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Members debate whether deposits fuel Utah lending; task force to study bank-level impacts
Summary
Task force members discussed whether depositing public funds in particular institutions increases lending in Utah. Participants recommended measures using call-report data to estimate the share of a bank's lending in Utah versus deposits collected, and suggested reviewing other states' models.
Howard Hadley (S11) and other members explored whether placing deposits in certain banks leads to more lending that benefits Utah. Hadley said the call reports and lending-by-state data show deposits and lending can differ by institution: "You may see a situation where JPMorgan Chase is actually pulling deposits in from other states and making more loans in Utah than it's collecting deposits in Utah," he said, noting the need to distinguish deposit location from lending activity when estimating economic impact.
Members proposed studying what Wyoming or other states do, and whether the money management council's safety-and-soundness lens should be supplemented with an economic-impact metric (for example, the share of a bank's loans that are made in Utah). Staff agreed to explore available call reports and aggregate measures but cautioned that deposits are fungible and tying a particular deposit to a particular loan is difficult.
