Now is not wise time to consider state bank

The state doesn't have the capital to start a bank. Plus, the private sector already offers plenty of options for student and local government loans.


Washington state has plenty of money woes to worry about. It does not need to create its own state-run bank to add a few more.

Yet, state lawmakers are giving the idea serious consideration, although their reasons seem to be more political than practical.

The idea of a state bank has strong support among the Democrats and House Speaker Frank Chopp, who called it a top priority in a speech opening this year's session of the Legislature, according to Jordan Schrader, a reporter for the Olympian and News Tribune newspapers.

"I think people see this as a form of empowerment, that we're going to try to do something in our state to regain control over the safety of our finances," said David Spring, a community-college instructor from North Bend who has spoken at Occupy movement rallies.

That's ridiculous. We, as a state, have not lost control of our finances.

Washington state does its banking with Bank of America, buys goods with U.S. Bank cards and distributes welfare aid through JP Morgan ATMS. We understand that no financial institution is completely safe, as we all found out in 2008 with the financial meltdown on Wall Street. But the banks the state is doing business with are reputable and appear to be on as solid a financial footing as any bank in the country.

The goal of a state bank would be to make low-interest loans to college students and to local governments for public works. Starting a new state bank with those aims would require a lot of capital. Where would that come from?

If the bank didn't have enough capital from the start it would be a risk for taxpayers. Besides, institutions to provide these loans already exists.

State Treasurer Jim McIntire, a Democrat, opposes the plan for that reason. So do many Republicans.

"Why set up a whole new bureaucracy?" asked Rep. Barbara Bailey, R-Oak Harbor. "And one step leads to another step and next thing you know we have a full-blown financial institution that is in direct competition with our financial industry."

This is not a place the state needs to go, particularly when it's having a tough time funding schools, prisons and everything else.


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