Our sources in Chicago and Springfield tell us that Illinois State Representative Mary Flowers has re-introduced the Community Bank of Illinois Act to the state's General Assembly.
Provides that State funds must be deposited in the Bank. Contains provisions concerning the nonliability of officers and sureties after deposit. Specifies the powers of the Bank. Contains provisions concerning the guaranty of deposits and the Bank's role as a clearinghouse, the authorization of loans the General Revenue Fund, bank loans to farmers . . . .
. . and other provisions. The bill had its first reading on January 14 of this year, and was assigned to the Financial Institutions Committee on February 3. The bill is to be heard by the Financial Institutions Committee at a hearing on Tuesday, March 10, at 2:30 PM in Springfield.
The Illinois Green Party included analysis of a public bank in Illinois, through this legislation, in its February 19 response to Illinois Gov. Bruce Rauner's budget--which the Greens called a "Divide and Conquer" budget. They wrote:
The Illinois Green Party has long proposed far better answers to our state’s fiscal problems. They include adopting a progressive or graduated income tax, like those already in place in our federal system and the majority of states. They include creating a public bank as a repository of state revenues. The publicly owned Bank of North Dakota has helped keep that state in the black and its economy healthy since 1919. And they include enacting a sales tax on speculative trading at the Chicago Mercantile Exchange, Board Options Exchange and other trading houses – a measure that could dramatically raise billions of dollars in new revenue, simply by taxing the sale of options, futures and derivatives at an infinitesimally small rate. Proposals for creation of a public bank, and for implementation of a sales tax on speculation have been introduced by State Representative Mary Flowers, in H.B. 107 and H.B. 106, respectively. The Illinois Green Party urges support for these bills.
Former Chicago Mayoral candidate, and urban planner, Amara Enyia is also a supporter of public banks--initially in the context of a city-owned bank in Chicago . . .
. . . right now we are in debt to other financial entities. I think when I last checked it was about $900 million. So the concept of a public bank is the notion of the bank as a public utility, a bank that works for the interests of the city of Chicago. Its allegiance is to the taxpayers. What that means is, we have the money to invest our own dollars into, for example, extending lines of credit to small businesses, to extending for homeowners who want to get loans for homes and repairs on their buildings if you're a landlord. These are the sorts of things that it's very difficult to get private financing from traditional banking institutions. The other [benefit] is infrastructure—having the money to execute infrastructure projects, [such as] our streets, our sewage systems, all those sorts of projects at low interest rates. Right now, the interest rates are sky high and, with that interest, the city never sees any of those dollars. We're just paying it out to these other financial entities, so imagine if that interest is actually recirculating back into our economy. It reduces the cost of these projects, but it also means that our money is recirculating back, which is in the interest of the public, the taxpayers. This is something that has worked in North Dakota. They've found that the Bank of North Dakota is actually outperforming all of the Wall Street banks. It is something that has been done in Europe, so it exists and the model is there, it's just a matter of pushing this idea for the city of Chicago.
. . . but the principles she outlines would also work for a state-owned bank. PBI will keep supporters posted on the progress of the Illinois legislation.