SANTA FE, N.M. — Santa Fe is not ready for a public bank, but the city should work with the Legislature and state officials to look into creating a public bank at the state level that Santa Fe and other cities could utilize.
That’s one of the recommendations of the city’s Public Bank Task Force’s final report that was presented to the City Council on Wednesday.
The report concludes that “current legal and regulatory requirements are not conducive to the creation of a State-chartered Public Bank,” and would require legislation to change existing laws. If that were to happen, then state officials could consider forming a public bank.
“We believe this more appropriate statewide scale would justify work needed to amend the current legal and regulatory restrictions,” the report says. “We also think incurring business planning costs and examining capitalization requirements would be justified.”
Several people who spoke during a public hearing on the matter said they were disappointed that the task force determined a public bank wasn’t feasible for the city at this time. But they were encouraged by the prospect of a public bank owned by the state.
Glenn Schiffbauer, executive director of the Santa Fe Green Chamber of Commerce, said 95 percent of businesses in the state are small businesses, which often have trouble obtaining loans. He said a state-owned public bank could help rectify that.
“I think it’s a great start and since we do a lot of lobbying (at the state Legislature) we are willing to help in any way we can,” he said.
City Councilor Renee Villareal, who helped lead the effort to study the possibility of forming a public bank, said she remained encouraged by the report. She promised to introduce resolutions consistent with the task force’s recommendations.
“I’m not forgetting about the public bank effort,” she said. “We’re not done yet.”
Mayor Alan Webber said he supported a state-owned public bank when he ran for governor in 2014.
“I still think it’s worthy of consideration,” he said.
The nine-member task force was appointed by former Mayor Javier Gonzales a year ago to provide information to the City Council about public banking so it could make an informed decision about whether it should take steps to apply for a New Mexico bank charter.
According to the task force’s report, the purpose of a public bank is to “maximize the financial and human potential of the community.”
“Local investing of economic resources can address critical, locally identified priorities in ways current financial entities are not able to accomplish,” the report says.
Benefits of a public bank include keeping public money invested locally, lowering costs for borrowing and lending, and using internal money to finance infrastructure, according to the report.