Big Banks Attempt Secret Coup Against Cheap Loans

Too Big Banks Try End Run to Kill Growing Public Banking Movement

The Trans-Pacific Partnership (TPP) is an international treaty negotiated in secret – hidden even from congressmen who oversee such treaties – which threatens to destroy national sovereignty.

Public banks – such as the Bank of North Dakota – can provide low-cost loans to Main Street, when Wall Street insists on high interest rates … or won’t even extend credit.

More and more states are considering launching their own public banks.

A 2011 study from Demos – a non-partisan public policy organization – in conjunction with the Center for State Innovation, analyzed the potential for “partnership banks” across the country, including numerous states already considering such legislation.   The study found:

Across the country, states are considering proposals to move general revenue deposits out of the Wall Street banks that dominate the banking business today, and use them to capitalize a new local public structure with a mission to grow the local economy. A “Main Street Partnership Bank” would be modeled on the nearly 100-year-old public Bank of North Dakota (BND). This public policy innovation—also known as a Public Bank or State Bank—could contribute to the health of local community banks, state budgets and small business job growth in an era of rapid banking concentration, budget deficits and disinvestment on Main Street.

Partnership Banks can raise revenue for states without raising taxes, and increase loans to small businesses precisely when Wall Street banks have cut back on lending and raised public borrowing costs. A Partnership Bank would act as a “banker’s bank” to in-state community banks and provide the state government with both banking services at fair terms and an annual multi-million dollar dividend.

If modeled on the successful Bank of North Dakota, Partnership Banks in other states would:

  • Create new jobs and spur economic growth. Partnership Banks are participation lenders, meaning they partner—never compete—with local banks to drive lending through local banks to small businesses. If Washington State had a fully-operational Partnership Bank capitalized at $100 million during the Great Recession, it would have supported $2.6 billion in new lending and helped to create 8,212 new small business jobs. A proposed Oregon bank could help community banks expand lending by $1.3 billion and help small business create 5,391 new Oregon jobs in its first three to five years. All of this would be accom- plished at a profit, which Partnership Banks should share with the state.
  • Generate new revenues for states directly, through annual bank dividend payments, and indirectly by creating jobs and spurring local economic growth…
  • Lower debt costs for local governments. Like the Bank of North Dakota, Partnership Banks can get access to low-cost funds from the regional Federal Home Loan Banks. The banks can pass savings on to local governments when they buy debt for infrastructure investments. The banks can also provide Letters of Credit for tax-exempt bonds at lower interest rates.
  • Strengthen local banks even out credit cycles, and preserve real competition in local credit markets. There have been no bank failures in North Dakota during the financial crisis. BND’s charter is clear that its goal is to “be helpful to and to assist in the development of [North Dakota banks]… and not, in any manner, to destroy or to be harmful to existing financial institutions.” By purchasing local bank stock, partnering with them on large loans and providing other sup- port, Partnership Banks would strengthen small banks in an era when federal policy encourages bank consolidation.
  • Build up small businesses. Surveys by the Main Street Alliance in Oregon and Washington show at least 75 percent support among small business owners. In markets increasingly dominated by large corporations and the banks that fund them, Partnership Banks would increase lending capabilities at the smaller banks that provide the majority of small business loans in America.

These various proposals would “move general revenue deposits out of the Wall Street banks that dominate the banking business today, and use them to capitalize a new local public structure with a mission to grow the local economy.”

This would obviously cut into the big banks’ profits.  Indeed, the big banks have engaged in mafia-style big-rigging fraud against local governments (see this, this and this), scalped local governments by manipulating interest rates, and engaged in all sorts of other shenanigans to fleece governments, businesses and citizens.

And the big banks are using dirty tricks to try to kill the growing public banking movement, so as to protect their racket.

