When the Great Recession of 2008 hit, small and medium sized businesses suffered a sharp reduction in borrowing ability as the large banks, which have come to dominate our credit markets over the past two decades, sharply reduced their lending to these businesses. Instead, the large banks used the government bail-out money — given them for the purpose of stimulating of the economy through lending — to invest in the more lucrative but riskier derivative market, or to simply to take bad subprime mortgages off their books. Without access to affordable credit, small and medium sized businesses across the country laid off workers, stopped buying from suppliers, and went out of business. This deepened the crisis, pushing community banks’ loan portfolios into distress and state and local government budgets into deficit.
In Colorado, as in most other states, falling tax receipts have forced our state and and local governments to cut back on public services at the precise moment when their residents and local businesses needed them most. This damaging cycle has not abated in most of the country, and only partially in Colorado, despite the recovery of the handful of Wall Street financial firms, who set off this crisis in the first place.
This financial crisis and its aftermath have exposed how little control communities have over their local economies. When economic disasters hit, state and municipal policymakers have few tools at their disposal to stop the flight of money out of their local economies and have no reliable way to keep money flowing to local banks, local businesses, and local governments.
As a result, states across the country have begun considering proposals to move general revenue deposits out of the large multi-national banks that dominate the banking business today, and use them to capitalize a new local public structure, a public bank, with the mission of growing their local economies. These public banks — also known as partnership banks — would protect government investment and be accountable to the public.
Such a bank could be modeled on the 95-year-old and very successful public Bank of North Dakota (BND), which over the period of its existence has contributed to the health of local community banks, state budgets, medium and small businesses, and job growth. In fact, North Dakota was the only state to not take an economic downturn during the Great Recession. While other states were experiencing large government budget deficits and sharp reductions in investment in local economies, the BND increased its lending into the economy, employment actually increased, and the state experienced record budget surpluses.
To inform the public about the benefits of public banking and to foster public banking initiatives within the state of Colorado, Be The Change – USA has founded the organization Banking on Colorado, a new and growing movement in Colorado filled with people of diverse backgrounds and interests who are deeply committed to changing our financial system. We welcome you to join our movement, which is as big in scope and courage as the Civil Rights movement of the 1950s and 60s.
A central part of this effort is to advance the concept of public banking. To this end, Be The Change – USA, supported by a grant from the Denver Foundation, and along with the Rocky Mountain Employee Ownership Center, the Community Forum, and the Public Banking Institute hosted a conference in Denver on Saturday, January 31, 2015, Banking on Colorado: Bringing Our Money Home, featuring local and national leaders in the public banking movement.
The conference was well attended — with over 120 registrants. It informed Colorado citizens – public officials and their constituents – about:
- The dominance of the large, multi-national banks in our economy with their often abusive, fraudulent, and sometimes criminal operations
- Why the current financial system ignores or even harms local economies and the middle class,
- The financial challenges faced by homeowners, entrepreneurs, small businesses, and students because of the current financial system,
- What public banking is and how it benefits its constituents,
- Why public banks lend counter-cyclically, to increase lending in a recession, and decrease or control lending to prevent bubbles,
- The bold story about a new, sustainable economy based on respect, compassion, dignity, and democracy, and
- The ability to help kick-start the implementation of public banking through the power of our diversity and numbers
Public banks support Main Street, not Wall Street – by supporting community banks, growing small businesses, creating jobs, and lowering government debt. Attend our conference and learn more from our nationally renowned speakers:
- Nomi Prins
Senior Fellow at Demos, former Managing Director at Goldman Sachs; former Senior Managing Director at Bear Stearns
Author, All the Presidents’ Bankers: The Hidden Alliances that Drive American Power and It Takes A Pillage: Epic Tale of Power, Deceit & Untold Trillions - Ellen Hodgson Brown
Founder, President Emerita, and Senior Advisor, Public Banking Institute
Author, Web of Debt: The Shocking Truth About Our Money System and How We Can Break Free and The Public Bank Solution, From Austerity to Prosperity - Gwendolyn Hallsmith
Executive Director, Public Banking Institute
Author, Creating Wealth: Growing Local Economies with Local Currencies and The Key to Sustainable Cities - Mike Krauss
Chairman, Board of Directors, Pennsylvania Public Bank Project
Founding Board Member, Public Banking Institute
Former Executive Director of the Pennsylvania Republican State Committee - Karl Beitel
Director, Public Bank Project
Author, Local Protest, Global Movements: Capital, Community, and State in San Francisco
