Indiana lawmakers amended a proposal that had attempted to give some of state Treasurer Daniel Elliott’s powers to big banks angered by his strong defense of taxpayers, Christians, and conservatives. Yet the program is still at risk of being turned over to the state’s powerful banking lobby, which has donated to all the politicians who control the $3 billion local investment pool targeted by the changes.
The provision inserted by Republican Sen. Travis Holdman, a former bank CEO, initially attempted to demote Elliott from sole manager of TrustIndiana to one member of a banker-controlled five-member board managing that pool. Holdman was formerly on the board of a bankers’ organization that merged into the outfit that lobbied for these changes, the Indiana Banker’s Association.
The IBA “has been opposed to some of my policies right from the beginning,” Elliott said in a phone interview. “They were opposed to me pushing back on ESG [leftist social justice investment metrics]. They were opposed to me fighting against BlackRock … That’s fine, they can have their opinions. What bothered me was that this was a backroom deal done in the middle of the night.”
Banking Regulations Hurt Taxpayers
Elliott told The Federalist bankers on the board would present a conflict of interest, as banks can financially benefit from the pool investments. Local officials are beneficiaries of the program, and thus naturally want TrustIndiana to perform optimally while lacking ethical conflicts over where the money is invested, Elliott noted.
This is why the Association of Indiana Counties opposed the attempted changes. So did Hoosier conservative activists, who rallied at the governor’s mansion in late April to push for property tax cuts and protect TrustIndiana.
“This is crony capitalism at its worst,” “said Coalition of Central Indiana Tea Parties Chairman Adam Harvey in a press release. “They want to put a board of bankers over the elected State Treasurer, directing investments that benefit their shareholders instead of Hoosier taxpayers and local governments.”
The banking lobby already has reduced TrustIndiana’s returns by requiring 50 percent of the pool to go into bank deposits, which return a lower interest rate, Elliott said. The S&P will not rate TrustIndiana, he said, “because it has too much of its assets in bank deposits.”
That’s just one of several examples of how Indiana’s banking lobby has reduced TrustIndiana returns for local officials and taxpayers via regulations, Elliott said. To get some of those removed, he agreed to the legislature creating a board to oversee the program. Index funds have historically overperformed managed funds.
Appointments Key to TrustIndiana Changes
The measure that passed the Indiana legislature inside its massive budget bill allowed for five TrustIndiana board members out of seven to be local officials instead of bank employees. But they could also be bank employees. It all depends on the appointments.
The new seven-member board that begins on July 1 includes the state treasurer, the director of Indiana’s bank regulator, and five appointees. Those five are appointed by the Indiana governor, House speaker, and Senate pro-tem. The governor appoints one and picks the board’s chairman, and the House speaker and Senate pro-tem each appoint two.
Elliott says those officials have assured him they will appoint local officials, not bankers. Republican Gov. Mike Braun’s office declined to comment on its appointment to this board or the governor’s stance on debanking, citing pending discussions. Republican Senate Pro Tem Rodric Bray’s office did not respond to repeated requests for comment.
“[T]he Speaker will focus on making his appointments within the parameters of the new law to ensure responsible stewardship of public funds. He certainly opposes any state support of discriminatory practices,” said House Speaker Todd Huston’s spokeswoman Molly Gillaspie in an email to The Federalist on Friday.
The new law allows these lawmakers to appoint either banking lobbyists or local officials, stipulating that they appoint “members with practical experience with financial institutions, local government or public finance, or financial investments domiciled in Indiana.” This means increased banking industry influence that would present conflicts of interest in managing TrustIndiana is only one nomination away.
Still, the law is an improvement over an earlier draft that required only banking representatives to be appointed. It specified that appointed members must have “practical experience at the executive level of a depository domiciled in Indiana.”
Blowback for Championing Republican Voters
As The Federalist reported last month, Elliott is part of a nationwide coalition of elected state financial officers defending Christians and Republican voters from financial bullying:
In a 2024 Alliance Defending Freedom (ADF) press conference, Elliott took a stand against pressure tactics the banking industry has used against conservatives and Christians. He said removing $13 billion in state business from Bank of America was on the table depending on how the bank responded to concerns from shareholders about its history of debanking Americans based on their political and religious views.
Sixty-nine percent of large financial companies’ policies allow them to deny service based on customers’ political or religious views, according to the business index on ADF’s 2024 Viewpoint Diversity Score
The IBA’s strategic plan, as The Federalist reported, includes support for “diversity, equity, and inclusion” efforts. In the 2024 election cycle, IBA’s political action committee Indiana BANKPAC donated $25,000 to Braun, $29,538 to Bray, $25,000 to Huston, and $22,500 to Holdman, according to TransparencyUSA.
“Treasurer Dan Elliott has been a champion to protect the citizens of Indiana from being debanked for years,” said ADF legal counsel Michael Ross in a statement to The Federalist. “Big banks are now trying to circumvent him to avoid being held accountable for politicizing their services. No one should have to be afraid that they will lose their bank account because of their religious or political views.”
Fight Over School Choice Program
The Indiana legislature pulled another program from Elliott in the 2024 session, its best school choice program. The budget also transferred education savings accounts (ESAs) for special-needs children and their siblings to Indiana’s education department, starting in 2026.
Policy experts including the Heritage Foundation, EdChoice, and Goldwater Institute agree the best practice is for state financial officers to manage ESAs, because education departments tend to impose more bureaucracy and one-size-fits-all curriculum, testing, and teaching methods. School choice advocates and Elliott will be working in 2026 to revert ESA management to his office, they told The Federalist.
“Who decides if [schooling] is successful? The parents,” Elliott said. “Nobody knows a child better than the parents — no teacher knows them better, nobody knows them better than the parents. And so I feel like this program is one that truly allows mom and dad to have total control over their child’s education.”
When Elliott entered the treasurer’s office in 2022, the computer system for enrolling ESA families and providers cost $2.6 million in taxpayer funds and could take months to make small updates, he said. Elliott, who is also a software engineer, found a new vendor to develop a superior system for $300,000.
“We built these systems to be pretty robust. My goal is for them to be able to handle tens and tens of thousands of kids,” Elliott said, adding that if the legislature were to expand Indiana’s ESA to all state K-12 students like Florida did in 2023, Indiana’s framework he developed “would be comfortable with that.”
States including Georgia, Ohio, and Texas have even copied the innovative technology Elliott commissioned for preventing fraud while providing parents robust access to their children’s education funds and providers. Elliott is the father of four children educated in public, home, and charter schools.
Indiana’s ESA management system is about to show what it can do in Texas. Texas has just created what may become the nation’s largest ESA. ESAs are considered the premiere school choice design because they offer high flexibility for parents not just to choose schools but custom-design individual classes, tutoring, extracurriculars, and therapies for their children’s individual needs and aptitudes.
Texas’s historic new universal ESA offers $10,000 or more per child to the parents of the more than 6 million K-12 children in Texas. As The Federalist reported, Gov. Greg Abbott primaried numerous members of his party to pass it. Indiana’s ESA, by contrast, is limited to special-needs families and has a waitlist the legislature failed to relieve this year.
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