoly on public deposits, and support creating a competitive free market that benefits taxpayers and local governments.”


S.60 has been referred to the Senate Finance Committee, and its companion bill in the South Carolina House of Representatives, H.3221, has been referred to the House Labor, License and Commerce Committee.


About Palmetto Public Deposits Coalition

The Palmetto Public Deposits Coalition is an alliance of community leaders, credit unions, and local government associations advocating a more competitive environment for returns on taxpayer dollars to empower South Carolina communities. The coalition is committed to ensuring that public funds are managed responsibly, with the best interests of South Carolina’s communities in mind. For more information about the Palmetto Public Deposits Coalition, please visit palmettopublicdeposits.com.

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