Kudos to Erik and Peg!
Erik Esselstyn and Peg Elmer, who were responsible for the Town Meeting votes in East Montpelier and Royalton, made the trip to the Senate Finance Committee Tuesday to represent all the people who voted to tell the legislators to support the legislation for a public bank in Vermont.
When Peg wrote to Barbara Dall to get on the schedule, she was initially turned down. She wrote back to the committee saying "Thank you for letting me know that they have no time to hear from me. Disappointing for the public not represented by lobbyists! I did lead the successful effort in Royalton to pass the town meeting item. Who will be there to represent our voters' interest? Please let Sen Ashe know that the interest on this in Vermont is quite broad and deep -- I had no problem gaining 150 signatures from people of all stripes in a conservative town, and it passed, no small achievement in Royalton."
Senator Ashe wrote Peg back, saying that they were pressed for time, and that the committee was "generally supportive" of the bill, and was "poised to move it forward" in time for crossover, a critical deadline in the legislature. Peg persevered, and spoke about the local support for public banking to the Finance Committee. She reported that "there's a 4 point memo Sen Pollina has worked out via the Government Operations Committee that the line-up: Treasurer's Office, VT Bankers Association, Jo Bradley [CEO of VEDA]…all say they can support."
(I suspect that this 4 point memo will involve a transfer of funds that represents 10% of the State's average daily deposits from the Treasurer's office to VEDA, but will stop short of granting them a banking license. Still, a baby step forward. That will be an additional $35M staying in Vermont to work for our economic well-being).
Erik also contacted the committee staff person to ask to speak. Here is his report of the meeting:
"I gave my testimony before the committee about 3:00 PM. Though I could have been much stronger, I emphasized that the committee members had heard from paid lobbyists representing corporations (banks) whose legal mission is to maximize profits for shareholders. And I said that resistance was to be expected from the public servants of the state financial bureaucracy who would defend the status quo. I shared detailed annual CEO compensation figures for TD Bank and People’s United Bank, over five million and over three million respectively. And I made the case that the average Vermonter with a median income just south of $50,000 deserved to be represented at the hearing. While TD Bank and People’s United Bank were in business to serve their shareholders, a Vermont State Bank would be in business to serve the citizens of Vermont.
At the close of my brief remarks I said I felt like Atticus Finch addressing the jury in “To Kill a Mockingbird.” Those of you around the table have become accustomed to supporting a system that rewards those with power and wealth far from the valleys and villages of Vermont. I would urge that new voices be heard at the Finance Committee, those of ordinary Vermonters who would be immeasurably helped by the creation of a Vermont State Bank."
An Observer's Report
Nat Frothingham of The Bridge in Montpelier attended the meeting, and reported that it all seemed "very mild and genial," and that the committee seemed welcoming of Senator Pollina's testimony. His is not optimistic about the legislation passing, and said that "The bankers I have talked with are telling me that they can't function without the very big banks and that a state bank in Vermont is not indicated, not advised."
This is a point worth researching. It has been our contention that the state chartered banks stand to gain by the legislation, and that their interests and the interests of the large out of state banks diverge on this issue. Yet what Nat says suggests that the smaller state chartered banks see their fortunes as tied to the larger ones. Can anyone offer some reasons why this would be? Surely it isn't just because the large banks pay the lobbyists in Montpelier?
There are several reasons the smaller, state-chartered banks would benefit from a State Bank, judging from the experience in North Dakota. The State Bank serves as something akin to a state level Federal Reserve bank, allowing the state banks in North Dakota more lending capacity through a partnership arrangement. The State Bank also helps the smaller banks cope with the Dodd-Frank Act requirements. The existence of the State Bank also makes the smaller banks more secure - there was not a single bank failure in North Dakota after the financial meltdown in 2008. This means they are more competitive with the larger banks, and are not as prone as Vermont banks have been to selling out and merging.
These are the reports I received - I'm sure there were other people there I'm missing. But we can all be very happy that the voice of all the Vermonters who took a stand on Town Meeting Day were represented in the legislature today. Well done!