Alexis Goldsmotih writes:  A group of Americans with a different agenda for the future of banking-people are pushing hard for policy change. They’re advocates of public banking, and they want to see new banks created that would be owned and operated by the government, usually at the state or city level. (This would greatly increase the amount of investment capital available for small business development, local infrastructure, and affordable public transportation, none of which are much favored by private banks seeking a high return on investment.).

Gwendolyn Hallsmith is one of those advocates. She’s currently the executive director of the Public Banking Institute, but she worked previously as a public servant in Montpelier, Vermont, where she resides and ran for mayor in 2014. Hallsmith also spent some time in divinity school, and you can hear it in her voice-which is soft but strong and deliberately paced.

To Hallsmith, the main advantage of a public bank is lower-cost financing, which can enable the state to pay for things like building affordable housing, repairing infrastructure, and expanding educational opportunities. And each of these projects creates jobs.

Hallsmith said: Public banks “allow cities, counties, and states to finance important public priorities without needing to rely on Wall Street and pay the hidden interest tax that Wall Street imposes on all our money.”

The quest to achieve public banking at the state and local level has been a long slog. Until quite recently, you had to go back almost 100 years to find the last major victory: the founding of the bank of North Dakota, the only state-run public bank in the United States, which was established in 1919.

But interest has been picking up around the country. Santa Fe, New Mexico, voted in October to conduct a study on the feasibility of a city-run public bank. And in December, the Seattle City Council’s finance committee hosted experts in public banking to explore the topic.

But nowhere have the steps toward public banking been more successful than in the state of Vermont. There, Hallsmith and other advocates won a small victory against Wall Street through an effort so relentless and strategic that it would have made any banking lobbyist proud. They combined savvy organizing with data-driven reports and policy briefs to prove the benefits of a public bank-like avoiding fat interest payments to Wall Street banks-for the state’s economy.   A Fight for Public Banks