Should Washington State start a “state run bank”? Senator Patty Kuderer (D) introduced Senate Bill 5509 (SB 5509) this legislative session, which proposes the creation of a state-run bank for state, municipal, tribal, and other public entities to deposit funds. The proposed bank will allow the state to borrow money against the value of the deposits. Currently, public agencies borrow from the private banking market, and bonds are sold to private buyers to raise capital, which is paid back by taxpayers with interest and loan fees. SB 5509 aims to create an alternative to this system.
he only other state that has a public bank is North Dakota, which was created over 100 years ago to provide farmers with an alternative borrowing option to a regular bank. However, the heavily regulated banking industry of today makes the original concerns of farmers regarding credit availability irrelevant. Despite this, Washington legislators are considering creating the first public bank in the United States in a hundred years. For more information, Lars speaks with Mark Harmsworth, who is a former Washington House of Representatives, representing District 44-Position 2.