"An Act to Establish a Massachusetts Public Bank"

We’re excited to announce that legislation to create a public bank has been filed in the Massachusetts House and Senate.

H.975, “An Act to Establish a Massachusetts Public Bank” has been filed in the House by Representatives Mike Connolly and Antonio Cabral. An identical bill, S.632, has been filed in the Senate by Senator Jamie Eldridge.

We are now working on building both legislative and community momentum for passage. Check back at this site for updates and information you can share with your lawmakers to encourage their co-sponsorship.

Why a public bank? A Massachusetts public bank will bolster local economies, especially those in underserved communities. It will help provide cost-effective financing for small businesses and municipalities, land trusts and cooperatives, and projects for climate change adaption and remediation.

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 co-sponsor “An Act to Establish a Massachusetts Public Bank.”

Contact information for the House and Senate is available on the Massachusetts legislature home page.  If you don’t know who your state legislators are, you can find out here.

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 Massachusetts-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— the bill 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 support local businesses 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’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.

Is a public bank the same as a “green bank?”

No, the green bank and the public bank are two separate proposals having different structures and abilities. The green “bank” is actually an investment fund which will only be able to lend out what is in the fund, e.g., what has been appropriated by the legislature or received from other sources such as federal programs under the Inflation Reduction Act and private sector funds.

The Massachusetts public bank is an actual bank. It can “multiply” its capital because it operates as part of a national network of banks where loan liabilities offset each other. This allows the bank to advance loans on a “reserve” that is a fraction of the deposit amount in the bank (thus the phrase “fractional reserve lending”). Once established, the public bank will operate sustainably without needing additional funding from the legislature even as the bank increases its loan portfolio. Green investments will be part of the bank’s portfolio which will also address other areas of special need.

That’s the basics.  Now let’s make it happen!