America's Only State-Owned Bank: Would It Work Elsewhere?
By Stuart Bramhall at Apr 27, 2010
America’s Only State-Owned Bank
In addition to deposits from private individuals, the Bank of North Dakota also serves as the depository for all state tax collections and fees – for which they pay a competitive rate of interest to the state treasurer. The bank then uses these deposits as the 10% fractional reserve required by the Federal Reserve – to issue up to 900% of their value as loans. As well as providing a major boost to the state economy by continuing to offer credit (when credit from private lenders has virtually dried up), the bank also pays a hefty dividend back to the
Owing to conservative management,
Ariana Huffington and others have been advising progressives to withdraw their support from the Wall Street banks responsible for the 2008 crash – and bank with local community banks instead. Attorney Ellen Brown, who has written extensively on the subject of state owned banks, feels this may not be enough to bring about genuine financial reform. Her main concern is that private community banks are unlikely to accumulate sufficient capital to compete effectively with the Wall Street giants.
Brown recommends that activists get on the bandwagon by supporting other states’ efforts to follow North Dakota’s example – as well as Congressman Dennis Kucinich (along with some Tea Party members) who propose to create a publicly owned federal bank - by having the government assume control of the Federal Reserve. At present the Federal Reserve is a consortium of private banks – which, thanks to their absolute control over credit and the money supply, have ultimate control over the
Currently there are five states (
The process of obtaining a charter to start a state owned bank is relatively simple. In
Creating a Federal Bank
Up until the creation of the private Federal Reserve system in 1913, the
In 2008 progressive presidential candidates Dennis Kucinich and Cynthia McKinney ran on a platform advocating the
In doing so, they are taking on some very powerful enemies. Perhaps this is why Bill Clinton and other members of the corporate establishment are working so hard to discredit them. (more with good links at http://stuartbramhall.aegauthorblogs.com)