Grossman Extends Application Deadline for Small Business Banking Partnership
Vigorous Response from Community Banks Spurs Deadline Shift
"The response to the Partnership has outpaced even our optimistic expectations - this has really proven to be a win-win-win for government, community banks, and small businesses," said Treasurer Grossman. "It directs additional deposits into Massachusetts banks, encouraging them to lend to Massachusetts small businesses. The Partnership puts the reserve resources of the Treasury to their optimal use, creating jobs, opportunity, and prosperity throughout the Commonwealth."
The Small Business Banking Partnership moves Treasury cash reserve funds typically held by large national and international financial institutions and deposits them in amounts of up to $5 million in Massachusetts banks. In exchange for the infusion of new deposits, the banks sign a Memorandum of Understanding (MOU) signaling their intent to enhance their loan portfolios to small credit-worthy Massachusetts businesses.
The first deposits were made in early May of this year, and the Treasury quickly surpassed the initial $100 million that had been set aside for the program, prompting it to designate another $100 million to the initiative. Presently, the Partnership has over $121 million on deposit with 27 community banks across the Commonwealth, many of which have already extended new loans leveraged through the deposits to small businesses.
In addition to the banks with Treasury money on deposit, 24 banks statewide have made a commitment to participate in the Small Business Banking Partnership and are in varying stages of signing up for the program. Treasurer Grossman said he has been travelling across the state to promote the program with bank officials, with an eye toward ensuring that all community banks are aware of the benefits of the Partnership before the application period closes on the newly extended deadline of January 1, 2012.
"We're confident that the Partnership will continue to generate interest, and we wanted to give as many banks as possible an opportunity to sign up, strengthen their business, and assist us in our job creation goals," said Grossman.
All deposits that the Treasury makes in these community banks are protected through either insurance or collateral, and the interest rate on the money is comparable to what the Commonwealth receives at out-of-state financial institutions.
A list of community banks participating in the Partnership is attached.
SMALL BUSINESS BANKING PARTNERSHIP
PARTICIPATING BANKS AS OF AUGUST 16, 2011
North Middlesex Savings Bank
Belmont Savings Bank
East West Bank
Mercantile Bank and Trust Company
Chicopee Savings Bank
Everett Cooperative Bank
Citizens Union Savings Bank
Bank of Cape Cod
Newburyport Five Cents Savings
Cape Cod Five
Reading Cooperative Bank
South Coastal Bank
South Shore Savings Bank
Bristol County Savings Bank
Mechanics Cooperative Bank
The Savings Bank
Walpole Cooperative Bank
Bay State Savings Bank