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Luzerne County Exploring Creation of County-Owned Bank

The prospect of starting a county-owned bank generated contentious debate during the Luzerne County Council meeting Tuesday night, with several members of the public questioning its feasibility.

Council Vice Chairman Edd Brominski has suggested creating a public bank to alleviate the county's massive debt. He hosted a breakfast seminar Monday morning in which Mike Krauss, a director of the Public Banking Institute, said such a facility could help reduce government debt and slash interest rates while keeping county money local.

The bank would assist local banks with capital for loans and would not compete with them, Krauss said. Krauss suggested money that has been "squirreled away," such as pension funds, could fund the endeavor.

Read the entire article here.

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Local officials get info on ‘public bank’ concept

WILKES-BARRE — Describing it as an “end run” around big banks and big government that could reduce the cost of floating municipal bonds while returning money to the county’s general fund, Mike Krauss extolled the virtues of establishing a “public bank” during a presentation to about 30 representatives of area governments and municipalities Monday morning.

Krauss, a director of the Public Banking Institute, said governments facing tight budgets currently have four options: “Cut services, layoffs, raising taxes or taking on more debt service. Those are the tools. We need another tool.”

public bank would be set up through a state bankcharter to pool financial resources of governments and public money, using those assets in partnership withlocal banks that, on their own, cannot compete with the large, multinational banks, Krauss explained.

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What does North Dakota's Public Bank Does for Small Businesses

Five years ago, Brian Brasch, president of Branick Industries, a maker of specialty automotive tools in Fargo, N.D., took a phone call from a stranger. The caller was an auto mechanic in Florida who had an idea for a new kind of drain plug for an oil pan, one with an O-ring that expands to stop oil leaks.

Mr. Brasch saw an opportunity. “There’s almost a billion oil changes a year in North America — so O.K., it’s a pretty big market, it’s a green product, everybody wins,” he said. The mechanic’s idea ultimately became Branick’s SMART-O drain plug, and the company now ships about 15,000 plugs a day that sell for about $6 each.

But before it could market the plugs, the company needed almost $2 million to import them from China, where, Mr. Brasch said, the manufacturer normally requires 50 percent down before it begins making the product. And, he said, given the time it takes for the manufacturer to ship two or three months’ worth of the product, and the time it takes for the first customers to pay for it, “that’s eight months of float.”

Mr. Brasch visited his local bank, Alerus Financial, based in Grand Forks, and came away with a financing package that would be unusual anywhere but North Dakota, which operates the country’s only public bank. The state-owned Bank of North Dakota helped finance the loan — and also used state money to buy down the interest rate, from 5.25 percent to 1 percent.

North Dakota uses the bank to funnel deposits from state agencies back into the state’s economy through a variety of loan and other development programs. Mostly it makes loans, teaming with local private banks that initiate the transactions with borrowers. The state-owned bank typically takes half of a business loan, and the interest rate on the state-lent portion is normally one or two percentage points below the market rate.

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Posted by on in National News
Vermonters for a New Economy

Vermont Town Meeting Campaign

We were successful in getting articles in favor of a state bank on the town meeting warnings in 20 towns. The towns are: Bakersfield, Barnet, Berlin, Calais, Craftsbury, East Montpelier, Enosburg, Fayston, Greensboro, Marlboro, Montpelier, Plainfield, Putney, Randolph, Rochester, Royalton, Ryegate, Tunbridge, Waitsfield, and Warren. We wish to thank all those who engaged in the process of talking to their neighbors and gathering the necessary signatures.

The other really good news is that Washington County State Senator Bill Doyle has agreed to include a question asking people if they support a state bank on his annual town meeting questionaire so even those who live in towns that will not be discussing a state bank as part of the town meeting agenda will be able to weigh in on the question.

Read entire article here

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What does North Dakota have that Pennsylvania does not.

More jobs, lower taxes
Public Banking
Banking for Main Street, Not Wall Street

Like Pennsylvania, the state of North Dakota is experiencing a boom in energy production. But unemployment in Pennsylvania remains at almost seven percent, in many communities far higher, foreclosures roll on and municipalities have made sometimes savage cuts in basic services like education.

North Dakota has two percent unemployment, rising incomes, a regular budget surplus and low taxes. No banks have failed and students and businesses can get affordable, low cost loans.

What does North Dakota have that Pennsylvania does not? A public bank.

Learn why cities, counties and states from Vermont to California and from Philadelphia to Pittsburgh are working to establish their own public banks, and what you can do to insure a prosperous Pennsylvania - now and for the future.

Banking for Main Street, not Wall Street

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