Public Banks

The Public Banking Movement Is Taking Off In The U.S.

March 19, 2018 Margaret Flowers and Kevin Zeese, Clearing the FOG. Podcast Banking and Finance, Money, Public Banks, Wall Street

Public Banks exist around the world. They are used to hold public dollars, such as taxes and fees, to keep the money local so it serves the public interest, instead of giving it to Wall Street banks who charge high fees and interest rates. There is only one public bank so far in the United States, the Bank of North Dakota. It has been in existence for almost 100 years. Now, thanks to the work of the Public Banking Institute, there is a vibrant movement to create more public banks in the U.S. at the city and state level. We speak with Walt McRee and John Comerford about the reasons to support public banks, how they would serve people instead of Wall Street profits and current efforts across the country.

Top Cannabis Regulator: Massachusetts Should Create State Public Bank

March 1, 2018 Staff, Publicbankinginstitute.org Create! Marijuana, Massachusetts, New Economy, Public Banks

Recreational pot sales are scheduled to begin in July in Massachusetts, and as yet, there are no banking services for the industry predicted to have $1 billion in sales by 2020. Cannabis Control Commission chairman Steve Hoffman said in the Boston Globe, “There’s a high degree of urgency, so it’s something we need to start talking about.” Hoffman suggests the state should consider creating a state-run bank. That adds Massachusetts to the list of states — including California and Ohio — considering Public Banking due to the urgent needs of the legalized marijuana industry. Hoffman continued: “Unfortunately, it’s a real possibility that the recreational industry won’t have access to any banking services. We’re working as hard as we can to preempt that, but we can’t force any bank or credit union to service this industry.”

How City-Owned Public Banks Could Transform Cities

February 21, 2018 Oscar Perry Abello, Nextcity.org Create! Cities, New Economy, Public Banks, San Francisco

It’s no surprise that Malia Cohen worries about what local public dollars are doing. As a member of the San Francisco Board of Supervisors, the municipal legislative body, it’s her job to know how, where and why the city’s money is coming in and going out. But recently, Cohen has joined a growing number of public officials around the country who are wondering what happens in between — what happens when the money in the city coffers goes to sleep at night. In fiscal year 2017, the city of San Francisco took in an average of $508 million a month in revenues and put out $467 million a month in expenses. But in between, the banks that handle all that cash sometimes used public dollars in ways that, in the opinions of Cohen and others, contradict the reasons why that money is coming and going in the first place.

Student Debt Slavery II: Level The Playing Field

January 7, 2018 Ellen Brown, Web of Debt Blog Educate! Banking, Public Banks, Student Debt

The lending business is heavily stacked against student borrowers. Bigger players can borrow for almost nothing, and if their investments don’t work out, they can put their corporate shells through bankruptcy and walk away. Not so with students. Their loan rates are high and if they cannot pay, their debts are not normally dischargeable in bankruptcy. Rather, the debts compound and can dog them for life, compromising not only their own futures but the economy itself. “Students should not be asked to pay more on their debt than they can afford,” said Donald Trump on the presidential campaign trail in October 2016. “And the debt should not be an albatross around their necks for the rest of their lives.”

An SF City Bank Is Not Only Possible — It’s A Great Idea

January 4, 2018 Tim Redmond, 48hills.org Create! Banks, New Economy, Public Banks, San Francisco

San Francisco faces no legal obstacles and no significant policy problems with creating a municipal bank, a recent report from the city’s budget and legislative analyst concludes. The report, released late in November with very little news media fanfare, represents a major step towards putting the city’s sizable financial resources into community development, affordable housing, and small businesses instead of the profits of giant, corrupt financial institutions. The report hinges in part on a change in the position of the City Attorney’s Office. In 2011, when then-Sup. John Avalos raised the issue, the budget analyst reported that state law would ban a municipal bank. But since then, after detailed research, City Attorney Dennis Herrera has concluded that “in fact, State law does not preclude the city from creating a bank as a separate legal entity.”

Boulder Holds Up Talks With JPMorgan, Considers Public Bank

December 6, 2017 Alex Burness, dailycamera.com Create! Colorado, JP Morgan, Public Banks

By Alex Burness for Boulder News - Boulder is holding off, for now, on renewing a contract with JP Morgan Chase, the city's longtime banking provider and a funder of controversial oil pipelines. Meanwhile, environmental advocates are urging Boulder to ditch JP Morgan Chase and create a public bank — an idea that will at least be discussed in concept, according to the mayor. About a year ago, the City Council passed a resolution in support of the Standing Rock Sioux and allies who protested the Dakota Access Pipeline, and in doing so also asked city finance staff to explore possibly severing ties with JP Morgan Chase, Boulder's bank since 2004. After issuing a request for proposals from banks and doing several months of exploration, staff returned in October to report to the council, via a memo, that it did not appear there were any banks both capable of handling the city's significant banking needs and up to the city's ethical standards on fossil fuels and other matters. The recommendation from staff was that Boulder extend the city's relationship with JP Morgan Chase. But the memo containing that recommendation arrived at an awkward time, Mayor Suzanne Jones said, since an election was around the corner. "I imagined that few had had time to read (the memo) and respond," Jones said this week, in an email.

