OBL Advocates for Stability and Collaboration in Ohio’s Homebuyer Plus Program

10/08/25

The Ohio Bankers League (OBL) and Community Bankers Association of Ohio (CBAO) jointly sent a letter to Ohio Treasurer Robert Sprague expressing serious concerns about newly proposed changes to the Ohio Homebuyer Plus Program (OHP). While OBL appreciates the Treasurer's continued collaboration with the banking industry, the letter highlights significant challenges these proposed modifications could create for participating banks and the customers they serve.

Since its launch in early 2024, the Homebuyer Plus Program has been a resounding success, helping tens of thousands of Ohioans save toward the purchase of a home. The program allows the Treasurer's Office (TOS) to place deposits with participating financial institutions at below-market rates, enabling banks to offer savers premium interest rates and additional benefits. Nearly 23,000 accounts have been opened to date, reflecting the strong appeal of the program and its positive impact on Ohio's housing market.

However, as the program has grown rapidly, TOS has introduced new proposals aimed at managing its scale and financial exposure. The most recent proposals include two major changes:

1. Increasing the interest rate on "excess funding" accounts from 50% to 75% of the BidOhio rate beginning in 2026; and
2. Requiring participating banks to return all excess deposits by January 1, 2027.

In its correspondence to the Treasurer's Office, the Associations conveyed that while both changes are concerning, the requirement to return nearly $1 billion in deposits would have the most severe consequences. Such a withdrawal, the letter explains, could create a liquidity strain across the industry-particularly for community and mid-sized institutions. A sudden removal of this funding could require banks to reduce lending, liquidate investments, or significantly adjust their balance sheets, which in turn could limit credit availability for consumers and small businesses.

The letter also notes that the issue of excess deposits will naturally resolve over time as initial Homebuyer Plus accounts close through home purchases or reach their five-year maturity. Allowing that process to unfold would avoid unnecessary disruption while still addressing long-term program balance.

OBL also raised concerns about the broader financial and operational impact of the proposed rate increase. Many participating banks already offer premium savings rates-sometimes two to three times higher than market averages-along with deposit bonuses for customers who reach their savings goals. A higher state charge on excess funding would reduce the resources available to sustain these benefits, potentially making the program less appealing to both banks and savers.

Beyond the financial implications, OBL emphasized that predictability and stability are critical to maintaining confidence in the program. Repeated and retroactive policy shifts have forced banks to make costly operational and compliance changes, update disclosures, retrain staff, and reconfigure systems on short notice. Over time, these disruptions risk eroding trust between the banking industry and the Treasurer's Office, undermining what has otherwise been a successful public-private partnership.

OBL's message to the Treasurer's Office is clear: the program's success should be viewed as an opportunity, not a problem. With thoughtful collaboration and careful policy adjustments, Homebuyer Plus can continue to thrive-supporting Ohio savers, strengthening financial institutions, and promoting homeownership across the state.

OBL will continue to work closely with state leaders to advocate for balanced solutions that preserve this program's success while protecting the financial stability of participating banks.