- NJ would be the second state, after North Dakota, to create publicly run bank.
- Gov. Phil Murphy signed executive order creating 14 member panel which must report back within a year.
This week, Gov. Phil Murphy signed an executive order aimed at creating the nation’s second public bank. If established. New Jersey would be the second state with such a system, after North Dakota.
The executive order creates a 14 member panel which is mandated to meet within 30 days and complete a full report within one year. The establishment of a public bank was part of Gov. Murphy’s platform in his 2017 campaign, but progress on the project had stalled at the beginning of the term.
Public banks are financial institutions directly run by government agencies. Advocates argue that these entities can reduce costs to the state, as these banks do not have to pay fees and debt servicing to private institutions. Public banks can also be mandated to provide services to under-served communities that private banks avoid. Additionally, public banks can be instructed to support goals of environmental and economic justice, with some arguing they are a crucial component in the transition away from fossil fuels.