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From the West Coast, the Move for Public Banking Is Within Reach

December 2, 2011

Occupy Shocker: A Realistic, Actionable Idea

From the West Coast, the Move for Public Banking Is Within Reach

By DAVID  WEIDNER of online.wsj.com
“…protesters in the Bay Area, especially Occupy San Francisco, have something their East Coast neighbors don’t: a realistic plan aimed at the heart of banks. The idea could be expanded nationwide to send a message to a compromised Washington and the financial industry.

It’s called a municipal bank. Simply put, it would transfer the City of San Francisco’s bank accounts—about $2 billion now spread between such banks as Bank of America Corp., UnionBanCal Corp. and Wells Fargo & Co.—into a public bank. That bank would use small local banks to lend to the community.

Backers of the plan aren’t using a reckless approach. They’re proposing a three- to five-year transition period and the relocation of just $500 million initially. It would be chartered as a credit union, member-owned and insured…

So far, the proposed Credit Union of San Francisco has gained traction among a few of the city’s politicians, including John Avalos, a city supervisor who recently finished third in the city’s mayoral race to Ed Lee.

Mr. Avalos began thinking about municipal banks about three years ago, after speaking with Karl Beitel, a researcher with the local teachers’ union. Mr. Avalos didn’t pick up the idea again until earlier this year, but he asked a city legislative analyst to study it. A report was issued in August…

… . In February, the city treasurer will begin soliciting new bids for city bank accounts. Mr. Avalos and other officials are requesting that part of the bid include bank promises on community lending, social responsibility and clear policies regarding lending practices to consumers, including foreclosures.

It might not be a gun to the head of banks, but it wouldn’t have happened without the support of Occupy San Francisco…”

(read the rest of the article)

***

We in San Francsico are aware of Mr. Avalos efforts but have heard nothing from Occupy San Francisco regarding their involvement in plans to change the city’s banking arrangements. One wonders what put the idea into Mr. Weidner’s head that Occupy is responsible for a plan that has been brewing for some time. We are pleased that it resulted in national recognition in the press.

Do State-owned banks violate state constitutional provisions – not according to this:

“..many states, including California, own infrastructure banks today..If state funds can be used to capitalize a state infrastructure bank without violating state constitutional provisions, those funds can be used to capitalize a state-owned bank on the model of the Bank of North Dakota without violating state provisions…”

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