Public Banking for New Mexico

What is a Public Bank?

Public Banking Made Easy, an animation that illustrates how public banks can provide towns and states with more resources to apply to their communities’ needs – from the Public Banking Institute

 

 

A bank for public funds owned by the State of New Mexico.

A public bank is owned by the people through their representative government: a Tribe, City, County, State or Federal Government. It can receive deposits of public funds (taxes, fees fines and interest earned) from and make loans to the government entity that owns it and other governmental entities.

A public bank for New Mexico can be founded and owned by the State of New Mexico, which holds it in trust for the people of New Mexico. A portion of its profits can be returned to the governing unit that owns it, to be used for public purposes with additional interest revenue retained to grow the bank. There are no “private” stockholders reaping the bank’s profits as stock dividends.

A public bank can pay the State higher interest on its deposits than currently paid by national/global banks, because a public bank doesn’t return profits to individual stockholders or pay exorbitant salaries to high level employees.

A public bank can generate revenue on interest earnings, on investments and loan re-payments, and re-invest those earnings based on state goals with democratic decision-making. Interest on out-of-state investments can be diminished with higher overhead costs accrued by national/global banks. A public bank doesn’t return profits to individual stockholders or pay exorbitant salaries to high-level employees. The revenue returns to the state to fund additional economic development and infrastructure projects, made possible with the increased funds remaining in the state.

A public bank will keep our state’s money right here at home in New Mexico.

 

Major Infrastructure and Economic Development projects are funded with borrowing on the bond market, allocation of tax revenue, and State reserves – a State Public Bank could provide the most efficient and least expensive funding for projects like these.

PHOTOS: (top) The Big I in Albuquerque is being studied by the Highway Division because of the number and severity of accidents. Any construction plan would take place in phases and could have a $373 million price tag. (courtesy of Keller & Keller); (bottom left) Renovation of UNM’s Farris Engineering Center houses the Computer Science, Chemical and Biological Engineering, and Nuclear Engineering Departments. (courtesy of Bradbury Stamm Const.); (bottom right) Construction of a new wetland adjacent to the San Juan River to improve life for riparian wildlife species, (courtesy of New Mexico Game and Fish)

 

A public bank manages the peoples’ money safely and efficiently.

The public bank will be chartered by the State of New Mexico, like other banks, but the public bank’s mission will be to receive, hold and invest substantial deposits from the State of New Mexico. Deposits will include state income from taxes, fees and fines and any interest earned.

Because the proposed public bank will not be set up for private bank accounts as a retail bank, it will not incur the expense of providing retail banking services and products. Thus it is more efficient to manage, with reduced expenses and a small professional banking staff.

A public bank can partner with local community banks, credit unions and community development fund institutions (CDFIs) to guarantee or share in local lending.

This will make it easier for those institutions to make loans that expand our economy, create jobs and invest in projects that enhance the wellbeing of our communities.

A chartered public bank can put its financial resources to work for New Mexico twice. First, it can issue bank credit (loans) for up to 90% of qualifying deposits, thereby using the fractional reserve system to multiply the value of its deposits with the credit it creates through the loans it makes. Second, those loans are held safely in a bank account earning a little interest for the State. The public bank can also leverage loans with credit unions and community banks, which are determined to be too small for them to fund alone.

Governance practices and management that serve the public good

For our public bank to serve the public interest (instead of private investors), AFLEP believes the public must be involved in establishing the bank’s governance to ensure transparency and accountability in how the bank manages and invests the public’s money.

Governance with public oversight will ensure that the mission and purpose of our public bank is carried out faithfully. The governance structure will include a way for the public to periodically review and inform the bank’s mission.

A public bank would be governed by New Mexico Statutes and the New Mexico Administrative Code and operated under the same regulations that apply to all state-chartered banks, subject to regular inspections, reviews and audits.

A governing board will ensure that the investment practices remain true to the public bank’s mission, and that financial management of the bank is sound. Bank policies and quarterly public reporting requirements assure compliance and transparency for how public funds are managed. Those appointed to the board must be residents of New Mexico, have clearly demonstrated personal and professional integrity and impartiality, and be very familiar with the needs of our communities. A portion of board members must have sound financial industry experience.

The public bank would be staffed by banking professionals who are public servants, who will be paid commensurate with their expertise, outside of the state compensation system, and not in the range of super-salaries and bonuses paid in the global banking system.

The management of the public bank would be independent from State elected officials and appointed staff, responsible to the board. There will be a firewall that prevents political involvement or tampering by non-bank officials.

There are several highly successful governance models that could be helpful for the public to review as part of the research for establishing the new public bank’s governance structure. Those include the Bank of North Dakota, the Sparkassen Savings Banks in Germany and our own local credit unions and CDFI’s.

