Indiana Initiates ESOP Support Program

Indiana State Treasurer Richard Mourdock has introduced a program to encourage banks to loan to ESOPs. The state will buy certificates of deposit from those institutions at reduced rates, increasing their funds available to loan. Banks then would loan these funds to new or existing Indiana ESOP companies for 4.25% (this is the current rate; it will change as interest rates change). The program will cost the state $500,000 annually, but Mourdock (himself a former ESOP participant) believes that the program will create a net increase in state revenues because ESOPs tend to keep jobs and business activity in the state.