Frequently Asked Questions

What is a public bank and how is it funded?

Public banks are owned by the people through their representative governments: a Tribe, City, County, State or Federal Government. Public banks hold a bank charter and must follow all the rules and regulations any community bank might be required to follow. A public bank is established to manage and invest public funds (taxes, fees), not an individual’s deposits.

How is a public bank different from a private bank?

  1. The mission of a public bank is to serve the public interest, not private shareholders.
  2.  Profits are returned to the public bank to be used for the benefit of the local community
  3.  Employees are public servants and do not receive bonuses.

How is the public’s money in the public bank used?

Depending on the Mission Statement of the public bank and its resources, funds may be invested in local projects or services, such as infrastructure (roads, buildings, parks, utilities). Public banks can substantially reduce debt service costs for public projects. It could also partner with local lending institutions to help them provide much needed credit for our community.

Would a publicly-owned bank compete with community banks or credit unions?

No. A public bank would not make loans directly, but would financially partner with local community banks, credit unions, and Community Development Fund Institutions to increase local lending capacity to benefit the local economy, such as small business and housing.

Are they safe?

Yes. Public funds invested locally are not vulnerable to the risk of loss associated with global investment banks.

How do I know that government officials will not play favorites with who gets funding?

A public bank is designed to carry out its mission independent of the political process. There is a clear separation between inappropriate influence and the public interest. A public bank is auditable and is required to be fully transparent and accountable to the public.

What are other examples of public banks?

The highly successful Bank of North Dakota has been owned and operated for the benefit of the people of North Dakota for 97 years. Oklahoma’s Bank2 has been owned and operated since 2002 by and for the benefit of the Chickasaw Nation. Forty percent of the banks worldwide are held in public banks.

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Public Banking — Funding Local, Sustainable Economies