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SB00216 • 2026

AN ACT CONCERNING THE COMMUNITY BANK AND CREDIT UNION INVESTMENT PROGRAM ESTABLISHED BY THE STATE TREASURER.

AN ACT CONCERNING THE COMMUNITY BANK AND CREDIT UNION INVESTMENT PROGRAM ESTABLISHED BY THE STATE TREASURER.

Labor
Passed Legislature

This bill passed both chambers and reached final enrollment, even if later executive action is not shown here.

Sponsor
Banking Committee
Last action
2026-03-23
Official status
File Number 120
Effective date
Not listed

Plain English Breakdown

The official text confirms the replacement of competitive bidding with an application process and sets a minimum rate floor.

Changes to the Community Bank and Credit Union Investment Program

This law changes how the State Treasurer invests money with small banks and credit unions by setting a minimum interest rate they must offer.

What This Bill Does

  • Allows the State Treasurer to accept investment rates that are no more than one percentage point below similar U.S. Treasury security yields.
  • Replaces competitive bidding with an application process for banks and credit unions seeking state investments.
  • Sets asset limits so only smaller community banks and credit unions can join the program based on their total assets.
  • Requires the State Treasurer to share a list of eligible institutions with the Department of Banking every year.
  • Gives the State Treasurer authority to set capital standards for participating financial institutions.

Who It Names or Affects

  • The Office of the State Treasurer
  • Community banks and community credit unions in Connecticut
  • The Department of Banking

Terms To Know

Basis points
A unit used to describe interest rates where one hundred basis points equals one percent.
Asset limit
The maximum amount of total assets a bank or credit union can have to qualify for the program.
Median percentage loan growth
The middle value showing how much loans increased or decreased among eligible lenders over time.

Limits and Unknowns

  • The exact financial impact on state funds is uncertain because it depends on future investment amounts and market rates.
  • The specific asset limits for participation will be set by the State Treasurer based on formulas in the law.
  • The effective date of October 1, 2026, means these rules do not apply until that time.

Bill History

  1. 2026-03-23 LCO

    Reported Out of Legislative Commissioners' Office

  2. 2026-03-23 Connecticut General Assembly

    Favorable Report, Tabled for the Calendar, Senate

  3. 2026-03-23 Connecticut General Assembly

    Senate Calendar Number 93

  4. 2026-03-23 LCO

    File Number 120

  5. 2026-03-16 LCO

    Referred to Office of Legislative Research and Office of Fiscal Analysis 03/23/26 12:00 PM

  6. 2026-03-10 BA

    Joint Favorable

  7. 2026-03-10 LCO

    Filed with Legislative Commissioners' Office

  8. 2026-02-19 Connecticut General Assembly

    Public Hearing 02/24

  9. 2026-02-18 Connecticut General Assembly

    Referred to Joint Committee on Banking

Official Summary Text

To establish that the State Treasurer may accept certain rates for investment-related services under the community bank and credit union investment program.

Current Bill Text

Read the full stored bill text 
Senate
SB216 / File No. 120 1

General Assembly File No. 120
February Session, 2026 Senate Bill No. 216

Senate, March 23, 2026

The Committee on Banking reported through SEN. MILLER of
the 27th Dist., Chairperson of the Committee on the part of the
Senate, that the bill ought to pass.

AN ACT CONCERNING THE COMMUNITY BANK AND CREDIT UNION
INVESTMENT PROGRAM ESTABLISHED BY THE STATE
TREASURER.
Be it enacted by the Senate and House of Representatives in General
Assembly convened:

Section 1. Section 3 -24k of the general statutes is repealed and the 1
following is substituted in lieu thereof (Effective October 1, 2026): 2
(a) The State Treasurer may establish a program under which the 3
State Treasurer may, based on cash availability, make available a pool 4
of funds not exceeding three hundred million dollars for investment 5
with eligible community banks and community credit unions. Such 6
funds shall be obtained from the state's operating cash managed by the 7
State Treasurer. 8
(b) (1) The State Treasurer shall establish eligibility criteria for any 9
program established under subsection (a) of this section. Such eligibility 10
criteria shall include, at a minimum, an asset limit for community banks 11
and community credit unions to participate in such program. Such asset 12
SB216 File No. 120

