|
FOR IMMEDIATE RELEASE |
|
|
State
Rep. Steven J. Santarsiero |
|
Santarsiero to introduce legislation to aid community banks' ability to offer business, individual loans
HARRISBURG, June 29 – State Rep. Steven J. Santarsiero, D-Bucks, today introduced legislation (H.B. 2631) aimed at making more of the Commonwealth's deposits available for community banks by updating the collateralization requirements to reflect more appropriate levels.
Santarsiero said his legislation would amend Section 505 of the Fiscal Code (Act 176 of 1929) to implement a recommendation from the Pennsylvania Treasurer's Office and reduce the required level of collateralization for Commonwealth deposits in state depositories from 120 percent to 102 percent. This would bring Pennsylvania in line with many of our neighboring states, including Delaware, Maryland, New York, and Ohio, which require 102 percent or even 100 percent collateralization.
"My legislation, which has the support of state Treasurer Rob McCord and many members of the banking industry, would allow community banks to have more capital available to offer for business and individual loans, thereby freeing up additional credit necessary to energize our economy," Santarsiero said.
"While this alone will not automatically put more loans out on the street, it is another important tool available to our local banks to help grow our economy in the long term," he added.
Santarsiero said this section of the Fiscal Code was originally written during the Great Depression, prior to the development of modern technology that enables the monitoring of bank collateral levels. This antiquated statute impedes the Office of the Treasurer's ability to obtain competitive rates on deposits without providing any meaningful security.