New report strongly recommends a public bank for New Jersey

Vault door

Photo courtesy NJ Spotlight.

 

Creating a public bank — Gov. Phil Murphy’s campaign centerpiece — has been left on the back burner since his election. But a new report supports the argument that it could play a key role in achieving big public-policy goals. John Reitmeyer writes about it in NJ Spotlight:

“The New Jersey Citizen Action Education Fund’s report suggests that New Jersey may be a prime location for a public-bank revival, given the state has many needs that are not being fully met by commercial banking institutions. It cites gaps in small-business lending, retirement savings, infrastructure investment, affordable-housing financing and the availability of low-cost student loans as examples.”

Reitmeyer continues:

“‘The primary mission of the (bank) would be to expand access to capital at competitive rates for creditworthy projects that fall within socially beneficial categories and are currently not adequately funded or financed,’ the report said.

“Murphy has suggested the bank could draw its capital from taxpayer deposits and other resources, which currently are held in large commercial banks that have been making profits off New Jersey’s assets without partnering with the state to fulfill its public-policy goals.

“The report highlights such accounts as a source of capital for the public bank, but it suggests there are a host of other potential sources. They include security deposits in landlord-tenant agreements that by law must be kept in interest-bearing accounts. The state could also dedicate a portion of fees that are levied for things like environmental permits, sell bonds, or appropriate funds out of the annual budget to provide seed money for the bank.”

[Read the full article]

[Read the report]

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