Oak Park Village Hall is pulling all of its money — some $4 million — out of the bank and putting it elsewhere, though not at a locally based bank.
Village trustees gave the go-ahead last week, allowing Oak Park to switch its financial institution to Rhode Island-based Charter One. For years, village hall had used Park National as its depository, before the institution was taken over by U.S. Bank in late 2009.
Craig Lesner, Oak Park’s chief financial officer, said it’s a sound business practice to test the market every five years or so. Plus, the village never picked U.S. Bank, rather, it was forced on them after the switchover.
“Every now and then, you’ve got to go out to bid, especially with banking services, to make sure you’re getting the biggest bang for your buck,” Lesner said. “And with U.S. Bank, we didn’t choose them; they essentially chose us when they took over Park National.”
So Oak Park recently sent out a call to financial institutions, and six responded. Charter One was picked, Lesner said, because it offered the highest “earning credit rate” on the $4 million or so that the village keeps in the bank, at 2 percent. Community Bank of Oak Park River Forest tied for third on the list, at .4 percent, while Forest Park National did not respond.
Lesner said Oak Park will earn as much as $75,000 a year from the interest, which Charter One uses to pay off the village’s banking fees.
Oak Park will have about 20 accounts through Charter One, including its payroll. The village plans to keep its lock box services with U.S. Bank open for a while during the transition, and they’ll be completely moved over to Charter One in six months.
Village Manager Tom Barwin said the transition to U.S. Bank was far from seamless, and it was necessary to make a change. He thinks Oak Park will test the market for some of its other services in the near future.