Phil Murphy’s win in NJ has caught the attention of the banking industry. Banking financial services magazine American Banker contacted PBI the day after the election to ask us how we were seeing the success. The resulting article by Laura Alix provides a balanced and overall positive assessment and highlights that the Murphy win “is being seen as a much-needed shot in the arm for the broader public-bank movement.”
Once community banks understand how a Public Bank can partner with them to overcome regulatory and capital burdens, PBI believes Public Banks are likely to gain many more banker allies.
“It seems to me that right now the biggest challenge is fear, based on a lack of education, that the local mayor or the governor or the state treasurer is going to run a bank and they’re not trained to run a bank,” said Debra Figart, a professor of economics at Stockton University in New Jersey. Figart said that as more people learn about the Bank of North Dakota and its mission, they will warm up to the idea of establishing a public bank in their own city or state.
"Murphy has said that a public bank would complement, not compete with, local banks and credit unions. His gripe is with large out-of-state banks, because the state "has no control" over how they spend state funds. As an example, he noted that one unnamed bank accepted more than $1 billion of public deposits last year but made only three loans in the state through the federal government’s small-business lending program.
Murphy’s victory is one of several recent developments that have given hope to advocates of public banks. ...
"Ellen Brown, the founder and chair of the Public Banking Institute, estimates she’s talked with about 20 different groups nationwide that are actively exploring options for creating public banks. Serious efforts to study the issue are also underway in Santa Fe, Seattle and Oakland."