Accelerating the Establishment of State Public Banks, Preventing Corporate Capture, and Building a Purpose-Driven Financial System for the People

By the authority vested in me as President by the Constitution and the laws of the United States of America, including the Defense Production Act of 1950, as amended (50 U.S.C. 4501 et seq.), and section 301 of title 3, United States Code, it is hereby ordered as follows:

Preamble

For generations, the financial system of the United States has ceased to serve the people who sustain it. What was once a tool for building communities has become an instrument of extraction. This order begins the work of building a parallel, people-accountable public banking architecture designed to serve human needs and ecological balance.

The federal government can remove barriers to state and local public banking by providing capital, coordination, technical assistance, and legal clarity while preserving democratic accountability and preventing private capture.

Section 1. Findings

Private banking concentration has reduced accountability, increased extraction from households and small enterprises, and encouraged speculative behavior that destabilizes communities. The state-owned public bank model, exemplified by the Bank of North Dakota, demonstrates resilience, low-cost lending, and direct public benefit.

It is the policy of the United States to encourage, facilitate, and protect the development of state public banks and purpose-driven financial institutions, and to ensure that such institutions remain permanently free from corporate capture.

Section 2. Definitions

1. Public bank: A financial institution chartered by a State, the District of Columbia, a territory, or a Tribal government; publicly owned; publicly accountable; and operated for public purposes.
2. Purpose-driven enterprise: A business, cooperative, nonprofit, mutual, or public entity with binding commitments to human needs, ecological sustainability, transparent accounting, and non-extractive practices.
3. Secretary: The Secretary of the Treasury.
4. Federal banking agencies: The Board of Governors of the Federal Reserve System, FDIC, and OCC.

Section 3. Public Bank Capitalization Seed Fund

1. Establishes a Public Bank Capitalization Seed Fund at Treasury.
2. Provides matching grants up to 50% of startup capitalization, capped at $500,000,000 per grantee.
3. Requires public accountability governance, prohibition on speculation, and prioritized lending to purpose-driven and community institutions.
4. Directs the Secretary to issue implementing regulations within 90 days.

Section 4. North Dakota Public Banking Technical Assistance Grant

Directs Treasury to award a grant to North Dakota (through the Bank of North Dakota or designated entity) to provide multi-year technical assistance to States, territories, Tribal governments, and local governments seeking to establish public banks.

Section 5. Technical Assistance Grants to States and Tribal Governments

Creates a Treasury Public Bank Technical Assistance Fund supporting:

1. Legal and financial advisory services;
2. Specialized staffing and operations planning;
3. Technology, banking systems, and cybersecurity;
4. Public education and outreach campaigns;
5. Governance and lending policy development; and
6. Other activities advancing launch and operation of public banks.

Section 6. Federal Banking Agency Coordination and Expedited Review

Directs Treasury coordination with federal banking agencies to issue guidance, create expedited review goals, establish an FDIC technical unit for applicants, and identify waivers or exemptions where legally appropriate and non-essential requirements would otherwise impede public banks.

Section 7. Federal Deposit Preference

Directs executive departments and agencies, to the maximum extent permitted by law, to prefer public banks and cooperative financial institutions for federal depository and fiscal agency relationships.

Section 8. State Small Business Credit Initiative (SSBCI) Integration

Directs Treasury to revise SSBCI program guidance to permit capitalization uses, align technical assistance, and support training and education for public banking and purpose-driven enterprise.

Section 9. Tax-Exempt Bond Guidance

Directs issuance of guidance clarifying that qualifying bonds issued by state-owned public banks for public purposes are governmental bonds under section 103 of the Internal Revenue Code.

Section 10. Federal Financing Bank Lending Program

Directs the Federal Financing Bank to establish a low-cost, long-term capitalization lending program for newly chartered public banks.

Section 11. Treasury Office of Technical Assistance Domestic Division

Establishes a Domestic Technical Assistance Division to advise state, local, and Tribal governments on public banking, cooperative finance, purpose-driven enterprise, and financial democracy.

Section 12. Preventing Corporate Capture of Public Banking

1. Education mandate: Develops and distributes educational materials on public banking, corporate capture risks, and civic accountability.
2. Purpose supervision: Requires grantee oversight mechanisms such as citizen boards, periodic audits, anti-privatization charter protections, and transparent public ledgers.
3. Protection from capture: Requires statutory safeguards against private ownership, exclusive control contracts, and conflicted board composition.
4. Reporting: Requires annual grantee reporting and Treasury summary reports to the President and Congress.

Section 13. Safeguards Against Obstruction

Provides for administrative accountability for willful implementation obstruction and authorizes civil action under existing law where coordinated conduct unlawfully restrains state, territorial, Tribal, or local public banking development.

Section 14. General Provisions

1. Implementation remains subject to applicable law and appropriations.
2. Severability applies to preserve unaffected provisions if one provision is invalidated.
3. No private right of action is created by this order.

Section 15. Effective Date

This order is effective immediately.

IN WITNESS WHEREOF, I have hereunto set my hand this 20th day of January, 2029.

Signed,
Vincent Cordova
President of the United States, 2028