The Public Bank Option – Safer, Local And Half The Cost

November 6, 2017 Ellen Brown, ellenbrown.com Create! New Economy, Public Banks

By Ellen Brown For The Web of Debt - For those few politicians who are aware of the banks’ magic money tree, the axiom that the people should own the banks – or at least some of them – is a no-brainer. One of these rare politicians is Phil Murphy, who has a double-digit lead in New Jersey’s race for governor. Formerly a Wall Street banker himself, Murphy knows how banking works. That helps explain why he has boldly made a state-owned bank a centerpiece of his platform. He maintains that New Jersey’s billions in tax dollars should be kept in the state’s own bank, where it can leverage its capital to fund local infrastructure, small businesses, affordable housing, student loans, and other state needs. New Jersey voters go to the polls on November 7. That means New Jersey could soon have the second publicly-owned depository bank in the country, following the very successful century-old Bank of North Dakota (BND). Other likely contenders among about twenty public banking initiatives now underway include Washington State, which has approved a feasibility study for a state bank; and the cities of Santa Fe in New Mexico and Los Angeles and Oakland in California, which are exploring the feasibility of their own city-owned banks.

Newsletter – From Neoliberal Injustice To Economic Democracy

November 5, 2017 Kevin Zeese and Margaret Flowers, www.popularresistance.org Newsletter Cooperatives, Economic Democracy, Energy, Housing, Mutual Aid, New Economy, Public Banks, Transportation

By Kevin Zeese and Margaret Flowers. This week, we will focus on positive work that people are doing to change current systems in ways that reduce the wealth divide, meet basic needs, build peace and sustainability and provide greater control over our lives. The work to transform society involves two parallel paths: resisting harmful systems and institutions and creating new systems and institutions to replace them. Throughout US history, resistance movements have coincided with the growth of economic democracy alternatives such as worker cooperatives, mutual aid and credit unions.

New Rules Are Killing Community Banks, Public Banks Can Revive Them

October 31, 2017 Ellen Brown, ellenbrown.com Create! New Economy, Public Banks, Regulation

By Ellen Brown for Web of Debt Blog - At his confirmation hearing in January 2017, Treasury Secretary Stephen Mnuchin said, “regulation is killing community banks.” If the process is not reversed, he warned, we could “end up in a world where we have four big banks in this country.” That would be bad for both jobs and the economy. “I think that we all appreciate the engine of growth is with small and medium-sized businesses,” said Mnuchin. “We’re losing the ability for small and medium-sized banks to make good loans to small and medium-sized businesses in the community, where they understand those credit risks better than anybody else.” The number of US banks with assets under $100 million dropped from 13,000 in 1995 to under 1,900 in 2014. The regulatory burden imposed by the 2010 Dodd-Frank Act exacerbated this trend, with community banks losing market share at double the rate during the four years after 2010 as in the four years before. But the number had already dropped to only 2,625 in 2010. What happened between 1995 and 2010? Six weeks after September 11, 2001, the 1,100 page Patriot Act was dropped on congressional legislators, who were required to vote on it the next day.

Newsletter – Mobilize For System Change

October 15, 2017 Margaret Flowers and Kevin Zeese, www.popularresistance.org Newsletter common wealth, Education, Energy, Neoliberalism, Peace, Public Banks, Puerto Rico

By Margaret Flowers and Kevin Zeese. Decades of neo-liberal economic policies in the United States and debt, which is required by the bottom 90% to survive, have fanned political unrest and the call for revolution, rather than reform. Just as Obama and the Democrat's populist façade disintegrated under a growing wealth divide, worsening climate change and militarization of our communities and woke many self-described progressives up to the need for systemic changes, the Trump presidency could have similar effects on conservatives. Voters who thought they were ending the status quo, "draining the swamp," by voting for Trump may find that loss of health care, trade deals that drive a race to the bottom and tax cuts for the wealthy move them to be open to solutions they may have once rejected.

How Public Banks Can Fund Renewable Energy

October 12, 2017 Staff of Public Banking Institute, www.publicbankinginstitute.org Create! New Economy, Oakland, Public Banks, Renewable Energy

By Staff of Public Banking Institute - September 25, Friends of Public Bank of Oakland organized a public forum to hear Wolfram Morales of the German Sparkasse (East German Savings Bank Association) explain how Public Banking works in his country to fund renewable energy development. The East Bay Times as well as Oakland North covered the event and connected it to how Public Banks here could do the same thing in the US that Sparkasse do in Germany: offer low-interest rates to companies providing solar and wind resources, driving development. "Though public banks are a fixture in Europe, the only one that exists in the United States is the Bank of North Dakota, Morales said. There are more than 600 in Germany, most of which are county-level, putting billions into renewable energy development. Those banks are able to offer interest rates as low as 1 percent on loans, which is much lower than what commercial banks offer. "Speakers at the forum talked about how a public bank can help give the community more control over its energy sources."

