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New Strides Forward for New Jersey
Philadelphia & New York Public Banks

Movement to create public banks continues to accelerate around US cities and states: San Francisco, Los Angeles, Oakland, New York City and State are all in mid-stage development of creating their own banks. That list also includes New Jersey and Philadelphia. New Jersey’s efforts are gaining focus and velocity while Philadelphia is pioneering a creative bank work-around. Its City Council will vote next week on the creation of a Philadelphia Public Finance Authority, a bank-like financial equivalent that evades a long bank charter process.  New Jersey is having similar thoughts.  Watch this space.

Dynamic Funding for NJ’s Green Revolution?

[New Jersey] expects to receive $12 billion over coming years… It should put that money into its own public bank — and underwrite a green legacy.

‘By financing New Jersey’s green transformation through a public bank we could dramatically accelerate and expand multiple investment opportunities’
Read More

“Decarbonization, Definancialization & Democratization"

Dr. Thomas Marois and Banking on New Jersey’s Walt McRee discussed Thomas’ new  book on “The Public Bank Solution” TV program, produced at Princeton Community TV.  Marois, a global expert on public banks, says public banks are essential in the effort to re-democratize money and the systems that manage it.  His new book on public banks illustrates the impressive global leadership of public banks on renewable energy investment.

Philadelphia Municipal Bank Concept Would Be a National First – Hearings Next Week

Philadelphia’s City Council will soon hear public testimony on creation of a hybrid municipal agency, a “Philadelphia Public Financial Authority”, which would initially establish “bank” operations under a municipal code rather than a bank charter.

Philadelphia City Hall. (Danya Henninger/BillyPenn)

By Tom MacDonald | December 4, 2021

A bank to help people in Philadelphia run by the city is another step closer to reality.

Councilmember Derek Green introduced a bill to create the Philadelphia Public Financial Authority, the first step to having a municipal bank, which he said would be the first in the country.

“This bill did not come out in a vacuum,” said Green, who said the bank will be able to help people who cannot receive loans from other situations. “We’ve been working on the legislation for about 6 years,” said Green, who added that the bank could help more people of color start businesses or expand existing businesses.

“Only six percent of the businesses with employees are owned by African Americans, although the African American population of the city of Philadelphia is about 44 percent,” said Green. He went on to say only four percent of the businesses are owned by people from the Latinx Diaspora, although they represent 15 percent of the city’s population. “So when you look at that six percent and four percent, that connects to the issue about twenty five percent poverty in the city of Philadelphia and the fact that these businesses are not able to grow and hire more employees is tied to the lack of access to credit,” which is something that the public bank would address, said Green.

Green believes the bank will help diversify business ownership in the city, while providing much-needed resources for people in need. The bill now goes to a council committee for review hearing on December 13, before heading to the full council sometime in 2022.

NYC and NY State Bills Both Want Public Banks

Legislative initiatives in the NY Assembly and Senate continue for establishing both a state bank and one for New York City. 

Democrat candidate for New York Mayor Eric Adams, center, poses for photos with people involved with the IHS Towers IPO, outside the New York Stock Exchange, Thursday, Oct. 14, 2021. (Richard Drew/AP)


Fresh off his electoral victory, Eric Adams declared that his administration will look abroad for policy solutions to New York City’s myriad social and economic problems. “Let’s learn what they’re doing there so we can do it here,” he urged.

It just so happens, there’s a broad-based citywide coalition pressing for a bold policy solution that is common throughout the world: public banking. Bringing public banking to New York, as a proven strategy for addressing racial and economic inequality, should rank among Mayor-elect Adams’ top priorities.

More than 900 public banks exist worldwide in many shapes and sizes — from national development banks to municipal banks providing everyday financial services. What they share is an explicit mission to serve the public interest.

That may indeed seem like a foreign concept in New York, where banks have long redlined and systematically extracted wealth from communities of color. To name just one recent example: During the first year of the pandemic, banks siphoned $1.3 billion in fees from struggling New Yorkers, according to a New Economy Project analysis. Approximately two-thirds of that sum came from predatory overdraft fees, mostly paid by the lowest-income account holders.

