By Mick Dumke, ProPublica and Haru Coryne, ProPublica / December 22, 2021

Yet experts note that multimillion-dollar deposits only benefit small banks if they are able to make loans in the community, which GN struggled to do. Unlike other tools at the government’s disposal, such as including smaller banks in bond deals, big deposits alone can’t help them make a profit.

“Municipal deposits can be very expensive for financial institutions,” said Horacio Mendez, president and CEO of the Chicago-based Woodstock Institute, a nonprofit policy group that focuses on financial issues. “Sometimes, a city or state kind of thinks that putting a lot of money into a financial institution is doing them a favor.”