IBJNews

House GOP budget spares bank insurance fund

Back to TopCommentsE-mailPrintBookmark and Share

Indiana bankers were relieved late last week when House Republicans decided to spare a bank insurance fund from being raided to plug holes elsewhere in the state budget.

The $250 million Public Deposit Insurance Fund, created during the Great Depression, is designed to replenish money deposited in a failed bank by schools, cities and other public entities, and which was not fully reimbursed by the Federal Deposit Insurance Corp.

Banks paid into the fund until 1985 and interest has built up since. As IBJ reported late last year, elected officials were eyeing the fund as a potential revenue source.

In January, Gov. Mitch Daniels proposed transfering $200 million from the deposit fund to the state’s general fund reserves—part of his plan to build up the state’s reserves by about $500 million.

But the industry unleashed a “full assault” on the Indiana Statehouse, sending local bankers to persuade legislators and the Daniels administration that the money belonged to the banks and still provides important protection for local taxpayer funds.

“Our bankers came out of the woodwork and were very, very spirited and passionate about saving this fund,” said Amber Van Til, vice president of government relations at the Indiana Bankers Association. She added, “We didn’t have one legislator tell us they thought it was a good idea.”

At the very least, Rep. Jeff Espich, R-Uniondale, agreed with the bankers. And as the head of the House Ways and Means Committee, he decided to find the $200 million elsewhere.

“I think it’s the banks’ money, but that’s not even my point. My point is that it continues to have a purpose and that is to protecting public deposits in those institutions,” Espich said at a Feb. 17 news conference, according to The Franklin Online.

Espich’s budget proposal would generate $200 million in four ways:

1.    Collecting $610 million in overpayments made by the state to local governments more quickly than previous forecasts, bringing in $88 million in the next two years that was originally predicted to arrive in the following two years.
2.    Maximizing the collection of quality-assessment fees from nursing homes and other retirement facilities, generating $48 million.
3.    Decreasing state contributions to the Mass Transit Fund by $15 million.
4.    Tapping the remaining $50 million in the state’s surplus fund.

The Ways and Means Committee passed Espich’s budget Feb. 17 by a 15-8 vote along party lines.

However, Van Til at the bankers association intends to keep lobbying to protect the bank insurance fund, which could still be tapped during budget negotiations later in the legislative session.

“What we’ve got to do is keep the profile at a high level, keep the arguments coming, the protection of the PDIF at the top of the agenda for legislators,” she said. “Because once the doors close in conference committee, we won’t be able to stand there and make our arguments.”

Tapping the banking insurance fund is not unprecedented. The state borrowed $50 million from it in 2003 and has yet to pay it back. Also, since 2002, interest from the fund has been used to pay police and firefighter pensions.

Daniels had argued that a new collateral-based insurance program for banks, approved by the Legislature last year, renders the old bank insurance fund obsolete.

ADVERTISEMENT

  • Big biz as uaual
    The middle class remains under attack while fat cats, banks, insurance companies and Wall Street cover each others backs thanks to the politicos.

    Great country or what?
  • To Jim
    Jim, yes, that is the same thing as the unions underwriting a lot of money to the Democrat party...so the Democrats took the "mature" way out and skipped town...I know that isn't related to this story, but you can't accuse the GOP of something when you know full well the Democrats do the same thing. Just saying. BTW, I am not affiliated with a particular party.
  • GOP Logic
    The real reason that they backed off of using this money is that the banks underwrite a lot of money to the GOP. Scratch my back and I line your pockets.
  • It's too bad
    It's too bad someone didn't step up when the government decided to raid the social security fund and use its money (deposited by the working citizens)to plug their overspending gaps. We wouldn't be in the mess we are in today. Somewhere along the line, government has got to learn they can't spend money that isnt theirs. How many times did they refinance the Hoosier Dome to get cash? How much debt still lingers from that?
  • ...
    typical republican corporate welfare

    screw unions but protect your fatcat banker buddies

    the tea party should be so proud....

