Are Public Banks Our Future?
article published in the Wall Street Journal on 12/01/2011
Occupy Shocker: A Realistic, Actionable Idea from the West Coast, the Move for Public Banking is Within Reach
SAN FRANCISCO—……..(The) Occupy San Francisco (movement has) ….. a realistic plan aimed at the heart of banks. The idea could be expanded nationwide to send a message to a compromised Washington and the financial industry. It's called a municipal bank. Simply put, it would transfer the City of San Francisco's bank accounts—about $2 billion now spread between (BIG) banks like Bank of America Corp., UnionBanCal Corp. and Wells Fargo & Co.—into a public bank. That bank would use small local banks to lend to the community.
Backers of the plan aren't using a reckless approach. They're proposing a three- to five-year transition period and the relocation of just $500 million initially. It would be chartered as a credit union, member-owned and insured. To keep everyone honest, small banks that get money from the credit union would be required to participate in what are called partnership loans, putting their capital next to taxpayer money, in an effort to get their skin in the game. The end result: "low-interest, long-term loans for projects located in San Francisco," according to a proposal made by the San Francisco Community Congress, a group linked with the area's Occupy protests……
Municipal banks aren't a new idea. They've just stayed off the radar as big, private banks have consolidated, grown and pressured state and local governments to keep banking jobs in the community. San Francisco activists pushed for a similar bank as far back as 1975.
But the financial crisis and the vocal opposition to the industry have thrust the idea of public banking back into the debate. Proponents argue that big banks often abandon markets because they deem them as unprofitable or risky. In effect, they say, San Francisco's capital is used to finance developments in Florida or even Finland when the city's deposits are held by global financial institutions.
In contrast, municipal banks would keep profits and investment in the community. Proponents also point to the Bank of North Dakota, a state bank founded more than 90 years ago by farmers upset with Eastern banking practices. The bank, with $4 billion in assets, is run by the state, earning taxpayers more than $61 million last year. In 2008, North Dakota's bank reported a profit of $57 million, while Bank of America had a $1.2 billion net loss.
……... Government officials in New Mexico and Santa Cruz, Calif., recently switched banks based on their local record. But San Francisco's nascent municipal-bank movement is the boldest institutional stroke yet against banks targeted by the Occupy movement.
"We have an opening now," John Avalos, a city supervisor says. "Social change is happening. Occupy Wall Street is a big part of that bubble, that change. We may see change in how we structure our economic system, and I'm really excited about that."
To read entire article by David Weidner: click here
Until you return, fill your days with GIGGLES, JOY, and APPRECIATION!
Sylvia Silk, D.D. Director of the Institute For Balanced Living, Los Angeles,CA, USA
DoctorofDivinity, SpiritualCoach, ReconnectiveHealingPractitioner, Writer
Occupy Shocker: A Realistic, Actionable Idea from the West Coast, the Move for Public Banking is Within Reach
SAN FRANCISCO—……..(The) Occupy San Francisco (movement has) ….. a realistic plan aimed at the heart of banks. The idea could be expanded nationwide to send a message to a compromised Washington and the financial industry. It's called a municipal bank. Simply put, it would transfer the City of San Francisco's bank accounts—about $2 billion now spread between (BIG) banks like Bank of America Corp., UnionBanCal Corp. and Wells Fargo & Co.—into a public bank. That bank would use small local banks to lend to the community.
Backers of the plan aren't using a reckless approach. They're proposing a three- to five-year transition period and the relocation of just $500 million initially. It would be chartered as a credit union, member-owned and insured. To keep everyone honest, small banks that get money from the credit union would be required to participate in what are called partnership loans, putting their capital next to taxpayer money, in an effort to get their skin in the game. The end result: "low-interest, long-term loans for projects located in San Francisco," according to a proposal made by the San Francisco Community Congress, a group linked with the area's Occupy protests……
Municipal banks aren't a new idea. They've just stayed off the radar as big, private banks have consolidated, grown and pressured state and local governments to keep banking jobs in the community. San Francisco activists pushed for a similar bank as far back as 1975.
But the financial crisis and the vocal opposition to the industry have thrust the idea of public banking back into the debate. Proponents argue that big banks often abandon markets because they deem them as unprofitable or risky. In effect, they say, San Francisco's capital is used to finance developments in Florida or even Finland when the city's deposits are held by global financial institutions.
In contrast, municipal banks would keep profits and investment in the community. Proponents also point to the Bank of North Dakota, a state bank founded more than 90 years ago by farmers upset with Eastern banking practices. The bank, with $4 billion in assets, is run by the state, earning taxpayers more than $61 million last year. In 2008, North Dakota's bank reported a profit of $57 million, while Bank of America had a $1.2 billion net loss.
……... Government officials in New Mexico and Santa Cruz, Calif., recently switched banks based on their local record. But San Francisco's nascent municipal-bank movement is the boldest institutional stroke yet against banks targeted by the Occupy movement.
"We have an opening now," John Avalos, a city supervisor says. "Social change is happening. Occupy Wall Street is a big part of that bubble, that change. We may see change in how we structure our economic system, and I'm really excited about that."
To read entire article by David Weidner: click here
Until you return, fill your days with GIGGLES, JOY, and APPRECIATION!
Sylvia Silk, D.D. Director of the Institute For Balanced Living, Los Angeles,CA, USA
DoctorofDivinity, SpiritualCoach, ReconnectiveHealingPractitioner, Writer
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