Hartford Business Journal

12 Hartford Business Journal • May 29, 2017 www.HartfordBusiness.com CT's liquidity door widens to state lenders A little-noticed bill passed by the Gener- al Assembly will continue to provide a liquid- ity lift to the state and some of Connecticut's larger banks and credit unions and the com- munities they serve. House bill 6320 was recently adopted by the House and Senate and awaits the gover- nor's signature. Backed largely by the Credit Union League of Connecti- cut, the measure expands an existing state program — first implemented in 2006 — giving the state Treasurer's office authority to deposit some of the state's funds in com- munity banks and credit unions of a certain asset size. Currently, the asset maximum for eligible financial institutions is $500 million, credit union and state officials say. That limit was fine years ago, when it was first adopted, but supporters say the growth in bank and credit- union deposits/loans and membership, along with mergers, have yielded a handful of state financial institutions whose assets approach or exceed $500 million. As a result, House bill 6320 doubles that asset-threshold maximum to $1 billion. Banks, thrifts and credit unions prize these stable sources of funds from states, munici- palities and large depos- itors for the liquidity needed to carry out their lending and other fiduciary functions. "This bill lifts the asset threshold in order to make more financial institutions eligible for participation, helping meet the treasurer's need for a safe investment that provides liquid- ity,'' Credit Union League of CT President Jill Nowacki said via email. "The fact that all of the proceeds stay within our Connecticut communities ties very well to credit unions' mission of serving their communities." According to state Treasurer Denise L. Nappier's office, 39 state banks and 11 credit unions initially qualified for the program. Currently, only 20 banks and 12 credit unions qualify. Increasing the asset limit would allow an additional 10 banks and one credit union to participate. Since the program began the Treasury has made $478 million in investments with 10 community banks and credit unions through a monthly competitive bidding pro- cess, treasurer's spokesman David Barrett said. Presently, there is $22 million invested through the program. New Haven's Connex Credit Union is one of those qualified bidders. When the treasury- deposit program began, Connex's assets were about $200 million. Today, its assets are $513 million — above the current threshold. As a result, Connex lost a matured $4 million state Treasury CD in March, CEO Frank Mancini said. Mancini says he's hopeful the governor signs the measure by early June, so Con- nex can regain access to Treasury deposits, which the credit union has reinvested into members' auto and home loans. – Gregory Seay CAPITOL BIZ State Treasurer Denise L. Nappier On your 2017 Lifetime Achievement Award and your years of dedicated service. Lawson Margaret Tesla pledges 10 CT stores In the waning weeks of the legislative session, electric vehicle manufacturer Tesla is pledging to open 10 stores in Connecticut by the end of 2018 if lawmakers approve a bill that would allow the company to sell its cars directly to consumers. It's the first time the company has divulged the number of stores it would open in Connect- icut, where the company has made two previ- ous unsuccessful attempts to change state law. D i a r m u i d O'Connell, Tesla's vice president of busi- ness development, said in an interview with the Hartford Business Journal that each of the 10 stores would "con - servatively" employ 25 full-time workers. "We're talking 250 jobs in the near term," O'Connell said, adding that some locations could employ as many as 50 people. Tesla sells its cars directly to consum- ers, without using dealerships as middle- men, a practice outlawed in Connecticut. That means Connecticut residents, like those in a handful of other states, must leave the state to purchase a Tesla vehicle. The promise to open up to 10 new stores is the latest move in a recently intensified lobby- ing effort by Tesla. The company this month registered a state political action committee, which released a Greenberg Quinlan Rosner poll showing that 74 percent of Connecticut residents "strongly" or "somewhat" support allowing direct sales in Connecticut. Tesla CEO Elon Musk also penned a letter to the editor in the Hartford Courant. Iterations of previous failed bills called for a three-store cap, but the current lan- guage of House bill 7097 has no such limits. O'Connell said Tesla believes the "thou- sands" of Connecticut purchase reserva- tions for its more affordable Tesla Model 3 vehicles (which will start at a base price of $35,000) shows there's plenty of demand to support 10 stores here. Jim Fleming, president of the Connecticut Automotive Retailers Asso- ciation (CARA), which has led the charge against the Tesla bills, was dismissive of the electric car company's proposal. Fleming noted that New York, a larger market, only has five Tesla stores. "If they were to build 10 stores, I would be surprised," Fleming said. Regardless of the number, Fleming said CARA's position remains that Tesla should engage with the state's franchise dealership system. "I've got a bunch of dealers in Connect- icut that would take that franchise," he said. – Matt Pilon A Tesla Model 3, which the company claims has drawn "thousands" of reservation purchases in Connecticut. P H O T O | C O N T R I B U T E D

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