"An Act to Establish a Massachusetts Public Bank"
Sustainable finance to build community prosperity
We’re excited to announce that legislation to create a public bank has received an extension from the Joint Committee on Financial Services.
The May 31 extension enables us to work on next steps to build both legislative and community momentum for passage. Now is the time to call your state Senator and Representative to help build awareness and support for public banking in Massachusetts.
“An Act to Establish a Massachusetts Public Bank” is sponsored in the House by Rep. Mike Connolly and Rep. Nika Elugardo. The House bill number is H.1223. The bill’s Senate sponsor is Sen. Jamie Eldridge and the current Senate bill number is S.665.
The bills were heard by the Joint Committee on Financial Services on October 26. You can read more about the hearing here.
We have submitted testimony in support of the bill, which provides a detailed look at why a public bank is needed, the structure and governance of our proposed bank, how it will be capitalized, and where its deposits will come from. You can read the testimony here.
A January press conference brought together community development and environmental justice experts and legislators, including Congresswoman Ayanna Pressley, to speak in favor of public banking for the Commonwealth. Watch it here.
Why a public bank? A Massachusetts public bank will enable a quicker, more equitable recovery from the economic impacts of COVID-19, and be a long-term benefit to our communities.
But to pass this bill, we need to build momentum across the state. How can you help?
Contact your state representative and state senator and ask them to support S.665/H.1223, “An Act to Establish a Massachusetts Public Bank.”
You can also help by connecting us with your mayor, city council member, or select boards, as well as local business groups and other civic organizations. We are eager to set up online meetings with local officials and community advocates. Contact us here!
Talking points: How a Massachusetts public bank will strengthen our communities
It puts public money to work for the public. When the state deposits a portion of revenues into the public bank, it enables our tax dollars to work for our communities many times over. That’s because those deposits allow the bank to be part of the larger banking system of loans and deposits which serve to expand the money supply. Our state revenues will stretch much further by being part of this system.
Currently much of the state’s funds are deposited in the Massachusetts Municipal Depository Trust which invests nationally and internationally. The Massachusetts public bank could bring some of those dollars home to work for our communities many times over. The state will not draw out funds deposited in MA based banks.
The bank will be established by having the Legislature transfer $50 million a year for four years to capitalize the bank as required by the law.
It provides needed financing— S.665/H.1223 specifically assists:
- Cities and towns seeking an affordable and flexible alternative to the bond market for infrastructure projects;
- Very small, small and medium-sized businesses paying livable wages, especially in underserved and rural communities;
- Job creation through creation of new businesses and expansion of existing ones, support for cooperative businesses and worker-owned coops, and financing for businesses where traditional financing is not available.
It promotes fair and sustainable economic growth by
- Addressing past and present inequities experienced by women and communities of color, their neighborhoods, businesses, and organizations working to address economic injustice;
- Supporting initiatives to mitigate the dangers of climate change and to promote substantial reductions in greenhouse gas emissions;
- Increasing opportunities to build affordable housing across the state by partnering with existing state agencies;
- Promoting sustainable agricultural production by local farms and helping to address food insecurity.
It increases the capacity for existing financial and development institutions to do business in Massachusetts.
- It strengthens our local state-chartered banks by joining with them to make loans benefiting our local communities.
- It provides further local financing by doing loans with Community Development Financial Institutions (CDFIs) and Community Development Corporations (CDCs).
- It does not transfer state fundsmoney out of Massachusetts banks.
It’s professionally run, with both robust oversight and public input
- The bank operates under the oversight of an independent chief executive officer and professional staff.
- A board of directors will be drawn from areas of expertise in finance and public administration.
- A board of advisors will represent the concerns of municipalities, underserved neighborhoods, small business, community development and community development finance, community banks and credit unions, sustainable agriculture and food security, workers’ interests, climate change and green finance, and environmental justice.
- An online public comment portal provides a way for community voices to be heard by the Advisors and conveyed to the directors and bank management.
That’s the basics. Now let’s make it happen!