Coalition urges lawmakers to advance South Carolina Financial Freedom Act

COLUMBIA, S.C. (WCIV) — Dozens of local elected officials from across South Carolina are urging state lawmakers to pass legislation that would allow cities, counties and school districts to deposit taxpayer funds in the financial institution of their choice, including qualified credit unions.

The Palmetto Public Deposits Coalition, formed by more than 40 mayors, county council members and municipal leaders have signed a joint letter calling on the General Assembly to advance the South Carolina Financial Freedom Act, a bill that, if signed, would lift long-standing restrictions that require public entities to deposit funds exclusively in commercial banks, even though state law already allows credit unions to accept public deposits.

The coalition argues the current system limits competition and prevents local governments from seeking potentially better rates, lower fees and more responsive service.

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“Local governments should have the same financial freedom that families and businesses have — the ability to choose the financial institution that best meets their needs,” Rick Osborn, chairman of the Palmetto Public Deposits Coalition, explained. “This commonsense reform will introduce healthy competition, help stretch taxpayer dollars further, and strengthen partnerships with community-focused financial institutions that are deeply invested in South Carolina.”

The efforts also won support from the South Carolina Association of Counties and the Municipal Association of South Carolina, whose boards have formally endorsed expanding deposit options. Their backing signals broad agreement among local government officials that the law should be modernized.

In their letter to lawmakers, the coalition argued that permitting credit unions to hold public deposits would restore financial choice and improve outcomes for residents.

“This legislation is about giving local leaders more tools to serve residents effectively and make responsible financial decisions,” said Goose Creek Mayor Greg Habib, one of the signatories.

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The Financial Freedom Act would allow, but not require, public entities to deposit funds in qualified credit unions. Coalition members said the bill is not designed to favor one type of institution over another, but to encourage competition in a market currently limited to commercial banks, many of which operate outside the state.

The Palmetto Public Deposits Coalition said it will continue working with local leaders, state associations and lawmakers as the legislation moves through the current session.