According to state law, the State Treasurer is the sole banking and cash management officer of the state. But what does that mean? As part of that role, Oregon State Treasury provides a variety of banking services—including deposits, electronic funds transfers, merchant card acceptance, prepaid card issuance, check and warrant issuance, and more—to state agencies and certain public universities. In 2020, we processed 31.3 million banking transactions totaling $317 billion.
While Treasury partners with various financial institutions to provide many banking services, we also internally manage a commercial banking system to maintain all agency accounts. In fact, with very few exceptions, Oregon law does not authorize state government agencies to open or maintain their own bank accounts. Instead, an agency’s accounts are maintained at Treasury.
Treasury currently partners with 12 financial institutions across the state to accept deposits from agencies. When an agency deposits funds at one of those institutions, the funds are actually deposited in an account owned by Treasury. The financial institution reports the transaction to Treasury, which we then credit to the agency’s account. Similarly, when an agency issues a payment, the funds are drawn against an account owned by Treasury. The financial institution reports the transaction to Treasury, and then we debit the agency’s account. Each day, Treasury provides account statements and other reporting to agencies detailing the activity in their accounts.
This model for account maintenance provides several benefits to the state. Because we negotiate banking contracts on a statewide basis, all agencies benefit from significant price savings. Agencies do not have to individually seek out and negotiate banking services, nor do they have to reconcile accounts or manage funds across multiple financial institutions. And because funds are centrally pooled at Treasury, we’re able to rapidly invest the funds and increase interest earnings for the state. Learn more about that side of our work here.
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