Community Bankers Association of Illinois

CBAI Welcomes Treasurer Giannoulias’s Deposit Initiative

On October 16, State Treasurer Alexi Giannoulias announced that his office intends to make $1 billion in additional State deposits available to Illinois financial institutions. The funds will come from the State’s existing investment portfolio and will be reallocated by the Treasurer as deposits in financial institutions to assist those institutions with liquidity and credit needs.

“The Community Bankers Association of Illinois is very pleased with this proactive step taken by Treasurer Giannoulias,” CBAI President Bob Wingert said. “Community banks throughout Illinois continue to operate with remarkable strength, safety and soundness in the face of today’s unusual economic conditions, but the Treasurer’s recognition of the need for access to funds is both welcome and appreciated.”

Existing restrictions on the amounts of State deposits that can be held by a single financial institution (10 percent of the bank’s total deposits or $100 million aggregate State deposits, whichever is less) will remain in effect. Also, the collateralization requirements of the Treasurer’s office will apply to any deposits that exceed the FDIC insurance coverage.

Under Treasurer Giannoulias’s plan, the additional $1 billion deposit initiative will be phased in with $500 million becoming available immediately and additional increments totaling $500 million being allocated on a monthly basis between December of 2008 and March of 2009.

Also, the nine large banking corporations in which the federal Treasury Department purchased equity interests earlier this week will not be eligible for any part of these new State deposits being offered by Treasurer Giannoulias.

If you have questions regarding whether your bank is an approved depository of State funds, you can contact the State Treasurer’s Banking Division in Springfield at (217) 782-2071. You can also find forms and information relating to depositories of State funds on the Treasurer’s web site at http://www.treasurer.il.gov/finances/Approved-Depository.aspx.

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