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From New Mexico

Prior to any of the below steps being taken, the City of Santa Fe will need to adopt one or more Ordinances of Resolution authorizing the and directing the appropriate actions.

STEP ONE:  Identify the proposed functions of the Public Bank.

? Direction should come from the City Council and the Task Force
? Deciding which functions the Public Bank should perform will determine the approvals
that are needed, and the laws and regulations which will need to be obeyed.
STEP TWO:  Create a business plan for the Public Bank.
? The business plan will be necessary for the various applications the City must make to
charter the Public Bank.
? The City will need to hire outside professionals - bankers, lawyers, accountants, and other
consultants - to create the business plan. Many of the costs will be incurred at this stage.
? The business plan must identify the local need for the Public Bank, its functions, and its
initial capital structure.
STEP THREE: Create a Bank Holding Company.
? New Mexico law requires that all banks be owned by bank holding companies, or individuals.
? Identify the individuals who will direct the affairs of the holding company.
? Identify the sources of capital for the holding company.
? Create Articles and By-laws for the holding company. Create a code of conduct for the
holding company compliant with applicable laws.
STEP FOUR:  Apply for a bank charter.
? Application is to the Financial Institutions Division for state bank charters. It will be
helpful to have conversations with FID about legal and other issues prior to submitting any
application.
? The Banking Act sets out a detailed procedure for the application, including especially
detailed procedures for raising the initial capital of the Public Bank.
? The Public Bank will need Articles and By-laws, distinct from those of the holding
company. It will also need a code of conduct for its officers and directors, that complies
with applicable federal and state laws.
STEP FIVE: Apply for deposit insurance from the Federal Deposit Insurance Corporation.
State-chartered banks must be FDIC-insured.
? The FDIC application differs from the FID charter application, and will require
considerable additional resources to complete.
? The FDIC gives very detailed, in-depth consideration to public bank applications for
insurance. The application will therefore need to be comprehensive and water-tight.
STEP SIX:  Establish operations, assuming all approvals are granted.
Detailed federal regulations govern each and every aspect of a bank's operations, up to an
including the purchase or lease of real property and the buildings necessary to house the
Public Bank's operations.
? Detailed accounting systems will be needed to comply with federal regulations.
? A detailed program of oversight will be necessary to ensure that the Public Bank's
operations are open, and free of any political interference.
? Compliance programs will need to be established to ensure that all operations comply one
hundred percent with applicable state and federal law and regulation.

From San Francisco:  

Key steps for the City to take to create a public bank would include:     

1. Creation of agreed upon goals and a founding policy statement by the Board of Supervisors and other City stakeholders including the Office of the Treasurer and Tax Collector and Mayor. 
2.Retention of staff and/or consultants to conduct detailed financial feasibility studies for the bank and create the administrative infrastructure of the bank.
3. Appointment of an independent board of directors and creation of articles of incorporation. 
4. Development of a multi-year business plan to: identify amounts and sources of funds to capitalize the bank to meet its reserve requirements and cover ongoing operations, define its ongoing capital structure, determine whether or not to originate loans directly or to partner with other financial institutions, identify ongoing staffing needs and administrative costs, identify reserve requirements, and determine mechanisms for ensuring the bank's accountability and independence.
5.  Determination of whether to be chartered by the State of California or the federal government and whether or not to become a Federal Reserve Bank member.


Nancy Abbey2018-02-05T17:52:53Z
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