Skip to content
hollywoodstarshoney

hollywoodstarshoney

Long Life Business

Primary Menu
  • Business Management
  • Business Analysis
  • News Business
  • Investment
  • Insurance
  • Banking
  • About Us
    • Privacy Policy
    • Contact Us
    • Advertise Here
    • Sitemap
  • Home
  • Could Mass. get into the banking business? Maybe.
  • Business Banking

Could Mass. get into the banking business? Maybe.

By Patricia A. Eldridge 1 year ago

That’s not to say it’s a sure thing that financial services chairs Senator Paul Feeney and Representative Jamie Murphy will endorse the idea, especially in the face of steadfast opposition from the state’s banking industry. They’re expected to meet again on Saturday to discuss and possibly act on a number of pending bills, including the public bank legislation, in time for the latest reporting deadline. Maybe the committee punts again. But the clock is running out, with an end to 2022 formal sessions just three months away.

Get Innovation Beat

Boston Globe tech reporters tell the story of the region’s technology and innovation industry, highlighting key players, trends, and why they matter.

This time, the committee has a new endorser to consider: The economist who, a decade ago, wrote a report that dashed cold water on the idea is now lending her full support.

Yolanda Kodrzycki downplayed the need for a state-owned bank back in 2011, when she coauthored a report while at the Federal Reserve Bank of Boston. (She retired from the Fed in 2015.) A state-owned bank was then viewed as a potential accelerant to lift Massachusetts out of the Great Recession, or a potential cushion to soften the blow of a future economic crash.

So Kodrzycki and a colleague analyzed the only state-owned bank in existence at the time, Bank of North Dakota, to see what kind of role that institution played in its home state’s low unemployment rate. The answer: not much.

They also noted that the Massachusetts and North Dakota economies are so different, it would be tough to draw too much of a conclusion for our local economy. Her report helped a legislative commission conclude at the time that a state-owned bank might not be worth the investment, and could be duplicative with existing quasi-public agencies.

But now, Kodrzycki is saying lawmakers should give the idea another look. The times have changed, as have the reasons for exploring the concept.

Instead of forming a bank to insulate the state from cyclical downturns, the motivation today is to address the inadequate access to credit in underserved neighborhoods and municipalities. Much like home ownership, business ownership helps families and communities build wealth over time. Kodrzycki said credit constraints have created astonishing wealth gaps among racial and ethnic groups. A public bank, she argues, could leverage public dollars to unleash the economic potential of these communities, by backing loans that private-sector banks don’t want to touch.

This new state institution, Kodrzycki added, could partner with private banks and community development financial institutions to backstop business loans, or help provide low-cost debt to municipalities that might not qualify for conventional bonds.

The public bank legislation, championed by progressive Democrats Jamie Eldridge in the Senate and Mike Connolly and Nika Elugardo in the House, would set aside $200 million over four years from the state budget to help seed the bank, as well as $1.4 billion in existing deposits from the state’s treasury. The new bank’s 15-plus goals, as spelled out in their legislation, would include helping businesses and cities recover from the pandemic, financing projects that address the risks of global warming, and ensuring state treasury deposits support economic activities within Massachusetts. (A separate public bank bill, filed by Senator Adam Hinds, also includes infrastructure financing in its mission statement.)

Eldridge said his motivations for the state-owned bank concept include helping to finance more affordable housing, and providing more funding for entrepreneurs of color. A public bank, he said, could also help with cannabis banking, a tricky market largely avoided by banks in Massachusetts today. The existing banks, by and large, are more focused on wealthier enclaves, he said, leaving much of the state with comparatively few options for obtaining credit. He said he has been encouraged by all the allies who joined the cause during this two-year session. But will it be enough?

Not if the Massachusetts Bankers Association has anything to say about it.

Kathleen Murphy, the association’s president, had fended off calls for a state-owned bank in Maryland, where she ran a similar trade group before taking the Massachusetts gig in 2020. Now, she is responsible for leading the industry’s charge against the concept here. Proponents say the state-owned bank would be a collaborator, not a competitor, to Murphy’s members. That’s not how Murphy sees it, nor is it how her members view the bill, Murphy said. This public bank would still get a piece of state deposits that would otherwise be set aside at a commercial bank, she said, and it could still end up vying with the private banks for loan clients.

