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I'm 110% behind my represtative Bob Hasegawa (11th LD) on this.
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eridani
(51,907 posts)Presentation by Rep Bob Hasegawa (D-LD11)
Reasons for establishing a state bank
• Better access to capital for small businesses and farms
• Promote economic development
• Smart government
• Best use of taxpayers’ resources
The legislation creates a bank that is modeled after the very successful Bank of North Dakota. http://www.banknd.nd.gov / The bank has 175 employees. It was established in 1919 as a response to a serious credit crunch that was impoverishing farmers. People were angry about the outside control of both credit and grain markets by people from outside the state. Politics as usual was not working, so a new political party, the Nonpartisan League, ran on the platform of establishing a state bank.
The BND is run by a three member Industrial Commission consisting of the governor, the agricultural commissioner and the attorney general. It is not like a regular bank taking deposits from and lending to individual consumers; it is more of a “bankers’ bank,” or a mini-Federal Reserve bank. It pays 0.25% less interest than state agencies would get from a commercial bank. It pays no federal or state taxes: North Dakota taxpayers are on the hook for any losses—luckily there haven’t been any recently. It has ~$4 billion in assets, a $2.67 billion loan portfolio, and $58 million in profits for 2009.
It has survived the worst situation for state governments since the Great Depression. They had little fallout from the 2008 crisis because they had no exposure to derivatives or sub-prime loans. Certainly it helps that resource prices for ND oil and minerals are high, but many other oil states have very serious budget problems now (OK, for example) and ND does not.
It does not compete with commercial banks, though CDs are available to the public. It is involved in housing only with secondary loans. The legislature can and does create loan programs as a cheaper alternative to tax incentives. Bob showed a short PBS clip featuring commercial bankers in ND testifying about the highly favorable partnerships that they have established with the state bank.
The one disadvantage to having a state bank would be the loss in the interest earned from commercial banks (about $4 million), though as of now this would be mitigated by the unusually low interest rates in effect. The advantages would be—
• The ability to self-fund capital projects
• The strong multiplier effect of keeping money local
• The ability to subsidize student loans
• The ability to use secondary financing to absorb debt capacity, thereby enabling us to keep more people in their homes and on their farms.
Activity in other states on banking issues includes—
• NM passed a bill 65-0 to give preferential treatment to local community banks for its deposit.
• OR gubernatorial candidate Bill Bradbury (D) is running on the issue of establishing a state bank.
• ID state representative Stivers (R) is running for state senate on the issue of a state bank
• The MA senate is introducing similar legislation
• IN VT, a House committee is exploring the issue.
Bob had to leave early to run the Finance Committee hearing on the revenue bill, and was not able to hear most of the testimony. I actually got there early enough to sign in first for an 8AM hearing. I wanted to formally offer the 11th LD’s support to Representative Hasegawa (also cosponsored by Representative Hudgins) for this innovative legislation, and just made a few brief points—
• There is a great deal of public outrage over bailouts and banker bonuses
• Despite that and record-low interest rates, banks lending less than ever
• More individuals are participating in the Move Your Money campaign, moving their own funds into locally-owned banks and credit unions http://moveyourmoney.info /
• Public money should consider doing the same: it’s our money!
There were a number of other witnesses testifying in favor. Sarajane Seigfriedt (co-chair of the King County Democrats Legislative Action Committee) summarized the issue as it will be included in the King County Democrats platform. Sustainable growth advocate Brian Derdowski pointed out that participation in secondary markets is a direct boost to community banks, that it could raise our state’s bond rating, and that it opens up revenue options without taxation. Cindy Cole of the 34th LD read a written statement that she sent to me. (If you want a copy, email me.) She is a member of a study group organized by Seattle Fellowship of Reconciliation that has been meeting since the financial collapse of 2008 to study banking and its effect on our economy and ecology. As a result, they met with Bob and did research that aided in writing this legislation.
The most significant testimony against was given by the State Treasurer, Jim McIntire, who would be tasked with implementing the legislation. He raised the issues of safety, liquidity and return, stating that our actual revenue from interest was closer to $160 million than to $4 million. He wants to keep the recently imposed (post-WAMU implosion) requirement of 100% collateral instead of the 10/1 deposit leverage that the BND uses. Could the bank meet both federal and state requirements for capitalization? Would a constitutional amendment be required first? Would withdrawal of fund from existing banks threaten their liquidity? I’d suggest arranging a chat with the ND State Treasurer to reassure McIntire on these issues.
There is a good article on the state bank issue from the Northwest Progressive Institute http://www.nwprogressive.org/weblog/2010/03/washington-state-bank-progressive.html
The Progressive States Network has a good overview of progressive monetary policies that are being implemented at the state level. http://www.progressivestates.net/policy/issue/215
rhett o rick
(55,981 posts)eridani
(51,907 posts)While individuals, businesses and governments suffer from a credit crisis created on Wall Street, the banks responsible for the crisis are tapping into nearly-interest-free credit lines and using the money to speculate or to make commercial loans at much higher rates. By forming their own banks, states too can tap into very low interest rates, and can buffer themselves from another Lehman-style credit collapse.
Keeping interest rates low is considered the first line of defense for central banks bent on easing the credit crisis and getting banks to lend again. The Federal Reserve's target for the federal funds rate - the overnight interest rate that banks charge each other - has been kept at a rock-bottom 0% to 0.25% ever since December 2008. A growing number of economists now think it could stay there well into 2011 or even 2012, prompted by fears that a spreading debt crisis in Europe could hurt a budding U.S. recovery.
Dirk van Dijk, writing for the investor website Zacks.com, explains what a good deal this is for the banks:
"Keeping short-term rates low . . . is particularly helpful to the big banks like Bank of America (BAC) and JPMorgan (JPM). Their raw material is short-term money, which is effectively free right now. They can borrow at 0.25% or less, and then turn around and invest those funds in, say, a 5-year T-note at 2.50%, locking in an almost risk-free profit of 2.25%. On big enough sums of money, this can be very profitable, and will help to recapitalize the banking system (provided they don't drain capital by paying it out in dividends or frittering it away in outrageous bonuses to their top executives)."
This can be very profitable indeed for the big Wall Street banks, but the purpose of the near-zero interest rates was supposed to be to get the banks to lend again. Instead, they are investing this virtually interest-free money in risk-free government bonds, on which we the taxpayers are paying 2.5% interest; or are using the money to engage in the same sort of unregulated speculation that nearly brought down the economy in 2008, or to buy up smaller local banks, or to pay "outrageous bonuses to their top executives." Even when banks do deign to use their nearly-interest-free funds to support loans, they do not pass these very low rates on to borrowers. The fed funds rate was lowered by 5% between August 2007 and December 2008; yet the 30 year fixed mortgage rate dropped less than 1%, from 6.75% to only about 6%.
eridani
(51,907 posts)Saturday June 5, we were able to meet with Bob Hasegawa, the first sponsor of the bill HB 3162 2009-2010 to establish a state bank in Washington State. We attended his town hall meeting. We were very encouraged by this meeting. Bob said the Majority Leader of the House, Sam Hunt, told him there is a good chance the bill could pass in next year’s regular session. Bob said a state bank is a top priority for him. He will be meeting soon with other legislators from the Progressive States Network who will form a committee on the idea of state-owned banks.
http://www.progressivestates.org /
Between now and the next year’s session, he encouraged us to be talking to our state legislators. We need to educate them and the general public about a state bank. Bob will speak to your group about a state bank if you organize the meeting. See his homepage to contact him. http://housedemocrats.wa.gov/members/hasegawa /
hasegawa.bob {at} leg.wa.gov
Subject. Please sign me up for Bob's state-owned bank stakeholder list.
On his homepage, you also can sign up to get e-mails about progress about bill as a stakeholder by clicking on the right hand side, bottom of the home page where it says. To be added to Bob's state-owned bank stakeholder list, write to. hasegawa.bob {at} leg.wa.gov
Subject line. Please sign me up for Bob's state-owned bank stakeholder list.
Over the weekend, Cindy and I also met with Marcee Stone who is running in the 34th for an open seat. She is on board at this point. We have appointments to meet with the Eileen Cody and Sharon Nelson (Sharon is running for State Senate in the 34th.) We think this is a good time to start talking to your district’s politicians. Their ears are open during election season. We need these people to get a bill passed through the Legislature.
We also met with Craig Salins of WashClean, the organization working for public-funded elections. He gave us some ideas and encouragement.
We were sent a link last week with a good 4 minute video about the Bank of North Dakota.
Sincerely,
John and Cindy
eridani
(51,907 posts)1. There is a great deal of public outrage over bailouts and banker bonuses. And banks on the national level have not been adequately regulated to prevent future risky lending and investments. Now despite record low interest rates, banks are lending less than ever.
2. The State of Washington is running huge deficits that cause public programs to be cut, negatively impacting Washington’s citizens.
3.. A Bank of Washington State would have the ability to self-fund capital projects, keep money local, subsidize student loans and provide new credit sources.
4. Our plan is to introduce a bill in the Washington State Legislature to charter a Public Bank, the Bank of Washington State. This is a Public, not for profit bank.
5. The Mission is written into the law establishing the bank: Develop agriculture, industry and commerce in Washington State.
6. All tax moneys and fees of Washington will be deposited in the bank. The bank would be a member of the Federal Reserve so that it could have access to the cheapest money available through the Federal Reserve Discount Window.
7. By using the deposits of the bank to make long term loans to small business and helping small farmers, jobs will be created; this in turn will increase the revenue tax base of the state.
8. The Office of the State Treasury uses tax monies now for short term investments in big banks, Federal treasury bonds, Fanny Mae etc. Instead the monies would be invested in long term loans to business here in Washington State.
9. The chartering of a public state bank will not solve all the problems of the recession. However, there is a credit problem in Washington State at the present time and the bank will get credit flowing to where it is needed.
