Public Banks Are the Answer

Public banks are the answer to low cost financing and divestment from the private banking casino.

Public banks are the answer to low cost financing and divestment from the private banking casino.

The Case for Public Banking

Public banks are an effective way to use public funds for the good of communities, much like public utilities, instead of for the profit of private mega-banks that take the public’s money and use it to play in the Wall Street casino. With public banking, cities and states place their revenues in a much safer banking environment and then can borrow at low cost to finance public-good projects such as schools, roads, offices, parks, libraries, water treatment plans and…even jails. Here is what the Public Banking Institute has to say about this concept.

“Public banking is banking operated in the public interest, through institutions owned by the people through their representative governments. Public banks can exist at all levels, from local to state to national or even international. Any governmental body which can meet local banking requirements may, theoretically, create such a financial institution.

“Public banking is distinguished from private banking in that its mandate begins with the public’s interest. Privately-owned banks, by contrast, have shareholders who generally seek short-term profits as their highest priority. Public banks are able to reduce taxes within their jurisdictions, because their profits are returned to the general fund of the public entity. The costs of public projects undertaken by governmental bodies are also greatly reduced, because public banks do not need to charge interest to themselves. Eliminating interest has been shown to reduce the cost of such projects, on average, by 50%.

“When the public interest demands, the mission of public banks is to respond immediately, to assure the long-term prosperity of the community.”

The only state with a such a bank is North Dakota with its Bank of North Dakota. Their bank, operating now for almost 100 years, helped them weather the financial crash of 2007/2008 because the state government’s money was not in casino banks such as Wells Fargo, CitiBank, Bank of America or other banks that had to be bailed out with taxpayer money. The Bank of North Dakota was established primarily to provide low-cost loans to the agriculture, ranching and business communities as opposed to the high interest loans proffered by the commercial banks. During the fiscal crisis of 2007/2008, the failing commercial banks were bailed out with taxpayer money from the federal government. When next these casino banks fail, these banks will look to depositors in what is called a bail-in. To recapitalize, they literally take your money and in the case of the deposits of cities and states, our money.

Public Banking and Washington State

Every year for almost a decade, State Senator Bob Hasegawa has introduced legislation to form the Washington Investment Trust, in other words a Washington state public bank. Sen. Hasegawa stated in a recent article,

“The Washington Investment Trust will keep taxpayer dollars in our state working for Washingtonians instead of Wall Street. It will generate revenue, but also save money and provide public financing options by loaning money to ourselves rather than going through big banks and bond brokers. We could boost local economies, invest in infrastructure like clean water and sewer projects and even provide loans for students and small businesses. Currently, the state sets aside over $1 billion per year in our operating budget for debt service, much of which is profit to Wall Street. Instead of paying profits to bankers, we could be borrowing from and repaying ourselves.”

Unfortunately, the banking lobby (read “shills for greedy corporations”) is strong in Olympia and the bill (this year SB 5464) gets beaten back in committee where it dies just as it did last Friday when the non-fiscal policy cutoff date for bills came and went without a committee vote on the measure. When I called Sen. Hasegawa’s office, the staffer said Hasegawa will likely re-introduce the bill next year or consider mounting an initiative to get the measure on the ballot and let the people, not the banking industry, decide.

Public Banking and the City of Seattle

The Seattle Public Banking Coalition exists for the purpose of exploring the establishment of a public bank for the municipality. From the coalition’s website:

“What if the City of Seattle could charter its own bank, a public bank, which would not only manage the city’s deposits, but could expand the money available through its loan portfolio for locally needed projects like affordable housing. The Seattle Public Bank would be a banker’s bank, and would partner with local credit unions and community banks, guaranteeing their loans for the needed projects or buying their loans so they can make more loans.”

The Seattle city attorney has already spoken to the issue in a memorandum outlining “legal and practical issues that should be considered in deciding whether to pursue the establishment of a city-owned bank.” At a minimum, the memorandum suggests obtaining clarity on the measure from the state. Washington law does not specifically speak to the issue of public banks, however, a good case for their legality and a discussion of relevant concerns can be found in a separate memorandum on the coalition’s website, entitled “Seattle’s Authority to Create a Municipal Bank.” The memorandum concludes, It is likely that a court would find that Seattle and King County have the power and are not prohibited by state law from establishing a municipal bank.”

And What of Bellingham?

Nothing prevents Bellingham (or for that matter Whatcom County) from pursuing the establishment of a public bank, easily piggy-backing on the extensive efforts of the Seattle Public Banking Coalition. In fact, Bellingham and Whatcom County can further the efforts of Seattle and King County by passing resolutions supporting legislation to establish a public bank at the state level and to work with the city of Seattle not only in establishing a public bank there but also committing to the creation of such a bank or banks in Whatcom County and Bellingham. I call on the Bellingham City and Whatcom County Councils to do just that.

About Dick Conoboy

Citizen Journalist and Editor • Member since Jan 26, 2008

Dick Conoboy is a recovering civilian federal worker and military officer who was offered and accepted an all-expense paid, one year trip to Vietnam in 1968. He is a former Army [...]

Comments by Readers

Michael Chiavario

Feb 28, 2017

Excellent article, Dick. How can I help?


Dick Conoboy

Feb 28, 2017


Thanks for the offer.

In the next month or so I will be taking action to get this before the Bellingham City and Whatcom County councils.  In the meantime, you can spread the word by sharing links (on FB Twitter, etc.) to this article with your friends and colleagues. 


David Camp

Mar 05, 2017

Dick - you are right of course - and an additional benefit of a local State bank is that law-abiding Washington  cannabis businesses will be able to have bank accounts and take non-cash payments instead of being treated like criminals by the corrupt federal banking cartel.


Dick Conoboy

Mar 05, 2017


Good point.  Will add that to my list.


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