March 22, 2007

Illinois State Treasurer Alexi Giannoulias gave the keynote address Thursday at the Community Bankers’ Association of Illinois’ annual spring conference at the Hotel Pere Marquette in Peoria.

As a former community banker, Giannoulias told the association that he understands the value of banks in the communities they serve.

He announced that an internal review committee is studying ways for the Treasurer’s Office and banks to work together to strengthen communities, especially those in underserved areas throughout the state.

Currently, the Treasurer’s Office asks banks to pledge more than 100 percent collateral in order to secure a state deposit for any of the state’s popular low-interest loan programs.

Some banks find this collateral requirement too restrictive. The Treasurer’s Office is reviewing ways to ease the collateral restriction but still protect taxpayer dollars.

The options include: the state becoming self-insured so no collateral is needed; lowering the collateral requirement by a few percentage points; or accepting forms of collateral other than U.S. Treasuries and Agencies.

“Under the current system, the Treasurer’s Office has never had a loan fail,” Giannoulias said. “Our first goal is to wisely and safely invest taxpayer dollars. However, I understand the relationship between healthy communities and strong banks, and I am reviewing ways to work with more banks statewide.”

The Treasurer’s Office has more than $1 billion invested in low-interest loan programs that benefit Illinois businesses, communities and consumers.

Almost $800 million is deposited in banks and credit unions that grant below market rate loans to farmers. The first low-interest loan granted under the Giannoulias administration helped a domestic violence agency in Freeport, Ill, relocate to a new building.