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State Senators Nia Gill and Richard Codey have introduced legislation (S-885) that would create a state-run bank to handle deposits from state government and other public entities. The idea was one of Gov. Phil Murphy’s campaign proposals.

As reported in Politico, all public entities in New Jersey would be able to use the state-run bank. It would provide transportation project loans, student loans, small business loans and be able to purchase mortgages from commercial banks. The bank would also be able to purchase, lease and construct buildings, and would even have the power of eminent domain.

Murphy called for the creation of a state-run bank early in his campaign, saying it would be a way to put “New Jersey’s resources to work for New Jerseyans.”

NJBIA President and CEO Michele Siekerka said the state should investigate the idea closely before taking action, noting that New Jersey already has numerous state funding institutions, including the Economic Development Authority, Transportation Trust Fund, Environment Infrastructure Trust and the Energy Resilience Bank.

“New Jersey’s community and regional banks are a significant driver of economic activity and impact in the state,” Siekerka said. “A clear understanding of the interrelation of the state bank to these institutions and the economic impact on New Jersey’s financial institutions must be conducted before taking action on the creation of a state bank.”

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