In the end, the complete failure
of the Federal Government to come to grips with the mortgage crisis, which is a
failure that must be laid squarely at the doorstep of this administration has
brought this about. The States have
quite rightly discovered that they now own the problem and that the only way
they can hope to repair it all is in fact do what saved North Dakota. This will take time, but it will soon lead to
a restoration of confidence and a proper home for State finances also while
isolating the citizens from bank fraud at the national level.
I am pleased to see the State of California Southern California .
Every other State needs to
actually do this. It puts up firewalls
between each State and the National Banks that are proven to be dangerous to
the interests of the citizens.
by Ellen Brown
Global Research, February 27, 2012
Web of Debt - 2012-02-26
Seventeen states have now introduced bills for
state-owned banks, and others are in the works. Hawaii’s innovative
state bank bill addresses the foreclosure mess. County-owned banks
are being proposed that would tackle the housing crisis by exercising the right
of eminent domain on abandoned and foreclosed properties. Arizona
The
long-awaited settlement between 49 state Attorneys General and the big five
robo-signing banks is proving to be a major disappointment before
it has even been signed, sealed and court approved. Critics maintain
that the bankers responsible for the housing crisis and the jobs crisis will
again be buying their way out of jail, and the curtain will again drop on the
scene of the crime.
We
may not be able to beat the banks, but we don’t have to play their
game. We can take our marbles and go home. The Move Your Money campaign has
already prompted more than 600,000
consumers to move their funds out of Wall Street banks into
local banks, and there are much larger pools that could be pulled out in the
form of state revenues. States generally deposit their revenues and
invest their capital with large Wall Street banks, which use those hefty sums
to speculate, invest abroad, and buy up the local banks that service our
communities and local economies. The states receive a modest
interest, and Wall Street lends the money back at much higher interest.
According to a December Treasury report, only
10 percent of Rhode Island ’s short-term
investments reside in truly local in-state banks, namely Washington
Further, millions have been invested by Rhode Island Rhode Island ’s representatives
in Washington , D.C.
Hence
asks:
Are Rhode Islanders and the state economy
being served well here? Is it not time for the state to more fully invest
directly in Rhode Island, either through local banks more deeply rooted in
the community or through the creation of a new state-owned bank?
Hence
observes that state-owned banks are “[o]ne emerging solution being widely
considered nationwide . . . . Since the onset of the economic
collapse about five years ago, 16 states have studied or explored creating
state-owned banks, according to a recent Associated Press report.”
2012 Additions to the Public Bank
Movement
Make
that 17 states, including three joining the list of states introducing state
bank bills in 2012: Idaho (a bill for a
feasibility study), New Hampshire (a bill
for a bank), and Vermont (introducing
THREE bills—one for a state bank study, one for
a state currency, and one for a state voucher/warrant system). With
North Dakota, which has had its own bank for nearly a century, that makes 18
states that have introduced bills in one form or another—36% of U.S.
states. For states and text of bills, see here.
Other
recent state bank developments were in Virginia , Hawaii , Washington State , and California
All of these bills point to
the Bank of North Dakota North Dakota
One of the reasons,
some say, is the Bank of North
Dakota, which was formed in 1919 and is the only state-owned or
public bank in the United
States North Dakota
Since 2008, while
servicing student, agricultural and energy— including wind — sector loans
within North Dakota, every dollar of profit by the bank, which has added up to
tens of millions, flows back into state coffers and directly supports the needs
of the state in ways private banks do not.
Publicly-owned Banks and the Housing
Crisis
A novel
approach is taken in the new Hawaii bill: it proposes
a program to deal with the housing crisis and the widespread problem of breaks
in the chain of title due to robo-signing, faulty assignments, and
MERS. (For more on this problem, see here.) According
to a February 10th report on
the bill from the Hawaii
The purpose of this measure is to establish the
bank of the State of Hawaii in order to develop a program to acquire
residential property in situations where the mortgagor is an owner-occupant who
has defaulted on a mortgage or been denied a mortgage loan modification and the
mortgagee is a securitized trust that cannot adequately demonstrate that it is
a holder in due course.
The bill
provides that in cases of foreclosure in which the mortgagee cannot prove its
right to foreclose or to collect on the mortgage, foreclosure shall be stayed
and the bank of the State of Hawaii
Arizona
Senate Bill 1451, which just passed the Senate Banking Committee 6 to 0, would
do something similar for homeowners who are current on their payments but whose
mortgages are underwater (exceeding the property’s current fair market
value). Martin Andelman
calls the bill a “revolutionary approach to revitalizing the
state’s increasingly water-logged housing market, which has left over 500,000
of Arizona
The bill would establish an Arizona
Critics
of the Arizona bill maintain that
it shifts losses from collapsed property values onto banks and investors,
violating the law of contracts; and critics of the Hawaii bill
maintain that the state bank could wind up having paid more than market value
for a slew of underwater homes. An option that would avoid both of
these objections is one suggested by Michael Sauvante of the Commonwealth
Group, discussed earlier here: the state or county
could exercise its right of eminent domain on blighted, foreclosed and
abandoned properties. It could offer to pay fair market value to
anyone who could prove title (something that with today’s defective title
records normally can’t be done), then dispose of the property through a
publicly-owned land bank as equity and fairness dictates. If a bank
or trust could prove title, the claimant would get fair market value, which
would be no less than it would have gotten at an auction; and if it could not
prove title, it legally would have no claim to the
property. Investors who could prove actual monetary damages would still
have an unsecured claim in equity against the mortgagors for any sums owed.
Rhode Island Next?
As the housing crisis lingers on with little
sign of relief from the Feds, innovative state and local solutions like these
are gaining adherents in other states; and one of them is Rhode Island, which
is in serious need of relief. According to The Pew Center
on the States, “The country’s smallest state . . . was one of
the first states to fall into the recession because of the housing crisis and
may be one of the last to emerge.”
Rhode Islanders are proud of
having been first in a number
of more positive achievements, including being the first of the 13
original colonies to declare
independence from British rule. A state bank presentation was made to the
president of the Rhode Island
Ellen Brown is an
attorney and president of the Public Banking Institute, http://PublicBankingInstitute.org.
In Web of Debt, her latest of eleven books, she shows how a private
cartel has usurped the power to create money from the people themselves, and
how we the people can get it back. Her websites arehttp://WebofDebt.com and http://EllenBrown.com
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