10. The model the bank would follow is the one in North Dakota. The Bank of North Dakota (BND) has helped north Dakota prosper even during these recession times. The bank is conservative and did not participate in risky behavior. North Dakota is the only state in the Union that is not suffering a deficit budget and they have very low unemployment. www.banknd.nd.gov /
11. Like the BND the state bank of Washington would partner with community banks and credit unions in their loan practices. The BND is well thought of by banks in that state and acts as a “mini-Fed” where banks can go for low cost loans.
Project of Western Washington Fellowship of Reconciliation Just Sustainable Economy Study Group. www.justsustainableeconomy.org /
eridani
(51,907 posts)In talking with our State Representatives and State Senators, Bob Hasegawa suggested we avoid focusing on the concept of a “state bank” as much as possible and instead focus on how we want to redirect the state’s investment policy for that is the whole intent of this reform. This is the advice Bob got from the powerful House Speaker Frank Chopp.
Currently all state money not immediately spent by the state is invested by the Office of the State Treasurer. The Office of the State Treasurer website has a page labeled “The Year at a Glance”. http://www.tre.wa.gov/documents/annualReports/ar09-6_year.pdf
There it is reported that the average daily investment balance of state money in 2009 was $4 billion dollars. And the average investment balance of local government (e.g. county) money which is also managed by the Office of the State Treasurer is $7 billion. Most of this money is invested in short term instruments, 1 to 30 days, 31 to 60 days and 61 to 90 days for example with large out-of-state governmental and private financial institutions. These investments are considered very secure, but they have also most recently helped finance the world-wide real estate bubble.
The “Invest in Washington” (tentative title) Act (hereafter The Act) would instead charter a bank which would be the depository of the state and local government tax receipts. The bank is thus a means to an end not an end in itself. This bank would also become a member of the Federal Reserve so that it could have access to the cheapest money available through the Federal Reserve discount window. With this access, it could begin to loan money to farmers, local business, and students in Washington State for productive use and for longer periods. That is the desired end or intent of the bank.
How could a bank loan money for longer terms when that money would be needed, generally within 90 days for state expenses? With the average daily balance of today’s Office of the Treasury at $4 billion, then, we know tax receipts will be coming in throughout the year just as the state is paying its bills throughout the year. That flow of money into the state bank from taxes and fees plus the ability of the state bank to access the Federal Reserve discount window would allow the bank to make long term investments (i.e. loans) in local productive economic activity. The Act must insist that the bank be extremely conservative in its loan practices since this is taxpayer’s money. We hear, mostly from farmers and small business, there is a credit shortage for farmers and small businesses but opponents of this idea, mostly bankers, say there is a customer shortage. Whatever the case, if there is not enough credit-worthy farmer’s and small businesses in Washington State, the state bank can continue the practices of the current Office of the Treasurer.
The mission of the bank will be to finance productive economic activity here in Washington State rather than maximize profits for the state. That mission will be written into the law. The current version HB # 3162 2009-2010 states: “The mission of the state bank of Washington is to promote agriculture, education, community development, economic development, commerce, and industry in Washington State”. The bank can also partner with community banks here in Washington State like the Bank of North Dakota does with community banks there.
_______________________________________________________________________
Unfortunately, we may be in the similar situation as the Bank of North Dakota found themselves in from 1919 to 1939 where the economy, especially in their case, the farm economy, was so depressed that the new Bank of North Dakota could not function as its founders intended. Instead of helping farmer’s get cheap credit in the 1920’s and 1930’s, the Bank made loans and later foreclosed on thousands of farmers. That certainly was not the intention of the founders. It was only much later, in the 1940’s and 1960’s when the economy improved that the Bank began to really help the citizens of North Dakota. We might need to start thinking about more powerful medicine to heal our ailing economy, medicine that can only be applied at the Federal level.
Currently, we face political gridlock. The progressive left wants to follow the advice of Stiglitz and Krugman, Keynesians, who suggest more economic stimulus which would increase the national debt at least in the short run and which assumes more growth must occur in the long run so the debts can be paid down later. But the environmental movement questions whether we can tolerate more growth in the future, particularly the kind of growth we have most recently experienced.
Basically we have been following the Keynesian approach since the end of WWII, mostly in the form of “military Keynesianism”, especially during the Bush Administration who started two wars and cut taxes at the same time. But we did not get the robust economic growth the theory predicted, probably because the spending was on non-productive uses i.e. war and wealth became very concentrated at the top. In addition, we had the successful movement to deregulate finance and to globalize corporate manufacturing. As a result we got a financial crisis and a severe economic crisis. The bailouts and the continuing recession (with fewer tax receipts) have massively increased the deficits and we are seeing severe cuts in education and health care at the state level. Currently the right wing is screaming about the deficits which make it very difficult to get more economic stimulus passed now. I fear the “Great Recession” will be long for those at the bottom end of our society.
There are ways out of this gridlock but they would require a political shift. We progressives know that one way is to return to more progressive taxation at the state level (Initiative #1098) and Federal level (let the Bush tax cuts for the wealth expire). Both those efforts may succeed. But much more may be required to move us toward a just and sustainable economy.
We saw the videos that showed our money supply is being created by the private banking system by means of the fractional reserve system, money as debt. What is the solution to this problem? David Korten in the first edition of Agenda For A New Economy(2009) makes point 12 of his 12 point program: “Transfer to the federal government the responsibility for issuing money” (p.142). Ed Dreby in the Quaker Eco-Bulletin entitled “Money and Growth: Another Inconvenient Truth?” writes on page four: “Governments could reclaim their traditional monopoly of issuing money which would be interest free.” Korten references Stephen Zarlenga’s book The Lost Science of Money (2002 with addendum from April 2010) which is a massive historical study of money systems throughout (mostly) western civilization showing the very long-term effects of the various systems. When the money system is based on wealth like gold or silver or even agricultural products, the wealthy who have the most control the society. When the money system is based on bank credits (like ours) the bankers control the society. When the money system is based on law, then, at least potentially, the society has its fate in its own hands. Zarlenga thinks that the source of most of our problems, from wealth concentration (and all the social problems that follow described by Wilkinson and Pickett) to the current financial and economic crisis is due to the fact that our so-called “democratic society” does not issue most of its own money for the common good. His group, the American Monetary Institute http://www.monetary.org / has written the American Monetary Act which will do three things; 1) Restore the power to create money to the Federal government 2) Take away the power of banks to create money by prohibiting the practice of fractional reserve banking, and 3) Have the Federal Government buy down its debt with newly issued interest free money and have the Congress spend new money by rebuilding our physical and energy infrastructure including our healthcare and education systems. Dennis Kucinich will introduce the American Monetary Act.
Project of Western Washington Fellowship of Reconciliation Just Sustainable Economy Study Group. www.justsustainableeconomy.org /
eridani
(51,907 posts)At the basic level, a development bank is capitalized by state money, publicly governed, can serve as a depository for state revenue, and returns a portion of its profits to the state. Rather than sending state funds to big banks, the development bank would keep deposits in-state. As such, a development bank reduces state dependence on large financial corporations and allows states to invest dollars in local communities rather than line the pockets of Wall Street CEOs.
A development bank would also be a source of job creation. The Center for State Innovation finds that such a bank could create or save up to 13,500 small business jobs in Oregon - about 6,700 of which would be supported by the augmented loan activity and ability to invest in local industry that the bank would permit. It would also increase state revenues. In 2009, the Bank of North Dakota “delivered a $30 million dividend to the state.” Interestingly, North Dakota has one of the lowest unemployment rates in the country and is one of the states with a budget surplus in recent years.
Messaging: Recent polling indicates strong public and small business support for a development bank. In Maryland, people were asked, "The state of Maryland keeps billions in tax dollars in big out-of-state banks like Bank of America and M&T. Would you favor or oppose the state using these funds to create a public bank that will keep Maryland tax dollars at home, create more local jobs and support local banks that provide credit to small businesses in Maryland?" In total, 67 percent of respondents favored the idea, with 42 percent strongly favoring the policy. Further, MSA polling found that 75 percent of small businesses polled would support the creation of an Oregon state bank like North Dakota’s.
eridani
(51,907 posts)Members and Staff of the House Infrastructure Financing Task Force:
A webpage has been developed for this Task Force. http://www.leg.wa.gov/JointCommittees/IFTF/Pages/default.aspx
We will continue to update it as items become available.
eridani
(51,907 posts)Today at the Renton Library, State Representative Bob Hasegawa gave a presentation and talk about the efforts to establish a Washington state bank.
Hasegawa began by saying that there’s really no downside to creating a state bank. It’s a no-brainer. (Sigh, that means most Republicans will oppose it.) Currently, sales taxes and other general funds are deposited in an account at Bank of America. Why shouldn’t Washington follow the example of North Dakota and keep the funds locally? The funds would likely have lower management fees, and could be more easily invested locally. We’d reduce or eliminate debt service costs. Washington citizens could earn interest on any funds held unspent in the account. (Hasegawa said that nowadays, revenue can’t keep up with expenditures, so fund turnaound time is fast.)
Videos
Part 1-
Part 2-
Part 3-
eridani
(51,907 posts)AB 750, California's bill to study the feasibility of establishing a state-owned bank that would receive deposits of state funds, has passed both houses of the legislature and is now on the desk of Governor Jerry Brown awaiting his signature.
It could be the governor's chance to restore the state to its former glory. As noted in Time Magazine:
"n the 1950s and '60s, California was a liberal showcase. Governors Earl Warren and Pat Brown responded to the population growth of the postwar boom with a massive program of public infrastructure--the nation's finest public college system, the freeway system and the state aqueduct that carries water from the well-watered north to the parched south."
But that was before Proposition 13, a California constitutional amendment enacted by voter initiative in 1978. Prop 13 limited real property taxes to one percent of the full cash value of the property and required a two-thirds majority in both legislative houses for future increases of any state tax rates.
Prop 13 radically reduced the tax base, and it would be difficult to raise property taxes now. The tax savings simply drove property prices up, getting capitalized into additional debt service to the banks. Today, a rise in property taxes would lead to even more foreclosures and abandonments, reducing tax revenues even more.