Les Leopold writes:

Clearly, from Wall Street’s perspective, the North Dakota bank must go, and all other state efforts to replicate it must be thwarted. Wall Street’s stealth weapon may be lodged within the latest corporate trade agreement called the Trans-Pacific Partnership (TPP), which currently is being negotiated in secret. We already know that Wall Street is seeking to remove all tariff restrictions that prevent the U.S. financial services industry from doing business in countries like Brunei, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. The biggest banks also want the treaty to eliminate “non-tariff” barriers including regulations that create “unfair” competition with state-owned financial enterprises.

Depending on the final language, it is possible that the activities of the Bank of North Dakota could be ruled illegal because “foreign bankers could claim the BND stops them from lending to commercial banks throughout the state” ….  How perfect for Wall Street: a foreign bank can be used as a shill to knock out the BND.

Truthout explains:

Legislators around the world are being kept in the dark about what they’re voting on until the deal [on TPP] is hammered out; it’s expected to be completed this year. When it’s finished, if the experience of Congress here is any indication, legislators will be feeling extraordinary pressure from corporate lobbyists and their heads of state to accept the deal without a fuss. [Indeed, lawmakers often vote on legislation without ever reading it.]


Publicly owned enterprises, for example, are being targeted by negotiators. One such entity in the United States that has been the subject of considerable interest in recent years is the Bank of North Dakota (BND) – the only fully publicly owned financial institution in the country. The BND, which is only allowed to lend wholesale, was a stabilizing force that helped keep the already energy-rich state insulated from the shock of the financial crisis (Alaska, for example, didn’t fare as well). It has also brought a small fortune to the state’s treasury – $340 million in net tax gain between 1997 and 2009. Legislators in at least 13 different states have proposed studying or emulating the North Dakota model – state-owned development of central-bank style institutions guaranteed by tax revenue. But if the TPP is passed, that option might not be available. [Barbara Weisel, the top American government  negotiator for TPP] said that State Owned Enterprises (SOE) are routinely “competing directly with private enterprises, and often in a way that is considered unfair.”

Some of the advantages that can be conferred on State Owned Enterprises are things like preferential financing,” Weisel said. “Those are things that wouldn’t be provided to private companies – preferential provision of goods and services provided by a government.”

She said that “State Owned Enterprises – which in some cases can comprise a significant percentage of an economy – can be used to undermine what we’re otherwise trying to gain from this free trade agreement.”

A spokesperson for the BND declined to comment on whether or not this outlook was perceived by the bank to be an institutional threat. But, depending on the report’s language, foreign bankers could claim that the BND stops them from lending to commercial banks throughout the state.

Citigroup’s Johnston [Rick Johnston is a a senior vice president and director for international government affairs at Citigroup], in response to another question from the audience, said that corporations weren’t exactly enamored of competition with publicly owned enterprises – and that they are prodding TPP delegates into doing something about it.

“The companies that are running up against the problem and the challenges of the state-owned enterprises, they obviously feel strongly enough about it that the problem is being addressed within the negotiations,” he said.


There can be no guarantee, until the draft is finally released, that the TPP will protect entities like the BND, especially when considering, as critics have contended, that the deal’s boosters are pushing an agreement that more firmly entrenches capital flow as a form of trade.

“When you hear the word ‘trade‘ in today’s business world, it doesn’t just mean goods moving across borders,” Johnston said. “It doesn’t even mean just services moving across borders. It also means investment. And that’s something where the TPP is really gonna make a big difference.”

Trade, according to Black’s Law dictionary, is defined as “Traffic; commerce, exchange of goods for other goods, or for money.” Yet this trade pact could usher in a rash of reforms, with minimal oversight and virtually no public hearings, treating investment rules as a trade issue, even though they haven’t traditionally been dealt with as such.

A lobbyist’s world-view on this issue is instructive.  As Michael Wendell told the Congressional Subcommittee on Trade:

SOEs [state-owned enterprises], by definition, are interested in promoting the interests of their home country, and are all too often guided by state interests, rather than commercial interests.

Why does this matter? Let’s consider a Chinese SOE. Chinese SOEs benefit enormously from below-market-rate financing by state-owned banks at rates well below what American companies pay. Many of these loans may not have to be repaid at all. How does a commercial entity here in the U.S. compete with the U.S.-based operations of an SOE that sets up shop here?


