Governor Rell Announces Five-Point Plan to
Maintain Free Flow of Credit to Connecticut Businesses
Governor Meets with Bank Officials from Across Connecticut,
Hails Strength of State Financial Institutions
This news release was issued by the Governor's Office
October 9, 2008
Governor M. Jodi Rell today met with top officials from community banks around Connecticut to discuss the state’s economic situation and outline a five-point plan to maintain a free flow of credit to Connecticut businesses, with the goal of fending off the worst of the national economic turmoil.
“Regular citizens – the ones who are not Wall Street CEOs – are opening their statements and seeing their savings, their retirement accounts, their college savings accounts and their nest eggs decimated,” Governor Rell said. “They are angry and terrified, and they have every right to be.
“It is more than simply a financial crisis – it is a crisis of confidence, and it is already having a direct and painful effect on jobs in Connecticut,” the Governor said. “Making sure that businesses and families – including families sending children to college – have access to credit is about more than borrowing and buying. It’s about jobs. The longer the national economy teeters on the brink, the greater the risk that our state is going to be dragged along with it.
“In the middle of all of the gloom, however, there are some very real bright spots,” Governor Rell said. “Banks in our state do not have the problems of their larger, national competitors. The community banks of Connecticut have done what they have always done – made smart, sensible loans and investments and acted prudently at all times to protect the interests of their depositors and shareholders.
“Today I met with the leaders of these banks and outlined a five-point plan to make sure that businesses in our state have access to the money they need to stay in operation and keep people employed,” the Governor said. “The state will be taking the lead on four of these initiatives and I have asked the banks themselves to step in and play a key role on the fifth part of the plan. Together, we will ensure that Connecticut’s economy not only weathers this storm but is positioned to make the most of the economic revival we know will eventually follow.”
The Governor said her plan includes these components:
- The DECD Direct Loan to Small Business Program: The Department of Economic and Community Development will allocate $5 million to provide low-interest loans to small businesses in key economic sectors such as aerospace, medical devices and alternative energy. These loans will be targeted to companies of 50 employees or less and will assist in job retention.
- Urbank Loan Guarantee Program: When the Connecticut Development Authority Board of Directors meets October 15, Governor Rell will ask that the agency enhance its Urbank Loan Guarantee Program by $10 million. These loans will be initially targeted at those businesses which are between 50 and 200 employees.
- Brownfields: Governor Rell is reallocating $5 million of Urban Act bond funding for brownfield remediation tied directly to job creation. DECD will administer this program with municipalities around the state that are struggling to recruit businesses and retain their real property tax base.
- Bond Anticipation Notes: Governor Rell will request that the Legislature amend the state’s municipal law to extend the Bond Anticipation Note (BAN) program. In 2000, use of BANs was extended from four years to eight; many of these notes are coming due in 2008 and 2009. Extending the program would enable municipalities to bridge revenue shortfalls caused by difficulties they currently face in selling bond issues.
- Loan Pool: Governor Rell asked the community banks from across Connecticut to work with the state Department of Banking and to each contribute $1 million for a lending pool that will be available for small businesses.
“I stressed to the bank officials that I am not asking them to make bad loans,” Governor Rell said. “I am not asking them to take on additional risk. I am asking them to work with our small businesses – to send the message that Connecticut’s banks are open and ready for business and that credit is available.
“Banks play a vital role in our economic strength,” the Governor said. “Their lending to small business fuels economic growth and product innovation. We need to ensure that in a tightening credit market banks can continue to serve both existing and new customers.”