Meanwhile, the state is struggling to meet its budget with a vastly shrunken tax base. What it needs is a new source of revenue, something that won't squeeze consumers, homeowners, or local business.
A state-owned bank can provide that opportunity. North Dakota, the one state that currently has its own bank, is the only state to be in continuous budget surplus since the banking crisis began. North Dakota's balance sheet is so strong that it recently reduced individual income taxes and property taxes by a combined $400 million and is debating further cuts. It also has the lowest unemployment rate, lowest foreclosure rate and lowest credit card default rate in the country, and it hasn't had a bank failure in at least the last decade.
Revenues from the Bank of North Dakota (BND) have been a major boost to the state budget. The bank has contributed over $300 million in revenues over the last decade to state coffers, a substantial sum for a state with a population less than one-tenth the size of Los Angeles County. North Dakota is an oil state, but according to a study by the Center for State Innovation, from 2007 to 2009 the BND added nearly as much money to the state's general fund as oil and gas tax revenues did. Over a 15-year period, according to other data, the BND has contributed more to the state budget than oil taxes have.
Read more at
http://www.opednews.com/articles/California-Legislature-Pas-by-Ellen-Brown-110916-76.html
eridani
(51,907 posts)An update to the Washington Investment Trust stakeholders:
As the 2012 legislative session quickly approaches, I want to give you an update on where we are at regarding the creation of the Washington Investment Trust (a public bank for WA State).
The Infrastructure Financing Taskforce Committee met on December 28 and we took significant action by voting 6-0 on a bill recommendation to the next legislative session to create the Washington Investment Trust.
We are wrapping up the final bill language and expect to file the bill next week. I’m hoping it will get heard early in session. I want to give you this information so that you’ll be prepared to come to the legislative hearings to support the bill. I will, of course, alert you as to when it will take place as soon as the bill is scheduled. Senator Keiser has agreed to prime sponsor a Senate companion bill.
Below is a brief summary of the intent of the proposed legislation and, if you want to watch the December 28 meeting, you can do so online accessing the TVW archives, here.
There are significant public infrastructure and higher education needs of the state that are unmet, and the level of unmet need has been exacerbated by the economic downturn. But there are opportunities to use the state's depository assets to generate additional benefit for the people and the economy of the state, which can be achieved by creating the Washington Investment Trust as a legacy institution that amasses sufficient capital reserves to address opportunities now and in the future.
The Washington Investment Trust may:
(a) Facilitate investment in, and financing of, public infrastructure systems that will increase public health, safety and quality of life, improve environmental conditions, and promote community vitality and economic growth;
(b) Assist students who are in need of additional low-cost student loans in order to finance the cost of higher education; and
(c) Leverage Washington's financial capital and resources, and work in partnership with financial institutions, community-based organizations, economic development organizations, guaranty agencies, and other stakeholder groups.
The mission of the trust is to utilize Washington's depository assets in ways that afford most efficient use of taxpayer revenues and public resources for the benefit of the people and economy of the state.
To read the entire proposed bill and review previous actions taken by the Infrastructure Financing Taskforce Committee, please go to the committee website here.
Thanks and please keep in touch,
Bob Hasegawa
Washington State Representative
11th Legislative District
http://www.housedemocrats.wa.gov/roster/rep-bob-hasegawa/
Hotline: 800/562.6000
Phone: 360/786.7862
Legislative Aide: Marissa Chavez
Olympia Office:
425 John L. O'Brien Building
P.O. Box 40600
Olympia, WA 98504-0600
360/786.7862
eridani
(51,907 posts)Establishing the Washington investment Trust. HB 2434
A hearing before the House Business and Financial Services Committee is scheduled for this coming Thursday, January 26 at 8am in House Hearing Room B, John L. O'Brien Building, Olympia. If possible, please attend the hearing, and sign in as in favor of the bill. If you can’t attend please write to the committee members encouraging them to vote in favor of the bill.
Business & Financial Services > Committee Members and Staff
269A John L. O'Brien, P.O. Box 40600, Olympia, WA 98504-0600
Committee Hearings & Bill Information: (360) 786-7128
Legislative Hotline Operators: 1-800-562-6000
Committee Members
Representative Room Phone
Kirby, Steve (D) Chair LEG 437B (360) 786-7996
Kelley, Troy (D) Vice Chair JLOB 334 (360) 786-7890
Bailey, Barbara (R) * JLOB 403 (360) 786-7914
Buys, Vincent (R) ** JLOB 470 (360) 786-7854
Blake, Brian (D) JLOB 306 (360) 786-7870
Condotta, Cary (R) LEG 122B (360) 786-7954
Hudgins, Zack (D) LEG 438A (360) 786-7956
Hurst, Christopher (D) JLOB 335 (360) 786-7866
Parker, Kevin (R) LEG 122F (360) 786-7922
Pedersen, Jamie (D) JLOB 330 (360) 786-7826
Rivers, Ann (R) JLOB 469 (360) 786-7850
Ryu, Cindy (D) JLOB 324 (360) 786-7880
Stanford, Derek (D) JLOB 318 (360) 786-7928
*Ranking Minority Member **Asst. Ranking Minority Member
Committee Staff
Staff Room Phone
Jon Hedegard, Counsel JLOB 270 (360) 786-7127
Alexa Silver, Counsel JLOB 240 (360) 786-7190
Philip Zitzelman, Legislative Asst.
eridani
(51,907 posts)Thank you to all of you who sent emails, called and testified for the WIT bill. We have done great so far! Now there is more to do:
We are on a short deadline. The Senate Financial Institutions, Housing and Insurance Committee must pass out of committee SB 6310 establishing the Washington Investment Trust by next Wednesday, Feb 1st and the House Business and Financial Institutions Committee must pass out of committee HB 2434 establishing the Washington Investment Trust by next Thursday, Feb 2nd .
Our focus needs to be on those reps and senators on the committees that have not committed. We think it is worth it to contact Republicans if you wish, but focus on the Democrats, the support will most likely come from the Democratic side. Those committee members names and emails are below.
If you call urge them to vote yes, to save the state, counties, and cities millions of dollars in debt service costs, help students, keep money in Washington State and create jobs. The Legislative hotline is 1-800-562-6000. The hotline is not available on Sunday, so call on Monday.
Put “Yes on SB 6310, The Washington Investment Trust” in the Subject line if you email the Senate committee members.
In the Senate Committee contact:
Steve Hobbs D [email protected] (360) 786-7686
Mary Margaret Haugen D [email protected] (360) 786-7618
Don Benton R [email protected] (360) 786-7632
Joe Fain R [email protected] (360) 786-7692
Steve Litzow R [email protected] (360) 786-7641
Put “Yes on HB 2434, The Washington Investment Trust” in the Subject line if you email the House committee members.
In the House Committee contact:
Troy Kelley D [email protected] (360) 786-7890
Christopher Hurst D [email protected] (360) 786-7866
Jamie Pedersen D [email protected] (360) 786-7826
Barbara Bailey R [email protected] (360) 786-7914
Vincent Buys R [email protected] (360) 786-7854
Cary Condotta R [email protected] (360) 786-7954
Joel Kretz R [email protected] (360) 786-7988
Ann Rivers R [email protected] (360) 786-7850
Thank you.
Report on the hearings in the Washington State Legislature, on Wednesday, January 25 and Thursday, January 26, on
SB 6310 and on HB 2434, the bills to establish the Washington Investment Trust (WIT), a publicly owned state bank.
Both hearings are available on TVW on the Internet:
Hearing SB6310 http://www.tvw.org/index.php?option=com_tvwplayer&eventID=2012011204
Hearing 2434 http://www.tvw.org/index.php?option=com_tvwplayer&eventID=2012011233
The hearing rooms were full of WIT supporters and many testified. The many different reasons given for support reflected a high level of understanding about the concept of a publicly owned state bank. It was a good display of citizen activism. The banking lobby did not testify as they are staying neutral on these bills. I suspect they know how unpopular they are right now. The strongest testimony against the WIT on both days came from the state treasurer, Jim McIntire. He summarized his testimony by saying that the core principles of a public treasury are “safety, liquidity, and return – in that order. This bill violates these principles.”
First, let’s look at liquidity. He said that the state does not have sufficient cash flow to pay the state’s bills and invest money not immediately needed for paying the bills. This was contradicted in testimony by Darel Grothaus who has had many years of experience in banking and was on the task force that developed the bill. Grothaus based his testimony upon information given to the task force by the Office of the State Treasurer (OST). OST has two investment portfolios. One is a liquid portfolio and another is a core portfolio. The core portfolio, over the last ten years has never gone below 1.2 billion dollars. The average time the money is tied up in the core portfolio is about 4 years. Just a portion of that portfolio would be enough to capitalize the WIT. So the Treasurer’s liquidity argument is false.
How about safety? Treasurer says the investments of WIT will not be safe. However, over the last 30 years, not a single infrastructure loan in the state of Washington has defaulted. If WIT is primarily a bank loaning to infrastructure projects of counties, cities, school boards, and the state itself the loans will be safe. McIntire is correct to be concerned about student loan defaults. But as any bank, the WIT would make a calculation about expected default rate and set aside funds to cover that. McIntire was wrong to say the taxpayers would have to make up the losses.
How about return? McIntire is proud of the returns to the state from the investments he has made as Treasurer. Within the system in which he is working, the returns are good. Under the current system when the state sells bonds for projects we pay fees up front to lawyers and bankers in addition to the interest we pay to the bondholders, often the big banks themselves. Conversely, with the WIT, it would be collecting interest on loans to other government jurisdictions, all with taxing power, and the interest would be lower than a typical bond and the upfront fees would be small. The savings to Washington State taxpayers would be huge. The Treasurer invests in paper and thus we don’t know where and even if the money gets invested in the real economy. The WIT will invest in real projects here in Washington State, projects that the state and local governments need. Many jobs will be created here in Washington. That is a big difference and must be considered a vital part of the return.
