Seattle Public Banking Coalition
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  • Why public banking
    • The Case for a Public Bank in Seattle
    • Keeping Money in the Local Economy
    • Memo on Constitutionality
    • Creating Our Own Credit
  • Who's Doing It
    • North Dakota - public for over 70 years
    • Cost Rica, but not the U.S
    • Santa Fe Analysis of Public Banking
    • Germany's Model for Healthy Economy
  • Updates & Analysis
    • Feasibility Study
    • Public Banks for U.S Cities
    • Protecting Public Revenues
    • Finance Public Projects, Lowering Tax Pressure
    • Open Letter to Seattle City Council
    • City of Seattle Responds to Public Banking Proposal
    • Stating the Obvious
  • Contact

Keeping it close to home:
Public banking, legality, and the resilience of local economy

By John M Repp and Cindy Cole
Washington State is a home rule state and the Seattle City Council has the authority to establish a public bank. It is also true that our courts would likely find that a public bank is constitutional. These are the conclusions of a 2014 memo that Nick Licata received as he began to consider the possibility of public banking in Seattle.

For a second opinion on the constitutionality of public banking, former state Supreme Court Justice Phil Talmadge wrote;”I am aware of nothing in the constitution that bars the state from creating a bank.  There is no lending of credit problem ( a constitutional provision) where the state gets a full return on its asset.  

The state has been in the business for many years of issuing bonds for housing assistance and taking deposits for guaranteed tuition programs, for just a couple of examples. Those are “lending” programs that have earmarks of bank-like activities.”

At the same time as Council member Licata was investigating the legality of public banking, a group of engaged citizens known as the Seattle Public Bank Coalition began to turn towards Seattle as a place to focus their efforts. For five years, they worked with Representative and now Senator Hasegawa to establish a public bank in Washington State. They worked the “outside game” helping him drum up popular support for the five bills he sponsored. However since the State Legislature has been in gridlock the last two years, they started focusing on the city of Seattle. (Senator Hasegawa plans to continue to sponsor a public banking bill in Olympia.)

The model for a Seattle public bank is the Bank of North Dakota (BND). Its deposit base is the taxes and fees the state collects and its loan portfolio keeps the money local, often working through the community banking system. Because BND has been in place 90 years, the community banking system in North Dakota is the most robust in the nation. They escaped the Wall Street driven mergers and acquisition mania. In North Dakota the community banks remained engaged in loans for farmers, small business, and home mortgages, because BND stood behind them as a banker’s bank. The community banks were not tempted to sell their loans to Wall Street or to buy the exotic new financial instruments that crashed the global economy in 2008.

As a consequence, North Dakota escaped the bad effects of the crash: high unemployment and home foreclosures. In addition, the state government has no debt because BND finances its capital projects.  All over the world much of the banking is done by public banks. Many central banks are public. Our central bank, the Federal Reserve, is private, actually a consortium of the private banks. A Federal Reserve Bank of Boston paper said the accepted and traditional position in the United States is for banks to be private “unless there is a market failure.” The Seattle Public Bank Coalition thinks the crash of 2008 caused by Wall Street was a massive market failure.

In Germany, 40 percent of the deposits in banks are held by over 400 locally owned savings banks called Sparkasse. Public banking has played a role in the very popular transition to wind and solar power. The transition is popular because the wind and solar installations are locally owned and return a guaranteed profit to the millions of citizen owners.

San Francisco has a group who is also working on public banking. They have proposed that other jurisdictions around the city can buy into the bank. Officials of jurisdictions surrounding Seattle have expressed interest in buying into a Seattle public bank.

We need to look ahead and see public banking as a long term project. Eventually, it could liquidate Seattle’s $4 billion debt. It could create the funding for the transition to renewable energy, for affordable housing, and the creation of thousands of living wage jobs. It could start a process of financial independence from Wall Street for our cities, counties, states, and eventually the nation. It is something we can do despite the political gridlock in Washington D.C and in Olympia.

Cindy Cole retired from SEIU 925 and works with 925 active retirees.  John retired from Boeing and is a delegate for SPEEA on the Martin Luther King, Jr. County Labor County. They are part of the Seattle Public Banking Coalition.


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  • Home
  • About
  • Why public banking
    • The Case for a Public Bank in Seattle
    • Keeping Money in the Local Economy
    • Memo on Constitutionality
    • Creating Our Own Credit
  • Who's Doing It
    • North Dakota - public for over 70 years
    • Cost Rica, but not the U.S
    • Santa Fe Analysis of Public Banking
    • Germany's Model for Healthy Economy
  • Updates & Analysis
    • Feasibility Study
    • Public Banks for U.S Cities
    • Protecting Public Revenues
    • Finance Public Projects, Lowering Tax Pressure
    • Open Letter to Seattle City Council
    • City of Seattle Responds to Public Banking Proposal
    • Stating the Obvious
  • Contact