A number of extra-governmental or super-governmental agencies or corporations, in and beyond New Mexico, can also provide models for how a public bank can be responsive to the citizens’ priorities while remaining protected from political tampering.

Where does the money in a public bank come from?

When all the legal steps to establish a public bank have been completed, a Public Bank for New Mexico could be created with a deposit of tax revenue, fines, fees or even funds from one or more of the State’s sovereign investment funds.

As a part of the bank charter application, the bank will describe the kinds of investments /loans it intends to make. Much of the bank’s lending will initially be to the State for public infrastructure or economic development projects. These are low risk loans that benefit the public as a whole, and the interest paid will grow the funds available for new lending. 

 

Bank of North Dakota

The National Movement

History of Public Banking in New Mexico

FAQs

Resources

Upcoming Events

october, 2020

01oct3:00 pm4:00 pm2020 Sustainable Agriculture Fall Workshop Series: Seed Saving and On-farm BreedingLearn what it takes to be your own plant breeder and understand concepts of genetics and plant selection

08oct3:00 pm4:00 pm2020 Sustainable Agriculture Fall Workshop Series: Strategies to Prevent Development and Spread of Herbicide-Resistant WeedsWeeds in the garden and farm can become resistant to our most depended-upon herbicide treatments

08oct5:00 pm6:30 pmBring on the Power of Public Banking for FloridaLearn how public banks have been shown to respond more rapidly, effectively and equitably to crises than privately-owned banks

09oct10:00 am11:00 amPublic Banking Coalition Monthly Conference CallLearn more about Public Banking, discuss current issues and get updates on the movement.

13oct1:00 pm2:00 pmKeeping the Water we do get –in the Soil!A collaborative fall webinar series for the benefit of New Mexico’s farmers and ranchers and advancement of healthy soil principles on working lands

15oct3:00 pm4:00 pm2020 Sustainable Agriculture Fall Workshop Series: Beneficial Insect Identification and Habitat ManagementLearn why cultivating the insect ecosystem on your land is pertinent to sustainable agriculture

21oct6:00 pm7:00 pmPublic Banking and YOU!What is a public bank and why is it good for New Mexico? Join Democratic Party of Bernalillo County & AFLEP to find out.

22oct3:00 pm4:00 pm2020 Sustainable Agriculture Fall Workshop Series: Growing vegetables in NM – Managing challenges for an abundant harvestAn informative overview on the farming and gardening methods pertinent to the southwest climate and soil

22oct7:00 pm8:00 pmBring On the Power of Public Banking: How to Rescue Main Street Post COVID-19Public Banking Institute's Town Hall for Butte County, Northern California

23oct2:30 pm3:30 pmPublic Banks vs. the Racial Wealth GapCould a publicly-owned bank be the real solution to a history of harmful private bank practices?

29oct3:00 pm4:00 pm2020 Sustainable Agriculture Fall Workshop Series: Pruning Fruit Trees for Sustainable Production: Why, When, and HowGet a grasp on fruit tree management, especially pruning

Revolution at the Federal Reserve:  Nomi Prins and Thomas Hanna

The Laura Flanders Show
Jan 22, 2019

As Jim Yong Kim resigns from the World Bank, we talk about the way central banks steer world development and for whom. Former Goldman Sachs managing director Nomi Prins, author of “Collusion: How Central Bankers Rigged the World,” and public ownership researcher Thomas Hanna believe that banking, and development, could be very different.

Truthout - FAIR Podcast - AFLEP

California’s New Public Banking Option Opens Door for Real Community Investment
FAIR / Truthout.org

Economy & Labor
Oct 22, 2019

Janine Jackson interviews Public Bank LA’s Trinity Tran about public banking for the October 11, 2019, episode of “CounterSpin.”

>> Listen to the Podcast

It's Our Money with Ellen Brown

Banking on the People by Ellen Brown - AFLEP

Ellen Brown’s
2019 Book

Today most of our money is created, not by governments, but by banks when they make loans. This book takes the reader step by step through the sausage factory of modern money creation, explores improvements made possible by advances in digital technology, and proposes upgrades that could transform our outmoded nineteenth century system into one that is democratic, sustainable, and serves the needs of the twenty-first century.

Order the Book

Join those who’ve endorsed a Public Bank for New Mexico

Paul Gibson endorses Public Banking NM

 

“I had the good fortune to work on this initiative before Bernie kidnapped all my time. This is one of those no-brainer initiatives that only the 1% could oppose. It has the potential to save the state millions of dollars by vastly reducing the cost of its bonds to improve infrastructure funding. in a public bank, our state funds can be used to build our local economy and our local infrastructure.”

– Paul Gibson
Retake Our Democracy

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