The Florida State Sunshine Bank: How a State-Owned Bank Can Protect Free Speech

Fifteen years have passed since the Occupy Wall Street movement focused attention on the inequities and hazards of large Wall Street banks, particularly those risky banks with trillions of dollars in derivatives on their books. “Move your money” was the obvious response, but what could local governments do? Their bank accounts were too large for local banks to handle. 

Thus was the public banking movement born. The impressive potential of government-owned banks was demonstrated by the century-old Bank of North Dakota (BND), currently the nation’s only state-owned bank. In the last fifteen years, over 100 bills and resolutions for local U.S. government-owned banks have been filed based on the BND model. But while promising bills are still pending, so far the allure of saving money, stimulating the local economy, banking the underbanked and avoiding a derivative crisis has been insufficient to motivate local legislators to pass bills opposed by their Wall Street patrons. State legislators have acknowledged potential benefits, but they have generally not been ready to rock the boat when the situation did not appear to be urgent.   

Now, however, Florida Chief Financial Officer Jimmy Patronis has come up with an urgent reason for a state to own its own bank – to avoid bank regulations designed to achieve social or political ends that state officials believe are inappropriate or go too far, including “debanking” vocal opponents of federal policy. The concerns are Constitutional, testing the First Amendment guarantees of free speech, freedom of the press and freedom of religion, and the 10^th Amendment right of states and citizens to self-govern in matters not specifically delegated in the Constitution to central government oversight. 

Tennessee, Louisiana, West Virginia, Florida, Arizona, Kentucky and Mississippi have also introduced bills to curb debanking on political or religious grounds. This may appear to be divisive — the South is rising again, in a digital civil war — but it is actually a promising development for the public banking movement. Liberal Democratic legislators have not found the will to break free of their Wall Street masters, despite a litany of benefits demonstrated by the stellar BND model. In 1919, North Dakotans mustered the will to form their own state-owned bank because they were being exploited by very large out of state banks. Prominent Florida residents and corporations similarly feel they are being unfairly attacked through their Wall Street bank accounts. Whatever the motivation, if a bold state can show what can be done in the 20^th century with its own state-owned bank, others will have precedent to follow. 

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