Letters to the Editor

  • Yes to Public Banking Saturday, October 21, 2017

    Given the often “ungressive” character of its editorial positions, it comes as no surprise that The New Mexican advocates against a public bank for Santa Fe (“City must take care of finances,” Our View, Oct. 13).

    What is especially unattractive, however, is the condescending tone that is used, calling the public bank effort “a notion” and then conflating it with justifiable concerns about the city’s auditing issues. I invite the editorial writer to attend one of the open meetings of the public banking task force to better appreciate its seriousness and competence.

    Perhaps, then, The New Mexican might be moved enough to reconsider its attitude and embrace an endeavor that will save the city money as well as free us from the clutches of Wells Fargo and other banksters.

    Robert Baroody

    Santa Fe

     

    Be Sociable, Share!
  • Public banking — an idea whose time has come Sunday, September 24, 2017

    By Rachel Stofocik and Mark Paris | 9-24-17 | New Mexican

    Berl Brechner (“Is public banking sound policy for city?,” My View, Sept. 17), is concerned that public banking may be too “complex” in a city “where auditors routinely find flaws.”

    Brechner and your readers might be interested to know that, according to the “City of Santa Fe, New Mexico Comprehensive Annual Financial Report for the Fiscal Year ended June 30, 2016,” the city held uninsured deposits of about $95 million in 2016, of which about 63 percent were held by Wells Fargo Bank. Most of your readers will recognize Wells Fargo as the financial institution that has recently paid in excess of $26 billion in “settlements” with the U.S. Department of Justice for defrauding its own customers.

    According to an assessment by the Federal Reserve Bank of Dallas, the 2007-09 financial crisis erased from $6 trillion to $14 trillion of wealth from U.S. households — due primarily to the actions of private banks. We might take Brechner’s assurance that “private banks handle government accounts because they have experience and expertise, independence, professional and technical resources in place” with a grain of salt.

    Public banks, where community welfare and public investment are guiding principles, have accountability measures far superior to those of the private sector where profit and personal gain encourage criminal behavior. Brechner favors the advocacy that continues the control of private bankers to enhance the fortunes of out-of-state wealthy bankers with questionable professional integrity.

    We think most middle-class voters welcome the community-based “advocacy” that public banking represents. Profits earned by public banking that would otherwise go to out-of-state banks like Wells Fargo will be used to benefit the people of Santa Fe by investing in programs for the public good. It’s an idea whose time has come and truly a “no-brainer.”

    Be Sociable, Share!
  • Is there a public bank solution for Santa Fe? Saturday, September 23, 2017

    by George Gamble | September 23, 2017

    Is public banking sound policy for Santa Fe? Berl Brechner (“Is public banking sound policy for city?,” My View, Sept. 17), raises an appropriate question, but he appears to be critical of the systematic educational and investigative efforts that the city has been following to answer that question.

    Yes, it’s true, as Brechner notes, that North Dakota’s almost 100-year-old public bank is the only example in the U.S. However, he neglected to mention how successful the Public Bank of North Dakota has been, and that community banks in North Dakota thrive while community banks in other states have been systematically swallowed up by large global banks. In addition, he did not mention that public banks are both common and successful in Europe.

    Why haven’t public banks caught on in the U.S.? Maybe it’s because of the outsized role that large global banks are allowed to play in the U.S. Global banks see public banks as competitive and lobby to prevent their establishment. In recent years, big bank lobbyists certainly worked against establishment of a state public bank in New Mexico.

    The city of Santa Fe has been engaged in a public educational and investigative process over the past three years to explore the feasibility and desirability of establishing a public bank in Santa Fe. A conclusion of the feasibility study contracted by the city last year was that a public bank was a feasible option for the city, one that could improve their financial situation.

    Any attempt to discredit the Public Banking Task Force by suggesting that its members are biased and therefore the investigative process is flawed is speculative at best. Some members have indicated an interest in public banking, but more importantly, they are engaged in a public, transparent, investigative process to identify critical issues in establishing a public bank here in Santa Fe.

    Anyone who supports the concept of a public bank here would also want to establish it only if they believed it would really be successful in saving money for the city by minimizing the need for some bonds, by eliminating the costs of depositing city money in big global banks, and by creating additional resources that could help leverage money for projects that improve the well being of Santa Fe citizens. The task force is working to answer many questions related to the legal, governance, regulatory and capitalization needs of a public bank.

    If anyone wants to learn more about this process, they are encouraged to read summaries of the task force meetings on the Banking on New Mexico website (www.bankingonnewmexico.org) and to attend the meetings of the task force, particularly the public forums that will be devoted to public input (dates to be announced).

    Establishing a public bank in Santa Fe would involve change, but hopefully that change would offer substantial new benefits to the city and the local economy. Currently, the city has few options other than global banks to serve as a fiscal agent. A public bank is not a problem-free undertaking, but it would be a public, transparent, locally and professionally managed institution. Is it sound public policy for the city of Santa Fe? While I am certainly interested in the city moving ahead with establishing a public bank, I only want it to do so after the relevant issues have been carefully researched and it is determined that the public bank’s substantial benefits will outweigh the risks for the people of Santa Fe.

    Be Sociable, Share!
  • Unanimously Approved Sunday, May 7, 2017

    Good for our City Council. Members have unanimously supported a task force to develop a public bank. Why should we keep paying interest into the great maw of Wall Street when we can pay interest to ourselves and use the money to help our community? Thanks to the late Craig Barnes and his group We Are People Here for developing this proposal.

    Mari GranaSanta Fe

    Be Sociable, Share!
  • Three Excellent Reasons Wednesday, May 3, 2017

    I support a public bank for Santa Fe, and so should you. Knowing where your tax dollars go to work in our city (transparency), turning the debt burden that we now pay to Wells Fargo into dollars for use in public work projects (leverage), and developing a boundary between city government and management of the bank by professional bankers (accountability) are three excellent reasons to take control of our finances to contribute more locally to the public good.

    Diane PinkeySanta Fe

    Be Sociable, Share!
  • Coaxing Councilors Monday, April 24, 2017

    City Councilor Renee Villarreal has introduced a substitute resolution developed by Banking On New Mexico, the Brass Tacks Team, city councilors and city staff calling for the creation of a task force to help establish a public banking task force. The task force will provide needed information about questions not addressed in the 2015 feasibility study. You will find the resolution on the city’s website at www.santafenm.gov/legislative_services. I look forward to the full council moving this resolution forward.

    A chartered public bank — managed by bankers, not the city — would use money paid to the city in our community taxes, fees and fines to fund our own community needs. It would keep our money circulating in Santa Fe; the interest would stay in our local economy.

    For more information, go to the informative website: bankingonnewmexico.org.

    Communicate with your city councilors and urge this prudent next step.

    Pam GilchristSanta Fe

    Be Sociable, Share!
  • Addressing Inequalities Tuesday, April 18, 2017

    Many thanks to Councilor Renee Villarreal for her vision and persistence in pursuing the investigation of a public bank for Santa Fe. Thanks also to Councilors Joseph Maestas, Carmichael Dominguez, Signe Lindell and Peter Ives for co-sponsoring the resolution to create a task force to map out the steps required for the public bank.

    As we learned at last week’s Interfaith Dialogue on Economic Justice at Temple Beth Shalom, public banking is a way to democratize our economic and financial system and to begin to address the economic inequalities in our community. A Santa Fe public bank could create money in the same way that other chartered banks do, through fractional reserve lending, and harness this money for the public good, instead of for private profit. By creating a public bank, Santa Fe can be a leader in implementing a moral and ethical approach to money and economic justice.

