The Oregon Public Bank Alliance is a coalition of public interest organizations and individual volunteers whose mission it is to bring municipal public banks to Oregon. A public bank’s purpose is to use a city’s financial resources to benefit the community, not to generate profits for executives and shareholders. We are building support for a bill that has been introduced in the 2021 legislative session. The bill will establish a legal framework for Oregon cities to create public banks by themselves or in partnership with other cities.
Our efforts are gaining support from state legislators. We have two chief sponsors in each chamber and numerous legislators who indicate support, several of whom have already committed to co-sponsorship. We are contacting city leaders because we believe that it is important for them to understand how public banks can contribute to economic recovery and growth, why this bill is important and to advocate for it with their constituents and state representatives.
Their support is not a commitment to create a public bank. They would simply be supporting the right of Oregon’s cities to have the opportunity to create public banks. It’s also important to recognize that your city can benefit from public banks in Oregon even if your city doesn’t create one by banking with another city’s public bank. Your city could deposit funds at the Bank for a better return and establish a relationship with another city’s bank. Alternatively, your city could collaborate with one or more other cities to create a regional public bank.
A municipal public bank is a bank chartered and capitalized by one or more cities to provide banking services for the benefit of the public. Public banks are established by cities but independently managed by banking professionals and a Board of Directors.
For most cities, a municipal bank’s initial focus will be to enable loans to local businesses in partnership with credit unions and community banks, thus creating jobs and increasing tax revenues. While municipal banks would not participate in risky or speculative loans, many of these loans are ones that Wall Street banks are not interested in making and credit unions and community banks are unable to make on their own.
After the bank builds sufficient assets, it can finance public infrastructure, public housing and other projects that will benefit cities, couties, school districts and other governmental entities. Cities and taxpayers will realize substantial cost savings on public projects and city business through lower interest rates and fees compared with conventional Wall Street financing.
A key feature of our bill is that public banks will not be required to take deposits from or make loans to individuals. This focuses the bank on commercial and governmental banking, allowing credit unions and community banks to continue serving individual retail customers without competition. It also makes it faster, easier, and less costly to create a bank because it is unnecessary to have FDIC insurance.
The biggest benefit of a public bank is a more vibrant local economy created by loans to local businesses. A public bank enables more loans in the community by investing locally and by partnering with local credit unions and community banks, increasing their access to funds at lower cost and enabling them to make more and larger loans.
Public banks can also fund infrastructure, affordable housing, and other public-benefit projects at lower interest rates and fees than conventional Wall St financiers, saving as much as 40% to 50% over the life of a 30-year bond. This is a big saving of taxpayer dollars.
Interest and fees earned by the municipal bank stay in the community instead of going to corporate executives and shareholders. This increases the Bank’s assets, which enables its local partners to make more loans in the community.
While it may seem that there are more immediate concerns than creating public banks, it’s important to think of our long-term needs. With federal help from Washington becoming less reliable and Salem less able to provide help,Oregon’s cities can develop ways to help themselves. The sooner we get started, the sooner we will have public banks available to help build a thriving economy and make us more resilient by improving our ability to respond to future economic shocks.
If you want a public bank to be an option for Oregon’s cities, here are ways you can help:
Sign our petition showing your support at orpublicbank.org/petition
Ask your city leaders to endorse the bill and contact your state legislators to request that they support passing the bill during the 2021 session.
Please contact us at email@example.com to discuss contacting your city leaders.
Find out more at our website www.orpublicbank.org. Find the text of the bill on the Resources page.