Resolution for Establishing a Seattle City Bank

WHEREAS banks on the national level have not been adequately regulated to prevent future risky lending and investments; and

WHEREAS there have been many bank failures which have negatively impacted the citizens of Washington State; and

WHEREAS despite record low interest rates, banks are lending less than ever; and

WHEREAS the City of Seattle, because of current regulations, may only place its tax monies in a bank large enough to collateralize its assets, and is therefore obliged to use large banks, many of which have been held civilly liable for fraud; and

WHEREAS the Federal Reserve, FDIC and Comptroller of the Currency, beginning in January 2015, have downgraded the rating of municipal bonds (while upgrading the rating of riskier corporate bonds), which is likely to cause a significant increase in interest costs to the city1; and

WHEREAS since the crash of 2008 Washington State and the City of Seattle have had to cut public programs, negatively impacting Seattle citizens; and

WHEREAS a publicly owned Seattle First Public Bank would act as a central banker and participate in commercial loans, thereby expanding commercial credit in the city and the state; and

WHEREAS a Seattle First Public Bank would allow the City to self-fund capital projects, keep money local, subsidize student loans and absorb debt capacity; and

WHEREAS, once established, a Seattle First Public Bank would not only foster economic development but would pay its own operating costs, with any profits generated given as dividends to the city; and

WHEREAS a Seattle First Public Bank would open up revenue options other than taxation; and

WHEREAS a Seattle First Public Bank would partner with community banks and credit unions, providing a direct boost to these institutions by participation in secondary markets;

THEREFORE BE IT RESOLVED that the 34th Legislative Democrats support the establishment of a Seattle First Public Bank; and

THEREFORE BE IT FINALLY RESOLVED that the 34th Legislative Democrats send copies of this resolution, Mayor Murray and members of the Seattle City Council.

Submitted to the 34th Legislative District Democrats meeting of November 12, 2014

Disposition:


1Preparing To Asset-strip Local Government? The Fed’s Bizarre New Rules
http://ellenbrown.com/2014/09/08/preparing-to-asset-strip-local-government-the-feds-bizarre-new-rules/
“Municipal bonds, long considered safe liquid investments, have been eliminated from the list of high-quality liquid collateral. assets (HQLA). That means banks that are the largest holders of munis are liable to start dumping them in favor of the Treasuries and corporate bonds that do satisfy the requirement.”