By Jim Merkel
By switching much of its business to two new banks, the St. Louis City Treasurer’s Office stands to make another $100,000 in interest a year. But part of the decision, City Treasurer Tishaura Jones said, was also based on how much the banks worked to benefit city residents.
Jones announced on April 26 that her office will open the city’s payroll funds accounts with Regions Bank and its parking operations account with Busey Bank. The banks were given the accounts after the office sought competitive proposals from financial institutions.
For several years, Lindell Bank handled the parking operations account, and UMB Bank had the payroll account, which disburses money to employees. “This was the first competitive bidding process that we are aware of,” said Benjamin Singer, a spokesman for Jones.
With so much money on the line, it raises the question of why alternatives to Lindell and UMB were not investigated sooner.
“Since I was elected in 2012, our team has improved investment and banking strategies, yielding over $20 million for the city,” Jones said in response to that question. “We are proud that this new process, which began last year, will do even more.”
When pressed for more specifics on why the change took seven years, the spokesman, Singer, refused to elaborate.
The city added factors to pick their new bankers beyond the normal fees and interest rates. Following the old adage of all politics being local, those making the decision made the number of branches within the city limits a factor. They also sought to find a bank that answers customer calls with centers in Missouri, not in some far-flung location.
They were also asked questions about the services they provide to the “unbanked” or “underbanked” community, the bank’s involvement in calls to action in the Forward Through Ferguson Report and whether the institution supports or makes payday loans.
Other questions include any financial education, counseling or resources a bank might have to meet the community’s needs, the bank’s small business loans in place and affordable home loans it has that target low to medium income communities. Also banks were asked what affordable home loan programs they have that help low to medium income communities or that specifically assist small or minority or women-owned business.
Both banks pledge to continue to conduct public education programs in managing money through the Treasurer’s Office of Financial Empowerment. Regions will offer services for city employees such as waiving checks on credit to help city employees build their credit.
“As the city’s chief banking officer, I use my position to get the best deal for the city and the best service for our residents,” Jones said. “That includes looking at bank locations and lending habits across the ‘Delmar divide.’ Are these financial institutions serving only affluent areas? Or are they also serving low- and moderate-income neighborhoods on the North Side and parts of the South Side? Some of these areas were previously denied credit due to discriminatory redlining, so it’s time for the city and others to do more for our communities.”
Under the agreement, Regions will provide new services for city employees, including waiving credit checks to help unbanked employees, open bank accounts and building credit. Busey and Regions will conduct public education programs.
The payroll account handles an average of $8.5 million every two weeks, while the parking operation carries a balance of more than $6 million.