By Malia Zimmerman | Hawaii Reporter
HONOLULU – Most of us have heard of the store, Abercrombie and Fitch, and of course, Gov. Neil Abercrombie, but what about the Bank of Abercrombie?
House Bill 1033, which, according to House Minority Leader Gene Ward, recently had its contents “gutted and replaced” by House Finance Chair Marcus Oshiro, would create a state bank that would put Gov. Neil Abercrombie, D-Hawaii, as its chairman.
Pictured at right: Gov. Neil Abercrombie with State Budget & Finance Director Kalbert Young (photo by Mel Ah Ching Productions)
The bank would actually be called the Clean Economy Bank of the State of Hawaii. There would be six other members on the board, including two appointees by Gov. Abercrombie, one by House Speaker Calvin Say, D-Palolo, and another by Senate President Shan Tsutsui, D-Maui.
Bankers and businesses and Republicans in the legislature would have no representation on the state bank’s politically appointed board of directors, but union leaders from the AFL-CIO and the Change to Win Federation would get to appoint one member each.
The bill, which passed the House Finance committee on Friday, March 2, and is expected to pass the final reading in the House, would deposit money from the state general fund into the state bank.
The state taxpayers would guarantee the funds as the FDIC does with other financial institutions.
Several union leaders and community organizing groups such a Faith Action for Community Equity, which is made up of several of Hawaii’s religious leaders, support the measure. FACE said in testimony a state bank would “create jobs, address foreclosure and affordable housing and aid small businesses” and allow money to stay in Hawaii rather than “flow offshore to Wall Street and private investors.”
Kalbert Young, Director of the State Department of Budget and Finance, opposed the bill saying it would over extend the state resources in such a way that it could negatively impact the state’s credit rating and hurt other existing state programs.
Iris Catalani, a former legislator who is now commissioner of state Financial Institutions, suggested rather than establishing a state bank, legislators should consider establishing an alternative, such as an investment authority or a Green Loan Guarantee Fund, if they want to invest in clean energy initiatives.
The Office of Information Practices notes the bill creates new level of secrecy in state government by making records in the proposed government bank only available through litigation.
The Department of Commerce and Consumer Affairs, the agency that would likely be charged with the task of setting up the bank, did not take a position on the proposal but said before the state takes any action, a task force should explore the issue in more depth.