Instead of courting highly speculative, unregulated cryptocurrencies that threaten financial stability and our environment, Adams should embrace measures that would actually address inequities in our financial system. He can find inspiration in a new report by the Cyrus R. Vance Center for International Justice surveying seven public banks on four continents.

In Costa Rica, the worker-owned Banco Popular de Desarrollo Comunal promotes gender equity and community representation in decision-making. A Workers Assembly — consisting of 290 delegates from community development, labor and other sectors — appoints a majority of the bank’s directors. At least half of the delegates from each sector, and half of the directors they appoint, must be women.
Banco del Estado de Chile, another example highlighted in the report, has expanded financing for renewables and energy efficiency and operates a green mutual fund that invests in sustainable projects, among other initiatives. The municipal Banco Ciudad de Buenos Aires, in Argentina, goes further — actively screening out investments in deforestation, tobacco and other activities at odds with the bank’s public policy principles.

As Wall Street continues to pump trillions of dollars into fossil fuels and other destructive industries, these examples demonstrate how cities like New York can invest in climate solutions and other critical needs.

Public banks also have responded quickly and effectively to the economic devastation caused by COVID-19. Many swung into action within weeks of the start of the pandemic, shoring up struggling local governments, public hospitals and small businesses.

As Dr. Thomas Marois of University College London has detailed, in March 2020, Germany’s KFW, one of the world’s largest public banks, was already delivering financial support to small and medium-sized businesses, freelancers and others impacted by the crisis. That’s because the bank’s mandate is to provide for the “sustainable improvement of the economic, social and ecological conditions of people’s lives,” not to maximize profits.

Compare that with the experience in the U.S., where banks came under fire for prioritizing their wealthy customers for Paycheck Protection Program loans. One exception was the Bank of North Dakota, a century-old public bank that has been credited with helping North Dakota small businesses secure more PPP loans, per capita, than small businesses in any other state.

Not surprisingly, a growing number of U.S. cities are now mulling the creation of public banks. New York should be the first.

Through a municipal public bank, New York City can leverage its vast resources to support permanently-affordable housing, small and worker-owned businesses, community solar and other critical needs, helping to ensure a just recovery in Black, Brown and immigrant neighborhoods hardest hit by COVID-19.
A public bank would also address persistent banking inequality in our city, by partnering with community development financial institutions to expand responsible lending and economic opportunity in historically redlined communities.

Creating a public bank in the home of Wall Street will be no small feat. It will require leadership from the top.

Adams should work with the City Council to advance legislation laying groundwork for public banking and put the full weight of his administration behind the effort.

He also should use his bully pulpit to push for action in Albany. The New York Public Banking Act would establish a special purpose charter for local public banks, ensuring strong governance and accountability and paving the way for cities like New York to move forward. Sponsored by state Senate Banks Chair James Sanders of Queens and Assembly Banks Chair Patricia Fahy of Albany, the bill has garnered support from more than 100 organizations and dozens of state electeds.

Adams is right to think globally. New Yorkers will need him to act locally.

Morrison is associate director of the New Economy Project. Del Río is co-director of New Economy Project and a board member of the Lower East Side People’s Federal Credit Union.

Have you added your signature yet?

The Public Banking Institute has launched a Friends of Public Banking initiative to encourage individuals and organizations to declare their support for the creation of public banks. The easy-to-remember URL simplifies asking your own friends and groups to support the movement.

As signatures build, the initiative will demonstrate to lawmakers and potential allies the broad-based interest that is materializing in operating banking as a public utility.

Declare your support here:  Friends of Public Banking website.
Public Banking Made Easy
This short animated video by the Public Banking Institute has helped thousands of people understand the basic concepts of public banking. Please help us make public banking common knowledge by sharing it with your friends and groups. Thank you for all your help!
Banking on New Jersey
Directors Joan Bartl & Walt McRee
Copyright © 2021 Banking On New Jersey, All rights reserved.

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