Vermont votes for public banking

Eric Garland Finance Trends, Government Trends Leave a Comment

ap_town_meeting_2Here’s another signpost of community banking competing directly with megabanks as a way to put investment ahead of speculation. Unsurprisingly, it is from that indomitable place founded by my ancestors, The Republic of Vermont. At Town Meeting Day, Vermont’s unique brand of direct democracy, several towns voted to create a state banking infrastructure dedicated to building the next generation of economic growth in the Green Mountains.

“…in just a few years the Bank of North Dakota will celebrate a 100th anniversary of assuring safe stewardship of state funds, providing loans at affordable rates and steering revenues toward the support of public projects.

After the 2008 financial meltdown, and the failure of Congress to regulate “too-big-to-fail” banks, activists and progressive legislators across the country began to explore the idea of replicating—or even expanding upon—the North Dakota model in other states.

But would the voters go for that?

Vermonters for a New Economy decided to test the idea.

This year, the group urged citizens to petition to place the public-banking question on the agendas of town meetings across the state—distributing information outlining a proposal to turn the Vermont Economic Development Authority (VEDA) into a state bank. Under the plan, the group explained, “the State of Vermont would deposit its revenues into the state bank. The bank would use these funds in ways that would create economic sustainability in Vermont by partnering with community banks to make loans and engaging in other activities that would leverage state funds to promote economic well-being in the state. The interest from these loans would be returned to the bank instead of out of state interests and would be available for further investment in the local economy or could be transferred to the state general fund. The bank would not invest in the risky financial instruments that the megabanks seem to love. The bank’s activities would be open and available for public inspection.”

Last week, at least twenty Vermont town meetings took up the issue and voted “yes.”

A lot of crazy stuff can come out of town meetings, when neighbors get together to plan for the next year. Mostly, they discuss road repair, plowing, salt budgets, and guardrails. But there will also be votes to impeach Dick Cheney and withdraw from Afghanistan. You gotta keep a close eye on my people. We’re wildcards.