Senate Bill No. 216 proposes amendments to the Community Bank and Credit Union Investment Program established by the State Treasurer. The bill allows the State Treasurer to invest up to $300 million in eligible community banks and credit unions, with specific eligibility criteria including an asset limit. For the period from July 1, 2023, to September 29, 2024, community banks and credit unions with assets exceeding $2 billion will be ineligible to participate. After this period, the asset limit will be adjusted based on the median percentage loan growth of participating institutions. The bill also mandates that the State Treasurer provide annual lists of eligible institutions to the Department of Banking and vice versa.

Significantly, the bill replaces the current competitive bidding process for selecting banks and credit unions with an application process. The State Treasurer will now accept investment-related service rates that are no more than 100 basis points below the previous day's yield for a comparable U.S. Treasury security. This change aims to streamline the investment process while still ensuring that the selected institutions meet established capital standards. The bill is set to take effect on October 1, 2026.

Statutes affected:
Raised Bill: 3-24k
BA Joint Favorable: 3-24k
File No. 120: 3-24k