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Lawmakers in state capitals across the country are increasingly intrigued by arguments for public banks. With the financial crisis fueling disdain for the banking industry in general, some view these banks as an appealing alternative to a system they consider to be broken. But Eric Hardmeyer, president and chief executive of the Bank of North Dakota, is not so sure.
April 1
A Virginia lawmaker is urging his colleagues in Richmond to consider creating a state-owned bank that would use deposits from residents and state agencies to lend to local businesses and stimulate economic growth.
The Washington Business Journal reported Wednesday that Del. Bob Marshall, a Republican, introduced legislation this week to study the viability of opening a bank that would be modeled after Bank of North Dakota, the only state-owned bank in the country. Marshall introduced a similar bill in 2010, but that bill failed to make it out of committee.
The idea of creating a state-owned bank has been gaining traction in a number of state legislatures of late. Lawmakers in California, Massachusetts, Oregon, Hawaii and several other states all
In introducing bills last year, most lawmakers said that state-owned banks could pick up the slack from traditional banks that have scaled back their lending in the wake of the financial crisis. A state-owned bank could also help states close budget shortfalls because, if it is modeled after the Bank of North Dakota, all profits would be returned to state coffers.
