Banking in Maine—
Thursday, March 02, 2017 11:50 AM
Dear Senator Whittemore and Representative Lawrence, and all Insurance and Financial Committee members — RE: LD 237: A Bill to Establish a State Bank, and the Amendment for a Maine Green Bank
I am well informed of this legislative proposal and have been for many years. In this year’s proposal I am very impressed with the work and thoughtfulness that my State Senator, David Miramant, has put forward.
A point I would like to make is that the Maine State Bank proposal has not had a proper public hearing. From the Committee’s webpage, the information given for the Public Hearing on February 14 (a challenging snow/traffic day) shows the testimony of seven bank officers and the credit union, and only one from the public, i.e., Roberta Beavers.
This can’t be adequate to go forward. I have no critique to make about our Maine private sector banks, but neither do the proponents of a state bank. The banks that have come forward to oppose have the understandable aim to protect their businesses from competition. However, there must be sectors and individuals among the citizenry who have an open mind. There must be people in Maine who recognize a fresh point of view, an idea that would give encouragement to new businesses, help struggling small businesses, and has a high potential of lowering the tax burden of all of us.
I believe that the public is not aware of this idea, which is very new to Maine people, yet has a generation of success in North Dakota, the only state that did not suffer the economic and social ravages of the 2008 catastrophe brought upon us by the Big Banks from which the State of Maine has not recovered. Nor have newspapers paid any attention. I went googling this week and found only 2013 references. I call attention to that especially to recommend that the Committee ought to include a look at the view of the past senator from Lincoln County, Christopher Johnson, a very good thinker.
In the current discussions, I will only highlight a few points made by Senator Miramant in his press release of February 13, that offers an excellent understanding, clearness of presentation and thorough arguments on all questions and concerns that have been advanced by skeptics.
In the section of the need for Maine to establish a public bank (bullet point #5), he points to the critical shortage of financial support in our natural resource sectors of agriculture, forestry, and fishing. Having the first responsibility to promote these industries, it seems to me his arguments could serve you very well, the legislators, in coming to a strong support of this bill and advancing it to the consideration of the full Legislature.
Further urgent needs are also addressed. You must see a need for new ideas to expand the needs of the tourism sector and urgencies in the rural counties for up-to-date communications, and ways of addressing job loss everywhere in Maine.
I understand that the availability of credit is vital for improving the Maine economy and so many social needs, and I admit I do not have the intellectual ability to speak on that subject. But I do understand that large undertakings require borrowing and long-term obligations of paying interest fees, and my values prompt me to approve that borrowing in any bond issue that regularly appear on ballots. Can you imagine the different response of voters if these proposed requests, where the dollar amount of the loan is given in the ballot question, but no information is provided about the costs of borrowing from large banks?
It is necessary to think about what Randall Parr’s research provides in his letter to your committee dated February 24, 2016, which illustrates the vast difference that a public bank, as proposed, would incur in the interest fees of any bond issue, over the long term.
I implore the committee to invite in the citizens of Maine on this issue. Do you not agree that all citizens of Maine have an interest and stake in the cost of any program imposed in the Legislature and presented to the Governor? That perhaps the interest costs of bond issues is quite astonishing and should be known by voters? For example, Mr. Parr writes that the “Maine Treasurer’s cash pool has $216 Million in Big Banks.” I do not know, but I know you all do, what the fraction of that large sum is allocated to interest payments in any biennial budget.
It is too late to involve the public in the committee proceedings of LD 237 and the amendment to it, but Senator Mirmant will be part of the Work Session scheduled for Tuesday, February 28, is he not? I am glad that Representative John Spear is among the co-sponsors, and I hope that all members of the Committee will see the importance of forwarding the bill to the full Legislature, with enough time before a vote in the House and Senate for the public to take notice.
I will be thankful for a large public dialogue on this measure,
Carmen Lavertu, Thomaston