There are many ways that disciplines on SOEs can be developed as part of the TPP talks. The best approach would be to ensure that all transactions are based on commercial considerations.

Basing all transactions on “commercial considerations” may sound okay initially.  But that would – in essence – mean that the interests of the banks in making high-interest rate loans are more important than the interests of the people in obtaining cheap loans.

Moreover, America as a nation is arguably paying trillions of dollars to the big banks in unnecessary interest costs which public banks would render moot. See this and this.

And  remember, the Founding Fathers’ vision of prosperity was largely based around public banking.

However we decide to treat foreign state-owned enterprises, banks owned by the American people will help to create prosperity for we the people and our small businesses.

Indeed, both conservative and liberal economists point out that the big banks are already state-sponsored institutions … so the government should create a little competition through public banking.

State-owned public banks – like North Dakota has – would take the power away from the big banks, and give it back to the people … as the Founding Fathers intended.

Don’t trust the federal government? That’s fine … we’re not talking about state – not federal – banks. Don’t trust your state?  Then support a county-level bank.

Postscript:  Obama is a shill for TPP.  So is Treasury Secretary Jack Lew, who told the Senate:

As Deputy Secretary of the State Department, I actively promoted the United States’ entry into the Trans-Pacific Partnership negotiations.

This entry was posted in Business / Economics, Politics / World News. Bookmark the permalink.
  • Honest Harry’s Used Cars

    Yeah, sure. More credit is not going to solve the problem that arose from too much cheap credit.

    long as credit is so cheap, the currency is worthless. Why? Because
    there’s no reason to save. If there’s no reason to save, then there’s
    no reason to work. The whole country is living hand-to-mouth right now.
    But, more people are looking for a cheap loan than are looking for
    work -despite 100 million Americans sitting at home and playing with
    their computers all day long.

    More cheap credit will add nothing to the economy. The problem is, insolvency. The problem is not the cost of borrowing money. Too many Americans are insolvent. To many American businesses are insolvent. The government is supporting insolvency. So, it grows and grows. It now pays to be insolvent.

    idea that businesses run on credit is preposterous. That’s only
    propaganda left over from the last century. Only businesses that
    are going out of business run on credit. Credit is about taking on a
    silent partner in business. And that silent partner is going to shut
    the business down and liquidate it, the moment the first payment is

    Real businesses run on profit. But there can be no
    profit, as long as the currency is worthless. And it is worthless as
    long as there is no reason to save. And there is no reason to save in
    an economy that doesn’t pay market-interest on savings. Right now, money is so cheap, it’s not worth anything. Money is certainly not worth working for. Ha!

    setting-up a state bank, isn’t going to give anyone the incentive to go
    back to work. Everyone is already mired in the ethic that says, simply
    file for social service benefits, disability, social security,
    unemployment insurance, Obama-phones, food-stamps and section 8 housing.

    Adding state banks to the current mess will simply add more corruption to the banking system. It will also increase the number of bums hanging around on the street corners selling dope or otherwise.

    So why work? That’s the problem.

    • jadan

      Honest Harry: the financial crisis did not arise from “too much cheap credit”. The famous “no doc”
      mortgage loans were not cheap when the teaser rate expired. Low Fed funds rates gave the banks and financial players low cost money for speculation, that’s true, but credit at the retail level was not cheap. Speculation and fraud in mortgage origination and the securitization market was the cause of the financial crisis. The “free market” doesn’t work, Harry. Deregulate the banks and the result is financial catastrophe. If cheap money were used to invest in productive enterprise, it could create an economic boom, but it has been used for speculation by right wing free market Republican ass holes in this casino economy. I’m sick of this blame the victim game. Your average person is the victim. And this same Joe Public is then asked to bail out the criminals. And the criminals are the people who talk like you. They blame the American people for taking on too much debt while at the same time they send jobs overseas and evade taxes at home. If there were jobs, people would not take on the debt they do in their pursuit of the American dream.