Los Angeles Public Bank Effort Gains More Steam

October 11, 2017 Staff, www.publicbankinginstitute.org Create! Los Angeles, New Economy, Public Banks

By Staff of Public Banking Institution - Strong steps taken by LA City Council toward a Public Bank for Los Angeles have drawn a good deal of media attention, including coverage by the local CBS affiliate. The Ad Hock Committee on Comprehensive Job Creation Plan began to debate the issue last Wednesday, Oct 4. Following the successful Sept 29 meeting that took place between interested Councilmembers, legislative directors and Public Banking experts, Ellen Brown was invited to attend the Ad Hoc Committee and explain how a Bank of Los Angeles can be feasible, profitable and beneficial for the city's residents. The Ad Hock Committee panel included the City’s Attorney Office, City Administrative Officer, Chief Legislative Officer, and PBI's Ellen Brown. As a result of the discussion, Chairman Krekorian moved to instruct the City Attorney’s Office and the CLA to report back on

What A Public Bank Could Mean For California

July 3, 2017 Ellen Brown, www.ellenbrown.com Create! California, New Economy, Public Banking, Public Banks

By Ellen Brown for The Web of Debt Blog - California is the eighth largest economy in the world, and it has a debt burden to match. It has outstanding general obligation bonds and revenue bonds of $158 billion, largely incurred for infrastructure. Of this tab, $70 billion is just for interest. Over $7 billion of California’s annual budget goes to pay interest on the state’s debt. As large as California’s liabilities are, they are exceeded by its assets, which are sufficient to capitalize a bank rivaling any in the world. That’s the idea behind Assembly Bill 750, introduced by Assemblyman Ben Hueso of San Diego, which would establish a blue ribbon task force to consider the viability of creating the California Investment Trust, a state bank receiving deposits of state funds. Instead of relying on Wall Street banks for credit – or allowing a Wall Street bank to enjoy the benefits of lending its capital – California may decide to create its own, publicly-owned bank. On May 2, AB 750 moved out of the Banking and Finance Committee with only one nay vote and is now on its way to the Appropriations Committee. Three unions submitted their support for the bill – the California Nurses Association, the California Firefighters, and the California Labor Council. The state bank idea also got a nod from former Secretary of Labor Robert Reich in his speech at the California Democratic Convention in Sacramento the previous day.

Amid Divestment Protests, More Cities Explore Public Banks

June 7, 2017 Oscar Perry Abello, www.billmoyers.com Create! Divestment, New Economy, Protests, Public Banks

By Oscar Perry Abello for Moyers and Company - Philadelphia City Council Member Cindy Bass was already thinking about how to cut the city’s ties with Wells Fargo when bank CEO John Stumpf testified last September before the US Senate. Questioning Stumpf about the bank’s fraudulent accounts scandal, Sen. Elizabeth Warren said, “So you haven’t resigned, you haven’t returned a single nickel of your personal earnings, you haven’t fired a single senior executive. Instead, your definition of accountable is to push the blame to your low-level employees who don’t have the money for a fancy PR firm to defend themselves.” Search the US Department of Justice website for “Wells Fargo” and “settlement” and you’ll get a litany of results: a $25 billion settlement for foreclosure abuse (a record), $1.2 billion for improper mortgage lending practices, and $184.3 million in compensation for steering black and Latino borrowers into predatory subprime mortgages. The 2016 hearing was the moment when the wheels fell off the stagecoach. Stumpf finally stepped down, about a month later, but he never returned a nickel of his pay. In fact, he left with a $133.1 million severance package. “Their lackluster responses, it was so outrageous, they just didn’t get it,” says Bass. “As a city, how could we be in bed with this company?

TiSA And The Threat To Public Banks

May 24, 2017 Thomas Marois, www.tni.org Educate! Public Banks, TISA

By Thomas Marois for TNI - The Trade in Services Agreement (TiSA) is an attack on the future publicness of public banking around the world. This briefing is about how the Trade in Services Agreement (TiSA) would be an attack on the future publicness of public banking around the world. Despite 30 years of privatisation, publicly owned banks remain active in most countries and communities. Yet the importance of TiSA to the future of public banks has yet to be raised as a fulcrum of resistance. Indeed, by privileging a private, profit-oriented vision of financial services over the public good and public provisioning, TiSA will impact public banks’ mandates and capacities to serve the public interest, directly and indirectly, now and in the future. In this way, public banks will be pressured to internalise the interests of a global, private, corporate elite by forcing their activities into increasingly narrow competitive market logics – this being a precursor to eventual bank privatisation. Again, we do not claim that public banks are perfect, but they do a lot of good.

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