SMUD deposits $15 million in local community banks to create jobs, grow businesses
SMUD is participating in a program designed to enable local community banks to provide loans to local businesses with the goal of economic growth and business expansion. Read more.
SMUD has made three deposits of $5 million each to Five Star Bank, River City Bank and American River Bank. The three banks are part of the Responsible Investments for a Stronger Economy program, also known as RISE, which encourages local agencies like SMUD and others to make deposits in community banks that can provide much needed capital and improvement loans. The banks will loan at least 50 percent of the funds in the SMUD service area to qualified applicants and will provide reports to SMUD on the loans made and projected number of jobs created.
“This direct infusion of capital into the local economy can help make the difference in launching or growing worthy local enterprises,” said SMUD CEO Arlen Orchard. “As our region’s not-for-profit community-owned electric company, it’s in SMUD’s and our customers’ best interests to support and expand our vibrant and increasingly diverse local business community. Keeping these investments local will not only benefit business owners but also grow employment opportunities for the residents of our community.”
RISE is a program developed by Region Finance, a local non-profit that advocates for local economic development and job creation. “By prioritizing investment into the community, SMUD has made a powerful statement about their dedication to supporting the growth of local businesses,” said Region Finance CEO Joshua Wood. “RISE will ensure that local businesses have more access to the capital they need to grow.”
From an investment perspective alone, the move benefits SMUD as the deposits will be fully collateralized and FDIC-insured, and will return a rate comparable to the state of California’s Local Agency Investment Fund, while allowing same day withdrawals. More importantly though, are the opportunities these funds will provide for local businesses and the regional economy by having significant capital available for lending.
About SMUD: As the nation’s sixth-largest community-owned electric service provider, SMUD has been providing low-cost, reliable electricity for more than 70 years to Sacramento County (and small adjoining portions of Placer and Yolo Counties). SMUD is a recognized industry leader and award winner for its innovative energy efficiency programs, renewable power technologies, and for its sustainable solutions for a healthier environment. SMUD’s power mix is about 50 percent non-carbon emitting.
For more information about RISE and Region Finance