General Discussion
Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region Forums15 Vermont Towns Say Yes To Creating A Public State Bank
On the first Tuesday of March, communities across Vermont hold town meetings at which they elect local officials, approve the coming years budget and vote on measures announced in advance.
This week, 19 Vermont cities and towns voted on a measure calling for the Vermont Economic Development Authority, a statewide finance lender created in 1974, to be turned into a public bank. Fifteen approved the notion.
In January, state Sen. Anthony Pollina (D) and five other progressive state lawmakers had introduced legislation to advance the proposal. Senate Bill 204 would direct the state government to deposit 10 percent of its unrestricted funds in a public VEDA bank, which could then leverage the money in the same manner as private banks do.
The Senate legislation would
(1) create statutorily the 10 Percent for Vermont Program within the Vermont Economic Development Authority for the purpose of establishing a banking system owned, controlled, and operated by the State of Vermont;
(2) amend the statutory authority of the Vermont Economic Development Authority to permit it to engage in the business of banking; and
(3) direct the State Treasurer to transfer 10 percent of the State governments cash reserves to the 10 Percent for Vermont Program for initial funding.
The pilot program would partner with local private banks to offer loans and boost economic development "by increasing access to capital for businesses in the State, according to the legislative text. VEDA is currently financed by legislatively appropriated funding, bonds and other means.
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http://www.huffingtonpost.com/2014/03/06/vermont-public-bank_n_4914755.html
Cali_Democrat
(30,439 posts)Vermont is a small state with a very small population.
About 600,000 people live there while many millions live in states like New York and California. There are a number of cities with more people than the entire state of Vermont.
Nevertheless, it'll be interesting if this works.
ProSense
(116,464 posts)Abby Rapoport
How did deep-red North Dakota end up with the nations most populist financial institution?
When the financial crisis struck in 2008, nearly every state legislature was left contending with massive revenue shortfalls. Every state legislature, that is, except North Dakotas. In 2009, while other states were slashing budgets, North Dakota enjoyed its largest surplus. All through the Great Recession, as credit dried up and middle-class Americans lost their homes, the conservative, rural state chugged along with a low foreclosure rate and abundant credit for entrepreneurs looking for loans.
Normally one of the overlooked states in flyover country, North Dakota now had the countrys attention. So did an unlikely institution partly responsible for its fiscal health: the Bank of North Dakota. Founded in 1919 by populist farmers whod gotten tired of big banks and grain companies shortchanging them, the only state-owned bank in America has long supported community banks and helped keep credit flowing. The banks $5 billion deposit base comes mostly from state taxes and funds. The money is leveraged so the bank can offer loans for local small businesses and infrastructure projects; the interest, rather than going to Wall Street banks, stays in the state. The Bank of North Dakota rarely makes direct loans; instead, when a community bank wants to give a sizable loan but lacks the capital, the state bank will partner on the loan and provide a backstop. Such partnerships help ensure that small-business owners, farmers, and ranchers can access lines of creditand they strengthen community banks, which is why North Dakota has more local banks per capita than any other state.
During times of economic crisis, from the Great Depression to the Great Recession, the state bank has been essential to cushioning the blow for North Dakotans. It offers countercyclical support, meaning that in bad times, when credit starts to dry up, it plays an even bigger role in offering credit and helping struggling small banks make loans to good candidates. But the state bank has been good for North Dakota in another way you wouldnt expect: Its helped bolster the state budget. Since it became profitable in the 1940s, the Bank of North Dakota has returned more than $555 million to the states general fund.
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To many Americans, of course, the idea that state governments should be running banksthat they can run them betteris anti-capitalist blasphemy. But in conservative North Dakota, the bank is so well established and popular that former U.S. Senator Kent Conrad, whos 64, says he cant remember a time when anyone seriously challenged it. Now, across the country, some policymakers and community groups want to follow North Dakotas lead. Since 2009, lawmakers in more than 20 states have filed legislation to either start a state-owned financial institution or at least study the prospects. Most of the efforts have fizzled, but this year lawmakers in several states are cautiously optimistic they can turn their proposals into policycreating, if not a full--functioning state bank, then at least the groundwork for one.
- more -
http://prospect.org/article/people%E2%80%99s-bank-0
A public option for banking
http://www.democraticunderground.com/10024601912
FrodosPet
(5,169 posts)From my understanding, it primarily serves private banks and government agencies.
http://banknd.nd.gov/contact_us/BND_FAQ_FINAL.pdf#page=8
Because of our unique structure, it is the Banks policy not to compete with the private
sector for retail deposits. Therefore, convenience products such as ATM cards, debit
cards, credit cards or online bill pay are not offered. Only standard checking and savings
accounts are available to North Dakota residents.
ProSense
(116,464 posts)this link from the PDF is interesting.
Expert testimony: Should Vermont form a state-owned bank?
http://vtdigger.org/2010/01/25/expert-testimony-should-vermont-form-a-state-owned-bank/
cali
(114,904 posts)understand why the size of the population is all that relevant.
And yes, VT is indeed a small state- but we're an innovative one too- on every level (more patents per capita than any other state)