Barely a month into a new year and already we’ve witnessed the first skirmish in the bank versus credit union kerfuffle of 2016. Credit unions are pushing for a bill that would allow them to accept public funds, while banks counter that they ought not to have that privilege while enjoying freedom from paying corporate income taxes.

But a bill that would grant credit unions the ability to accept public funds is not the only piece of would-be legislation that concerns the deposit of public money. Another bill pending on Beacon Hill right now would also adjust the way banks can accept public deposits, and this bill deserves consideration, as well.

House resolution 3760, titled “An Act Modernizing Commonwealth and Municipal Banking Laws to Protect Customers,” would allow a bank in Massachusetts that accepts public funds to participate in the Promontory Financial CDARS program. This would ensure that Massachusetts municipal funds deposited to another bank,  “wherever located,” are fully insured by the FDIC rather than collateralized by the local institution. Though it may sound mundane on its face, this bill could grant another tactical advantage to commercial banks over smaller, state-chartered thrift banks where the deposit of public funds is concerned.

Effectively, the bill would allow banks to accept public funds on deposit without having to collateralize those funds above the FDIC’s $250,000 limit. Collateralizing public funds can be very expensive and generally requires the bank to grant a lien on its assets. However, state-chartered savings and cooperative banks don’t have to collateralize funds deposited above the FDIC’s limit, because they have excess deposit insurance coverage through either the Share Insurance Fund or the Depositors Insurance Fund. Eliminating the collateralization requirement for commercial banks by allowing them to lay off excess deposits to out-of-state banks through participation in the Promontory CDARS program would grant them an advantage they do not currently have.

Furthermore, for an industry claims that “all banking should be local” and that municipalities ought to deposit their money into local financial institutions, there’s something funny about shutting credit unions out of the club and not kicking up a bigger stink about a bill that would let Massachusetts financial institutions participate out public deposits to banks as far away as Utah.

On the other hand, municipal banking is not a throwaway item or an afterthought. Government banking can get complicated when tax receipts and nonprofit accounting is involved. There’s a reason that not every bank operates in that space.

Moreover, municipalities have a duty to seek out the best returns on the public’s money; they should have the opportunity to seek it wherever it can be found, whether at a big regional bank, a little hometown bank, a bank-like credit union or a multinational behemoth.