Link to graph of core portfolio http://www.leg.wa.gov/JointCommittees/IFTF/Documents/2011Sep19/IFTFCashInvstmtMgmt.pdf
go to page 19
eridani
(51,907 posts)What follows is a report on the hearings that took place in Olympia on January 25 and January 26, 2012 on SB 6310 and on HB 2434, the bills to establish the Washington Investment Trust (WIT), a publicly owned state bank. This report includes a refutation of the testimony of the State Treasurer, Jim McIntire, who is funded by the big banks and is now opposing the Investment Trust.
Both hearings are available on TVW on the Internet:
Hearing SB6310 http://www.tvw.org/index.php?option=com_tvwplayer&eventID=2012011204
Hearing 2434 http://www.tvw.org/index.php?option=com_tvwplayer&eventID=2012011233
The hearing rooms were full of Washington Investment Trust supporters and many people testified. The many different reasons people gave in support of the Washington Investment Trust reflected a high level of understanding about the concept of publicly-owned state banks. It was an inspiring display of citizen activism. The ONLY testimony against the WIT on both days came from the state treasurer, Jim McIntire. He stated, “Safety, liquidity, and return. This bill violates these principles.”
However, not one word of McIntire’s claims have any relationship to the truth. The truth is that an Investment Trust would be much safer than the risky manner that McIntire currently invests State funds. Second, liquidity of State funds would greatly INCREASE if we have an Investment Trust. Third, an Investment Trust would offer a dramatically higher rate of return than we are now getting from McIntire’s policy of handing over all of our State taxpayer’s money over to Wall Street bankers.
First, let’s look at SAFETY:
McIntire claims that the investments made by the Washington Investment Trust to local school districts and other public agencies for infrastructure projects like building schools would not be safe. However, over the last 100 years, not a single infrastructure loan in the state of Washington has defaulted. So, it stands to reason that since the Washington Investment Trust will primarily loan funds to infrastructure projects of counties, cities, school boards, etc, the loans will be repaid as there hasn’t been a single default over the last 100 years. The Public Bank of North Dakota has also been in business for nearly 100 years and they have been rated as the SAFEST BANK IN THE ENTIRE NATION. Claiming that an Investment Trust would be risky is dishonest and inexcusable.
Now let’s look at how McIntire currently invests State Funds.
A copy of the Retirement System Comprehensive Annual Financial Report (CAFR) can be found at: http://www.drs.wa.gov/administration/annual-report/cafr/. This report shows that the Retirement System has a net balance of $52 billion. The current asset allocation is
35% gambling in the overseas stock market
25% gambling in the US stock market
14% in the real estate market
11% in the corporate bond market and
Less than 5% in US Treasury bills (the safest form of investments).
Our State paid $12 million in commissions just on stock trades in 2010. Clearly our public funds are not currently being put to work creating jobs in Washington State. Instead, for the most part, they are invested creating sweat shops overseas. Even worse, as recently as the stock market crash of 2008, our State funds lost hundreds of millions of dollars from gambling in the US and overseas stock markets. It is absurd for McIntire to claim that our public funds are safer invested creating jobs in the overseas stock market than invested creating jobs in school districts and cities here in Washington State.
Second, let’s look at LIQUIDITY.
McIntire claims that the state does not have sufficient cash flow to both pay the state’s bills and to invest money in the Investment Trust. Darel Grothaus, who has had many years of experience in banking and was on the Washington Investment Trust task force, refuted McIntire’s testimony. Grothaus stated that the Treasurer has enough liquidity to support the creation of the Investment Trust based upon information given to the task force by the Office of the State Treasurer (OST). To explain, OST has two investment portfolios. One is the liquid portfolio and the other is the core portfolio. The core portfolio, over the last ten years, has never gone below 1.2 billion dollars. In fact, the average time money is tied up in the core portfolio is about 4 years. According to Grothaus, just a portion of money from the core portfolio would be enough to capitalize the Washington Investment Trust. So the Treasurer’s liquidity argument is false. See the chart in attached PDF and on the HOME page of our website: wapublicbankproject.org
How about RETURN ON INVESTMENT?
McIntire claims that he is getting a high rate of return on State funds with all of his gambling in the overseas stock market. However, a simple direct comparison of the rate of return of Washington State funds to the Bank of North Dakota confirms that the public Bank of North Dakota has consistently gotten a higher rate of return – as much as double the rate of return as the funds under McIntire’s control.
Chart on the rate of return from http://www.stateinnovation.org/Initiatives/State-Banks-Materials/CSI-Washington-State-Bank-Analysis-020411.aspx
Chart also posted on attached PDF and on the HOME page of our website:
Wapublicbankproject.org
Moreover, we are losing billions of dollars due to our current state borrowing system which affects our bottom line rate of return. Under the current system, the State Treasurer goes to Wall Street Banks to buy bonds at 4%-5%. At 5% interest over 20 years the taxpayer ends up paying $1 billion in interest for every $1 billion the treasurer borrowed for infrastructure projects. Currently Washington taxpayers are paying $1.5 billion in interest payments every year to big Wall Street banks. The State of North Dakota does not pay any interest at all to the big banks as the Bank of North Dakota has helped the State of North Dakota to become entirely self-sufficient. Thanks to the revenue generated by the Bank of North Dakota, the State of North Dakota has almost no debt. So there is no question that the State tax payers would make more and save more by investing in our local economy than by putting ourselves at the mercy of Wall Street banks.
McIntire makes two other false claims. He claims that our State can already do everything that an Investment Trust could do. This is not true. Our State currently has no access to near zero interest funds from the Federal Reserve – we would if we had an Investment Trust. Nor can our State currently leverage assets in order to offer school districts and other public agencies low interest loans. We and every school district in our State are at the mercy of whatever Wall Street wants to charge us.
Finally, McIntire repeats the false claim that the only reason North Dakota is doing so well is that they have oil revenue. McIntire conveniently ignores the fact that 7 other States have more oil revenue than North Dakota – yet all of them suffered a severe collapse of their local economies because they did not have a publicly owned bank to keep the economy going after the big banks left their States small businesses in the dust. It is also a fact that in the past 10 years, the Bank of North Dakota has returned MORE revenue to the State of North Dakota than the oil industry.
Why is McIntire coming out against an Investment Trust, even though the Investment Trust would save local tax payers billions of dollars and create tens of thousands of local jobs?
The answer is that his re-election campaign in being paid for by the very bankers and wealthy corporations that benefit from keeping our State in debt to big Wall Street bankers. See the table in attached PDF). Of McIntire’s campaign chest of $39.5 thousand for 2012, $24,050 comes from institutions or individuals connected to the financial industry. This is just the beginning of buying the Treasurer’s Office. In the 2008 election, McIntire raised and spent nearly $300,000 – far more than any other candidate for State Treasurer – to buy his way into office. We need a State Treasurer that works for the people, not for the big banks.
The answer is that his re-election campaign in being paid for by the very bankers and wealthy corporations that benefit from keeping our State in debt to big Wall Street bankers. See the table in attached PDF). Of McIntire’s campaign chest of $39.5 thousand for 2012, $24,050 comes from institutions or individuals connected to the financial industry. This is just the beginning of buying the Treasurer’s Office. In the 2008 election, McIntire raised and spent nearly $300,000 – far more than any other candidate for State Treasurer – to buy his way into office. We need a State Treasurer that works for the people, not for the big banks.
Do not fall for the false claims of Jim McIntire. An investment trust would be safer and offer a better return on investment than the current system controlled by Jim McIntire and the big banks.
ACTION ITEMS FOR ACTIVISTS: Please go to www.leg.wa.gov and urge your State legislators to support creating an investment trust in Washington State!
Thanks for supporting the Washington Investment Trust!
You friends and fellow citizens at the Washington Public Bank Coalition.
To learn more, visit our website: www.wapublicbankproject.org
eridani
(51,907 posts)We talked to Bob Hasegawa’s office today, the bill failed to get out of both committees and Bob is trying to move the bill in another way. In the House Committee we needed two more Democrats to pass the bill. It is our understanding that we could not move these Dems: Kelley 28th Dist., Hurst 31st Dist., Pedersen, 43rd Dist. In the Senate we were unable to get the two votes from Hobbs 44th Dist. and Haugen 10th Dist. We didn’t really expect to move any Republicans.
Bob Hasegawa is continuing to push for the bill. He is seeing if he can get “Necessary to Implement the Budget” status. It is not looking good on that front. He is also seeing if he can move it to the Capital Budget Committee so that the bill can at least come to the floor of the House this session. His office should be issuing a report sometime next week and we will pass that on when we get it.
Thanks again for all the emails, phone calls and trips to Olympia.
Cindy and John
eridani
(51,907 posts)As many of you have already heard, the bill that would establish the Washington Investment Trust (WIT) has not made it out of committee in either the House (HB 2434) or the Senate (SB 6310). Today, February 14th, is the House of Origin cutoff date and that means that any bill that has not been moved out of either the House or the Senate is considered dead. However, as a wise person once said, “there are always options.” I’m continuing to work the bill, and looking for the legislature to take some steps to move the WIT forward.
I believe the WIT is one of those tools that will help us create a sound financial future for Washington State. Our taskforce worked diligently over the interim to find the ways we can safely invest our money to help it work in an innovative way for the citizens of our state. I realize there are some doubts, opposition, and possibly some misunderstanding of what exactly the WIT is trying to do. So we still have quite a bit of work ahead of us to help make the case as to why this can be a good thing for our State.
At the same time, I believe this challenge will help us refine our message about the very clear and tangible benefits the WIT can provide, such as savings on interest for infrastructure projects, expanded borrowing power for more capital projects, more jobs and lower interest rates on student loans. These are the messages that I will be working to convey. I’m committed to continuing the fight to move the issue forward this session. Over the next few weeks I’ll be looking for opportunities to help me do that. In the meantime, I think it will be important for folks to continue to spread the message within their communities about the specific benefits and opportunities the WIT can produce. If we can do a good job relaying our message, hopefully we will be building a strong foundation of support within each of the legislative districts.
