PI Original Angela Caputo Monday November 17th, 2008, 9:40am

$170 Million Spent, $830 Million Left To Lend

One month ago, Illinois Treasurer Alexi Giannoulias announced that
the state would extend $1 billion in credit to local banks to help spur lending amid the financial crisis. We checked in with his
office on Friday to see who's taken him up on the offer of low-interest loans...

One month ago, Illinois Treasurer Alexi Giannoulias announced that the state would extend $1 billion in credit to local banks to help spur lending amid the financial crisis. We checked in with his office on Friday to see who's taken him up on the offer of low-interest loans.

So far, roughly $170 million has been diverted to 30 banks located in all corners of the state -- from Collinsville to Highland Park. Only four banks asked for, and got, the maximum $25 million loan amount. As you see in this more detailed summary, some smaller institutions, like Shiloh's Catholic Community Credit Union, put in for lesser loans. Only four institutions have been turned down.

As far as the treasurer's office is concerned, the program creates a win-win scenario: Businesses and consumers have access to credit and the state earns a higher interest rate than in its normal investments. All of the one-year loans are secured with up-front collateral.

"The point here was to add a little extra capital to banks that are already healthy," spokeswoman Kati Phillips said. "We didn't want these banks to go backwards and we didn't want people to stop applying for loans."

Illinois was one of the first states to put together a stimulus program of this sort. Roughly a half-dozen others are now looking at what local resources -- from building programs to credit lines -- they can leverage to improve consumer confidence and boost employment. Stateline has more:

The state efforts come as Congress considers a national economic stimulus package in the wake of the Wall Street collapse this fall. Among the options for Congress are extending unemployment benefits, sending more Medicaid money to states to boost the health care industry and launching a major new public works initiative.

Congress could pass its package in a lame-duck session this year, or it could wait until after Barack Obama is sworn in as president next Jan. 20. In the meantime, a handful of states are pressing ahead with their own economic revival plans.

We've written about the hurdles that stand in the way of Congress approving direct assistance to the states. Nonetheless, a team of governors testified before a House committee on Friday, calling for a stimulus package to help states catch up on bills associated with Medicaid, infrastructure projects, unemployment benefits and other social programs.  It doesn't look like they're going to give up on these demands any time soon.

Taxonomy upgrade extras: 

Comments

Log in or register to post comments