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Task force weighs using state reserves to boost Utah lending while protecting pooled fund investors
Summary
The Asset Investment Task Force reviewed a draft final report that explores directing a portion of state reserves (separate from the Public Treasurer's Fund) into Utah banks and credit unions, agreed to pursue a pilot program to test local economic benefits, and asked consultants to add dollar figures and clearer language.
Marlow Oakes, treasurer and chair of the Asset Investment Task Force, opened the group's final meeting by framing the central tension for the report: the Public Treasurer's Fund (PTF) is a commingled vehicle with a fiduciary duty to more than 750 public investors, but some members want a way for state reserves to produce more local economic benefit.
"We have over 750 public entities across the state that are investors in the PTF, and they invest, looking for yield and safety and ... preservation of capital," Oakes said, stressing the treasurer's narrow fiduciary mandate and the need to keep any pilot separate from the PTF.
Legislators and industry representatives debated whether the report understates the potential benefits of reinvestment. Howard Headley of Utah Bankers argued that, in practice, deposits placed with Utah-only banks and credit unions are highly likely to be lent locally and produce a larger statewide economic return than purely chasing yield in diversified markets. "If you put a deposit in the Bank of Utah or Central Bank ... that money is gonna be lent in Utah," Headley said.
Consultants from Tour Partners, who prepared the draft study, told the task force the analysis can be made measurable through a controlled pilot and recommended reporting metrics such as loan-to-deposit ratio and absolute loan growth for participant banks. Members asked the report authors to include dollar amounts alongside percentages in the executive summary, to clarify that the PTF itself is not the target of change, and to draft language that avoids the impression the report is defending the status quo.
The task force approved the minutes from the Nov. 3 meeting and directed staff and the consultants to incorporate today's feedback, circulate an updated draft, and send a letter to the Executive Appropriations Committee describing progress. The group set an internal schedule for further edits and a follow-up meeting in early December to finalize the report.
The report and pilot design will aim to show whether a measured redeployment of certain state-held reserve balances into participating Utah depositories leads to demonstrable loan growth and measurable fiscal benefit for state entities. The task force emphasized that any deployment would be carved out separate from the PTF to preserve fiduciary protections.
