PUBLIC BANKING

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.


Learn more: http://www.publicbankinginstitute.org/

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16 Jan 2018
To The Editor
The Times Journal

The Schoharie County Board of Supervisors held their organizational meeting earlier this month and one of the routine tasks undertaken was the designation of financial institutions where county funds could be deposited. 

A quick check with the Consumer Finance Protection Bureau (CFPB) reveals that three of the designated banks have voluminous complaint histories; Bank of America (BoA), JP Morgan Chase (Chase), and Key Bank. Chase and BoA have a disturbingly unwholesome history regarding the 2008 economic melt-down. They avoided criminal charges courtesy of an obligingly complicit US Dept of Justice. Matt Taibbi writing for Rolling Stone in 2014 helps us remember:

"...Justice Department struck a series of historic settlement deals with Chase, Citigroup and Bank of America. The root bargain in these deals was cash for secrecy. The banks paid big fines, without trials or even judges – only secret negotiations that typically ended with the public shown nothing but vague, quasi-official papers called "statements of facts," which were conveniently devoid of anything like actual facts." 

We remember, and must ask, why would we want to get in bed with criminal enterprises? Why would we want to trust these institutions with our wealth? Rather, Schoharie County should be boycotting and divesting from these banks. Sound advice for individual citizens as well.

Additionally, Schoharie County should establish its own Community Bank, A publicly owned bank in the service of our local economy and community needs. The Public Banking Institute reports:

"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%." 

If Schoharie County is serious about economic development, I prefer to use the term economic vitality, a public bank would clearly be an asset. This is something we can and should do.

Wayne Stinson
Summit, NY

References:
Bank of America: https://data.consumerfinance.gov/dataset/Consumer-Complaints/s6ew-h6mp
Key Bank:  https://data.consumerfinance.gov/dataset/Consumer-Complaints/s6ew-h6mp
JPMorgan Chase:  https://data.consumerfinance.gov/dataset/Consumer-Complaints/s6ew-h6mp
https://www.rollingstone.com/politics/news/the-9-billion-witness-20141106
http://www.publicbankinginstitute.org/intro_to_public_banking