As an economic crisis unfolds along with the current pandemic, and our state budget facing a $3B shortfall, it is clear we need to chart a different path forward. 350 Colorado is a co-founder of the Colorado Public Banking Coalition and we’re actively working to enable public banks in our state. Establishing public banks now would provide a new, much needed funding source to help Colorado handle its current financial crisis, yielding immediate and major permanent benefits. Public banks would also provide an alternative to Wall Street banks, which are financing the climate crisis and human rights abuses.
At the federal level, a new bill was introduced at the end of October by Reps. Rashida Tlaib and Alexandrai Ocasio-Cortez, proposing a public option for banking. The Public Banking Act would foster the creation of public banks across the country by providing them a pathway to getting started, establishing an infrastructure for liquidity and credit facilities for them via the Federal Reserve, and setting up federal guidelines for them to be regulated. This is an essential first step in making it easier for public banks to exist and would also give grant money for public banks to get started.
Here’s how you can take action now to urge our leaders to implement public banks to meet our current crisis:
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Send a letter today urging your legislators to support the Public Banking Act, and to support local efforts to enable public banking solutions in Colorado.
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Please sign onto this letter of support for public banking here.
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Learn more about public banking and join the Colorado Public Banking Coalition.
Here’s what else you need to know:
The Federal Reserve recently dropped interest rates to 0.25%, eliminated reserve requirements, and relaxed capital requirements. So banks (including public banks) could now borrow effectively for free, without restrictions on the money’s use. This facilitates state and local governments’ abilities to set up their own publicly-owned banks and act quickly to lend to local businesses, municipal agencies, and provide emergency funds for healthcare, housing and other critical community needs at substantially reduced rates while replenishing the government’s revenue base. Public banks (like all banks) can create money in the form of bank credit and lend at low interest rates instead of focusing on maximizing profit as a private bank would. With no shareholders to pay, it can pass the low rates on to borrowers such as public agencies, local businesses, and residents.
Not only will a public bank save us money during this precarious time (in fees to the Wall St. banks and in interest on infrastructure projects), but it will generate new, non-tax revenues, outside of the constraints of TABOR. State and/or local public banks would help keep public funds local, funding community needs and values (e.g. healthcare, housing, renewable energy transitions, job training, etc.).
Let our elected leaders know we want innovative options and urge swift action. The time is now.