    Leslie Lakind, D.D.S.Santa Fe

    Be Sociable, Share!
  • Leaning In Friday, April 14, 2017

    Banking on New Mexico has worked long and hard championing a Public Bank of Santa Fe. Several years ago, this dedicated nonprofit convinced the City Council to invest in a public bank feasibility study. That study affirmed that it could be done and would be of great financial benefit to Santa Fe.

    A task force must now present the “ways and means” to actualize a public bank. At the April 26 City Council meeting, Councilor Renee Villarreal will introduce a resolution that creates that task force. Santa Fe residents can show support for this historic undertaking by attending that meeting.

    Thanks to Councilor Villarreal for introducing this critical resolution and thanks to her co-sponsors, Councilors Joseph Maestas, Carmichael Dominguez, Peter Ives and Signe Lindell. As the nation’s politicians appear determined to drag the country backward, it’s heartening that our local officials are leading Santa Fe into the future.

    Gershon SiegelSanta Fe

    Be Sociable, Share!
  • Finding Economic Justice Thursday, April 13, 2017

    Recently, Santa Fe community leaders (Mayor Javier Gonzales, Rabbi Neil Amswych, Sensei Joshin Byrnes, Councilor Renee Villarreal, Elaine Sullivan of Banking on New Mexico) spoke on “Economic Justice in Santa Fe” and reminded us to become active participants. The presentation might have been titled “Community: How to use money to build and maintain it.” We learned that economic justice is both a social and moral issue. A public bank might just help us build and maintain community. A public bank focuses local money on local projects. Instead of paying big banks to hold the assets of Santa Fe, it would serve as the savings bank for Santa Fe, and it would serve as the lending bank for Santa Fe city government projects. All the interest earned on loans would come back to the public bank for future loans to contribute to the community’s welfare and to economic justice here in Santa Fe.

    George GambleSanta Fe

    Be Sociable, Share!
  • Follow The Money Sunday, January 22, 2017

    The most exciting benefit of a public bank for Santa Fe is the fact that chartered banks actually create new money through a process called “fractional reserve banking.” When getting my MBA in finance, professors talked about it. Wikipedia, Bank of England and others have excellent online articles about this practice. It would multiply the amount of capital flowing through our community and supporting worthy projects several times over the initial invested capital.

    Of course, we need pay attention to the city’s cash-flow management. Our city staff have been making valuable changes since the Public Banking Feasibility Study was completed one year ago. That, plus a public bank for Santa Fe, can create new, safe economic possibilities for a sustainable Santa Fe. It is important to remember that banks create money. No other financial intermediary can do that.

    Alston C. LundgrenSanta Fe

    Be Sociable, Share!
  • Reader View: How A Chartered Public Bank Works For Santa Fe Saturday, January 7, 2017

    Recently, discussions about a public bank in Santa Fe have increased. This note addresses skepticism expressed about the utility of a chartered public bank. Chartered banks have a marvelous, some say almost magical, way of creating money in the economy by advancing bank credit (lending). Serious students of banking have understood the process for decades. Yet, many grasp neither the process nor its importance.

    The process relies on our understanding of money as an IOU (I owe you). The issuer of an IOU makes a promise to redeem it by exchanging the IOU for some specific thing of value. A coat check ticket is an IOU that is redeemed by returning your coat. A grocery store coupon is an IOU that is redeemed at the checkout counter as a payment on your grocery bill. Dollars issued by the federal government are IOUs that circulate as money and may be redeemed only for other dollars or as payments on your tax bill.

    Your bank deposit is an IOU from the bank that promises to redeem the deposit in dollars. You can have cash or, should you write a check, the bank will decrease your account balance and increase the balance of the recipient’s account. If the recipient’s account is at another bank, the Federal Reserve Bank provides the clearing service to make the transfer from one bank to another. Nowadays banks record balances on electronic spreadsheets (ledgers) and transfers occur by electronic means.

    When any chartered bank advances credit, two events occur. First, the bank accepts a promissory note (IOU) committing a borrower to pay the principal plus interest. Second, the bank increases the balance of the borrower’s bank account by the amount of the principal. The entire loan process is an exchange of promises that creates money where none existed before.

    Redemption begins when the borrower writes a check to make a withdrawal from the new account balance. The bank must find the funds with which to redeem its promise. Purposefully, the banking system allows a bank to borrow funds from other banks in the federal overnight funds market at a low interest rate. That rate is near the federal funds rate that the Federal Reserve Bank recently increased to 0.75 percent.

    A bank may have excess funds if it takes in more deposits than it loses in withdrawals on a given day. Excess funds are available for lending to banks that come up short of funds at the end of the day. Having set the price of money, which is the funds rate, the Fed has the responsibility to supply all the money demanded by the banking system

    Here is the important advantage of a public bank that the city owns. Like any chartered bank, a public bank can access funds at the low Federal Reserve Bank rates rather than at private bank rates. And bank profits go to the owners, the city rather than private investors.

    Of course, bank operations are much more complex than the essentials outlined above. Bank regulations are numerous and limit the amount a bank may lend to some multiple of owners’ invested capital. For small banks that multiple is over eight and depends on loan risk, which is small for city projects. Also, banks need plenty of deposits to allow ready access to funds needed for daily operations. And deposits bring with them assets deposited at the Federal Reserve Bank that the bank may invest in safe treasuries or other government assets.

    Finally, because it does not need to satisfy the investment desires of private investors, a public bank can be a super-safe depository for public funds.

    Be Sociable, Share!
  • Ready Or Not Monday, January 2, 2017

    In response to David Shulman’s recent letter suggesting that the city of Santa Fe is not ready to run a public bank (“Not ready,” Dec. 16), let me say that the city would not be running the bank.

    At this time, there is much about the management, oversight, etc. of the proposed public banking model that would be determined by a recommended task force. However, it could be a truly democratic model, guided by people with banking, regulatory and legal expertise, with much input from the public. We hope people with expertise and commitment to our community will join our effort.

    Ellen LefkowitzSanta Fe

    Be Sociable, Share!
  • Building The Economy Friday, December 30, 2016

    I am writing to urge the Santa Fe city councilors to support the public bank resolution. As I illustrate in my book, Breaking Big Money’s Grip on America, the practices of Wall Street and the global banks have been very detrimental to most Americans, the 2008 Great Recession being the most glaring, recent example.

    A Santa Fe public bank is a very sound way of keeping our city’s funds safe and working for the good of our community, rather than for Wall Street. Partnering with locally owned community banks and credit unions, a Santa Fe public bank would assure local control of our city’s resources. Moreover, it would increase lending to projects beneficial to our citizens; projects like affordable housing, early childhood education and improved infrastructure. Why gamble our city’s money with Wall Street banks? Let’s help build our local economy by creating our own public bank.

    Bruce BerlinSanta Fe

    Be Sociable, Share!
  • New Tool That Adds But Does Not Subtract From Taxpayers Sunday, December 25, 2016

    Mike Krauss
    Like local and state governments across the nation, both Bucks and Montgomery counties have limited tools to balance their annual budgets: cut services, lay off employees, raise taxes, take on more debt or ask for employee givebacks. This year, the Montgomery County Commissioners raised taxes. It was the same in next door Philadelphia, where a so-called “soda tax” was introduced, leaving some Philly residents to wonder, what’s next? A tax on soft pretzels, cheese steaks?