Thanks for your continued efforts!
-Bob
Here are some specific examples of how the WIT can benefit the taxpayers of WA:
· If the Trust were capitalized at $1 Billion and it turns over on average every 24 months, it could finance $2 Billion of construction every 48 months. By contrast $1 Billion in bonds can only finance $1Billion in construction over the 20 to 25 year repayment period of the bonds.
· The Trust can finance construction at 1% to 2% below current bond rates and still get a higher return than investing in Treasury securities. On a $50 Million project there will be savings of $500,000 on 1% and $1,000,000 on a 2% reduction in rates over 24 months.
· Few students can afford to pay for college without some form of education financing. Interest rates on these loans can be as high as 17%! The Trust could help make loans more affordable for students who are feeling the ever growing financial pressures of higher education.
eridani
(51,907 posts)Washington Investment Trust (WIT) Strategy Meeting
When: Monday, June 18th 5:30-7:00 p.m.
Where: Rainier Vista Neighborhood House, Paul Allen Meeting Hall
4410 29th Ave S. Seattle, WA 98108
Directions: http://www.nhwa.org/contactus/location.php?location=2
Who: Anyone interested in creating the WIT
Re: Help us build the campaign and strategy to create our own publicly owned state bank.
With 44 co-sponsors on HB 2434<http://apps.leg.wa.gov/billinfo/summary.aspx?bill=2434&year=2011>—Creating the Washington Investment Trust (the most co-sponsors of any bill filed this session, to my knowledge), we were still unable to move the bill out of committee in either the House or Senate this past legislative session. Senator Karen Keiser sponsored the Senate companion bill SB 6310.
While the bill died in both House and Senate committees, we were able to get a $150,000 budget proviso into the capital budget to make a plan before the next legislative session to consolidate all the state's existing loan programs, but the Governor vetoed that proviso. However, there was also some funding provided in the operating budget to restructure existing student loan programs and determine if students could benefit from the creation of a new loan program.
Obviously, we have work to do if we want to see the WIT become a reality. Please come to a strategy meeting to discuss how we should move forward.
Any strategy we adopt will need to be statewide. If you have contacts in other parts of the state who cannot attend this meeting, I’m happy to schedule something more convenient for them in their areas. Just have them contact my Legislative Aide Wendy Cho Ripp at (206) 587-5554 to set it up.
I hope to see you at our WIT strategy meeting next Monday.
Bob Hasegawa
State Representative, 11th District
_____________________
WIT Meeting Agenda (June 18, 2012)
1. Update on HB 2434<http://apps.leg.wa.gov/billinfo/summary.aspx?bill=2434&year=2011> and 2012 session progress
2. Discussion of building a statewide campaign
a. Do we want to formalize the campaign, i.e. file C1, fundraise, hire coordinator, etc.?
b. Identify current and potential allies
c. Getting organizational endorsements
d. Adopting convention resolutions/planks
e. Building a speakers’ bureau
f. Framing and targeting our message
g. Constitutional amendment?
h. Initiative?
i. Website?
j. Other issues
3. Implications for upcoming elections
4. Next steps
Questions? Contact:
Bob Hasegawa
Washington State Representative, 11th District
Wendy Cho Ripp, Legislative Aide
District Office (during interim): (206) 587-5554
Olympia Office (during session): (360) 786-7862
email: bob.hasegawa {at} leg.wa.gov
http://www.leg.wa.gov/house/representatives/pages/hasegawa.aspx
http://www.housedemocrats.wa.gov/roster/rep-bob-hasegawa/
dr5645kr
(25 posts)eridani
(51,907 posts)This summer various interested parties have been strategizing about how to have a statewide campaign. Business groups, City Council members, Washington Council of Churches, Community groups, Puget Sound Advocates for Retirement Action (PSARA with a new name) have all committed to work toward passing a bill establishing the Washington Investment Trust in the 2013 Legislative Session.
Save the Date: Thursday, September 27, PSARA will be hosting a forum: Would the Proposal for a State Investment Trust (state bank) Be Beneficial to the People of Washington?
This important forum will feature State Treasurer, Jim McIntire, Rep Bob Hasegawa and community banker, Darel Grothaus discussing the potential benefits and risks of creating a state investment trust. Filipino Community Center, 5740 Marin Luther King Jr. Way South, Seattle, 98118.
We want a good turn out for this forum to show that people want to get the state’s money out of the big banks and keep our tax money circulating locally.
Cindy Cole
www.wapublicbankproject.org
www.justsustainableeconomy.org
eridani
(51,907 posts)Bob Hasegawa will be speaking about the public bank proposal at my home on Friday, August 10. Please pass the word to whomever might be interested! My address is 32926 NE 140th PL Duvall 98019. Potluck dinner 6:30, Bob speaks about 7:15, and then film on the North Dakota bank. Phone # at my place is 425 788 5769.
Thanks,
Barb
eridani
(51,907 posts)The Metropolitan District Club is holding a forum A State Bank for WA?, on Wednesday, August 22, from 12 noon to 1:30 p.m. (600 Stewart Street, Suite 205), with speakers WA State Treasurer Jim McIntire (against) and banking and commercial real estate consultant Darel Grothaus (for), moderated by Seattle City Councilmember Gael Tarleton. Free and open to the public - feel free to bring your lunch and a guest along with you.
Speaker presentations will be followed by audience Q&A. Suggestions for questions welcome!
The event is open to the public.
RSVP for this event by replying to Donald A. Smith <[email protected]>
eridani
(51,907 posts)On Wednesday, join us for a noon forum: A State Bank for WA? with WA State Treasurer Jim McIntire (against) and banking and commercial real estate consultant Darel Grothaus (for), moderated by Seattle Port Commissioner Gael Tarleton (12 noon to 1:30 p.m., 600 Stewart St., Ste. 205). Speaker presentations followed by audience Q&A. Ideas for questions welcome! Free and open to the public. Here's the link on Facebook. http://www.facebook.com/events/447017405333174/
Smickey
(3,356 posts)The likes of Jamie Dimon and B of A have had their way long enough and have proven themselves to be refuse. They no longer (if they ever did) have any public good component to their ways of doing business. I am a West Sider and would like to do my small part in helping to make this happen. What can I do?
eridani
(51,907 posts)Please post events and other WA State stuff that you know about.
Smickey
(3,356 posts)I have contacted Rep. Hasegawa and asked what I can do to help. Thank you for you good work on this.
HiPointDem
(20,729 posts)eridani
(51,907 posts)For those of you unable to attend the forum last Thursday, Sept 27, 2012 sponsored by PSARA -"Would a State Investment Trust (AKA a public bank) Benefit the People of Washington"? We submit here our notes and comments. The forum was very well attended. Interest in the idea of a public bank remains high.
The three person panel was introduced by Robbie Stern, chair of PSARA.
Rep. Bob Hasegawa spoke first and he told us that the new bill for the upcoming legislature will focus on funding infrastructure in our state. The name of the public bank will be the Washington Investment Trust (WIT), same as last year. He said we need to use Washington tax money locally and for the benefit of the citizens of our state. He sees the WIT as a long term project for the future of our children and grandchildren. It will not get us out of the current recession. It is a step to get out from under the Wall Street Banks.
Jim McIntire, the state Treasurer, spoke next and began with the phrase, “the Treasurer’s Office is the ‘state bank’”. We think this shows 1) either he is being deceptive with the word “bank” or 2) he really does not understand the privileges a real bank has. He went on to talk about the good job that the Office of the Treasurer(OST) has done in investing and managing the state’s money. Later on when he makes the claim that we do not have enough cash flow to start a bank, this claim contradicts his statement that his office has invested and has earned billions for the state. If we don’t have enough cash flow to start a bank, where does his office get all the cash to invest and earn returns for the state? We are talking about the same money. ( For those of you who think we can solve the problem of Jim McIntire by elected a new Treasurer in 4 years, be aware that as soon as the Treasurer of Oregon got even close to working with the movement there to establish a public bank, he faced massive criticism from his fellow treasurers at the first national meeting of State Treasurers he attended.)
McIntire said that his main concern is “safety, liquidity and return.” We agree. On “safety”, the third speaker, Darel Grothaus told us that in 30 years there has not been default on public infrastructure bonds in this state. Therefore, if the WIT loans money to fund infrastructure, the funds will be safe and those loans will be carefully scrutinized for safety. The plan is for the WIT to follow good banking practices, be audited each year and follow guidelines set forth by the Department of Financial Institutions.
On “liquidity” McIntire does not seem to understand that managing liquidity is what banks do. A retired Bank of North Dakota official told us this spring that Treasurer McIntire simply does not understand how banks maintain liquidity as they deal with deposits flowing in and out of depositors accounts. That official told us off the record that he felt the opposition by State Treasurers to the public bank concept is primarily a “turf” thing.
McIntire told us that his office primarily invests in Federal Government Securities that can be sold at any time if the State needs the money. There is also a guaranteed return. Here we see the real difference between a public bank and an Office of the Treasury. The WIT will fund infrastructure projects, schools, sewers, water systems, roads and bridges here is Washington State. The current Office of the Treasury invests in paper i.e. Federal Government Securities and short-term CD’s.
When Darel spoke next, he repeated the idea that Washington State taxes need to be invested here at home in public infrastructure. Currently, the government jurisdiction, say school board, water district, city, county or an agency of the state must go to the private bond market to borrow money for the project. The Wall Street Banks underwrite the bonds i.e. loan the money. There are significant upfront fees as well as the interest on the loan that the jurisdiction must pay. The Washington Investment Trust (WIT) would be a short term revolving lender for these projects. He believes that the Office of the State Treasurer’s core portfolio can be used for infrastructure construction loans without endangering cash flow and the liquidity needed to pay current obligations. There are ways to calculate how much of this core portfolio could be used and still maintain liquidity. Darel emphasized that state and local government borrowing costs can be significantly reduced and the state can get a better return on investment compared to bond financing. If the state charged only 1% less interest, the savings to local government would be huge and the WIT would earn the interest instead of the Wall Street Banks. The creation of jobs in this state must be part of the calculation of “return”. For example a billion dollar loan for a sewer project could produce 13,000 jobs. And when that loan is repaid with interest the WIT could again leverage that money to create more loans and more jobs. So, on “safety, liquidity and return” the WIT is a better way for our state.