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
 
Subscribe to IBJ
  1. Uh, sorry Johnnie, but you are incorrect. Despite the assertions by yourself and various defenders and captains, sports attendance is NOT off significantly at most sporting events in the US. Variances in attendance has been in the range of single digits, both + & - for years now. MLB has had most of its best overall attendance nubers in the last decade, and that trend has been consistent for most major sporting events. The number one issue cited by most fans when asked about attendance is the overall cost of attending. The presence of HD and big screen televisions in home doesn't even register, as a factor for not attending an event. VALUE in the product is the key, and apparently is something lacking in the current ICS. What other explanation is there when with what is routinely touted as the "best" racing on the planet, fans are staying away in DROVES. A "close" title battle into the last event at Fontana, with the "cars and stars" of the ICS, and who showed up? MAYBE 8K. Sorry, but HD TV isn't to blame for that kind of fan apathy.

  2. Do you need finance to establish your business ? Are you interested in getting a loan at 3% from our private company? If so please Email: suntrust_oil@blumail.org

  3. If she was worth the $ the public outcry over direct tv dropping them would have kept them on their dishes as we have seen with other companies. I too quit watching channel 13 after she showed up since I left channel 8 because of her all show rather than production results. When Randy on 8 corrected her she had a big head and incorrectly challenged his correction for pronunciation of a city. Other antics while she matures was too much for me with her very inaccurate forecasts. All the forecasters were predicting rain until Thursday except Chris. They predicted sunny on Thursday but instead of rain until Thursday upon which the sun would finally make it out in full glory Chris was right on the money just as I too predicted looking at the radar on weather.gov. One thing I love about Angela is the fear you can see in her every time it thunders in the winter. It far exceeds the entertainment value of her body language (high heel noise drags, depression, etc) when her forecasts are so incorrect. Her hair stands on end, you have to see it!!!

  4. Good Day, Apply For A Loan I am Mr Fernadez Antonio, a private Loan lender and a cooperate financial for real estate and any kinds of business financing. I also offer Loans to individuals, Firms and cooperate bodies at 3% interest rate We offer any kind of loans. email us via fernadezloaninvest@outlook.com LOAN APPLICATION FORM First name:......................... Middle name:......................... Last name:........................................ Date of birth (yyyy-mm-dd):....................... Gender:........................................... Marital status:................................... Total Amount Needed............................... Loan Duration.................................... Address:.......................................... City:............................................. State/province:................................... Zip/postal code:.................................. Country:.......................................... Phone:............................................ Fax:.............................................. Mobile/cellular:.................................. Monthly Income.................................... Occupation:....................................... Best Regard, Mr Fernadez Antonio.

  5. i will love to share my testimony to you all the people in world i got married to my husband about 2 year ago we start having problems at home like we stop sleeping on the same bed,fighting about little things he always comes home late at night,drinking too much and sleeping with other women out side i have never love any man in my life except him. he is the father of my child and i don't want to loose him because we have worked so hard together to become what we are and have today .few month ago he now decided to live me and the kid,being a single mother can be hard sometimes and so i have nobody to turn to and i was heart broken.i called my mom and explain every thing to her,my mother told me about DR.okoro how he helped her solve the problem between her and my dad i was surprise about it because they have been without each other for three and a half years and it was like a miracle how they came back to each other. i was directed to DR. okoro on his email:okorospell@gmail.com and explain everything to him,so he promise me not to worry that he will cast a spell and make things come back to how we where so much in love again and that it was another female spirit that was controlling my husband he told me that my problem will be solved within two days if i believe i said OK So he cast a spell for me and after two days my love came back asking me to forgive him i Am so happy now. so that why i decided to share my experience with every body that have such problem contact Dr okoro the great spell caster on his email addresses spellcasterforlove@outlook.com

ADVERTISEMENT