    But in municipalities large and small a new tool is being fashioned for the municipal finance tool kit, one that adds to and does not subtract from the taxpayers or the local economy: a public bank.

    Modeled on the hugely successful Bank of North Dakota (BND), a public bank is not a retail, commercial bank. It does not compete with the local community banks and credit unions for deposits or borrowers, but instead partners with these financial institutions; “buying down” interest rates to allow more borrowers to qualify or participating in loans that would otherwise be too large for local banks and lost to the mega banks.

    The president of the North Dakota Bankers Association reports that the state’s local banking industry has grown stronger because of the BND, and says, “The bank (BND) is a very good partner for our banks in the state… a very useful tool.” A Montgomery or Bucks County public bank can be expected to have the same effect on our local community banks and credit unions, now under siege by the mega banks and Dodd Frank regulation compliance costs.

    Because it is not a retail bank, a public bank has no branches, tellers, ATMs or retail advertising. It provides no incentive in the form of bonuses and commissions for risk taking. This low cost business model is profitable.

    The profits — at the BND, tens of millions of dollars a year, well over $400 million in the last decade — return each year to the general fund as non-tax revenue, or can be reinvested in the loan portfolio, or both.

    That in a state with a population smaller than Montgomery County and not much larger than Bucks County.

    This public bank also makes direct low interest loans to school districts, invests with other public agencies and authorities in infrastructure and consolidates student loans at below market rates.

    Right now the BND is making $250 million available to local school districts for construction, at an interest rate of less than 2 percent — a huge savings over financing from the bond market, which will lower the debt service portion of school district budgets. And instead of exporting taxpayer money to Wall Street, it is captured and recycled locally.

    And a public bank can take the place of the set aside, “rainy day” funds held by most local governments, which earn negligible interest and remove funds from productive purposes. In the budget just approved by the Montgomery County Commissioners, another $6 million was added to the set aside.

    Lastly, the public bank will hold the county deposits safely away from the risk ridden, failure prone mega banks, while providing municipal banking services at lower cost. Security and savings.

    A review of the latest Comprehensive Annual Financial Reports (CAFR) indicates that both Bucks and Montgomery counties have ample investments and funds, some portion of which can be redirected to capitalize a public bank. Last year the BND generated returns on equity (ROE) at about 18.1 percent. Current Bucks and Montgomery County investments don’t produce even half that return.

    Small wonder an ever growing number of both local and state governments coast to coast are exploring how they can form a public bank, and are addressing the key issues common to all: mission, capitalization, deposit base, governance, management and projected benefits.

    Studies have already been completed indicating the feasibility and benefits of public banks. The Bucks and Montgomery County commissioners might want to explore the possibilities and put their counties at the forefront of a long overdue revolution in municipal finance — or settle for more of the same in years ahead: more taxes, more debt, job cuts, reduced services or employee givebacks.

    The president of the North Dakota Bankers Association reports that the state’s local banking industry has grown stronger because of the BND, and says, “The bank (BND) is a very good partner for our banks in the state… a very useful tool.” A Montgomery or Bucks County public bank can be expected to have the same effect on our local community banks and credit unions, now under siege by the mega banks and Dodd Frank regulation compliance costs.

    Because it is not a retail bank, a public bank has no branches, tellers, ATMs or retail advertising. It provides no incentive in the form of bonuses and commissions for risk taking. This low cost business model is profitable.

    The profits — at the BND, tens of millions of dollars a year, well over $400 million in the last decade — return each year to the general fund as non-tax revenue, or can be reinvested in the loan portfolio, or both.

    That in a state with a population smaller than Montgomery County and not much larger than Bucks County.

    This public bank also makes direct low interest loans to school districts, invests with other public agencies and authorities in infrastructure and consolidates student loans at below market rates.

    Right now the BND is making $250 million available to local school districts for construction, at an interest rate of less than 2 percent — a huge savings over financing from the bond market, which will lower the debt service portion of school district budgets. And instead of exporting taxpayer money to Wall Street, it is captured and recycled locally.

    And a public bank can take the place of the set aside, “rainy day” funds held by most local governments, which earn negligible interest and remove funds from productive purposes. In the budget just approved by the Montgomery County Commissioners, another $6 million was added to the set aside.

    Lastly, the public bank will hold the county deposits safely away from the risk ridden, failure prone mega banks, while providing municipal banking services at lower cost. Security and savings.

    A review of the latest Comprehensive Annual Financial Reports (CAFR) indicates that both Bucks and Montgomery counties have ample investments and funds, some portion of which can be redirected to capitalize a public bank. Last year the BND generated returns on equity (ROE) at about 18.1 percent. Current Bucks and Montgomery County investments don’t produce even half that return.

    Small wonder an ever growing number of both local and state governments coast to coast are exploring how they can form a public bank, and are addressing the key issues common to all: mission, capitalization, deposit base, governance, management and projected benefits.

    Studies have already been completed indicating the feasibility and benefits of public banks. The Bucks and Montgomery County commissioners might want to explore the possibilities and put their counties at the forefront of a long overdue revolution in municipal finance — or settle for more of the same in years ahead: more taxes, more debt, job cuts, reduced services or employee givebacks.

    Mike KraussPoint Pleasant, PA

    Be Sociable, Share!
  • My View: Take Another, Closer Look At The Benefits Of A Public Bank Saturday, December 24, 2016

    A public bank task force resolution will come before the City Council in January (“What’s the fuss about a public bank in Santa Fe?” Dec. 11). The feasibility study completed by Building Solutions was a good economic development study, but failed to address crucial public bank questions that the volunteer task force can answer. That study also implied that a cash management system was a kind of public bank, which is not the case.

    The city has begun careful, strategic financial planning — otherwise known as an internal cash management system. A good cash management system goes hand in hand with a public bank because it matters where our community’s cash is deposited. Instead of Wells Fargo and other private banks that work to fatten the pockets of private shareholders, the city could deposit our community’s cash in our own public bank, which could then lend to the city for important public projects and save the city money. A share of bank profit earned from those loans could be returned to the city to benefit the public good.

    Unlike a cash management system, a chartered public bank does not lend out its deposits or financial assets, but instead leverages its core capital up to at least eight times to issue bank credit (loans). The power to lend that comes with a bank charter far surpasses the capacity of an in-house cash management system.

    An internal cash management system is managed by city staff. A chartered public bank would be managed by professional bank staff. Day-to-day bank decisions would be made independently of the city and special interests, and be governed by a publicly established mission and oversight.

    The process to establish transparency and accountability to the public (governance) has been clearly defined in the public bank task force resolution. The governance model that is developed might also serve as an example for transparency and accountability for the city’s internal cash management system.

    Unlike the city’s other projects, startup capital for a public bank would not be an expense but rather an investment. The city could transfer a small fraction of its current investment portfolio to be invested in startup capital for a public bank. This long-term investment could provide an immediate reduction in costs and debt to the city.

    Any municipality has long-term liabilities in the form of loans and bonds. A well-designed cash management system, such as the one the city Finance Department is implementing, will not end the need for long-term financing that a public bank can provide. The city’s lack of long-term financial planning has brought Santa Fe to its current crisis. Its interest payments on long-term financing will only increase over time.

    Brass Tacks Team learned from Santa Fe’s 2011-15 Comprehensive Annual Financial Reports and debt service documents that Santa Fe spent $7 million in bond issuance costs and fiscal agent fees, and will pay $25 million in interest to Wall Street.

    If Santa Fe had had a public bank that refinanced that debt at 4 percent, its debt service costs would have been reduced by $282,425 and total debt by $52,439,584.

