A Public Bank for Connecticut
A powerful tool for restoring financial sovereignty for all citizens.
The Pandemic has revealed the inadequacy of our current financial system to meet the credit needs of our local agencies or to serve our most disenfranchised populations. We urgently need the means to bring desperately needed funds into urban and rural communities ignored by Wall Street banks. The Connecticut State Public Bank will strengthen the financial positions of local governments and local financial institutions to facilitate a just and speedy economic recovery for the people of Connecticut.
Economics is a Team Sport.
Racial inequality is not a natural byproduct of credit markets, it is the legacy of racist lending policies which continue today. Public banks can address this inequity at the deepest level by using the power of money-creation to offer low-cost loans to communities historically cut out of access to capital. Unlike the big Wall Street banks, a public bank is chartered not simply to make a profit for its owners, but to look after the economic well-being of all of its citizens. Public banks can help us to make black lives matter, working class lives matter and New American lives matter. A more democratic economy awaits a more democratic banking system.
The bill
This bill will create an public infrastructure bank owned by the state of Connecticut. The advantages of creating this bank for the state include:
• Help small businesses through lending, rather than letting Wall Street decide where the money should go.
• Provide a long-term source of stable financing for local governments, redirect existing investment funds into the state economy, and lay the foundation for resilient and equitable growth.
• Partner with community banks and credit unions so they can expand much-needed investment in their neighborhoods.
• Create a sustainable stream of revenue for emergency funding so we can better prepare for the future.
What is a public bank?
A public bank is a financial institution owned by the state, cities, counties, or joint powers authorities. A public bank's deposit base consists primarily of tax revenues and fees which it leverages to issue loans, just like any bank. Unlike private banks, the interest paid to and profits earned by a public bank are returned to the community. The bank is owned by the state, but not run by the state.
Will the state bank compete with local banks?
A state public bank will not compete with local banks because it is a “banker’s bank” designed to support local community banks by a variety of tools it has to increase their lending capacity. Individuals cannot hold deposits in the state bank. The bank is easy to set up in part because it has no branches. The local banks are its branches.
Can the state be trusted to run a bank?
Public banks owned by the state are not run by the state. They are just like regular commercial banks, being independent organizations, subject to all the standard oversight and regulatory conditions, and lending practices. The key differences lie in their (a) ownership, and their (b) mission.
Public Bank Connecticut is a volunteer-run group working to form a public bank in Connecticut, owned by the people of Connecticut, to promote diversity, equity, sustainability and economic renewal.
(860) 704-9570