NEW YORK, Feb 24 (Reuters) - Massachusetts should consider creating a state-owned bank, which could help boost lending for small businesses the way North Dakota has done since 1919, according to the president of the state Senate.
Therese Murray, the Senate president, has called for a commission to study whether Massachusetts, whose economy partly relies on its money management firms, should adopt the North Dakota model, which has been credited with helping that state escape the worst of the recession.
In Massachusetts, such a bank might, for example, replace the commercial institutions that now collect fees for managing the Commonwealth’s revenues.
A new Massachusetts state bank could help unfreeze the still sluggish credit markets by lending funds to other banks, enabling them to make more small business loans, for example.
For more details on North Dakota's bank, the nation's only state-chartered bank, please see: www.banknd.nd.gov/
Other states, including Idaho, Florida and California, also are considering North Dakota’s model, according to the proposal from Murray, a Democrat, who said ”there may be other reasons why North Dakota has escaped the worst of the recession.
“But certainly their experience warrants careful consideration,” Murray’s proposal added, referring to North Dakota’s experience.
North Dakota is one of a cluster states in the center of the country that showed resilience and stability during the recession, thanks to strong commodity prices and the lack of a significant housing bubble, Moody’s Investors Service said in November. For details, please see: [ID:nN13463565].
The Massachusetts Senate is expected to take up Murray’s bill in March; if it is enacted, the commission’s study might take a year. (Reporting by Joan Gralla; Editing by Jan Paschal)