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PUBLIC BANKING: Testimony to Illinois General Assembly Committee

Today, March 23, 2021, the Financial Institutions Committee of the Illinois General Assembly is hosting a “subject matter” hearing on state banks, as promoted in a current bill HB0089, “Community Bank of Illinois Act”. Members of the informal Illinois public banking coalition were invited to provide testimony. Knowing how these hearings sometimes go, I opted to send written testimony. This is the testimony that I sent at 7:30 this morning — an hour before the hearing is to start.

Here’s the links:
— Official hearing page
— Official bill page

For anyone interested in joining the public banking or monetary reform movement, here’s three centers of action in the U.S.:
Public Banking Institute  The nonprofit founded by Ellen Brown, the mother of the 21st century public banking movement
National Public Banking Alliance  a Google Group founded in 2020 by grassroots activists
Alliance for Just Money an action spin-off of American Monetary Institute, a think tank promoting public sovereign money


To: Financial Institutions Committee,
Illinois General Assembly
Hearing: March 23, 2021
Subject: State Bank (HB89)

Please accept this statement as my testimony on the subject of STATE BANKS, also commonly known as PUBLIC BANKS. 


I am a Chicago native, have lived most of my 70 years in Illinois, the last 43 in Evanston, IL (a Chicago suburb). For 25 years I was a professional gardener. Since 2005, I have worked as a grassroots activist on restoring our local food and farm systems—in the Chicago area, statewide, in the Midwest, and nationally.

Unfortunately, just as we unanimously passed the Illinois Food, Farms, and Jobs Act of 2007, the financial crash dissipated much of the non-profit funding for food & farm work, especially in the Midwest. Most Illinois people don’t know that Bernie Madoff’s ponzi scheme was a major funder of Midwest food & farm projects, primarily through the Fair Food Foundation in Michigan.

This personal and intellectual crisis led me to The Money Question — who creates new U.S. money, how does it enter the economy, who decides. Research on the “money power” led me to a variety of other financial and economic questions and the discovery of possible answers in the form of structural monetary and banking reforms.

In 2011, public banking was the first structural reform I came across, shedding light on many undemocratic aspects of our democracy. By definition, undemocratic institutions and processes create, perpetuate, and increase economic and political disparities. The first question that public banking asks is: Why should governments have to borrow money? With that big question comes a possible answer: Maybe they don’t have to borrow money. That opens up a whole new range of possibilities for governments in relation to money.

I have been working informally with Public Banking Institute and other public banking advocates ever since. There is no doubt in my mind that public banks are a missing link in our democracy, both at the national level and the state level, possibly at the county and city level.

(also known as public banks)

A. Research and development
Over the last ten years, much progress has been made by U.S. legislators, think tanks, and grassroots groups on identifying (1) the most pressing needs that can be addressed by public banks, (2) the best model(s) to address each need, and (3) the best jurisdictions for public banks. Applying my own learning to Illinois:

1. In Illinois the most pressing needs that can and should be addressed by public banks are:
a. Financial health of the State of Illinois and other governmental jurisdictions in the state
b. Lack of access to banking services by vulnerable residents of Illinois

2. The best model(s) to promote in Illinois:
a. To address #1a, a public bank acting as a central bank to a network of independent private community banks seems to be the best model and is modeled on the Bank of North Dakota (the only existing public bank in the U.S.).

b. To address #1b, a public bank on the national level would reach more people, both in Illinois and across the country, and be portable.

3. The best jurisdictions for public banks in Illinois
a. To address the financial health of government In Illinois, I recommend a State of Illinois bank to best serve all  Illinois residents (rural, suburban, urban) and all local units of government. A properly structured State of Illinois bank would have the capacity to
—reverse the population loss of Illinois
—properly implement the Illinois Food, Farms, and Jobs Plan, adopted in 2009 as a comprehensive economic development strategy based on sustaining Illinois’s prime assets: farmland, people, transportation and water infrastructure.

Some states are also researching county and municipal banks. I would not recommend a public bank for the City of Chicago because I believe it would increase the concentration of power and resources within the City, where power and resources are already over-concentrated. This over-concentration in the hands of a few is detrimental not only to the rest of Cook County and the State of Illinois; it is oppressive to most residents of the City of Chicago.

I do advocate (and have advocated in the past) a public bank for Cook County as a way for Chicago and 126 suburbs to work better together.

b. To provide banking services for unbanked Illinois residents, the postal banking model would be the best model and would benefit the USPS at the same time.

B. Recommendations for drafting legislation on State Banks (also known as public banks)
1. Develop rigorous terminology to distinguish between:
— Public banks that act as central banks in their state (such as Bank of North Dakota) and whose deposits are public monies (not monies from private individuals or businesses).
— Public banks that act as community banks for individuals who have limited or no access to banking services (accounts, check-cashing, notary services, ATM, etc.).

2. Adopt plain language for legislation, especially for financial and economic matters.

C. Nationalizing the Federal Reserve in support of state and local governments
Of great benefit to all U.S. people as well as state and local governments would be clarifying Congress’s Constitutional power to be the sole creator of U.S. money. There are current proposals to do this by:
— transferring ownership of the 12 Federal Reserve banks (and all operations of the Federal Reserve System) to the U.S. Treasury
— ending the privilege of commercial banks to create and issue what we use as money (fractional reserve lending)
— creating an independent public monetary authority to regulate the supply of money

Here are two resources for creating a national public bank by nationalizing the Federal Reserve:
— The 2012 NEED Act (proposed by Ohio Congressman Dennis Kucinich) is an excellent template for nationalizing the Federal Reserve. It also includes an infrastructure jobs plan that would distribute federal monies directly to states. It is a precursor to the Green New Deal in that it can also include restoration of our natural infrastructure: soil, water, and biodiversity.
Three critical reforms to achieve sovereign money, by Alliance for Just Money. AFJM is a non-profit with many members in Illinois including the president (Lucille Eckrich [Bloomington, IL]) and treasurer (Steven Walsh [Evanston, IL]).


— A State of Illinois public bank should not compete with commercial community banks. A State of Illinois public bank should act as a central bank to independent community banks.
— The easiest and best way to provide banking services to Illinois residents currently without access would be a national network operated through the U.S. Postal Service. The State of Illinois should support such a network.
— Language and terminology in State of Illinois legislation on public banks, public finances, economics, etc., should be rigorous and accessible. I recommend that the State of Illinois avoid using the term “community bank” as a synonym for state bank or public bank or as an adjective for state bank or public bank.
— The State of Illinois, whether or not it creates its own public bank, would benefit from supporting the 2012 NEED Act or similar federal legislation to nationalize the Federal Reserve System and restore to Congress the monopoly power to create U.S. money.

As a former tradeswoman, I know from experience how important it is to set the foundation stones 100% accurately. I appreciate that the Financial Institutions Committee is having this hearing.

P.S. If this committee is interested in other monetary reforms, I have been working on a number of them, all of which address inequities that were either (a) written into the U.S. Constitution, or (b) developed since the Constitution was written. They are succinctly listed on my webpage Real Democracy under B. Transitional Structures

Debbie Hillman
Evanston, Illinois

Getting specific about life, liberty, and the pursuit of happiness