State lawmakers are once again considering legislation to establish a Public Bank of New Mexico.
The Investments and Pension Oversight Committee met last week at Roundhouse to hear about the proposal and other issues.
A presentation from the Alliance for Local Economic Prosperity told legislators that the bank would increase growth by maximizing equity access to emerging businesses.
The bank would help provide financing for small businesses and rural and tribal development needs.
Advisory Board member Harold Dixon is the former CEO and President of the State Employees Credit Union.
He says he initially opposed the creation of the State Bank but changed his mind after learning more about what it would be offering.
“My idea was that the Public Bank was just another bank…and how do you compete with someone who has state funds and cheaper money and you don’t have to advertise,” he said. “When I found out it’s really to advance what you are already doing, not to compete with you, it’s not a direct consumer bank. That’s what really changed my mind.”
Committee Chair Albuquerque Representative Patricia Roybal Caballero says the bank would be great to help entrepreneurs who corporate owned banks may be hesitant to fully fund and it would keep dollars in New Mexico.
“But more importantly, it can assist other local communities around the state, compound their ability to lend because the Public Bank becomes a guarantor,” she said. “You really have a dollar for dollar guarantee on the loans and you encourage local economic development, you encourage jobs, and you encourage a lot of growth.
The initial state funding would run $50-million, but supporters say if it is successful it would wind up paying for itself after only a few years.
Roybal Caballero has introduced similar legislation a couple of times but the bills have never made it to the house floor.