JEFFERSON CITY — State Treasurer Clint Zweifel outlined a plan Tuesday to pump hundreds of millions of state dollars into Missouri banks as a way to help spur the economy.
Zweifel said his "Invest in Missouri" initiative would route more money through Missouri banks by making it more profitable for the state to deposit money with them and by expanding the pool of businesses that could receive low-interest loans from them.
"The economy is in difficult shape, and Missourians need our help," said Zweifel, a former Democratic state lawmaker who took office as treasurer last month.
His proposal would need legislative approval.
Missouri already operates a program under which it deposits money into banks at below-market interest rates so they can offer reduced-rate loans for certain business and agricultural projects. The linked-deposit program began in the 1980s and was expanded in 2004.
But Zweifel said it remains "severely underutilized." Although the program allows up to $720 million in linked deposits to banks, less than $230 million is being used, the treasurer's office said.
Zweifel proposed several ways to expand eligibility, including by enlarging the definition of a qualifying small business from 25 employees to 100 employees. He also wants to make the program available for the first time to local governments for public works projects and to individuals for alternative energy projects.
"I believe we can increase use of this program to help rebuild our economy, create jobs and increase community investment in our state," he said.
Zweifel also proposed to change the law governing state time deposits made with community banks. He said Missouri and Alabama are the only states that cap the interest rates they can receive on those deposits.
Missouri has $552 million in time deposits in community banks. If lawmakers remove the interest-rate cap, the treasurer's office said it could afford to immediately put an additional $250 million in community banks, giving the banks more cash while also earning more money for the state.