To the Editor:

Since January 1999, state time (short-term) deposits in California institutions have increased from less than $2 billion to almost $3.5 billion. My office has worked very hard to expand and market the program, specifically targeting independent and community banks.

The time deposit program assures a yield to the state that is above the Treasury bill rate, with full collateral, at the same time that it provides well-priced capital to California lenders for home and business lending.

Your May 24 article "California Asked to Ease State-Deposit Law" suggested that independent and community banks are crowded out of the time deposit program by larger, regional banks. However, 45 of the program's 79 participants are community banks (defined as those with less than $250 million of assets).

I encourage readers who are interested in participating in this program to contact investment manager Bill Dowell in my office at 916-653-3147.

Philip Angelides
California state treasurer
Sacramento

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