Steelman renames, restarts deposit-loan program

JEFFERSON CITY, Mo. -- State Treasurer Sarah Steelman is hoping some new incentives and a new name can help renew interest in a long-standing state program that allows banks to offer below-market loans to farmers and businesses.

The treasurer's office will begin to take applications today for the BIG Missouri program, which deposits money in Missouri banks to be used for low-interest loans. The new acronym stands for Believe, Invest, Grow.

"The program is about believing in people, investing in those dreams and growing Missouri into a bigger and better and brighter state," Steelman said Thursday.

The state has offered what is known as a linked-deposit program since Republican Wendell Bailey was treasurer in the 1980s. At the time, it was known as MO BUCKS. During the subsequent tenures of Democratic Treasurers Bob Holden and Nancy Farmer, the program was known as Missouri First.

But participation declined in recent years because banks already were offering low interest rates. Although the program had a cap of $360 million of deposits for the special loans, it had only about $30 million of outstanding deposits as of Thursday, the treasurer's office said.

A law that took effect Aug. 28 doubled the program's cap to $720 million, expanded eligibility for the loans and changed the discounted interest rate so that it's more attractive to banks and developers when the market interest rates already are low. Steelman decided to give it a new name.

The Missouri Bankers Association, which supported the legislation, recently held seven regional meetings around the state, during which it touted the revamped programs to its members.

"It just wasn't viable with the guidelines that were in place," said Max Cook, president of the bankers organization, who was present for Steelman's promotional kickoff. But "I truly believe you're going to see the bankers ready to pick this up and run with it again."

Standing alongside Steelman at her news conference Thursday was bill supporter Rep. Steve Hobbs, R-Mexico, a farmer and investor in a biodiesel plant in Mexico, Mo., and an ethanol plant in Ladonia. Those plants, which turn soybeans or corn into fuel, are among the law's newly eligible entities to receive low-interest loans.

Hobbs said board members at the plants are excited about the loan option, which they view as a fall-back position in case of potential financial needs.

The treasurer's office has a conflict of interest policy that prohibits legislators from receiving loans under the linked-deposit program. But Steelman spokesman Mark Hughes said that likely would not apply to alternative fuel plants in which Hobbs invests, since he is only one of many investors and would not be personally applying for the loan.

Under a proposed policy by Steelman's office, certain types of businesses would be ineligible for loans in the BIG Missouri program, including abortion clinics, strip clubs and casinos. The law gives the treasurer the final say in approving or rejecting deposits for specific loans.

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On the Net:

BIG Missouri: http://www.bigmissouri.com