Put Iowa first by keeping funds local

A debate that could impact the direction of our economy for decades is brewing at the Iowa Capitol.

A recent study by the Common Sense Institute revealed that public entities like schools, cities and counties are holding nearly $2.5 billion of taxpayer dollars outside of Iowa financial institutions through vehicles called joint investment trusts. In doing so, they’re denying their communities the positive benefits that come when money is reinvested in the local economy.

In community banking, the dollars in an account don’t sit idle — they fuel local lending and build wealth. Deposits in your local bank help fund home mortgages, finance small businesses and provide credit for the agriculture industry.

This cycle of local deposits and local lending keeps money where it matters most — in our communities, helping it grow and thrive.

When these dollars leave our state through these investment trusts, it shrinks our economy and tax base — making it even more difficult to fund local governments.

Unfortunately, billions of dollars in deposits have already left our hometown banks, and there’s a real risk of losing billions more. In turn, that could cost Iowa billions in lending capacity and the economic growth that would result.

Even worse, joint investment trusts paid kickbacks of nearly $2 million to private associations in Iowa in 2025 to incentivize the removal of these deposits from community banks and the communities they serve.

The good news is, there are relatively simple solutions to this issue. The Iowa Legislature should place explicit limitations on the amount of local government funds that can be invested outside their community. This will help ensure these taxpayer dollars are available to support lending by local institutions, further strengthening our small-town economies.

I also encourage school board members, city councilors and county supervisors to consider the broader impact of their decisions. Let’s keep taxpayer money local and give our communities a better chance to thrive.

Through action on this issue, our elected officials can put Iowa first — keeping funds local and fueling our economy.

Abram Tubbs is CEO and chairman of the board at Ohnward Bank & Trust in Monticello and Co-CEO of the parent company, Ohnward Bancshares in Maquoketa. He is also the current chairman of the Iowa Bankers Association.

Doug Benjamin is CEO of Keystone Savings Bank in Marengo.