More of Delaware’s money will be going into Delaware’s banks thanks to an initiative signed today by State Treasurer Chip Flowers.
Under the directive, newly qualified Delaware banks would be eligible to receive state funds totaling $5 million to $10 million. Flowers estimates that 15 to 20 Delaware banks in all three counties could participate in the program.
“The state of Delaware should be putting money in Delaware banks,” Flowers said. “That way the money that people are using and paying taxes with is actually coming back and getting circulated in our economy.”
The directive calls for depositing up to $250,000 in any qualified FDIC-insured Delaware bank that has an active banking presence in the state, Flowers said. The funds would be deposited in savings accounts or certificates of deposit that are paying a rate of return equal to or higher than the rate the state is currently receiving on similar deposits.
Flowers says the plan increases the diversification of state funds, and increases state revenue, by getting an increased rate of return. More importantly, he says, more funds will be available for residents and small businesses seeking loans.
“It’s an additional $5 to $10 million into the system, so that’s not small change,” he said. “It’s something that adds to the greater good and really gets our economy moving.”
Flowers says if the program goes well, the plan is to put more state money into state banks in the future.