Gov. Murphy takes first step toward establishing a public bank in New Jersey

NEWARK, N.J. (KYW Newsradio) — Only one state in the nation, North Dakota, has a bank owned and operated by the government. Other states, like California, are considering the concept as a way to provide a lower-cost alternative to the private sector, and New Jersey is the latest to join that list. 

Gov. Phil Murphy has signed an executive order that paves the way for a public bank in the Garden State, which could, in time, offer another source to fund civic and private needs alike.

“I still believe in the ability of a public bank owned by the people of New Jersey,” said Murphy at an event in Newark, “to be a force for good in helping small businesses succeed, in providing student loans at affordable rates, and opening lines of credit to municipalities for meeting long-term infrastructure and affordable housing needs.”

I believe in the ability of a public bank – owned by the people of New Jersey – to be a force for good in helping our small businesses, residents, students, & municipalities.That’s why today I signed an E.O. creating a Public Bank Implementation Board.

— Governor Phil Murphy (@GovMurphy) November 13, 2019

Murphy said private, community banks are fine, but many of the larger corporate entities are taking local monies to fund projects out of state — possibly even out of the country. 

Murphy’s executive order creates a 14-member board that’ll spend the next year putting together a blueprint to establish the bank and its rules, which will likely include leveraging public assets to raise the capital needed to fund it.

“The concept is a bank owned by us to keep those dollars in New Jersey to benefit our economy,” the governor added. “For every dollar you put into infrastructure, student loans, small business, affordable housing, you get multiple dollars back.”

Proponents admit it won’t be easy, and they’re certainly not looking to put private banks out of business. But this is the first step in providing a lower-cost option that’s easier to access.

The plan, however, could be a hard sell with some in the Legislature, not to mention the private sector.