It’s not just that a public bank would be a rival. Murphy agrees with the findings of that decade-old legislative commission: essentially, that this initiative could become a redundant government bureaucracy. Rather than funnel state funds (without FDIC insurance, she’s quick to point out) into a new arm of state government, Murphy said, why not figure out ways to shore up existing quasi-public agencies, such as MassDevelopment or Mass. Growth Capital Corp., to address the real or perceived needs?

These are the questions Feeney and Murphy will confront, possibly as soon as Saturday. Eldridge remains hopeful about winning the committee’s endorsement. But even without it, he plans to push to include his state bank language in the Senate’s version of the economic development bill when it’s ready for debate.

While there’s no way to know if it would survive the inevitable House-Senate horse trading this summer, one thing is certain: This once-radical concept has been pushed out of the fringes and into the mainstream.


Jon Chesto can be reached at [email protected]. Follow him on Twitter @jonchesto.

Tags: Amazon Business Login, Amazon Business Prime, Bank Of America Business Account, Best Business Schools, Business Attorney Near Me, Business Bank Account, Business Card Holder, Business Card Maker, Business Card Template, Business Cards Near Me, Business Casual Attire, Business Casual Shoes, Business Casual Woman, Business Plan Examples, Ca Business Search, Ca Sos Business Search, Capital One Business Credit Card, Chase Business Checking, Chase Business Credit Cards, Chase Business Customer Service, Chase Business Login, Chase Business Phone Number, Cheap Business Cards, Citizens Business Bank, Cox Business Login, Digital Business Card, Facebook Business Suite, Finance In Business, Free Business Cards, Google Business Login, Harvard Business School, Lands End Business, Massage Parlor Business Near Me, Michigan Business Entity Search, Mind Your Business, Mind Your Own Business, Ohio Business Search, Risky Business Costume, Skype For Business, Small Business Loan, Small Business Saturday 2021, Starting A Business, Texas Business Entity Search, Triumph Business Capital, Vending Machine Business, Verizon Business Customer Service, Vonage Business Login, Wells Fargo Business Account, Yahoo Small Business, Yahoo Small Business Login

Continue Reading

Previous ConnectOne Bank, Nymbus Announce Partnership
Next Citizens Bank Awards Grants to 30 ‘Small Business Community Champions’ for Creating Jobs and Fostering Economic Growth

Archives

  • June 2023
  • May 2023
  • April 2023
  • March 2023
  • February 2023
  • January 2023
  • December 2022
  • November 2022
  • October 2022
  • September 2022
  • August 2022
  • July 2022
  • June 2022
  • May 2022
  • April 2022
  • March 2022
  • February 2022
  • January 2022
  • December 2021
  • November 2021
  • October 2021
  • September 2021
  • August 2021
  • July 2021
  • June 2021
  • May 2021
  • April 2021
  • March 2021
  • February 2021
  • January 2021
  • December 2020
  • November 2020
  • October 2020
  • September 2020
  • August 2020
  • March 2020
  • November 2018
June 2023
M T W T F S S
 1234
567891011
12131415161718
19202122232425
2627282930  
« May    

Recent Posts

  • Five Rules on How to Write a Business Letter
  • Auto Insurance – Understanding the Different Types of Collision Insurance
  • Real Estate Investment in Stunning Cyprus
  • Small Business Owners: Your Leadership Style Can Increase ‘Profits’
  • Benefits of Diversified Portfolio Benefits in International Real Estate

BL

Tags

Amazon Business Credit Card American Airlines Business Class Att Business Login Austin Business Journal Best Bank For Small Business Best Business Bank Accounts Best Business Schools In Us Best Business To Start British Airways Business Class Business Business Attire Men Business Card Ideas Business Casual Shoes For Women Business Continuity Planning Business Entity Search Business Letter Template Business Management Degree Business Manager Facebook Business Plan Outline Business School Rankings Colorado Business Search Delaware Business Entity Search Drop Shipping Business Family Business Bet Fox Business Live Georgia Sos Business Search Google Business Account Harvest Small Business Finance How To Build Business Credit Is Saturday A Business Day Is Sears Still In Business Management Microsoft 365 Business My Business Google Name Generator Business None Of Your Business Ny Sos Business Search Open A Business Bank Account Pa Business Search Plus Size Business Casual Pnc Business Banking Sos Business Search Ca Sunbiz Business Search Taking Care Of Business The Business Of Being Born
hollywoodstarshoney.com | Magazine 7 by AF themes.

WhatsApp us