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State bank idea evolves

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Articles - March 2011
Wednesday, March 02, 2011

State legislators haven’t walked away from the ambitious project of establishing a state-run bank from scratch in Oregon. They’re running away from it. A bill introduced this session by Rep. Bob Jenson (R-Pendleton) calling for a North Dakota-style bank quickly morphed into a compromise proposal for an “Oregon Financing and Credit Authority” backed by Rep. Phil Barnhart (D-Eugene) with support from State Treasurer Ted Wheeler. Business groups such as the Oregon Business Association and Associated Oregon Industries have not yet taken a position on the issue.

The still-evolving compromise proposal calls for consolidating existing programs and funds rather than creating a new state bank. “We’ve spent a lot of time looking at how to use the assets we already have in a more productive way,” says Barnhart. “We could invest some of that money in lending to small businesses to build Oregon’s economy.”

Wheeler, whose role would change radically under a state bank system, says it makes sense to combine the state’s economic development offerings into one office that also participates in loans originated by local banks rather than competing with those banks. “We don’t need to replicate the North Dakota model,” Wheeler says. “I don’t think it would be a good use of public funds, and I don’t think it’s necessary. We can leverage off of the things already in place and achieve the same goals.”

For example, in late January Wheeler’s office reduced collateral requirements for banks that receive public fund deposits from 100% to 75% as a reflection of the improved economy. That freed up an estimated $600 million for local lending without costing taxpayers anything.

Wheeler says improving other existing programs and policies could bring similar results. He has shared his ideas with the bankers association and the Working Families Party, and the ironing out of details is under way.

The end product, should it become law, will probably share little in common with the much-idealized and feared Bank of North Dakota. It will not require the immediate hiring of bankers for state jobs. Nor will it endanger the liquidity of public funds or sap money from the general fund in times of intense cost-cutting. Wheeler, Barnhart and other supporters of the middle way are hoping it will help solve the credit problem without creating a fresh supply of new problems. Time will tell how deep their support reaches in a legislative session already packed with challenges.

Oregon Business writer Peter Beland provided reporting for this article.



 

Comments   

 
James Chesky
0 #1 state bank idea evolvesJames Chesky 2011-03-13 22:12:22
Yes, it is time for a state bank of Oregon, A state bank of Washington, etc., etc., etc., 49 times over (since one of the 50 is already there).
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Robert Bows
0 #2 The usual disinformation from the private banks and their minionsRobert Bows 2011-03-28 17:34:27
Private banks and those who benefit from private control over our currency are certainly running scared, as more people discover the hoax that is being perpetrated on them.

So, in articles like this, they spread disinformation, begin with the charge that the Bank of North Dakota (BND) represents "socialism." If these folks would bother to read the Constitution of the U.S. and of many states, they would discover that currency and credit are SOVEREIGN functions, that is, requirements of governance, just like the postal service, the armed forces, etc. The use of the term socialism is just an ad hominem (name-calling) to scare people. In fact, what we have now is fascism--corpor ate control over the state.

It's important to understand that the "too big to fail" (TBTF) banks that were bailed out at the taxpayers expense own the Federal Reserve, that is, they control the money supply for the United States and charge us interest for doing so.

This is completely unnecessary, but they don't want you to know that. With this control, they determine when to contract and expand the supply of money to benefit themselves, which means stealing the fruits of our labor. It is just like the infamous financier Andrew Mellon said, "During a depression, assets return to their rightful owners." These folks believe that everything belongs to them and that they loan these things to us.

So, the current economic crisis (the 25th since 1890) is just one more robbery. The private banks are claiming that loans are available, but there aren't any folks with assets to collateralize to get the loan. Duh! They removed 40% of the money supply and kept the spigot off until massive numbers of people went broke, so these banks could foreclose on the assets.

As North Dakota exemplifies, a publicly owned bank behaves differently. Don't be fooled by the sophistry of the TBTF private banks and their minions. It's time to send them packing. As the community bankers of North Dakota will tell you, the BND not only helps them through participation, it doesn't steal their customers, like the TBTF banks. This is why there are more local banks per capita in North Dakota than in any state in the union.

For more, see www.publicbankinginstitute.org
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Jefferson Smith
0 #3 Credit UnionsJefferson Smith 2011-04-07 11:42:38
Credit unions are non-profit and accomplish exactly what the advocates of the state bank want (except without the additional power in the government's hands).
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