    Though a public bank’s mission can expand over time, the immediate need is for financing (or refinancing) public projects. This is a much simpler, lower risk model than the partnership model described in the Building Solutions study. A public bank that finances infrastructure can support economic development, substantially lower city costs and debt, and return a share of profit from those loans to the city.

    Check out the “Five Year Model” (www.BrassTacksTeam.org) for starting a small chartered public bank that funds public projects. Learn why we call it a “Debt Reduction, Budget Easing, Income Generating Strategy for the City of Santa Fe.”

    Nichoe LichenSanta Fe

    Be Sociable, Share!
  • Affordable Credit Friday, December 23, 2016

    Mike Krauss
    The New Mexican recently published a generally excellent and informative report by Bruce Krasnow on the steps being taken by the city and residents to establish a public bank for Santa Fe (“What’s the fuss about a public bank in Santa Fe?” Dec. 11). As a founder of the Public Banking Institute and chair of the Pennsylvania Public Bank Project, I can report that there are now more than a dozen such efforts underway in other U.S. cities coast to coast.

    The driving force behind these efforts is a desire to strengthen municipal budgets without resorting to service cuts, more taxes, more debt or employee give-backs; by instead creating a tool that adds non tax revenue, lowers debt service and gets affordable credit into the local economy. The people of Santa Fe can be proud of the leadership of the mayor, City Council and informed citizens.

    Mike KraussPoint Pleaseant, PA

    Be Sociable, Share!
  • Let’s Do It Thursday, December 15, 2016

    Bruce Krasnow’s piece (“What’s the fuss about a public bank in Santa Fe?” Dec. 11) was one of the best and clearest statements on the subject during the several years the “fuss” has been growing. Craig Barnes, a modest man, would probably be satisfied that the article did not mention his name, but the history of this remarkable grass-roots movement leads back to him (“Activist, author, radio host Craig Barnes dies at 79,” Nov. 5, 2015).

    I am confident that the article brought Barnes to memory for many readers. A stellar resident of Santa Fe, Barnes presented a series of stimulating and analytical lectures at our wonderful Collected Works Bookstore in January 2011, calling attention to developments that were important to the survival of our democracy. A thoughtful continuation of the dialogue he started eventually resulted before his death in a push to create this public bank. The idea is not radical but, rather, is good business. Let’s do it.

    Nancy M. Burgas
    Santa Fe

    Be Sociable, Share!
  • Strong Defense Wednesday, November 30, 2016

    As the states sometimes serve as test laboratories for the nation, so Santa Fe has an opportunity to serve as a test laboratory for New Mexico, in this instance to test the potential of a public bank to serve (as stated by the Bank of North Dakota) as “an agile partner that creates financial solutions for current and emerging economic needs.” Since I live outside the city limits, having a public bank for the city will not provide an immediate benefit for me. But if it could serve as a model for the state to follow, it could provide long-term benefits for all New Mexicans.

    This is especially significant in light of Moody’s downgrade of New Mexico’s bond rating (“Moody’s lowers New Mexico’s credit rating,” Oct. 26). Each such downgrade is seized upon by Wells Fargo and other major banksters to impose more severe terms on state borrowing. A public bank would be a strong defense against such actions.

    Kenneth E. MayersSanta Fe

    Be Sociable, Share!
  • Now’s The Time Friday, November 25, 2016

    Congratulations to Mayor Javier Gonzales for holding firm to the precept that Santa Fe should remain a sanctuary city. A strong majority of Santa Feans heartily agree, despite the fact this ethically based policy could trigger a roughly $6 million reduction in federal support for our city. Given this potential fiscal crunch, there now is increased reason to institute public banking for Santa Fe, so that public revenues stay in Santa Fe and work to support deserving community programs and initiatives within our fair city.

    A public bank will keep public funds safely within our community rather than having them with Wells Fargo (or some other commercial megabank) that funnels its profits to distant shareholders, provides its officers with humongous bonuses, gambles with high-risk derivatives and commonly engages in ethically questionable business practices.

    Janiece JonsinSanta Fe

    Be Sociable, Share!
  • A Public Bank for Santa Fe – An Idea Whose Time Has Come! Friday, November 25, 2016

    Dear Santa Fe Councilors & Citizens:

    As many institutions around this country and the world, particularly commercial banks, are falling apart, Public Banking is an idea whose time has come. Santa Fe’s City Council has an opportunity to lead the way into the future by embracing this new direction and adopting the resolution recently introduced by Councilor Renee Villarreal and supported by Councilors Carmichael Dominguez and Joseph Maestes who are to be commended on their foresight. Public Banking is a transformed monetary and banking system that functions in the public interest, resulting in broadly shared prosperity. The benefits to Santa Fe include revenue from bank loans of the city’s tax deposits, lower interest and fees on city borrowing such as for construction bonds, security and control of the city’s resources prioritizing investment in projects that serve our community and retention of these funds locally to foster the Santa Fe economy.

    John MeadeSanta Fe

    Be Sociable, Share!
  • A Stronger Santa Fe Friday, November 25, 2016

    Councilors Renee Villarreal, Carmichael Dominguez and Joseph Maestas are to be applauded for putting forth a resolution to form a task force to further explore the establishment of a public bank for Santa Fe. Structural changes like this can provide the critical missing leverage that helps address far-reaching and seemingly unrelated problems that defy solution when tackled in isolation.

    With our money and the bank’s profits staying safely local, we have greater independence to realize our goals and priorities, including lending for projects such as early childhood centers, affordable housing, green infrastructure, etc. Every time a dollar recirculates locally, its positive impact for the community multiplies and our common good is enhanced. I hope the City Council will unanimously support the Villarreal resolution. Public banking is a growing trend, and it’s a smart idea for Santa Fe.

    Virginia DwyerSanta Fe

    Be Sociable, Share!
  • A Closer Look Wednesday, November 23, 2016

    Santa Fe has engaged in serious public bank research and discussions for two years. The pending task force resolution will provide more information. Our city’s 2011-2015 annual financial reports show it spent more than $7 million for bond issuance and fiscal agent costs and committed more than $25 million in interest to Wall Street over the next 10 to 30 years.

    The Brass Tacks Team (Public Banking Facts that Stick!) used the 2011-15 debt service schedules for 29 bonds and loans and showed how a public bank would have lowered the city’s annual debt service costs by more than $282,000 and reduced its total debt by nearly $52,439,584 by refinancing the remaining debt at 4 percent and adjusting the terms when beneficial. A closer look at the facts shows that $1 million spent to manage a public bank is insignificant when compared to the savings and financial gains a public bank can provide.

    Elizabeth DwyerBernalillo

    Be Sociable, Share!
  • Future Banking Sunday, November 13, 2016

    Councilor Renee Villarreal, supported by Councilors Carmichael Dominguez and Joseph Maestas, has introduced a resolution to take the next steps toward establishing a public bank for Santa Fe. The process began in October 2014 and has now culminated in a feasibility study that found in favor of implementing a public bank that would hold the city’s deposits. Instead of paying huge fees to private banks like Wells Fargo, our public bank will have the benefit of keeping city deposits safely local and earning interest that will augment the city’s coffers rather than depleting them. There is still a long way to go, but once the task force has been approved and selected, the future of a public bank for Santa Fe will be much brighter. I urge everyone to support this important step toward banking independence for the city of Santa Fe.

