PRESS RELEASE
Treasurer Fitzpatrick Increases Maximum Size of Linked Deposits
Jefferson City, MO – Missouri State Treasurer Scott Fitzpatrick
today announced changes to Missouri FIRST, the state’s linked deposit program,
that will increase the maximum size of linked deposits for participants. At today’s
Linked Deposit Committee Meeting, the maximum size of linked deposits was
increased from $1 million to a maximum of $2 million per loan request. “When I took office, the linked
deposit program, which supports Missouri small businesses and farms, was on an
unsustainable path. Today, because of reforms I enacted less than two months
into my tenure as Treasurer, the program is healthy,” Treasurer Fitzpatrick
said. “Additionally, because of our work with the General Assembly, legislation
was passed to increase the statutory cap on the program size, which will allow
us to invest more of Missouri’s portfolio in growing local businesses and
supporting our agricultural producers. As a business owner myself, I know how
important it is to have access to affordable capital in order to start and grow
a company—and I am proud that Missouri FIRST is now back in a position to help
provide small businesses and farmers with low cost funding.” In February 2019, the
Treasurer announced reforms that were intended to control the rapid growth
of the program that occurred in 2018 and brought the program close to reaching the
statutory cap. These actions increased the long-term viability of the program
and ensured that Missouri’s small business and agriculture communities can
continue to access and benefit from these low-interest loans. This year, Treasurer
Fitzpatrick worked with the General Assembly and Missouri’s financial
institutions to pass legislation that raises
the statutory cap from $720 million to $800 million. Currently, Missouri has $440
million in linked deposits placed. “The Missouri Bankers
Association supports the linked deposit program and we appreciate the
Treasurer’s careful stewardship of the program,” Max Cook, MBA President, said.
“We are glad to see this worthwhile program remain viable.” A linked deposit allows the
Treasurer’s Office to place state funds with participating lenders to offset
the funds they loan to Missouri farms and small businesses. These funds are deposited
at reduced rates and in return, the institution passes this reduced rate on to
the borrower by lowering the interest rate on the loan. The program allows the
borrower to save, on average, 30% on interest. All deposits must be 100%
collateralized and each institution must have a signed depository contract with
the State Treasurer’s Office. The program has clear statutory guidelines, outlined in
Sections 30.750 through 30.860, RSMo. More information about Missouri FIRST
can be found at https://treasurer.mo.gov/content/low-interest-loans/. ###