In the Q and A session, Jeff Johnson of the WA State Labor Council spoke about the support from labor unions for a WIT. He asked the Treasurer to use his expertise to help in finding a way to allow the State to keep its money local through a WIT and to use that money to make loans and create jobs.
An audience participant who is also a financial advisor said that she had looked into having some of her clients buy Washington State bonds when they were offered by the state. What she found was that the bonds were underwritten by the big Wall Street Banks and after their fees and the way the bonds were structured, only sold in large denominations, her clients, when and if they were able to buy them, would get very little return and that the Wall Street banks got the major benefits. She could not recommend to her clients that they buy WA state bonds. Her question to the Treasurer was, “Why can’t we think outside the box, do something different, how can we make a WIT possible and viable?”
Larry Brown from the Machinists Union wondered if the WIT could help bring another airplane company to Washington as a competitor to Boeing. Senator Marilyn Chase told the group that the University of Washington has an internal bank. The legislature gave the U of W bonding authority a few years ago. In effect, public banking already exists in this state and we have not heard McIntire speak out against this.
It was mentioned by several people that we need to get out from under the Wall Street Banks. Bank of America has foreclosed illegally on Washington State citizens, backs war, backs coal, and cares nothing for the people but only about profit. Why do we keep using it to collect our tax money? (B of A is contracted by the state to collect all the taxes and fees for the state). The mood of the crowd was in favor of the WIT and they wanted the help of the Treasurer to make it possible. However, legislation will be introduced once again this legislative session and we will work state wide to make a WIT happen. Stay tuned, there will be some actions to take as the session draws near.
Cindy Cole and John Repp
eridani
(51,907 posts)This Thursday,
October 25 at the Common Good Café
University Methodist Temple
1415 NE 43rd, Seattle, WA 98105
The event begins at 7 PM.
Many of you have been following the state bank issue for some time, but you can pass this announcement on to friends or if you want to hear the latest on what is going on with the Washington Investment Trust or you want to lend support, please come.
The Workshop will cover the differences between private banks and public banks. There will be a power point about the history of Public Banking and currently what is happening world wide with the crisis and the present banking system. We will focus on the bill that will be introduced into the Legislature in 2013 and how the Washington Investment Trust (WIT) can promote prosperity and create jobs. There will be time for questions and we will break out to role play talking with others in our community and our legislators about the WIT .
eridani
(51,907 posts)A PUBLIC BANK IN WASHINGTON STATE?
You are invited to an informational presentation on “WIT” (the Washington Investment Trust) – a public, local alternative to the current bank system!
SUNDAY, JAN 13, 3-4:30
NE LIBRARY (6801 35TH NE)
Cindy Cole and John Repp of Just Sustainable Economy will present information about the history of public banking—including the story of the Public Bank of North Dakota--, the unique challenges of public banking in Washington, and how the public bank would work. There will be time for questions and comments.
Sponsored by the Wedgwood Justice and Peace Coalition, Occupy NE Seattle (ONES),
and the 65th Street Change Gang
(This event is not sponsored by Seattle Public Library.)
eridani
(51,907 posts)Dear State bank stakeholders,
On behalf of Senator Hasegawa, Creating the Washington investment trust has now been assigned a Senate bill number, SB 5029 http://apps.leg.wa.gov/billinfo/summary.aspx?bill=5029&year=2013 and has been referred to FINANCIAL INSTITUTIONS & INSURANCE.
eridani
(51,907 posts)Senator Hasegawa has introduced a bill in the Senate. #5029 The bill has 10 co-sponsors: Chase, Shin, Conway, Rolfes, Darneille, Hargrove, Keiser, Kohl-Welles, Kline and Frockt. It has been referred to the Financial Institutions & Insurance Committee. There was no hearing date as of today 2/4/13. You can find a copy of the bill here: http://apps.leg.wa.gov/billinfo/summary.aspx?bill=5029&year=2013
Put “SB 5029 Washington Investment Trust Hearing Wanted” in the subject line of the email. Please email these Senators and say that you want a hearing on Senate Bill 5029 establishing the Washington Investment Trust. In the body of the email ask when there is going to be a hearing on SB 5029 establishing the WIT. There is a large constituency that wants this bill to pass.
[email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]
eridani
(51,907 posts)On behalf of Senator Hasegawa, I am pleased to inform you that SB 5029, Creating the Washington investment trust, has been scheduled for a public hearing on Thursday, February 14th at 1:30 pm in the Senate Committee of Financial Institutions and Housing & Insurance, Senate Hearing Room 2 in the Cherberg building.
eridani
(51,907 posts)And try to make it even if you don't testify--a strong show of support is helpful.
RE: SB 5029, Creating the Washington investment trust’s public hearing on February 14th in the Senate Financial Institutions and Housing & Insurance committee.
Senator Hasegawa has requested you let our office know if you will be coming to the public hearing on February 14th so that we can coordinate testimonies as there is a limited amount of time allotted for public comments. Please let me know if you will be testifying to [email protected]. Senator Hasegawa has also requested that there be a strong showing even if you will not be testifying.
If you would like to submit public written testimonies and are not able to attend the public hearing on SB 5029, Creating the Washington investment trust on February 14th, please send them to Ariel LeMoine, Financial Institutions and Housing & Insurance session committee assistant, at [email protected].
In addition, the Washington State Legislature is conducting a pilot program enabling public comments to be submitted electronically.
eridani
(51,907 posts)Senate Hearing in Olympia
February 14, 2013
1:30 pm in the Cherberg Building at the State Capitol
OR
Write to the following State Senators who are on the committee:
Steve Hobbs (D) 44th LD- [email protected]
Don Benton (R) 17th LD- [email protected]
Joe Fain (R) 47th LD- [email protected]
Brian Hatfield (D) 19th LD- [email protected]
Mark Mullet (D) 5th LD- [email protected]
Sharon Nelson (D) 34th LD- [email protected]
Pam Roach (R) 31st LD- [email protected]
For more information on the state bank go to http://involveddemocracy.org/State_Bank.html
If you want to carpool down to the hearing, please send an email to [email protected] and we will try to get groups together.
eridani
(51,907 posts)If you would like to submit public written testimonies and are not able to attend the public hearing on SB 5029, Creating the Washington investment trust on February 14th, please send them to Ariel LeMoine, Financial Institutions and Housing & Insurance session committee assistant, at [email protected].
In addition, the Washington State Legislature is conducting a pilot program enabling public comments to be submitted electronically. Please see the attached press release.
Best Regards,
eridani
(51,907 posts)Posting under the State Bank heading because this may be a possible opening for us
http://www.thestranger.com/seattle/where-to-stash-your-cash/Content?oid=16460585
When state-licensed cannabis companies start selling sinsemilla later this year, perhaps the biggest conundrum for state regulators will be where to put all that marijuana money. Federal laws against money laundering forbid banks and other financial institutions from depositing dope dollars—a well-known problem in the pot world. Some entrepreneurs secure bank accounts through "white lies" and by omitting certain financial details, but still, the state's medical cannabis industry is mostly cash-based.
State deposits run through Bank of America, according to state treasury spokesman Chris McGann, who says the agency isn't experienced with large cash-based accounts. "We do have a vault, but it's not really set up for storing cash. It's mostly used right now to store bond documents."
The state currently deposits pot sales tax, but those funds are commingled with many other deposits. How is Bank of America going to view state money earmarked for our Dedicated Marijuana Fund? According to bank spokeswoman Britney Sheehan, "If the proceeds can be directly tied to cannabis operations, we would not bank it."
<snip>
State Depository: A state bank requires millions of dollars in start-up capital, but a state depository requires only a large enough safe—like the one storing bond documents at the treasurer's office. A pot-bank scheme might avoid federal regulation if it acts only as a safe-deposit box for the state's cannabis cash—no transactions with other banks, no federal deposit insurance, etc.
eridani
(51,907 posts)www.publicbankinginstitute.org We hope to begin implementing some of this summer and fall. If you have some contacts or ideas, willing to work on something, let us know. The Public Banking Institute is holding a conference in June in San Rafael, CA, north of San Francisco. It looks like a good batch of speakers and topics, see their web site. Attached is the Strategy Document and I have also copied it here below. Cindy Cole
Strategies April 22, 2013
Washington Public Bank Coalition (Washington State)
We have a core membership of about 12 to 15 people.
Goals:
Long Term Objectives
Build a better society based on social and economic justice, fair foreign policy, and protection of the environment.
Take power away from Wall Street Banks and the Federal Reserve and return it to the people in order to use it to support more positive, sustainable, local enterprises.
Slowdown or stop the corporate domination of government
Establish a public bank in and for the state and possibly in counties and cities. Create a state-owned bank with broad powers and with Federal Reserve System membership; a bank that can circulate money from local governments and local businesses within the state.
What are the Incremental Goals and partial victories?
Creation of local discussion groups to learn and share knowledge about public banking
Creation of music and banners and posters that can be shared at rallies and meeting with legislators.
Creation of coherent and comprehensive list of reasons why we need a public bank and how it will work.
Creation of sample bills establishing public banks.
Get public entities on the county and city level to take seriously the need for public banking on all levels not just the state level.
Refute emphatically unconstitutionality argument.
Get enabling legislation for county or city banks
Meetings with legislators who will eventually sponsor and/or vote for the creation of a public bank.
Convince self-interested supporters such as school districts etc, and have them support with emails, letters phone calls, etc. Other stake holders may include community bankers, local county and municipal officials, chambers of commerce, taxpayer organizations, students, civic organizations, unions
Organizational Considerations
Resources
People: Activists from the Democratic Party, activists from alternative parties, retirees with some time, the faith based community, labor, we have a legislator willing to put forth the legislation and work on it on the state level. We have some interested city council people from the City of Seattle.
