Missouri Treasurer Clint Zweifel wants to eliminate an interest rate cap on government deposits in community banks. The cap currently ties interest-earned to that of six-month US Treasury securities, which recently was as low as 0.2%.

Zweifel also hopes to expand eligibility to the Missouri Linked Deposit Program, which will allow community banks to offer more low-interest loans to small businesses, farms, and alternative energy projects.

The “Invest in Missouri” bill was filed in the House by Representative Tim Flook (R-Liberty). Senator David Pierce (R-Warrensburg) filed legislation in the Senate regarding the Missouri Linked Deposit Program. On Monday, the Missouri Bankers Association agreed to support the bill.

Zweifel believes that lifting the interest rate cap would generate $10-15 million dollars for the state. More importantly, he says, is that “changing this cap and eliminating it really encourages reinvestment back in our state.”

The current interest rate cap, Zweifel says, is an “encouragement to place money outside of the state.” He believes that removing the cap is “an incentive to reinvest money in Missouri community banks.”

The Missouri Linked Deposit Program needs to be modified because, as Zweifel notes “it’s only about 30% utilized at this point.” He contends that the program has too much bureaucratic red tape and only applies to small businesses and farms with less than 25 employees. The “Invest in Missouri” legislation would increase the employee limit to 100.

Zweifel is “very optimistic” that the “Invest in Missouri” bill will pass smoothly through the General Assembly. “I think our economy right now demands that both parties work together to get things done for taxpayers in our state," he says.

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