Oregon Public Broadcasting

Oregon Treasurer Ted Wheeler says he wants banks who do business with the state to make more loans to consumers and companies.

The Democrat says the way he'll incentivize that is by reducing the amount of collateral banks need to have on hand.

Right now for every dollar of public money a bank holds they have to have one dollar of collateral.

Wheeler's move lowers the collateral rate to 75 percent, which in theory frees up $600 million for banks to make new loans.

But the Treasurer concedes there's no guarantee that banks will lend out the extra cash.

Ted Wheeler: "Banks want to make a profit by loaning money out, so they will see this as an opportunity to take $600 million that they've basically been sitting on, and instead they loan it out and they collect the profits on that loan."

Wheeler says only banks with strong balance sheets will qualify for the lower collateral rate.

Oregon Treasurer