A bill to establish The Maine Street Bank was introduced in the Maine legislature on 13 January 2015. Titled An Act to Create a Public Bank, the bill proposes to create a public bank by 1 July 2017 for the state of Maine that is largely modeled after the nearly century old Bank of North Dakota. It would also authorize the formation of public banks in municipalities and cities around the state.
To summarize the bill as it currently stands:
The purpose of the bank would be
- Economic development. To support job creation and economic development in Maine by increasing access to capital for businesses and farms within Maine in partnership with local financial institutions;
- Financial stability. To provide stability to Maine’s financial sector, but not to compete with state-chartered financial institutions, credit unions or other financial institutions within Maine;
- Basic banking services. To reduce costs paid by the State of Maine for basic banking services; and
- Return profits. To return profits, beyond the revenue needed to accomplish the purposes and for continued sound operation of the bank
The operation, management, and control of the bank would be by a Board of Directors consisting of five voting members appointed by the Governor and subject to approval and confirmation by the State Legislature. The Treasurer of Maine and the Commissioner of Administrative and Financial Services would serve as ex officio non-voting members of the Board. The voting members of the board would serve without compensation.
The Board would appoint and determine the compensation of the President of the Bank, who should have extensive banking experience, and other subordinates they deem necessary for the operation of the bank.
The Board would also appoint a seven-member Advisory Committee who must be representatives of the Maine’s financial, business, agricultural and labor sectors and at least two must by officers of financial institutions chartered in Maine and who do not maintain offices outside the state.
The proposed powers of the bank are given in detail in the legislation, found at the link — An Act to Create a Public Bank.
Hearings were held in the Joint Committee on Insurance and Financial Services on 3 February 2015. The written testimony of six individuals, representing themselves or a private or governmental organizations, can be found through the links below. It is no surprise that of these the only written testimony in support of the bill was from its sponsor and one private citizen. The individuals and organizations representing the establishment all submitted testimony in opposition to the bill.
In support of the bill were
- Diane Russell – The Bill Sponsor
- Allan Tibbets – Private Citizen of the State of Maine
In opposition to the bill were
- Carlos Mello – Director of Business and Finance of the State of Maine
- Terry Hayes – Treasurer of the State of Maine
- John Witherspoon – President and CEO, Skowhegan Savings Bank – Representing the Maine Bankers Association
- Doug Ray – Director of Legislative Affairs and Communications, Maine Department of Economic and Community Development
The Senate committee should be voting on the bill today, 5 February 2015. We will post further information as it becomes available.
We should be prepared in Colorado to see the same sort of opposition to the formation of either a state bank or municipal banks. We can learn from the testimony in other states and municipalities that have proposed legislation.
Please read and these testimonies and comment on how to rebut the opposition arguments and to improve the supporting arguments in the form below. If you don’t support the idea of establishing public banks, we would like to hear from you today. Your ideas are important to us.
We will update this post as the bill progresses through the Maine Legislature. You can find details of the bill’s progress at the link, HP23