    Patricia VictourSanta Fe

    Be Sociable, Share!
  • Serving Safely Tuesday, November 8, 2016

    Hats off to John Chiang, California state treasurer, who is taking his responsibility to the people of his state seriously. In a letter to Wells Fargo, withdrawing all California funds, Chiang asked, “How can I continue to entrust the public’s money to an organization which has shown so little regard for the legions of Californians who have placed their well-being in its care?”

    Keeping the public’s money safe — that’s exactly what a public bank can do. With no shareholders to pay, no golden parachutes to fund and no bank officers earning millions, a public bank will serve our city just the way the public Bank of North Dakota serves its state. BND is more profitable than Goldman Sachs and safer. Support a public bank for Santa Fe at www.BankingOnNewMexico.org

    Bruce Merchant, M.D., Ph.D.Santa Fe

    Be Sociable, Share!
  • Support Public Bank Monday, November 7, 2016

    Santa Fe’s effort to establish a publicly owned city bank is in line with other moves around the country. In New Jersey, Phil Murphy, the front-runner in next year’s gubernatorial contest, pledged in September to create a state-owned Bank of New Jersey as a cornerstone of his economic policies. Murphy anticipates that the state bank could fund state infrastructure improvements, offer better terms on student loans and return profits to the state budget. We can do the same at the city level in Santa Fe. We urge the City Council to support Councilor Renee Villarreal’s resolution to move forward with this timely project.

    Frederick SawyerSanta Fe

    Be Sociable, Share!
  • Support A Public Bank Monday, October 31, 2016

    With corporate greed and corruption at an all-time high — the recent Wells Fargo scandal just one more example — public banking is our best long-term solution. It would save the city of Santa Fe millions of dollars in interest, and our funds would stay in our community to benefit the local economy instead of lining the pockets of megabank CEOs.

    Contrary to what many people think, a public bank in Santa Fe would not be operated by city employees. It would be managed by a professional banking staff and board of directors independent of elected or appointed government officials. The 100-year-old public Bank of North Dakota is a stellar example of the local benefits of a public bank. With no shareholders to pay, no golden parachutes to fund, and no bank officers earning millions, Bank of North Dakota’s profits serve the people of North Dakota.

    Roxanne BarberSanta Fe

    Be Sociable, Share!
  • I Am So Proud Wednesday, October 26, 2016

    Bl @ Lily Lake
    I am so proud to be a citizen of Santa Fe, and on the cutting edge of a new movement — to harness the mighty power of finance to benefit all of our citizens, instead of padding Wall Street’s bottom line. An independent study has concluded that a publicly owned city bank could reduce the city of Santa Fe’s total debt by almost $5 million over the next five years and could yield additional revenues of $10.5 million over the same time frame. This is not a pie-in-the-sky idea — North Dakota has had a tremendously successful state-owned bank for the last 100 years. We can do it here in Santa Fe, too. Let’s take control of our own economy.

    Bill Light

    Be Sociable, Share!
  • A Public Bank Sunday, October 23, 2016

    How can the city of Santa Fe continue to do business with Wells Fargo after it’s now been exposed as a criminal organization? If this latest outrage by yet another big bank isn’t enough proof of a need for a city-owned public bank, what is? The state of North Dakota has had a public bank for 100 years. It’s time Santa Fe lives up to its forward-thinking reputation — time for a public bank that serves the public rather than boosting CEO bonuses.

    Gershon SiegelSanta Fe

    Be Sociable, Share!
  • Better Local Sunday, October 9, 2016

    The recent shenanigans at Wells Fargo Bank add yet more ballast to the proposal to create a city-owned public bank in Santa Fe. We as city citizens and taxpayers are in effect underwriting Wells Fargo’s crooked dealings, because the city of Santa Fe banks with Wells Fargo. We have an alternative within reach — let’s create a public bank, a bank of the people, run by the people, for the benefit of the people. Interest payments paid by the city would go to improving public services, instead of toward enriching Wells Fargo’s executives and stockholders.

    Esther KovariSanta Fe

    Be Sociable, Share!
  • Bridging The Divide Thursday, September 29, 2016

    What I like best about living in Santa Fe is the favorite waitstaff at local restaurants welcoming my dog by name (Bear); familiar faces everywhere, friendly smiles (in congested Cerrillos Road traffic, even); and giving back to the community that holds me here. To this end, I am a strong proponent of public banking. Imagine divesting from corporate giants and having the opportunity to invest in our city. This could greatly improve our infrastructure, fiscal accountability, and access to affordable housing as we strive to eradicate homelessness in Santa Fe. I urge my neighbors and colleagues to join in this effort to bridge the economic divide in the city we call home. We can make the difference in our City Different.

    Meryl A. Lieberman, Ph.D.Santa Fe

    Be Sociable, Share!
  • Remembering Craig Barnes Tuesday, September 20, 2016

    Renowned author Terry Tempest Williams once said about Wallace Stegner that he was “a man who offers us his hunger for justice and his love of possibility.” This quote is an apt description also of the late Craig Barnes, whose last fight for justice and possibility was founding the organization WeArePeopleHere and its local initiative in support of a Public Bank for Santa Fe. Economic democracy in a society that respects and represents the well-being of all its people is our goal. Join us in this work toward keeping our public dollars safe and circulating in Santa Fe for our community’s priorities.

    Ada BrowneSanta Fe

    Be Sociable, Share!
  • Bridge Payment Sunday, September 18, 2016

    I read with interest that the new bridge on DeFouri Street has finally been approved (“City may award contract soon to replace old DeFouri Street bridge,” Sept. 2). If the town had a public bank, as has been proposed, the cost could be between 30 percent and 50 percent less than if the town were to float a bond in typical fashion. The town will start paying interest on the bond long before construction begins. Not true with a public bank. The interest, in all probability, would be higher than if we had our own bank. I would urge everyone to go to bankingonnewmexico.org to learn the many advantages of having a public bank.

    Sally SabooSanta Fe

    Be Sociable, Share!
  • Banking On It Monday, September 12, 2016

    Thank you, city councilors, for taking a concrete step toward the creation of a public bank here in Santa Fe. In October, Councilor Renee Villarreal introduced a resolution (co-sponsored by Councilors Joseph Maestas and Carmichael Dominguez) calling for the convening of a task force to lay out the steps required to make public banking in Santa Fe a reality. Public banking would offer a healthy boost to our local economy; city revenues will be deposited with our own bank, instead of with commercial banks, and then can be leveraged to provide funds at fair rates for needed projects within our own community. Our funds stay in our community, building financial strength and resilience. Given the state of our city’s finances, such a reform is sorely needed.

    Amy BertelliSanta Fe

    Be Sociable, Share!
  • My View: Public Banks Provide Responsible Stewardship of Public Funds Saturday, August 6, 2016

    Usually a household wishing to own a home must borrow funds from a bank. The household pledges its future earning capability to pay off a mortgage during the home owner’s lifetime. Likewise, a city needs to borrow for public projects like streets, utilities and the airport. That city pledges its earnings from taxes to pay off the loans over its lifetime. But a city’s lifetime is indefinite, so it borrows continuously forever.

    It would be nice if a city could use a simple process like a “cash management system” to finance its long-term investments. But like most households, most cities do not have the financial capacity to pay for their long term investments with cash.

    Interest typically adds between 30 percent and 40 percent to the costs cities must repay for their borrowing. Wouldn’t it be marvelous if the city of Santa Fe could recover that interest? For a household, the interest goes to the bank’s private owners. For a city borrowing from its own public bank, the interest goes back to the city to benefit the community.

