A report details the need for “People’s Banks” in Scotland

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Solar energy could be a focus for a proposed public banking system in Scotland

A coalition of social justice groups in the UK have released a study criticizing Scotland’s “too big to fail” shareholder banks, and proposing the creation of small, non-profit banks based on public banking models, including public banks in Germany and credit unions in the US.

The study points to benefits for communities, business, and the environment, noting that the current banking system, 70% of which is controlled by Lloyds and Royal Bank of Scotland (parent company of our own local Citizens Bank, and described by the report as “a pin-up for casino capitalism”) fails to support necessary funds for needed infrastructure or a transition to a low-carbon economy.   “Instead, billions are channelled into property, inflating asset prices, as well as unsustainable industries such as coal mining, the manufacture of nuclear weapons, and speculation on food prices, a practice which is fuelling global malnutrition.”

The report calls on Scotland’s political parties to discuss and endorse the report, and asks the Scottish government to create a task force to meet with a broad range of stakeholders to assess needs, including legal and regulatory experts who could advise on how such banks could be created and regulated.

You can read the report here. While the focus is on Scotland, there are definite parallels between the situation there and what we’ve seen in the US, where rural and low income areas are under-served by retail banks, and even in Massachusetts, where real estate investment in “hot” markets is creating only luxury housing, where small and emerging businesses are hard-put to access credit, and where large banks are turning away some municipal clients.

Steps forward for public banking in Arizona

An Arizona legislative committee has voted 6-1 to advance a bill authorizing a state task force to study the feasibility of a state-owned bank. S.B. 1301 goes on to Arizona’s State Senate for debate.

According to Matt Stannard of the Public Banking Institute, the only comment against the bill came from the Arizona Bankers Association. Stannard wrote that the bankers likely believe that “a state-owned bank would compete with, and not help, small banks in the state.”

We know that in Massachusetts we’ll be facing the same concern from our own smaller, independent banks. This FAQ, written by working group member Steve Snyder, details opportunities for cooperation between a state-level public bank and community banks. And in addition to the points Steve makes, keep in mind that the Bank of North Dakota, the US’s only state-owned public bank, has a strong record of support for community banks there. In fact, there are more community banks in North Dakota per capita than any other state.