[Occupymendocino] Public Banking and the Fort Bragg City Council-please attend

[agnes at mcn.org]

---------------------------- Original Message ----------------------------
Subject: Public Banking and the Fort Bragg City Council
From:    agnes at mcn.org
Date:    Sun, December 9, 2012 10:08 pm
To:      jessie at mac.com
Cc:      jessielee at mac.com
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Good evening Fort Bragg City Council Members,

 Thank you for this opportunity to talk about what I've learned regarding
public banking.
I believe if you are interested in taking direct control of Fort Bragg's
foreclosure problem, it can be resolved by using banking laws along with
eminent domain. The City or county applies to its state banking regulatory
body for a state bank charter. (All states define the requirements for
charters and oversee the compliance) according to an article I read at
www.nationalcommonwealthclubgroup.net.  Much of the following  applies to
county as well as city public banks:See the website for the City of San
Francisco at the end of this letter for a CA precedent.

      Once a charter is granted, a bank can commence with normal banking
activities that conform to internationally accepted processes and
procedures. The above group advocates that a local public bank not
offer retail banking services to the general public. The fundamental
banking activity is the ability to create credit(money). As
explained on the Federal Reserve Banks, Bank of Dallas under a
section called "How Banks Create Money". Banks actually create money
when they lend it.

      When a bank creates credit for a borrower, it does not reach into a
pool of existing funds, but rather creates that credit simply with
an accounting entry.
(For example When it gives you a car loan of $30,000. it does so by
entering a liability on the bank's balance sheet to give you $30,000 and
is offset by an entry on the asset side of its balance sheet represented
by the loan document you signed. (The bank doesn't have to get the money
from depositors or anyone else,
but creates it out of thin air.)

  The only constraint on how much credit money banks can create is based
on the long standing convention that limits the amount to a multiple of
the bank's assets.  That varies by jurisdiction (ie.,conditions set by
local regulators) and the prevailing economic climate, but averages about 10
times, ie. for every $1 in assets owned by the bank, it is allowed to create
$10. in loans....

 So if . for example the county or city owned $100 million in net assets,
that county bank would have the credit generating capacity of up to $1
billion, that is, it can create up to $1 billion out of thin air, just
like any other bank, money that it can make available to its own citizens
because it and they own those assets.

  How can the county  use this credit creating ability to solve its
foreclosure
problem? It takes just two steps according to the Commonwealth Group:

   1. The County issues a moratorium on all foreclosures, requiring that all
mortgage holders deal with the county bank instead of instituting
foreclosure procedures against property owners.
 and
  2. It buys distressed real estate loans from existing lenders, just as the
Federal Reserve did by buying toxic assets from the Wall Street Banks. The
county bank acquires those loans by creating a credit account for the
current mortgage holder in the amount of the fair market purchase price
for each loan/property. This now puts the distressed mortgage in the hands
of the county.
     This benefits every one: the county or the city, the home owner and the
mortgage holder-especially if it is a local bank.

     Also note p.5,6 of the above website to see how Congress can help
regarding reasons for separating county banks from FDIC and forming a
separate  corporation, such as a holding company.
      This information can be crosschecked at
www.publicbankinginstitute.org,contact Mark Armstrong there.

As a precedent the City of  San  Francisco  explores a revolutionary new
model, visit
http://www.huffingtonpost.com/2011/11/03/municipal-bank-sanfrancisco-n-1074600.html.)

The first of a 3 part series on the Foreclosure Town Hall Meeting
sponsored by Occupy Mendocino will be aired on MCTV Wednesday Dec.
12,2012.
Thank you  for your attention,
 Agnes Woolsey