    A five-year model for a public bank for Santa Fe considered refinancing $45 million of the city’s existing debt of over $300 million and another $5 million in partnership lending with other financial institutions for affordable housing, small businesses or renewable energy. The model found that such a bank could make a profit of $10.5 million to benefit the public and reduce both the city’s total debt and the amount of its annual debt payments.

    Critics of a public bank question how a city can benefit by depositing funds in a bank and borrowing those same funds back while paying bank overhead costs. If that were the case, those critics would be rightfully indignant. However, public bank overhead costs are minimal compared to the costs saved by reducing the number of public projects required to be funded through municipal bonds.

    Many people think that banks merely pay a low interest rate on deposits and lend those same deposits at a higher rate to make a profit. This is a misleading oversimplification. A close look at the double-entry accounting of banks tells a different story.

    A bank deposit is a liability for the bank that must be repaid to the depositor upon demand. Chartered banks do not lend out deposits. When the city deposits our taxes and fees in a bank, the money is not held in that bank. The money is held electronically in the bank’s asset account at the Federal Reserve Bank. So, the deposit is a promise, or an IOU, that the bank will redeem requests for cash or check withdrawals. Banking regulations allow a bank to issue loans up to several times its core capital. Interest on those loans is the main source of a bank’s income. A public bank returns loan interest to the community it serves.

    A loan is an exchange of promises. As a banker explained it, banks book loans on both sides of the balance sheet. The bank has an asset in the borrower’s promissory note to repay the loan and an equal liability in the new deposit. The borrower has a liability in the promissory note and an asset in the new deposit. The new deposit is new money created when the bank issues the loan. A public bank’s profit is returned to the public through the city’s investment in public projects. By investing in a public bank, the city of Santa Fe will be exercising its proper role as a responsible steward of public funds.

    Elizabeth Dwyer
    Bernalillo

    Be Sociable, Share!
  • Public Banking Shines Friday, August 5, 2016

    Recently, there has been much ado about cash management operations replacing the need for a public bank. It appears that the city is implementing an excellent cash management system and other improvements in city financial management.

    Cash management is what families do when they pay off their credit cards every month. They plan ahead and avoid unnecessary debt and interest payments. This kind of financial management doesn’t work when they need to make large capital investments as for a vehicle or a house. The city is in a similar situation with projects like roads, utilities and the airport. To enjoy the benefits now rather than save far into the future, it is necessary to go to the bank for loans. This is where a public bank outshines a commercial bank. Instead of interest in the millions of dollars, the only cost to the city is bank overhead.

    Dan Metzger
    Santa Fe

    Be Sociable, Share!
  • Reader View: A Public Bank Is Good For Santa Fe Saturday, July 23, 2016

    In a recent My View in The New Mexican, retired senior bank loan officer Jim Lodes (“A public bank for Santa Fe? It’s too expensive,” June 12) suggested we don’t really need a public bank in Santa Fe. Here are the reasons why a public bank is a fiscally responsible pathway toward greater social and economic justice for our community. A public bank in Santa Fe could decrease the amount the city pays in interest for borrowing, most often with bonds, increase the lending power and movement of money in our community, and fund important local priorities.

    In my view, creating a public bank for Santa Fe, chartered by New Mexico, managed by a politically independent board and professional banking staff, into which our money is deposited after it’s collected from us by the city for taxes, fees, fines and licenses, is an opportunity we should seize. Being a real bank, chartered by the state, has the following huge advantages:

    When the city deposits its money in a public bank, it would very likely earn slightly higher interest than if deposited in a “big 10” global bank like it is now.

    When the bank makes loans, interest paid on those loans would remain in Santa Fe as profits for the public bank. Some of these profits can then be used to make new loans or to invest in local programs here in Santa Fe, and some of those profits could go directly to the city’s revenue stream. For example, over the last 21 years, the Bank of North Dakota, our country’s only state-owned public bank, generated almost $1 billion in profit, and nearly $400 million of that, or about $3,300 per household, has been transferred into the state’s general fund to help keep taxes down and fund public programs. The population of North Dakota is just over 700,000, only 10 times that of the city of Santa Fe.

    But most importantly, our public bank for Santa Fe will be a real, chartered bank — just like Wells Fargo or U.S. Bank or First National.

    Why is that so important? Because real banks are able — because of the rules of the Federal Reserve, America’s bank for banks — to lend up to 90 percent of the funds they have on hand. The formulas are complex and the terms around the Fed’s rules complicated, but this ability is only available to chartered banks. It is a powerful engine for economic growth and will be most meaningful in our city, if our money remains in our hands in our public bank.

    It’s essential, that we, the people, create a real bank, a chartered bank, our own public bank, which will create new lending power right here at home.

    Over the past few months, two major studies about a public bank for Santa Fe have been undertaken, one by the city and the other by Banking on New Mexico. Both studies were conservative in their assumptions, modeling low interest rates paid for borrowing — low interest rates paid on deposits and slow, cautious growth. Both studies concurred that a chartered public bank in Santa Fe would be profitable in year one and could be a powerful engine to stimulate our local economy. It’s time we bring that power back to the people of Santa Fe.

    It’s why our mayor and many city leaders support a public bank. It’s why the Bank of North Dakota has succeeded for a century. It’s why 40 percent of the world’s money is in public banks. It’s why I’ve supported public banking since the late Craig Barnes identified it as a primary pathway to greater social and economic justice for our community.

    Elaine Sullivan has worked on many community initiatives, including the Santa Fe Business Alliance and the Living Wage Network. She was a founding member of WeArePeopleHere! and is the board president. Banking on New Mexico is an initiative of WeArePeopleHere! advocating a public bank for Santa Fe.

    Elaine SullivanSanta Fe

    Be Sociable, Share!
  • Reader View: Public banks can work for citizens Monday, July 18, 2016

    Mike Krauss
    In a recent op-ed column, Jim Lodes (“A public bank for Santa Fe? Too expensive,” My View, June 11), warned against creating a Santa Fe public bank and said, in part: “Over the last few decades, not one city, county or state has analyzed this and decided to start a public bank.”

    To the contrary, in the last several months alone, a growing number of state, county and city governments have taken action to move forward to create a public bank: Manchester, N.H., and Philadelphia city councils, Arizona’s Senate Financial Institutions Committee and the New Hampshire’s House Commerce and Consumer Affairs Committee among them. I can cite many more examples. Interestingly, support has been bipartisan, with even tea party Republicans and occupy Democrats joining hands.

    The reason for this interest is that state and municipal governments across the nation struggle with chronic budget shortfalls and a lack of funds for sustainable economic development, job creation, needed investment in infrastructure and schools.

    Those charged with municipal finance and stewardship of public funds have long worked to meet the challenge with the same tools, having to choose their own poison: cut services, layoffs, seek employee give-backs, take on more debt or raise taxes.

    Philadelphia, for example, recently enacted a new tax on sugary beverages. But Philadelphians are already asking, what about next year? A tax on soft pretzels? Cheese steaks?

    There is an alternative for the long term, a new tool for the municipal finance tool kit: creation of a public bank. The model is the almost 100-year-old, state-owned Bank of North Dakota.

    The BND in not a retail, commercial bank. It does not compete with the local community banks and credit unions for deposits or borrowers, but instead partners with these financial institutions and uses their existing infrastructure to get affordable credit into the community for new businesses and mortgages.

    It makes direct low-interest loans to school districts, invests with other public agencies and authorities in infrastructure, and consolidates student loans at below-market rates.

    A public bank can also refinance existing municipal debt at significant savings, providing a reduction of the debt service paid by taxpayers.

