SB157 Crosses $300 Million

For years, Georgia’s community banks were at a distinct disadvantage compared to large, mostly out of state financial institutions when competing for municipal deposits. The pledging requirements in place made it cost prohibitive for community banks to secure deposits from local municipalities that wanted to keep their money local. As Georgia’s community banking-only state association, CBA made changing the law a top priority in the fall of 2018 to help level the playing field for community banks. In May 2019, CBA’s efforts were realized when Governor Kemp came to CBA headquarters to sign SB157 into law. The law allows banks to use the reciprocal deposit network to place municipal deposits and provide 100% FDIC insurance for all balances. Onerous and costly pledging is no longer required!

At the time of signing, projections suggested that over $1 billion in deposits would flow into the networks over a two-year period. Even with the pandemic and current liquidity positions, approximately $300 million combined has been placed by the two approved provider firms. With the need for core funding on the rise again, we will be tracking the progress and reporting to the membership and the Kemp administration over the coming months. In the meantime, please contact CBA with any questions.

The success of SB157 is a clear indication of the value of single constituent advocacy in the financial services industry. Large banks and community banks have different needs and concerns, and the fight over SB157 provides all with a very recent example of those differences. As the voice for the community banking industry, we need your help to fight for the legislative and regulatory priorities that are important to you. To be effective, please consider supporting the CBA Advocacy Fund. Your contributions go directly towards efforts to advance the community bank agenda here in Georgia. Thank you for your support!

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