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Ohio Treasurer Josh Mandel...
Innovative STAR
Plus Program
Helps Keep Ohio Taxpayer Dollars in Community Banks
COLUMBUS - State Treasurer Josh Mandel announced today that Ohio would
become the first state in the nation to offer an innovative new program
that will provide safe and competitive returns on cash deposits for
Ohio local governments and aims to help keep Ohio public funds in Ohio
banks. The STAR Plus program is modeled after established
private-sector programs and will allow government funds managers to
deposit funds into a carefully-screened network of hundreds of Federal
Deposit Insurance Corporation (FDIC) insured banks via a single
convenient account. Public funds deposited in the program will be
fully secured with no credit or market risk and earn a competitive
yield.
“This innovative idea is a win for local governments who are tightening
their belts and stretching tax dollars, a win for community banks that
fuel local economies, and a win for Ohio families because it will
foster an opportunity for job creation across Ohio,” said Mandel.
“STAR Plus strives to keep Ohio public funds in Ohio community banks, a
goal made all the more significant in the aftermath of the Wall Street
bank bailouts and era of ‘too-big-to-fail’ programs at the federal
level.”
STAR Plus was made possible by a new law, HB 209, that Treasurer Mandel
supported and the state legislature passed with bipartisan
support. The law seeks to help public funds managers deposit cash
reserves in Ohio banks in an effort to help keep local taxpayer dollars
in the community banks that fuel local economies and small business
growth. According to data compiled by the FDIC, community banks
hold less than 25% of all deposits in the banking system nationally,
but make more than 50% of the small business loans.
“With the launch of this program, Ohio is leading the nation by example
and helping communities invest their taxpayer dollars in banks here at
home,” said Mandel. “Local community banks play an important role
in providing capital to the small businesses that create jobs for
Ohioans. I urge public funds managers in our townships, counties,
cities and school districts to take a look at the program and see if it
makes sense for them.”
“Community banks can benefit from the program’s goal of redirecting
deposits to Ohio community banks,” said Robert L. Palmer, President and
Chief Executive Director of the Community Bankers Association of
Ohio. “Community banks have a long and proven track record of
making capital available to small business customers which stimulates
local economies. The Community Bankers Association of Ohio is
excited about this innovative program, and to work closely with
Treasurer Mandel, local governments and the small business community to
strengthen the investment we all have in Ohio.”
STAR Plus offers local governments a competitive yield compared to
investments with similar maturities, such as money market funds, U.S.
treasury bills, commercial paper, certificates of deposit, and time
deposits. Currently, STAR Plus is earning 25 basis points.
“Many public funds managers across Ohio are experiencing low yields on
investments due to historically low interest rates. The
Treasurer’s new STAR Plus program is a welcome option for counties
looking for safe investments that provide competitive returns for
taxpayers,” said Butler County Treasurer Nancy Nix. “The fact
that this program seeks to place deposits in Ohio banks is an added
bonus that can help keep our tax dollars closer to home in local
communities.”
STAR Plus is powered by an innovative, patent-pending process that will
ensure that government cash deposits have full FDIC insurance coverage
from an extensive network of carefully-screened, participating
banks. Public funds managers will create one STAR Plus account
for cash deposits. Funds will be deposited in multiple banks to provide
the maximum deposit insurance amount as set by the FDIC, currently
$250,000, providing the backing of the full faith and credit of the
U.S. Government. The minimum amount required to open a STAR Plus
account is $500,000, and the current maximum amount is $10,000,000 per
depositor. The program offers daily deposit capability and weekly
liquidity with penalty-free withdrawals for public funds managers.
STAR Plus is offered exclusively to STAR Ohio participants and is fully
endorsed by the State Treasurer of Ohio, who will provide continuing
oversight to ensure that the program remains a safe and reliable option
for local public investment officers.
For more information on STAR Plus, please visit: www.STAROhioPlus.com
or www.OhioTreasurer.gov
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