    And a public bank can take the place of the set-aside “rainy day” funds held by most local governments and school districts, which earn negligible interest and remove funds from productive purposes.

    Because it is not a retail bank, a public bank has no branches, tellers, ATMs or retail advertising. It provides no incentive in the form of bonuses and commissions for risk taking. This low-cost business model is profitable.

    The profits — at the BND, tens of millions of dollars a year — return each year to the general fund as non-tax revenue or can be reinvested in the loan portfolio, or both.

    And the public bank holds the public deposits safely away from the risk-ridden, failure-prone mega banks, while providing municipal banking services at lower cost. Security and savings.

    Santa Fe has already concluded a feasibility study, which along with another conducted by an independent citizens’ organization supported the creation of a municipal public bank and identified immediate savings in debt service and steadily increasing job creation and profits.

    Municipal governments across the U.S. are drowning in debt and are in dire need of new jobs creating long-term and sustainable economic development models. Public banks are a giant step toward sound municipal finance and democratic economics.

    Mike Krauss is chairman of the Pennsylvania Project and founding director of the Public Banking Institute. Philadelphia

    Be Sociable, Share!
  • Read Up On Public Banks, Then Decide Wednesday, July 6, 2016

    Recently, several letters have appeared in The New Mexican opposing a public bank for Santa Fe. The key argument is that the bank would be managed by the city. That’s not how a public bank works. As a chartered bank, a public bank would be managed by professional bankers and overseen by a policy-setting board. The bank would be subject to the same regulations and oversight as any stockholder-owned chartered bank in New Mexico. A public bank is not a retail bank. It serves only the city, not individuals: No tellers, branches, ATMs or advertising. As a result, the operating costs are low.

    A public bank is an innovative way to provide long-term, nontax income for the city. According to the feasibility study, profits from a public bank could earn $10 million in the first five years. Make up your own mind; read the two independent studies that examine the proposed public bank. They’re on the web at BankingOnNewMexico.org.

    Alan WebberSanta Fe

    Be Sociable, Share!
  • Pay To Play Sunday, July 3, 2016

    In his op-ed (“A public bank for Santa Fe? It’s too expensive,” June 12), Jim Lodes suggested that instead of establishing a public bank, Santa Fe could earn better interest investing in New Mexico’s State Investment Council fund. He’s right that Santa Fe doesn’t invest in the SIC fund. That’s because city policy prohibits investments in “derivative instruments, collateralized mortgage obligations or equity securities” and “investment purchases on margin or short sale,” and the SIC invests in both derivatives and hedge funds.

    Meanwhile, in April, The Associated Press reported on the $90 million 2008 State Investment Council loss in the pay-to-play scheme involving an investment in collateralized mortgage obligations. Gov. Susana Martinez, chairwoman of the Investment Council, now recommends taxpayers accept a $24 million settlement from the outfit that sold those dodgy derivatives in the first place, and with it, a $66 million loss. Maybe Santa Fe does need a public bank free from political meddling after all.

    Be Sociable, Share!
  • Better Banking, Funding Wednesday, June 15, 2016

    After I read Dan Metzger’s opinion piece (“Santa Fe could use a public bank,” My View, April 24), I understood why a public bank would be good for Santa Fe. I know the city often borrows money to pay for parks, roads and other public projects we citizens use and enjoy. Before reading Mr. Metzger’s letter, I didn’t know there was another, better way for Santa Fe to fund its endeavors.

    In his piece, Mr. Metzger explained the hypothetical model his team created for the first five years of the public bank’s existence. He showed that borrowing from a public bank would significantly reduce the cost of securing the city’s needed capital. Given the budget cutbacks we are now facing, we must find ways to do things smarter and less expensively. I encourage the city to move forward and create a public bank for Santa Fe.

    Bonnie GrossSanta Fe

    Be Sociable, Share!
  • Banking Sense Sunday, May 22, 2016

    I recently attended a meeting about starting a public bank in Santa Fe. What I learned is that it is hard to understand how a public bank works because the structure is so simple. A public bank would be owned by the city and managed by professional bankers under the authority of a public board. In the beginning, the city will be the only depositor and will pay its bills from the deposits (taxes, fees and fines).

    The city will provide the capital to start the bank, which is used as leverage for loans the bank will make to the city for capital improvement projects. The capital generated by our taxes, fees and fines will be an investment in our city and ourselves. That’s it in a nutshell: simple, safe and successful. I encourage the city to give serious consideration to this bold initiative whose time has come.

    Fabio MacchioniSanta Fe

    Be Sociable, Share!
  • Seeing Something Cool Thursday, May 19, 2016

    I recently read about the Santa Fe Civic Housing Authority exploring the purchase of the old St. Catherine Indian School to renovate it for low- and middle-income housing, a senior living campus or a school (“Housing authority in talks to purchase St. Catherine,” April 18). All such uses could help invigorate the city, reinforcing concepts of community diversity, vitality and pride in our downtown area.

    This is exactly the kind of project a public bank for Santa Fe could finance. Instead of borrowing from a private bank in some other state and paying it interest and fees, the housing authority instead could borrow from our own public bank. In this way our community’s money would be invested in a local project and reap its share of public bank profits from the loan while earning a new source of nontax revenue for our community.

    Diane KarpSanta Fe

    Be Sociable, Share!
  • Banking On it Friday, April 29, 2016

    Santa Fe may cut library hours and increase park fees as a way to trim the budget. For many people in Districts 3 and 4, this is the only leisure activity outside their homes that they can afford. As the City Council cuts the budget, I ask councilors to make fair, equitable decisions that recognize these needs.

    Raising the gross receipts tax or cutting services always hurts those who least can afford it. But if we had established a public bank for Santa Fe five years ago, the city’s budgetary crisis would be less severe. A public bank would provide a new source of nontaxed base revenue to benefit our community. It could help restore dignity, respect and access to opportunity to Santa Fe’s working poor. Please read more at www.bankingonnewmexico.org. Be inspired.

    Pamela GilchristSanta Fe

    Be Sociable, Share!
  • Reader View: Santa Fe Could Use A Public Bank Saturday, April 23, 2016

    A study funded by the City of Santa Fe was released in mid-January. It both supported the feasibility of a public bank in Santa Fe and increased public interest in the idea.

    The financial crisis of 2008 followed unscrupulous behavior of Wall Street banks. Then Main Street was hung out to dry while the Federal Reserve Bank bailed out Wall Street. So, we might look askance at banks in general.

    Most of us have checking accounts at a bank, and our banks have checking accounts at the Fed. Let’s face it, we are stuck with banking. Bank loans account for most of the money in our economy. But public banks offer a way for banks to serve the people instead of people serving banks.

    Public banks are not new. The Bank of North Dakota (BND) is a century-old public bank that is an essential element of that state’s economy. In Germany, public banks garner 40 percent of all bank assets. In other parts of the world, public banks are common.

    My own skepticism toward a public bank turned to enthusiasm upon working with the Brass Tacks Team of Banking on New Mexico. We modeled the first five years of a hypothetical public bank. Also, we calculated the savings to the city of refinancing existing bonds and loans through our public bank. Independent of the city’s study, we showed that a public bank can reduce city borrowing costs significantly.

    Generally, this is how our public bank could work. Our public bank would be the city’s bank chartered by the state. The city would own the bank as it would provide the capital to be leveraged for loans. The city would deposit its income in the bank and pay its bills from the deposits. We assumed $100 million in city deposits, $10 million in capital and a $50 million loan portfolio. These amounts are consistent with city assets and liabilities reported for fiscal year 2014.