Public Banking Institute, possible conference call with the core group to discuss options, strategies.
Skills: Writing, computer skills, research skills, organizational skills, presentation skills,
Access to meeting facilities, Resources from PBI, Some legislative contacts
How build our Organization
Expand the leadership group, increase members’ experience, build membership base, connect with other groups working on similar projects (for example, local economies, states rights groups, environmental, criminal justice groups, developmental agencies, public entities, all of which a public bank would impact
Problems: . Internal problems: Childish behavior is self-destructive along with political correctness!!A problem is burn out of volunteers.
No money at this point. It has been suggested that we need a paid, full time organizer.
We need to use our constituent data base of around 1,000 to communicate more and with relevant articles.
Constituents
Citizens of Washington State, public banks will keep money local.
Allies:
99%
Cultivate relationships with Lloyd Hara and legislators in other states, particularly pro state-owned bank California Assembly Speaker John Perez and Assemblyman Roger Hernandez
Possible Ally is Larry Gossett, president of the King County Council. Set up a meeting’with Mike O’Brien, Seattle City council.
Washington State Employees Association. It's worth reaching out to them to ask how their lobbying for the WIT fared in February and how we can prepare for next year.
Washington State Cannabis Association, whose rep testified for the WIT in February explore possible cooperation.
Community Development Organizations, money for projects
Community Banks and credit Unions
Labor, jobs
Washington Community Action Network
Main Street Alliance – jobs and more money circulating locally
Public Entities,(school boards, water districts)
Puget Sound Association for Retirement Action: Caring Across Generations Campaign
Cities, counties
State’s Revolving Funds (could also be opponents) their money would go farther because of leverage, may have influence with legislators.
Progressive Democrats
Justice Party
Justice oriented groups
Faith Based
Opponents
1%
Jim McIntire, Treasurer, well respected, Democrat, Economist The Treasurer really is a progressive – let's consider ways to make him an ally rather than an opponent.
Bankers Association, influences small community banks, has lots of money
Wall Street banking industry. Bank of America, has lots of money, will lose the State’s account.
Bond Market and lawyers that work for them
Legislators paid for by Wall Street.
Individuals brainwashed into believing banks are not risky or that we have no choice. But almost any opponent can become an ally.
Wall Street and the slaves of Wall Street, the politicians
Elected Officials in Seattle and WA State
We can challenge their elections, run someone against them--McIntire, Hobbs, Pedersen
Targets
Primary
Fellow Washingtonians and out of state people who also want public banks in their states. Legislators who can vote to create a public bank and their aids
The State Treasurer
County and city officials
Secondary
Legislative aides, newspaper editors, organization heads and participants
Tactics
Forums
Symposiums
Organize large scale conference and bring representatives from the 99% under one roof and talk and act like adults instead of little teens!!
Power point Presentations
Letters of support by email and phone, letters
Offer a helpful solution to current budget crisis
Get Cities and counties to pressure State Legislators
Emails to Legislators
Meetings with elected officials
Op-eds
Letters to the editor
Web Site
Face Book Page
Road trips
Local concerts, rallies, festivals
Commission Jim Page to write a song about public banking.
Come up with a slogan that would make the movement recognizable across the state, bumper stickers
Persuade labor unions to deposit with, and lobby with, community banks to strengthen mutually- advantageous presentation to legislature.
Why pay interest to Wall Street Banks when you can pay the interest to yourself?
Caution community banks about deposit risks if FDIC treats depositors as unsecured "Partnership Bank", a bankers' bank to instate community banks. .. Providing money and dividends to state and local governments at fair terms andc with dividends". local banks "going off the grid" before the grid self destructs.
Creditors at mega-banks too large to manage and too large to supervise. Consider recent developments in Cyprus and New Zealand. Remind politicians and treasurers of their fiduciary responsibility. Bring up Dodd Frank, how depositors may be at risk. The tax payers will not bail them out. The first in line if a bank goes bankrupt are the those holding derivatives, depositors come second and who knows if there will be anything left. It is unwise to put state money in these large TBTF banks.
Illustrate how community banks and credit unions may partner in participation loans with state-owned bank to keep large customers without threat of correspondent bank poaching customers.
If revolving funds' are held up as making a public bank unnecessary, we might want to learn more about them and imagine how they can be part of a public bank in the Treasurer's Office.
Show community banks that state-owned bank may issue letters of credit to collateralize large deposits and effectively reduce cost of money.
Estimate the banking costs paid yearly by the state and by the largest city and county entities in the state. Let’s acquire these costs as an argument for public banking
Calculate how agencies may lower borrowing rate of interest and amount of fees to fund projects.
First, get a champion; second, get the local university to commit resources; third, get business associations and a few banks on board; fourth, expand the coalition; fifth, go for a vote with the city or county council.
eridani
(51,907 posts)See videos of conference presentations and exclusive interviews with our presenters at the PBI conference http://www.publicbanking.org!
Learn more about how public banking can reclaim our economy from speculative roller-coaster of Wall St at http://www.publicbankinginstitute.org!
Marco Vangelisti's webinar, July 24, noon pacific, on "Understanding the Money and Banking System" registration link:
https://cc.readytalk.com/cc/s/registrations/new?cid=wywjtxpk22h
eridani
(51,907 posts)Green Light for City-Owned San Francisco Bank
http://www.truth-out.org/opinion/item/17895-green-light-for-city-owned-san-francisco-bank
Compounding the risk is the reason Cyprus “bail in” shocker, in which depositor funds were confiscated to recapitalize two bankrupt Cypriot banks. Dodd-Frank now replaces taxpayer-funded bank bailouts with consumer-funded bail-ins, which can force shareholders, bondholders and depositors to contribute to the cost of bank failure. Europe is negotiating rules imposing bail-ins for failed banks, and the FDIC has a U.S. advisory to that effect. Bank of America now commingles its $1 trillion in deposits with over $70 billion in risky derivatives, and has been pegged as one of the next banks likely to fail in a major gambling mishap.
San Francisco and other local governments have far more than $250,000 on deposit, so they are only marginally protected by the FDIC insurance fund. Their protection is as secured creditors with a claim on bank collateral. The problem is that in a bank bankruptcy, state and local governments will fall in line behind the derivative claimants, which are also secured creditors and now have “super-priority” in bankruptcy. In a major derivatives calamity of the sort requiring a $700 billion bailout in September 2008, there is liable to be little collateral left for either the other secured depositors or the FDIC, which has a meager $25 billion in its insurance fund. Normally, the FDIC would be backstopped by the Treasury – meaning the taxpayers – but Dodd-Frank now bars taxpayer bailouts of bank bankruptcies caused by the majority of speculative derivative losses.
The question today is whether cities and counties can afford not to set up their own municipal banks, both to protect their money from confiscation and to take advantage of the very low interest rates and other perks available exclusively to the banking club. A government that owns its own bank can keep the interest and reinvest it locally, resulting in government savings of an estimated 35% to 40% just in interest. Costs can be reduced, and taxes can be cut or services can be increased. Banking and credit can become public utilities, sustaining the local economy rather than mining it for private gain; and banks can again become safe places to store our money.
eridani
(51,907 posts)Senator Bob Hasegawa called together stakeholders at 6pm at the Georgetown SSCC campus. There were 11 people in the room. He thinks that the passage of I-502, the legalization of recreational cannabis and the need of both the medical and recreational cannabis businesses for banking services, gives us a unique opportunity to start a public bank in Washington. Because the state needs a cannabis industry that has bank accounts in order to tax them in order to implement I-502, the need is urgent. Bob has talked with the Governor’s office legislative director and the Liquor Control Board, who is charged with setting up the recreational cannabis industry rules. He and the Senate legislative aide present (Eduard) will draft a bill. Bob assured us that it would receive funds from the cannabis industry as its deposit base and would invest in public infrastructure projects. He also said he would submit last year’s bill as well, so there will be two tracks. The Department of Justice memo told the state that if “due diligence” is achieved in their accounting, they will not prosecute. It was not clear if this applies to those agencies like the FDIC responsible for banking regulation.
Bob then mentioned we need to start thinking about an initiative to the people, long term. We also talked about the difference between a revolving loan fund and a public bank, because many legislatures first response to the public banking idea is “we already do that” i.e. loan out money. A bank has access to Federal Reserve funds as well as overnight funds from other banks. A bank can leverage up to ten times it capital and have a loan portfolio roughly equal to its deposit base. Banking law and practices are very different than revolving loan funds law and practices. The legislature often takes back revolving loan funds in a fiscal crisis after those funds has grown. Washington State also has a debt to private banks that is as much as 95 of the state budget. North Dakota which has a public bank has no debt and no fiscal crisis. Bob’s goal is to start a public bank so it can grow large enough to play the positive role the Bank of North Dakota played in ND during the crisis of 2008. They avoided the crisis completely.
Cindy Cole
Video by Public Banking Institute on the Big Banks and “bail in”.
http://www.safeshare.tv/w/jkbxcFMkyu. Send to your public officials. They need to be aware and look into this.
eridani
(51,907 posts)Senator Bob Hasegawa plans on submitting two bills establishing a public bank to process cannabis funds and also for giving industrial hemp production banking services. As things develop we will keep you informed. This Legislative session is short as last year the two year budget was passed (lacking a solid transportation budget). The WA Senate is still tied up with the defection of Rodney Tom and Tim Sheldon who now caucus with the Republicans.
Here is an article from the Public Banking Institute Newsletter. If you want to get them on a regular basis you can sign up on their web site www.publicbankinginstitute.org
The Public Bank Solution: : Transforming Our Broken System
As the US federal government sits largely silent on the eighth day of a shutdown and the nation moves ever closer to a debt ceiling default, it has never been more clear that the 'dialectic' that passes for debate today between two parties that operate within the box of a privatized money system, is not solving our most pressing, fundamental problems. The core problem we face is nothing less than money itself, and who gets to issue it. A completely privatized monetary system results in the empowerment of those who control the money. In the US this of course is Wall Street and its central bank, the Federal Reserve.
