Banking without the rip-off

Last month we reported that the US is starting to notice the success of North Dakota’s state-owned bank, which has enabled it to escape the credit crisis unscathed. In 2009, the 92-year-old, state-owned Bank of North Dakota (BND) not only sailed serenely on but sported the largest budget surplus it had ever had. It helps fund not only local government, but also local banks and businesses, by providing matching funds to support small business lending.

During recent weeks, three states have introduced bills for state-owned banks, following the North Dakota model. Oregon, Washington State and Maryland have all introduced bills saying they are undertaking feasibility studies on the possibility of state-owned banks. Illinois, Virginia, Hawaii and Massachusetts all introduced similar bills in 2010. The state treasurer of Oregon, Ted Wheeler, suggests that a ‘virtual’ state bank, with no bricks and mortar involved, can work perfectly well. In fact, our own Co-op bank works very much in this way, with only a single physical branch in Scotland, just by Glasgow Central Station. Who needs branches when the phone or online service is available all hours of the day and night?

We tend to regard the US as devoted to making a fast buck, but in fact the push towards setting up state banks has grown spontaneously across America in response to unmet needs for local credit. Groups have sprung up to demand a new kind of banking deal. So what’s the matter with Scotland? Our Royal Bank was bought out by the Government to save it from total collapse, but what use is it to its customers? It spends thousands on plastering its name all over airports but you’d need a pneumatic drill to get any working credit out of it, while it continues to pay itself outrageous bonuses. Scotland, as a nation state, needs its own bank, run for its own people.

Do you disagree? Let us know. Drop an e-mail to info@voiceforarran.com or join our blog pages.