SB216 / File No. 120 2

limit shall provide that: (A) During the period beginning July 1, 2023, 13
and ending September 29, 2024, no community bank or community 14
credit union with assets exceeding two billion dollars may participate in 15
such program; and (B) beginning September 30, 2024, no community 16
bank or community credit union may participate in such program if 17
such community bank's or community credit union's assets exceed the 18
sum of (i) the preceding asset limit established by the State Treasurer, 19
and (ii) the median percentage loan growth of community banks and 20
community credit unions eligible for the program at the time when the 21
State Treasurer establishes such asset limit. As used in this subsection, 22
"median percentage loan growth" means the middle value representing 23
the percentage increase or decrease, as the case may be, in loan assets 24
over a period of time reflected on the balance sheet of a specified group 25
of lenders. 26
(2) Not later than July 1, 2024, and annually thereafter, the State 27
Treasurer shall provide to the Department of Banking a list of the 28
community banks and community credit unions that are eligible to 29
participate in such program at the time when the State Treasurer 30
provides each such list to the department. Not later than August 31, 31
2024, and annually thereafter, the Department of Banking shall provide 32
to the State Treasurer the median percentage loan growth of each such 33
community bank and community credit union. 34
(c) The State Treasurer shall establish a schedule for making such 35
investments with such banks and credit unions. 36
(d) The State Treasurer shall establish a [competitive bidding ] 37
procedure under which such banks and credit unions may [compete] 38
apply for investment-related services under said program. Under such 39
procedure, the State Treasurer may accept rates for such investment -40
related services that are not greater than one hundred basis points below 41
the previous day's yield for an appropriately comparative United States 42
Treasury security with the same maturity date as the maturity date 43
applicable to such investment -related services, as determined by the 44
State Treasurer. 45
SB216 File No. 120

SB216 / File No. 120 3

(e) The State Treasurer may establish capital standards for such banks 46
and credit unions wishing to participate in said program. 47
This act shall take effect as follows and shall amend the following
sections:

Section 1 October 1, 2026 3-24k

BA Joint Favorable

SB216 File No. 120

SB216 / File No. 120 4

The following Fiscal Impact Statement and Bill Analysis are prepared for the benefit of the members of
the General Assembly, solely for purposes of information, summarization and explanation and do not
represent the intent of the General Assembly or either chamber thereof for any purpose. In general,
fiscal impacts are based upon a variety of informational sources, including the analyst’s professional
knowledge. Whenever applicable, agency data is consulted as part of the analysis, however final
products do not necessarily reflect an assessment from any specific department.

OFA Fiscal Note

State Impact:
Agency Affected Fund-Effect FY 27 $ FY 28 $
Various Various -
Uncertain
See Below See Below
Note: Various=Various
Municipal Impact: None
Explanation
The bill allows the Treasurer to accept lower investment return rates
as part of the Community Bank and Community Credit Union
programs, instead of using the competitive bid process under current
law. The impact of th is change is uncertain, as it will depend on the
amount and timing of investment received from offerings under the
new system versus the current, as well as any difference between
investment returns generated by these programs compared to other
short term cash flow investments. Any impacts would be to various
funds that are invested within the short-term investment markets.
The Out Years
The annualized ongoing fiscal impact identified above would
continue into the future subject to the terms and results of short term
investment.

SB216 File No. 120

SB216 / File No. 120 5

OLR Bill Analysis
SB 216

AN ACT CONCERNING THE COMMUNITY BANK AND CREDIT
UNION INVESTMENT PROGRAM ESTABLISHED BY THE STATE
TREASURER.

SUMMARY
This bill sets the minimum interest rate that the state treasurer may
accept for investment-related services under the Community Bank and
Credit Union Initiative. Specifically, it sets the minimum rate at 100 basis
points (one percentage point) below the previous day’s yield for a
comparable U.S. Treasury security with the same maturity date as the
one applicable to the investment-related services, as determined by the
treasurer. The bill also requires that the treasurer select banks and credit
unions to participate in the program through an application process,
rather than a competitive bidding process as current law requires.
Under this initiative, the treasurer may invest up to $300 million in
Connecticut-based banks and credit unions that meet the applicable
asset limits and capital standards ’. The financial institutions
participating in the initiative make loans to people and small -to-
medium sized companies and provide banking services in underserved
markets.
EFFECTIVE DATE: October 1, 2026
COMMITTEE ACTION
Banking Committee
Joint Favorable
Yea 13 Nay 0 (03/10/2026)