I have recently been reading about the Bank of North Dakota, unique in the United States in being owned by a state. It is not a member of the FDIC, but its debts are backed by the full faith and credit of the state. Mississippi could greatly benefit from such a bank, provided that it is ensconced in the text of the Mississippi constitution1 and insulated to some degree from raids by our Mississippi legislature, which has throughout its history shown itself to be frequently irresponsible, if not outright corrupt.
The Bank of North Dakota was established in 1919 by an act of the legislature2. It is prohibited from competing with local banks, but authorized to make loans throughout the state, with the earnings being paid over to the state treasurer. All state funds, including the “float,“ that the state receives and holds before disbursing must be deposited in the Bank.
The bank has been a success. During the crisis of 2008, it experienced few problems.
It would not be impractical for the City of Jackson to establish a municipal bank in which to keep its money. This is a concept that has been tried and proven. Like the Bank of North Dakota, it would be prohibited from competing with the private sector banks. State or city funds deposited in the bank would earn interest to be paid over to the state or city. Moreover, the bank could loan money for undertakings that benefit the public.
Considering our legislature’s eagerness to take away Evers Airport from the city’s jurisdiction, the likelihood of the Mississippi legislature allowing the city to start a municipal bank is very small. Hopefully, we will enjoy in the near future a more civilized and less racist legislature that will look favorably upon projects that benefit the citizens of Jackson, as well as its surrounding counties.