The most powerful alternative to our current, privatized monetary and banking system is public banking, which continues to explode into popular awareness. Ellen Brown's new book The Public Bank Solution is making waves, receiving critical acclaim and opening doors for new conversations and possibilities to emerge. As an example, Ellen was recently invited to lead an online discussion by the New York Times on their website, on public banks. The discussion just opened on October 1st and is raging away as you read this with a powerful impact so far, judging by the comments and conversation. Dive in!
In an excellent interview on the Max Keiser show last week, Public Banking Institute Executive Director Marc Armstrong makes a central point about money which could transform our whole economy: no one thinks twice about electricity being a fundamental human need that should be generated and regulated in the public interest, so why not money? Money is as vital a need in our complex society as electricity, and should be issued and regulated in the public interest as well. As Ellen said this week in the New York Times, "Banking, money, and credit are not market goods but are economic infrastructure, just as bridges and roads are physical infrastructure." Currently in our economy, money is issued and regulated in the corporate interest, which is a primary reason that corporations are doing well, sitting on trillions in cash, stock market near record highs, while the rest of the economy falters.
The consequences of a privatized corporate monetary system include a national debt. Our nation is subject to needless showdowns and ongoing panic over the national debt; however in a completely publicly-owned monetary system this drama and consternation would simply not exist, as there would be no national debt. There would simply a money supply, in amounts required to support full employment and sustainable prosperity. In contrast, in our privatized corporate monetary system, the Federal Reserve's quantitative easing can go on for years, increasing banks' balance sheets - without increasing the money available to main street. As a result, tens of millions of unemployed citizens today remain idle, while factories and crucial infrastructure priorities lie in wait - for money. That private banks do quite well under quantitative easing while people suffer is no accident, and until we as a people start to think outside the box that our politicians operate in, we will continue to languish.
Two years ago House Majority Leader John Boehner said of government workers during the Republican austerity budget cutting drive, "...if some of those jobs are lost so be it. We're broke." Actually, we are broke as long as we have a monetary and banking system that serves elites, not the people.
Meanwhile, House Minority Leader Nancy Pelosi recently said of Republican-led budget cutting efforts, "The cupboard is bare. There's no more cuts to make. It's really important that people understand that." Of course, there is another way beyond endless austerity battles, and it starts by fundamentally rethinking money and banking.
No one is suggesting that public banks would give politicians a blank check for endless spending on pet projects. We are suggesting that public banks can transform the process by which we set our collective priorities and create our future, making that process fundamentally accountable to we the people, not they the corporations. This is what this movement is ultimately about - empowering citizens to bring money and banking back under the people's control, one public bank at a time.
Our readers are very passionate, informed, and active. Thank you for all that you are doing to spread the word, shape the debate, and get public banks on the ground. Working together we can - and already are - creating the foundation for real and lasting change.
Christapher C. Cogswell
Board Member, Public Banking Institute
eridani
(51,907 posts)Here's hoping that the state of WA can be the bank for the marijuana industry
http://apps.leg.wa.gov/billinfo/summary.aspx?bill=5955&year=2013
This is to notify you that SB 5955 is scheduled for a public hearing in the Senate Financial Institutions, Housing & Insurance Committee on January 16, 2014 at 1:30 pm in Senate Hearing Room 2.
Please see the link below to the Financial Institutions, Housing and Insurance Committee’s agenda:
http://www.leg.wa.gov/Senate/Committees/FIHI/Pages/Agendas.aspx
eridani
(51,907 posts)In the meantime:
•I have reserved the meeting room at the NE Seattle Library (6801 35th Ave NE) for Saturday, Feb 1, 1-3pm, for our next Public Bank Coalition meeting. Please RSVP as to whether you can attend this proposed meeting.
•I have spoken with someone from the company (American Speakers Bureau, I believe it is named) that handles Chris Hedges' speaking engagements. He is available Oct 19, 2014, the date of our forum in the fall, but it would be expensive, possibly $10,000. Cindy, can you find out from PBI how much they are willing to spend on a speaker?
•do we have a facebook page? would be good if someone could create one so that we can start posting things like that NYTimes article Cindy just shared.
Looking forward to hearing from everyone if they can come to the Feb 1 meeting.
Mary
eridani
(51,907 posts)Washington Public Bank Coalition Working Group
Meeting Notes Feb 1, 2014
Present: Dennis, Mason, Cindy, Stephen, Bill, John, Tom B, Tom A, Rebecca, Ruth M, David W, Mary
Dennis gave a report about SB 5955. He and George were at the hearing on January 16. People have received an electronic copy of his report. Briefly, people were impressed with how well the bill was written. The Banking and Credit union lobbyists testified against as well as the Treasurer’s office. Dennis was surprised that there was no one there from the Marijuana lobby. They had planned to be there but did not show. Rebecca made a point that a Trust is different than a bank and must follow different rules. (However, in 5955 Section 20 #4 it states: This section does not prevent the Washington publicly owned trust created in section 3 of this act from being called a trust or from providing banking services without being called a bank. cc)
Eric Holder of the DOJ has said that there will be new rules governing marijuana and the ability of banks to process the money without being prosecuted for money laundering. Dennis was upbeat that these would not be sufficient to calm the fears of the banks but it was pointed out that if the banks get the guarantee that they will not be held liable and that the 502 marijuana folks will assume the liability, the banks will be able to charge large fees because of the risk factor. It was agreed that the banks want the marijuana money and along with Inslee and other politicos the banks are lobbying Holder for rules which allow them to process the marijuana funds. Most likely the big banks will go for the business and the community banks will avoid it because of the risk.
There was some confusion but it looks like there will not be another hearing in front of the Senate Financial Institutions Housing and Insurance Committee. (I could not find a companion bill in the House introduced by Rep Ryu. cc) Feb 18, last day to consider bills in the house of origin; Feb 28, last day to read reports from the opposite house; Mar 7, last day to consider bills from the opposite house; Mar 13, last day of the regular session.
It was agreed that the argument for the state legislature is that 5955 is a revenue generator for the state without raising taxes. Senator Benton (R) perked up somewhat when he heard this about the BND. And why should the marijuana folks be gouged by the big banks? Stephen and Rebecca will work up a one page piece on how public banks (5955 and other) is a revenue generator.
Seattle: Tom B. has broached the subject of a City bank to new City Council Member, Kshama Sawant but she is focused elsewhere at the moment. He will see how it goes. We are hoping that after the 15 minimum wage initiative that we can run a City of Seattle Public Bank initiative in 2015. If we go through Kshama we may get the support of her many activists. Mary brought up that we could perhaps get 350.org to join in as this would be divestment from the big banks and could the city also put its fossil fuel money into the City of Seattle Bank? It was brought up by Stephen and Rebecca that the problem with divestment in fossil fuels is that the city needs to get an equal or better return on investment than it is getting now from fossil fuels. We will have to see if the public bank could get a better return.
Cindy emailed with Newell Aldrich, Licata’s aid, who reported that the contact with Wells Fargo is 5 years in length but that it “opens” each year. Tom B will send Cindy specific questions to ask Newell about the W.F. contract. The terms of the contract need to be clearer. Cindy will also get a copy of the WF contact.
Scott Baker of PBI did a preliminary perusal of the Seattle CAFRs. Rebecca pointed out that the important thing is “what can the city do with the money?” What are the rules surrounding the CAFRs? The City Charter should also be looked at in relation to how the money is and can be used. Can the rules be changed with a public vote or can the City Council change the rules without a public vote? We need to do some research on how the system works. After John and Mary brought up that we do not want to be totally bound by the rules or we won’t get anywhere, Tom B mentioned that we could change the Charter rules as part of an initiative. However, we do need to know how the system works before we get to that point. Stephen, Rebecca and Tom B. will do some looking into the Charter and CAFRs. Governance is important: Risk, Liabilities, the structure of regulatory development, complying with Federal regulations and not being part of the FDIC.
Web Site: Elizabeth will begin working another 10 hours per week and therefore, would like someone to take over the Web Site and Face Book Page. David Ward says he may be willing to do it but would like some help. David Spring can teach people the program.
Symposium: Mary has done the work on this. The Symposium will be to educate folks and be the outreach before the initiative campaign. We will need to pull in allies and develop materials for the different constituents. We have reserved Town Hall which holds 802 in the grand hall. It is scheduled for Sunday, October 19th. We need $ to put a down payment on Town Hall and secure a speaker. Suggested is Chris Hedges who has written on Public Banking and filled Town Hall when he was here before. His price is $10,000 plus expenses. Another idea is Robert Reich who would be a draw. Mary will investigate Robert Reich. The plan for the symposium is to have workshops in the afternoon, perhaps a fund raising reception to meet with the speaker from 5:00 – 7:00 and then the keynote at 7:00. It was agreed that we want to keep the price reasonable (perhaps sliding scale) to draw as many people as possible. Town Hall will help publicize if we keep the price low. Cindy and Mary will contact Leah of PBI and see if there is any more news about what PBI would be willing to help fund.
The ending conversation was on community bankers and how we could get them on board. Stephen was very interested in this. It was suggested that we have someone from the Community Bankers Association come to one of our meetings. Using the BND model it was discussed how a public bank can reduce risk for community banks though participation loans. In Washington State there is the constitutional problem of several sections of the Constitution that make it illegal to give the State’s credit to private entities. It can be argued that if it is in the public interest those sections do not apply.
Cindy Cole, Feb 5, 2014
eridani
(51,907 posts)Hello Public Bank Supporters,
We have a room reserved at the Greenwood Public Library (N. 81st and Greenwood Avenue) on Monday, March 17, from 6 to 7:45pm. (Still ample time to celebrate St Patrick's Day afterwards!)
Cindy Cole will circulate the agenda for the meeting in the coming weeks.
Please respond to Cindy or me (or both) if you're free to attend. [email protected]
Thanks, Dennis Ortblad
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