Montgomery County Moves Money to Community Banks
June 29, 2012
Today, the county government announced a new initiative to invest its bank deposits in county businesses. I worked with business leaders in the county to request this initiative and I applaud the
and his expert finance team for launching it. County Executive
We have an opportunity to change that by investing a portion of our deposits in community banks, which target their loans to small businesses in local communities.
is home to a number of these banks, including Capital Bank, Congressional Bank, EagleBank, Monument Bank, OBA Bank, and more. The county government has announced a new program that would invest up to $10 million in county-headquartered community banks over the next year. In return, those banks would have to loan that money along with $10 million of their own money to county-headquartered small businesses. The banks would have to report on their loan activity and the number of jobs those loans create. Montgomery County
This will be a great test of the value of community banking for governments. If it works, we should expand the amount of money that we invest with the community banks. At the same time, we will be developing a valuable policy framework that we can leverage into our county’s RFP for our overall banking relationship, which comes up for bidding in two years. We may be able to structure the RFP in such a way as to further these goals.
This program shows a lot of promise for leveraging county assets into local job creation. I’m happy that the
is moving forward with it and I will be watching to make sure it works. County Executive