next speaker. >> thank you. thank you for calling for this hearing. i'm the political action share for sau 1021 and we have endorsed pulling money out of the commercial bank and doing something more excited with it -- something more exciting with that. in los angeles county, we have worked with ace to pull some of the money out and create the vestment strategies. when i go to our union meetings throughout northern california, including san francisco, we start our meetings with what we call a human senses. the first question is how many people and the room have are in foreclosure or in your immediate

family -- three-fourths of the room stands up. it is pretty overwhelming how many people are being effected. we have members who are saying they're losing their homes through foreclosure and their wives have spiraled out of control since then. clearly members are being affected a lot of different ways personally and the budget fights every year and the devastating effects of the financial crisis on our economy. but it's up not without irony that those same banks that crashed our economy also crashed our pension portfolios, which is why nationwide there is a huge call for workers to pay back into their pension, more than we are contributing, and there is a lot of blame being put on workers. but it was the banks who pressed the investments and that's why our portfolios lost a lot of money. i would like to add that

including consumer protections that came from our members is to include that this fees and protection against interest rate jumps that people have and student loan interest -- average to low-interest are between 7% and 13% higher than the governments to the loans. [tone] supervisor avalos: thank you. next speaker, please. >> good afternoon. we are with the public banking institute. it was established earlier this year as an educational nonprofit. our vision is to establish a network of public banks owned by the state, county and needs will governments that provide affordable credit to people these governments represent. as governing officials, with

fiduciary duties, many of you are familiar with the budget revenue shortfalls, tax increases, budget cuts or selling public assets for a onetime gain. none of these are attractive. i would like to suggest a fourth alternative used by the state government of north dakota colleges in the envious position of year after year budget surpluses underscored by a decision this past spring to cut state income and property taxes. the state of north dakota is doing business as the bank of north dakota. a separate legal entity 100% owned by the state of north dakota with nearly all deposits coming from state tax revenues and fees. it is a $4 billion banquet laurent -- loan portfolio of $3 billion and generated a wrecking -- record $62 million, about half of which was transferred to the state's general fund and the rest leveraged into targeted lending. of the past few years, a bolster

the fund by three under $50 million -- not bad for a total population of 670,000. their mission is to serve the interest of the people of north dakota. this is the overriding decision factor used to determine everything from business strategy to loan participation decisions. in my conversations with retired executives, board of advisor members and north dakota community bankers, serving the interest of the people of north dakota is frequently referenced as their guiding principle. the bank of north dakota takes the credit available to it from the deposits in the bank and packages it into dozens of long programs which are the key to the success of the bank. it's a way for the bank to inject liquidity into specific sectors of the state economy, including high-tech start-ups, manufacturing expansion, and use of new agricultural technology. agriculture is the lowest segment of their loan portfolio.

many of the loans start at 1% per annum. still loans are 4%. the bank requires for every $100,000 loan, a new full-time job is created by the loan recipients. the bank of north dakota has 160 employees and its offices a single building in bismarck. [tone] it is a wholesale bank that works with a partnership of over 100 community banks brought north dakota. these community banks do the loan applicant qualification, credit checking and scoping of the deal. because the banks have scanned in the game and because it's the bank of north dakota that ensures the at hearings, the end result is a conservative loan profile. no banks have failed layover 12

years. their return on equity has been 26% and 19%. >> as elected representatives, it is up to you to put into place the structure needed to ensure a democratic economy free from many economic injustices clear from our private banking and financial system. the occupied movement is a witness to these very same unjust and exploitive system. establishing a minute to play on a bank with transparent and solid governance is not an optional step on the path toward a democratic economy. it is necessary in order for the public's credit to be used in the public's interest. we are currently leaving that credit, our credit, on the table and the transnational wall street banks are using it to further their own private interests, often times funding companies overseas to compete with the very same taxpayers in

this city whose state and local tax payments were deposited in these transnational banks. in conclusion, just as libraries cannot undermine the businesses of independent bookstores and just as open space does not devalue surrounding private property, a public bank like the bank of north dakota does not undermine the need for credit and lending services provided by the private sector. in fact, it makes for a healthier private banking system. i urge you to continue to demonstrate leadership in this very important opportunity. supervisor avalos: thank you very much. are there any other speakers? seeing no one come forward, will close public comment. i would like to thank everyone for their participation. the stories, the different parts of the economy and from a

personal level, happen to of the affected by the current banking system in san francisco and around the country, i was hoping this hearing would bring a final and to free, and regulated capitalism, but it did not quite at that goal. there is more work to do. -- unregulated capitalism. there are a lot of steps to get into the process of a municipal bank, legal constraints to move through or imperatives -- impediments presented to us to move through. i do not see that as something happening overnight, but it's something i'm very interested in seeing that we can achieve. i appreciate all your work on this. i know we have a lot of great minds to help achieve something to that effect in the years to come hopefully not 70 years to

come. there is a process the treasurer is going through, looking at inrfp. mr. kato is here from the treasury office -- i think to proceed, given the great about of interest that is here, treasurer at cisneros has said he would be meeting with some of the stakeholders in the next couple of weeks, maybe we can set up a meeting between my office and your office and the stakeholders in the community to talk about the rfp process, if that is something you can commit to do? >> yes. i can be with anyone interested in this process. supervisor avalos: will come back for another meeting on the rfp process itself. when do you expect them to issue the rfp?

>> in early 2012. supervisor avalos: so we have some time. i would like to thank the budget and legislative analyst for the report. thank you very much for your report. i believe we will be doing some ongoing work on this issue as well and if we can retain your services, that would be great. i would like to thank my colleagues for this hearing. we will roll up our sleeves and move forward. thank you very much.