Grossman brings his banking initiative to Holyoke

Date: 4/26/2011

April 27, 2011

By G. Michael Dobbs

Managing Editor

HOLYOKE — State Treasurer Steven Grossman was very specific about one aspect of his trip to Holyoke last week and not so specific about the other.

Grossman wants to bring the state's money back home and into local community banks where it can be used to help small business through his Small Banking Initiative.

Grossman met with Mayor Elaine Pluta, State Sen. Michael Knapik, State Rep. Michael Kane, City Treasurer Jon Lumbra and David Thibault, assistant vice president of commercial lending at PeoplesBank on April 21 to discuss his new program.

Grossman explained that he is planning to initially take $100 million of the Commonwealth's reserves out of the out-of-state banks and foreign banks where it currently is deposited and place it in community-based banks for the purpose of expanding the pool of funds available for small business lending.

Three billion dollars of the state's funds are in banks outside of the state, Grossman said.

The initiative was one of Grossman's campaign promises.

Grossman, whose background is in a family-owned business, called the community banks "heroes" during the on-going recession as they were the institutions that still lent money to businesses.

"The goal here is to spur small business development," Grossman said.

Small businesses are the "lynchpin" of the Massachusetts economy and create 85 percent of the jobs, Grossman explained.

So far, 25 banks across the Commonwealth have agreed to participate in the program. Each of them will receive a deposit of state funds up to $5 million. Grossman anticipates adding another $100,000 into the program.

Thibault did not commit PeoplesBank to the program — he said his role was one of a "fact-finding mission" — but he did say, "Any program that brings funding to commercial lending can be beneficial."

He added that his bank has seen an increase in lending applications.

Prior to the meeting, Grossman toured the Victory Theater and said its renovation would "create a resurgent sense of optimism."

When asked how and if his office would become involved in the renovation effort, Grossman said, "Anything with the economic health of gateway communities is my responsibility."

"I'm bullish on Holyoke, bullish on Western Massachusetts," he added.

Donald Sanders of the Massachusetts International Festival of the Arts said Grossman expressed "an interest in various theaters [in the state] and their impact on economical development."

Sanders added the campaign to raise the final funds for the renovations "are on schedule" and the next aspect of the campaign will be announced in another month.