      A state bank could impose regulation on financial activity on its home turf. The BND does do that to some extent, which is why not all the private banks in ND belong to the BND system. But I agree that a state bank is not going to solve the problems in the states. And that problem is not food stamps, housing support, social security, and etc. The welfare Cadillac is such horseshit! That Cadillac doesn’t come from welfare, it comes from the most profitable business in the country: drugs. The problem in the states is too much debt. The states owe too much money to rich ass holes who own all the bonds. You blame poor people. But you’re the problem, Harry. You want to sit back on your fat ass and collect interest income. You want interest rates to go up! You think you’re entitled to your interest income and you don’t give a fuck if it comes from payday loans or the exploitation of slave labor. You’re a saver, you’re a righteous individual and all these poor people are not working their asses off to support you! They don’t have “incentive” because they’re all living off the state.

      There are too many people out there who don’t give a shit about anyone but themselves, just like you, and they’re looking to blame somebody. Look in the mirror!

  • 12 trees

    Globalization institutionalizes systemic theft. It is ultimately a ponzi scheme that can only fail, catastrophically. The situation can be remediated, but all those who gain temporary advantage through the inequities of globalization are committed to destroying viable and prudent alternatives.

    In general we can describe a broad range of healing repairs under the term “relocalization”. Relocalization attempts to serve needs first through local resources, whatever they may be. In addition to the TPP we have UN Agenda 21 and Codex Alimentarius, all working covertly to, for example, make home food production and organic farming in general, illegal or impossible. Globalists want to eliminate cash so that there are transaction fees on every exchange (crebit cards first, then embedded chips). They want to strictly limit what people are allowed to eat. In booth cases the goal is to have total behavioral compliance (social lockdown) from all persons by being able to take away their money, property, and food, at any time for undisclosed reasons. Toward those ends the goal is to completely eradicate nature, and replace it with a patented genetic machine, that includes (trans)human genetics as well.

    Nature is actually quite complex, poorly understood, and, all things considered,an elegant design. The goal of privatizing nature, basically by killing and replacing it, is an overarching satanic work. The is no difference between supporting relocalization, in all its forms, and defending the nature on our planet from willful assassination. That is the true scope of the challenge before us.

    Thanks GW for your amazing work. You are always the first place I go on the web at the start of the day, and the last place i look for a meditation before sleep. In some way I am dedicated to being your disciple. If there is a way to get really god at that, please share. In the meantime I am just trying to open as many minds as possible with your courageous insights. Thanks are not enough, but many thanks!

  • jadan

    The point of this story hits the bull’s eye. Globalization destroys national sovereignty and conceals a move towards global financial tyranny. And it is certainly true that a state bank could offer unwelcome competition to the TBTF banks and support the financial independence of the states which runs counter to the centralization of financial power.

    There is considerable hype about the Bank of North Dakota being generated by the Public Banking Institute, and most of the claims are unsubstantiated. It is, after all, a cog in the private financial machine called “The Fed” as a member of the Minneapolis Federal Reserve. It is not a rogue populist institution challenging the powers that be, even though you are depicting it in those terms.
    The claim that the BND is responsible for the good financial condition
    of ND is unproven, and very likely just BS. The fracking boom would
    generate enough revenue for the state to keep it in the black without
    this state-owned bank. No doubt that the presence of the BND does allow
    the state to invest in the boom through its proxy private banks and thus
    allow the state to keep a slice of the profits from exploitation of public resources in ND. The bank
    participates in the loan activity of its private member banks and shares in some of the profits. Since the fracking operations began and have turned into a boom, the BND has generated a total of some 300+ million dollars for the general fund, or roughly 2% of the annual budget. Before the fracking boom began to light up the ND night sky, the BND did not contribute to the general fund because it is not the dynamo that drives the ND economy.

