Why Support a DC Public Bank, Part 1

DC PUBLIC BANKING CENTER 

Creating Public Money for the Public Good 

Problems a DC Public Bank Will Address

Lack of jobs which are due to artificial scarcity of affordable credit.

Government deposits are not safe in today’s big banks.

Financing is lacking to meet Sustainable DC goals.

DC Public Bank Solutions

Creates new jobs and spurs economic growth

Enhances the financial health and security of the city's general fund

Promotes a Sustainable DC

82%

13%

5%

DC Gov't Deposits

Large Banks 82%

Treasury Bonds 13%

Local Banks 5%

Where does DC government currently deposit its money?

Do you think your DC tax dollars are safe in the big banks

?

Current U.S. law puts DC government deposits at risk

2010 Dodd-Frank law: taxpayers will no longer bail out failing banks. Now we have bail-ins.

Government deposits above $250,000 are not FDIC insured.

No DC government deposit accounts are less than $250,000 (as of Jan. 2012).

Many DC government deposits are held in uninsured accounts.

Confiscation of deposits to save a bank is called a “bail in”!

FDIC & Bank of England Approve Bail-in Policy

“Resolving Globally Active, Systematically Important, Financial Institutions”

A joint memorandum by the Federal Deposit Insurance Corporation and the Bank of England,10 December 2012, which says…

Under Dodd-Frank Act authority, the FDIC would assign losses to shareholders & unsecured creditors if a such bank fails.

Source: http://www.fdic.gov/about/srac/2012/gsifi.pdf

Derivatives Held by Bank Receive Priority When Bank Fails

Government accounts may be subject to bail-in requirements.

Derivatives have super priority claim on bank collateral.

There may not be any funds left for local government deposit claims.

Source: Ellen Brown, “Winner Takes All: The Super Priority Status of Derivatives”

Are all banks in the world private

?

No! Globally, 40% of all banks are publicly owned.

Germany has had public banks since the 19th century.

The Bank of Canada operated as a public bank from 1935 to 1971.

Brazil, Russia, India and China all have very large, mature public banking sectors.

Japan & New Zealand have public banks through their post offices.

The United States once had public postal banks!

Public Banks Resist Recession

That’s why, around the world, public banks have escaped the credit crisis and helped their economies to recover.

North Dakota owns its own public bank

The Shawnee Tribe in Oklahoma also has its own public bank.

At least 15 states, one city, and one county are considering creating public banks.

http://www.ncsl.org/issues-research/banking/state-owned-financial-institutions-2012-legis.aspx

Public Banking in the U.S. Today

North Dakota has had its own bank since 1919

• The farmers were losing their farms to the Wall Street bankers.

• They organized, won an election, and passed legislation to create a public bank.

Photo thanks to Ellen Brown

The Bank of North Dakota (BND) How It Works

All state revenues are deposited in

BND by law.

BND is wholly owned by the state of ND.

BND makes participation loans with local banks.

BND’s home today

What does BND do for ND today?

Partners with local banks to increase local lending

Makes low interest loans for designated local projects

Redirects credit away from speculation in derivatives toward local lending

Fulfills mandate to deliver quality, sound financial services that promote agriculture, commerce and industry in North Dakota.

The only state to escape the credit crisis

State budget surplus every year since

financial meltdown in 2008

Lowest unemployment rate in US

Lowest foreclosure rate in US

Lowest loan default rate in US

How's North Dakota's Economy Now?