Lack of credit stymies firms. Could a state-owned bank be the answer for Michigan businesses?
Katherin Yung • Detroit Free Press • October 6, 2010
…What happened to Moebius and Dearborn Mid-West are not isolated incidents. Banks continue to pull credit lines or refuse to renew them. And they have tightened their lending standards, making it harder for businesses to qualify for loans.
So far, government efforts have failed to end this credit squeeze, which is holding back Michigan’s economic recovery. But Lansing Mayor Virg Bernero, who’s campaigning to be Michigan’s next governor, says he has a solution. Michigan needs its own bank, he says.
Bernero has proposed creating a state-owned bank in Michigan modeled after the Bank of North Dakota, the nation’s only state-owned bank. That bank has proven to be a moneymaker for North Dakota, generating profits every year for the state. The majority of its $2.9 billion in deposits comes from tax collections and state fees.
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