    The BND is not a public bank. It uses state revenues and assets to underwrite and support the private banking sector. It does not compete with the private banking sector. When you state that it can “provide low cost loans to Main Street”, you’re talking about a real public bank, not the BND. Main St pays competitive rates for credit, same as you would find in Wyoming & Montana and these rates are set by “the market”. ND is a free market Republican play ground where your daughter cannot get an abortion. But there are certain groups in ND that don’t play by free market rules: agriculture, students, and private banks(!). Special status by statute merits them special low cost loans.

    The PBI cannot have its cake and eat it, too. The BND does not and cannot operate in the public interest as a true public bank could and should. It is not a public bank. A public bank loans real money, not debt disguised as credit. A public bank finances public infrastructure at no cost. The BND does not do this. PBI hypes the BND as public banking and it creates confusion. PBI supports the Fed and the private banking system. Ellen Brown seems to believe that you can have a public bank within a private financial system. No can do!

  • mmckinl

    Excellent piece !!!!!!!

  • robertsgt40

    Let’s face it, the cartel doesn’t like competition. The S&L “crisis” comes to mind.

  • gozounlimited

    Bankster fraud is a trade secret in the form of intellectual property.The Fed has made explicit that it wants to preserve banks’ ability to rip off people. So the Fed’s official policy is bank profits trump the law. Not that we didn’t know that, but it has now been stated in a baldfaced manner….
    read more:

  • mohammed

    Do you need a quick long or short term loan with a relatively low interest rate as low as 3%? We offer business loan, personal loan, home loan, auto loan,student loan, debt consolidation loan e.t.c. no matter your credit score. We are guaranteed in giving out financial services to our numerous clients all over world. With our flexible lending packages, loans can be processed and transferred to the borrower within the shortest time possible, contact our specialist for advice and finance planning. If you need a quick loan contact us via

  • Mohammad Sahid

    Are you a business man or woman? You are in financial difficulty or need funds to start your own business?nDo you need a loan to pay debts or to pay your bills?nYou have bad credit and have difficulty obtaining capital loan from local banks / other financial institutions?nYou need a loan for any reason, asna) Personal Loan, Business Expansion,nb) Business Creation, Education,nc) Debt Consolidationnd) Hard Money LoansnWe offer loans to individuals and companies at an interest rate of 2%, our services are fast and affordable, you can contact us via E-mail,

  • klain

    Are You In Need Of A Private Or Business Loans At 2% Rate For Various Purposes? If Yes; Contact us with this details below take note we give out from $20,000.00USD to 10million USD
    Full Name:
    Amount Needed:
    Cell No:
    contact us via email
    Best Regards
    Mr.Marsha Goodman

  • klain

    Do you need personal loan? Does your firm,company or industry need financial assistance? Do you need finance to start your business? Do you need finance to expand your business? We give out loan to interested inviduals who are seeking loan with good faith. Are you seriously in need of an urgent loan contac us at Email:
    Your Full Details:
    Full Name:
    Loan Amount Need:
    Loan Duration:
    Phone Number:
    Applied before?
    Monthly Income:
    You are to send this to our Company Email Address:

  • klain

    I am a private loan lender which have all take to be a genuine lender i give out the best loan to my client at a very convenient rate.The interest rate of this loan is 3%.i give out loan to public and private individuals.the maximum amount i give out in this loan is $1,000,000.00 USD why the minimum amount i give out is 5000.for more information contact us email
    Your Full Details:
    Full Name :………
    Country :………….
    Sex :………….
    Tel :………….
    Occupation :……..
    Amount Required :…………
    Purpose of the Loan :……..
    Loan Duration :…………
    Phone Number :………

  • Mr Kanke Mohamend

    Are you looking for Finance?
    Are you looking for Money to enlarge your business?
    I think you have come to the right place.
    We offer Cash at low interest rate.
    Interested people should please contact us on
    For immediate response to your application, Kindly
    reply to this emails below only.

    Mr Mohamend Kanke

  • Smater Fater

    private money lender and corporate financing for real estate and any kinds of business financing. I also offer loans to individuals, firms and entities e.t.c of 3% per annul Price for annual and 3% per annul monthly base, loan terms us for more information’s we look forward to working with you. contact our E-mail: