Tuesday, June 15, 2010

A New Bank of New Mexico - One Step Closer to Reality!

Since the last session of the legislature, I have been working on a plan to create in New Mexico a state-owned bank for New Mexico. Today, that vision got one step closer to reality.

Today, the New Mexico Finance Authority Oversight Committee, on which I serve during the interim (the period between our legislative sessions), added the creation of a state-owned bank for New Mexico to its agenda. We are working hard on a bill and plan to present it to the committee in October.

As you may know, this idea has been incredibly successful in North Dakota, where the Bank of North Dakota has been working with that state's local economy to grow its economy and work with its local businesses for over ninety years (learn more HERE and HERE). The idea is based on the concept that we should keep New Mexico's money in New Mexico for the benefit of our citizens instead of sending our state's funds to California, North Carolina and New York.

By creating a Bank of New Mexico, we will be able to provide an important new resource for the state and critical support to our community banks and credit unions during these tumultuous times. The Bank will be able to do several key things:
  1. Work with our New Mexico-based banks and credit unions to expand credit to homeowners and small businesses,
  2. Maintain our state's "check book" so we don't have to hire big national banks to do it for us, and
  3. Invest in our local economies statewide by leveraging state funds to make available billions of dollars in loans to worthy projects.
The new Bank of New Mexico won't compete with our community banks and credit unions. Instead, it will partner with them to assist the loan-making process and drive credit access further into New Mexico's under-served communities.

The great thing is that New Mexico already has all the building blocks we need to make this vision a reality. We have a well-run and stable Finance Authority that is already doing some of this work, though on a much smaller scale. The Finance Authority will have a surplus in excess of $100 million in the next two years that can be used to capitalize the new bank. And, we have a terrific and competent staff that can manage this new bank.

Pleas follow this blog to keep up with the project.

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