Each year whether through the legislature or ballot measures, California funds many of it’s projects by issuing general obligation bonds….And each year taxpayers are obligated to pay large banks billions of dollars in interest payments to fund these bond measures. My question is why? Why pay huge multinational corporations billions of dollars in interest every year while our schools are starving for cash and our infrastructure is falling apart? A state bank would keep that money out of the hands of big banks and would instead use it for the benefit of the people.
Big banks would still be able to operate in your state, but large bond measures would be financed through your state bank. State banks are not a new idea. In 1919, North Dakota founded their own publicly owned bank. The Bank of North Dakota’s mission is to “promote agriculture, commerce, and industry” and “be helpful to and assist in the development of… financial institutions… within the State.”
In North Dakota, community banks are much more numerous and robust than in other states. North Dakota has more banks and credit unions per capita than any other state. In fact, it has nearly six times as many local financial institutions per person as the country overall. In most of the country, locally owned small and mid-sized banks and credit unions (those under $10 billion in assets) account for only 29 percent of deposits, but in North Dakota they have a remarkable 83 percent of the market.
By helping to sustain a large number of local banks and credit unions, BND has strengthened North Dakota’s economy, enabled small businesses and farms to grow, and spurred job creation in the state. Over the last 21 years, BND has generated almost $1 billion in profit. Nearly $400 million of that, or about $3,300 per household, has been transferred into the state’s general fund, providing support for education and other public services, while reducing the tax burden on residents and businesses.
Let’s learn from North Dakota’s example and create more state banks as well as small and mid sized banks which are locally owned throughout the country. This is a brief overview of the initiative we are working on. Once we have the final text we will post the measure for review and comment before setting out to gather the necessary signatures. Long term, once we pass this initiative in California we will use it as a boilerplate which can be modified for use on other state ballots. Donations and volunteers are needed! If you are interested please sign up below.