In July 2018, Washington State’s Office of Financial Management asked the Evans School of Public Policy and Governance at the University of Washington to complete an evaluation on the benefits and risks of establishing and operating a state-chartered, public cooperative bank. This evaluation would inform the creation of a business plan for such a bank. The interim report delivered mid-December concluded that: “Improvements can be achieved by creating a state-chartered public cooperative bank.”
The report also clarified that creation of such a bank is feasible under the state’s constitution, although it would require an enabling statute and the amendment of others. The final business plan report is due June 30, 2019.
More elected officials every week are seeing the potential of public banking to address budgetary woes. The latest is Connecticut State Representative Josh Elliott, who writes in the CT Mirror of how the century old Bank of North Dakota has “spun off $300 million in revenue to the state over the last decade alone [now $360 million since 2005] while also providing some significant functions. ...
“We need to implement a public bank in Connecticut because it allows for consistent and cheap lending. It works both for the state as an institution, and it works for its residents.”
The concept of “community wealth building” is gaining traction in the UK with politicians on all sides seeing the appeal of community-owned banking models. UK law was changed in 2014 making it possible for banks to be licensed as a true cooperative bank. The resulting coop banks are starting to spread across the UK with the vision of developing a wide network of regional community banks.
One such bank’s founder, Jules Peck, writes how these regional coop banks can put banking back in the hands of the people:
“As well as the bank I have helped found in the West of England region, Avon Mutual, we have banks already in formation in London and the South West and soon we hope in the Preston, Merseyside and Lancashire region, as well as in Wales. … We won’t be trading and involved in the speculative ‘financialized’ economy—just the real economy of our regions. Using local savings to lend to local citizens and businesses and other institutions.”
A recent CalMatters article by Felicia Mello and Ben Christopher examines the arguments made for public banking in California. What is the precedent? How could it work? They cover five things to know.
“If California had a bank controlled by the government rather than profit-hungry shareholders, public banking advocates argue, the state could fund social goods that often get the cold shoulder from commercial institutions: infrastructure projects, low-interest student loans and affordable housing.”
By September 2017, the Divest / Defund movement ignited by the unprecedented Standing Rock camp protests against the Dakota Access pipeline was already responsible for over $5 billion being withdrawn from DAPL-funding banks, according to organizers with Mazaska Talks. Billions had been divested from cities such as Seattle, Philadelphia, and Los Angeles, as well as more than $80 million in individual accounts.
Once a city divests to put their money “where their values are,” as Matt Remle, co-founder of Mazaska Talks and a member of the Standing Rock Sioux tribe, puts it in a recent Yes! Magazine article, “the question all along was what to do with the city’s money. And our philosophy was it’s not going to be a victory to close accounts with Wells Fargo and go to Bank of America.”
The solution: public banks.Read more
In late December, Washington State’s Treasurer’s office released a report that made many negative conclusions about public banks that were not based on any of the studies the report cited. PBI Chair Ellen Brown writes a response to correct the report:
“The only report actually addressing Washington State was the 2010 study by the Center for State Innovation. It concluded, ‘a state bank would have a positive effect on state revenue and could effectively strengthen the banking industry and create and sustain jobs through a revenue positive investment in a state bank.’ The $100 million the CSI recommended in capitalization was not stated as a reason not to do it. Capitalizing a bank is not an expenditure; it is an investment repaid over time with profits. The CSI study said the funds could be acquired through a bond issue repaid with bank dividends. Assuming a 10 percent capitalization requirement, the result would be a bank with a potential $1 billion portfolio, which could make below-market loans for those state and local infrastructure needs sorely lacking funding today.”
The Bank of North Dakota turns 100 years old this year. It’s Our Money with Ellen Brown will mark this centenary year by focusing on BND’s contribution as well as related monetary and policy issues.
Co-host Walt McRee introduces this episode:
“2019 is the centenary of the only public state bank in the United States, the Bank of North Dakota. It’s a big deal. From the struggling prairie farmers who started the bank after they took control of their state government to its unmatched success as a financial institution, the BND has inspired the launch of a hopeful national movement to bring about key systemic changes to the public’s access to its common wealth. Dr. Rozanne Enerson Junker is our guest, an expert on the history of the Bank. Rozanne talks about the way things were in North Dakota that precipitated the bank’s creation, how it got started and how many of the same aspects of monopoly-controlled finance still impact communities today. It is the first in our series of broadcast discussions on the Bank of North Dakota for 2019.”
PBI Chair Ellen Brown sheds light on how we could fund even our grandest ideas by injecting money directly into the economy without risking inflation. In her latest article in TruthDig, Ellen explains:
“A network of public banks could fund the Green New Deal in the same way President Franklin Roosevelt funded the original New Deal. At a time when the banks were bankrupt, he used the publicly owned Reconstruction Finance Corp. as a public infrastructure bank. …
“The publicly owned Reconstruction Finance Corp. (RFC) was a remarkable publicly owned credit machine that allowed the government to finance the New Deal and World War II without turning to Congress or the taxpayers for appropriations.”
As France’s working class pushes their government into submission and revolutionary mass protests now engulf Europe, the realization reaches our shores that the levers of our economies are begin pulled in favor of the very wealthy. This latest episode of It’s Our Money with Ellen Brown, co-hosts Walt McRee and Ellen talk with Dr Jack Rasmus and Me’Lea Connelly about how people are coming for their money.
Walt describes the episode:
“In so many ways and places around the world, citizens are expressing their intention to reclaim wealth that has been siphoned from their lives and local economies by the mechanisms of private capital control. Banks and governments are both targets for the wrath and revolutionary ideas that have arrived in France and are heading to Washington. In this edition, Ellen talks about the emerging Green New Deal idea that uses the Fed and a network of public banks to finance a sustainable future and social equity. And she talks with author and economics professor Dr. Jack Rasmus about the mechanisms of the Fed and financial markets which undermine the prospects for realizing the public’s interest in economic fairness. But some folks aren’t waiting: Walt and Ellen talk with Me’Lea Connelly, a founding Director of Village Financial, a new black-owned credit union co-op that is changing the economic prospects of a long-underserved community.”
Public banks can turn austerity into prosperity
Year-end appeal from Ellen Brown, Chair of the Public Banking Institute
Pundits warn that 2019 could be the start of the next Great Recession and that environmental devastation looms on the horizon. But solutions ARE possible with adequate public funding, and this funding can be generated with a network of local and national public banks. It’s not too late to turn things around, but more people need to know how, and soon. Your financial support now will help fund our 2019 Campaign for Public Banks to create the BIG PUSH we need now to get public banks established. You can sign on to support and contribute here.Read more