Where do states bank?

June 9, 2017 11:16 AM

I know the United States federal Treasury has an account with the Federal Reserve system. This account is where tax payments go, and where federal payments come from. But where do states do their banking?

I know that in between Jackson killing off the Bank of the United States, and the Federal Reserve Act, the U.S. government kept money all over the place. Does California just have an account at Bank of America? (Does Oklahoma bank at Bank of Oklahoma?)

posted by Huffy Puffy to Law & Government (8 answers total)

Best answer: According to the PA Treasury,

The Pennsylvania Treasury keeps deposits in nearly 50 financial institutions throughout the Commonwealth, including about a dozen banks that function as “active depositories” where Treasury maintains accounts from which payments are issued to pay the Commonwealth’s bills.

I have not found a list of their specific banks.
posted by muddgirl at 11:53 AM on June 9, 2017

Each state would be different. I think they tend to use qualified banks that apply to be depositories. I don't know of any state-run banks. And I think some states choose to keep piles of gold as well as money.
posted by zennie at 12:01 PM on June 9, 2017

Best answer: The California State Treasurer's Office has a contract with Union Bank for EFT payments.
posted by djb at 12:27 PM on June 9, 2017

Banks bid in an open process. If you look at the state's comptroller office and the public bids portal, you can probably find the framework for banking services which should tell you who the incumbent contractors are.
posted by parmanparman at 12:54 PM on June 9, 2017 [1 favorite]

Best answer: North Dakota has its own state-owned bank and state agencies are required to keep their funds in it.
posted by Esteemed Offendi at 12:55 PM on June 9, 2017

This article talks about states having gold deposits at the Federal Reserve Bank of New York.
posted by Jahaza at 1:15 PM on June 9, 2017

They bank with many of the large banks. We have a government division at the bank where I work now and our clients are city and state agencies. When I was unemployed, I received a Bank of America ATM card to receive my money so the California State Employment Development Department has a contract with BofA.
posted by shoesietart at 2:57 PM on June 9, 2017

Best answer: If I read this page about Washington state's cash management policy and this page about their banking practices (for state agencies), it seems that Washington state has consolidated their accounts with US Bank.

Searching for the keywords "bank of record", suggests that Vermont uses TD Bank and Washington, D.C. uses Wells Fargo as their respective banks of record but it's not 100% clear to me if that means that's where all (most?) of their cash is located.

Poking around on different state treasurer websites might also yield some clues. According to this, Arizona's "servicing bank" is Bank of America but they also maintain working relationships with Bank of the West, JPMorgan Chase, National Bank of Arizona, Wells Fargo, and Zions Bank. On Ohio's treasurer's page, they have more than 50 banks listed as "depository banks". And, as indicated above, North Dakota has its own state-owned bank (which appears to be unique in the US according to this).

In conclusion, state cash management procedures are a land of contrasts.
posted by mhum at 4:02 PM on June 9, 2017