    Over the five years, our model yielded $10.5 million in profits and reduced city debt by $4.85 million.

    The bank would minimize its own expenses. It would not handle individual citizen deposits. And, it would use neither tellers nor ATMs. The bank staff would be few and other overhead would be austere. Employees would be hired and paid by the bank, not by the city.

    Bill Black’s book, The Best Way to Rob a Bank is to Own One, along with prevailing public sentiment, tell us that the city will not manage the bank. The City Council’s role is to approve city borrowing. Banking professionals would operate the bank day to day with an appropriate oversight board.

    A bank depositor is an unsecured creditor of a bank. To be a safe haven for city deposits, the bank must make conservative investments of its assets. Not founded to satisfy private investors, our bank need not take risks to chase high profits.

    Our bank would offer the city an alternative to expensive, omnibus bonds and provide transparency to funding. Instead of large bonds, the city could take out loans for individual projects as needed. When the local lending environment improves, the bank could cooperate with community banks and other lenders for local development efforts.

    Our bank would return to the city interest on loans that would otherwise go to private investors and Wall Street. It would provide a safe haven for city funds against the turbulent environment of private banking. And, it would provide better transparency of city spending.

    Like BND, a public bank for Santa Fe would aspire to make a significant impact on the prosperity of the local economy.

    Dan Metzger – Santa Fe

    Be Sociable, Share!
  • Banking For Community Tuesday, April 12, 2016

    The city of Santa Fe has to deposit public funds in a chartered bank somewhere, so why not establish our own public bank for Santa Fe? That way the taxes, fees, licenses and fines we all pay can benefit our community rather than private shareholders who live someplace else. Bank decisions would be made by highly qualified bankers, not the city. It could also support our local community banks, credit unions and financial institutions. A Public Bank Feasibility Study completed for the city, and a Five-Year Financial Model by BankingOnNewMexico clearly establish that a public bank could have significant financial benefit for our community.

    Now is the time for the city to appoint a task force to answer the remaining questions of: capitalization of the bank, a five-year business plan, governance, transparency and accountability to the public.

    Nichoe LichenSanta Fe

    Be Sociable, Share!
  • A Smart Investment Tuesday, March 15, 2016

    I was listening to state officials discuss cutting services when one constituent asked about creating “new” revenues. I thought about how smart the city of Santa Fe is in its quest to create a public bank.

    Over the past five years, Santa Fe has spent more than $7 million for fees to issue municipal bonds in addition to more than $25 million in interest that goes to Wall Street for the next 10 to 15 years.

    Think about this: After five years of operation, the public bank is projected to make a profit of more than $10 million, which goes right back to the people. I wonder how much the city could save if it lowered the amount of bonds it issued and funded a bunch of street projects with loans from the public bank? That would create “new” revenue!

    Elizabeth Dwyer
    Bernalillo

    Be Sociable, Share!
  • Looking Ahead Thursday, March 10, 2016

    Kudos to the forward-thinking city of Santa Fe and consultant Katie Updike for the excellent public banking feasibility study. Kudos, too, for Banking On New Mexico and the Brass Tacks’ five-year model. Both studies may be found at bankingonnewmexico.org. Thousands of hours of thinking outside the box have gone into the creation of a chartered public bank — managed by bankers, not politicians — which would use community taxes, fees and fines to fund our own community needs.

    In the five-year model, the bank refinances $45 million of the city’s current debt and it is predicted to save the city $1million in debt service and make a small profit in the first year. In five years, the bank would make a profit of $10.5 million and reduce the city’s debt by $4.8 million. How cool is that? Please read the report for yourself and contact Janiece Jonsin, bankingonnm@gmail.com , to help spread the word.

    Pamela GilchristSanta Fe

    Be Sociable, Share!
  • Yes To Public Banking Monday, February 22, 2016

    I have read both the Santa Fe Public Banking Feasibility Study Final Report and the Banking on New Mexico’s Five-Year Model report. Both studies show that a public bank will significantly reduce debt while keeping our taxpayers’ money in Santa Fe, not invested out of state. It can also make a profit, which will benefit our community. As a result, I am very much in favor of establishing a public bank here. I encourage the city councilors and staff to support a public bank for Santa Fe.

    Once created, a public bank will be here for generations to come, eventually creating affordable credit to those sectors of the economy that raise the standard of living for all the people.

    Ada BrowneSanta Fe

    Be Sociable, Share!
  • Public Banking Could Be What New Mexico Needs Wednesday, September 30, 2015

    Santa Fe is researching the feasibility of a chartered public bank. This type of bank is different from a traditional bank in that its sole purpose would be to accept deposits of our community funds gathered from taxes, fines, etc. Instead of depositing our public money with Wells Fargo or Citibank, which charge big fees and high interest rates for Santa Fe to borrow back what’s really our own money, a public bank would issue bank credit against these public funds for public projects, like infrastructure.

    Those big, poorly regulated banks crashed our local economy in 2007-08. Santa Fe is still struggling — fewer tourists, more businesses closing or not starting up and fewer jobs, which equals fewer tax dollars in our city coffers. A public bank is one way to create a more sustainable, locally based economy. Learn more about this solution to our revenue problems at www.bankingonnewmexico.org

    Patricia VictourSanta Fe

    Be Sociable, Share!
  • Banking On N.M. Wednesday, September 23, 2015

    “The public Bank of North Dakota is a watermelon. A Public Bank of Santa Fe would be a peach. Both are sweet.” So said Nichoe Lichen, volunteer with the WeArePeopleHere grass-roots initiative, Banking On New Mexico. A growing number of Santa Feans are joining a growing number of communities across the United States, as we look at the many ways a public bank could benefit our community.

    A public bank is owned by the public — you and me. It holds our community’s cash — our taxes, fees and fines — and lends that money locally for projects identified by us as priorities. It operates according to the regulations for a chartered bank and is managed by professional bankers making the day-to-day lending decisions and earning a civil servant’s salary. It offers so much good for our city. Learn more at BankingOnNewMexico.org or call 505-216-6376.

    Elaine SullivanSanta Fe

    Be Sociable, Share!
  • Reader View: Public Bank Will Be Good For Santa Fe Saturday, July 11, 2015

    Good on the Santa Fe City Council for approving the Banking Fiscal Impact Study, which explores the feasibility of a public bank in Santa Fe. Last week, the City Council heard an update on how the study is progressing. The potential for our city is exciting.

    Contrary to the opinion of some, a public bank is not “instead of” established banks or Santa Fe’s beloved credit unions (of which this writer is a member and will continue to be), but works in tandem with them, often assuming parts of loans borrowers could not manage otherwise.

    Even if using a different model, public banking has potential to do for Santa Fe what it has done for North Dakota: address the fundamental issue of access to capital, affording real opportunities for entrepreneurship, homeownership and self-sustainability for those across socioeconomic strata — for us rank-and-file folks who deserve a chance to better our lives — not just for the moneyed of Santa Fe. This could plausibly help to foster citywide solvency amid future economic downturns, just as it has done in North Dakota, as well as in countries like Germany. (Facts show North Dakota’s solvency has not been just because of the discovery of the Parshall Oil Field.)

    Local investment and belief in the potential of all people of Santa Fe is what’s needed in these uncertain economic times. And a public bank is just the thing to spearhead those efforts.

    Carol NorrisSanta Fe

    Be Sociable, Share!
Be Sociable, Share!

Public Banking — Funding Local, Sustainable Economies