State and local governments have a wide range of banking requirements and investment responsibilities. Local ordinances and charters often place restrictions on the locations of financial organizations with which governments may conduct business. These restrictions, in turn, often result in uncompetitive banking fees, below-market investment returns, and inferior or unavailable services.
The Government Finance Officers Association (GFOA) encourages local governments to remove artificial restrictions upon the investment of public funds and the use of banking services by:
- authorizing and encouraging professional investments by removing geographical restrictions on eligible financial entities,
- allowing the use of banks and other financial institutions anywhere permitted by state law, and
- allowing the use of custodians anywhere in the country.
- Publication date: June 1997