A public bank solution for Santa Fe?

Is public banking sound policy for Santa Fe? Berl Brechner (“Is public banking sound policy for city?,” My View, Sept. 17), raises an appropriate question, but he appears to be critical of the systematic educational and investigative efforts that the city has been following to answer that question.

Yes, it’s true, as Brechner notes, that North Dakota’s almost 100-year-old public bank is the only example in the U.S. However, he neglected to mention how successful the Public Bank of North Dakota has been, and that community banks in North Dakota thrive while community banks in other states have been systematically swallowed up by large global banks. In addition, he did not mention that public banks are both common and successful in Europe.

Why haven’t public banks caught on in the U.S.? Maybe it’s because of the outsized role that large global banks are allowed to play in the U.S. Global banks see public banks as competitive and lobby to prevent their establishment. In recent years, big bank lobbyists certainly worked against establishment of a state public bank in New Mexico.

The city of Santa Fe has been engaged in a public educational and investigative process over the past three years to explore the feasibility and desirability of establishing a public bank in Santa Fe. A conclusion of the feasibility study contracted by the city last year was that a public bank was a feasible option for the city, one that could improve their financial situation.

Any attempt to discredit the Public Banking Task Force by suggesting that its members are biased and therefore the investigative process is flawed is speculative at best. Some members have indicated an interest in public banking, but more importantly, they are engaged in a public, transparent, investigative process to identify critical issues in establishing a public bank here in Santa Fe.

Anyone who supports the concept of a public bank here would also want to establish it only if they believed it would really be successful in saving money for the city by minimizing the need for some bonds, by eliminating the costs of depositing city money in big global banks, and by creating additional resources that could help leverage money for projects that improve the well being of Santa Fe citizens. The task force is working to answer many questions related to the legal, governance, regulatory and capitalization needs of a public bank.

If anyone wants to learn more about this process, they are encouraged to read summaries of the task force meetings on the Banking on New Mexico website (www.bankingonnewmexico.org) and to attend the meetings of the task force, particularly the public forums that will be devoted to public input (dates to be announced).

Establishing a public bank in Santa Fe would involve change, but hopefully that change would offer substantial new benefits to the city and the local economy. Currently, the city has few options other than global banks to serve as a fiscal agent. A public bank is not a problem-free undertaking, but it would be a public, transparent, locally and professionally managed institution. Is it sound public policy for the city of Santa Fe? While I am certainly interested in the city moving ahead with establishing a public bank, I only want it to do so after the relevant issues have been carefully researched and it is determined that the public bank’s substantial benefits will outweigh the risks for the people of Santa Fe.

George Gamble is a board member of We Are People Here and a committee member of Banking on New Mexico. He resides in Santa Fe.