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Speaker Frank Chopp: State bank could help students

Post by Jordan Schrader / The News Tribune on Jan. 9, 2012 at 6:13 pm with No Comments »
January 9, 2012 6:13 pm
Frank Chopp

House Speaker Frank Chopp opened the 60-day legislative session today with a speech laying out House Democrats’ priorities: preserving basic education funding; maintaining safety net programs like Apple Health, the Basic Health Plan and Disability Lifeline; stimulating the construction industry; endorsing gay marriage.

And one priority that is more surprising: A state-run bank, an idea that has strong support in the Occupy movement as an alternative to Wall Street banks.

Chopp said an “investment trust” would help college students obtain cheaper loans:

Tell me, why is it that I can get a loan for a new car today at zero percent interest, but young people pay 7 percent interest on a student loan? Particularly when I only paid 3 percent when I graduated from the UW back in the last century. Yeah, it was the last century. I hate to admit it.

The “Washington Investment Trust,” as it has been formally called in proposed legislation, is a state bank modeled on the Bank of North Dakota.

It has drawn opposition from Republicans and the Democratic state treasurer out of concern for the risk, the expense, and the potential violations of restrictions in the state constitution on loaning out state credit. It didn’t go anywhere last year but Chopp singling it out may be a sign it has legs this year.

A task force worked on the proposal after it failed last year and its main proponent, Rep. Bob Hasegawa, said his scaled-back proposal would focus on areas that avoid constitutional limitations.

The bank would make college loans and loans to local governments to build schools, water and sewer systems and other infrastructure, said Hasegawa, D-Seattle. It also could take over services related to welfare benefits cards, which are now provided by JP Morgan Chase under a government contract. Chase charges welfare recipients 85 cents for ATM withdrawals using their benefits cards.

Here’s legislation drafted in the task-force process. Hasegawa said he plans to introduce an updated version this week.

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