Lawmakers, advocates and bankers testify as committee hears HB 2966 to study public financing and a possible state bank

The House Committee on Commerce and Consumer Protection opened a public hearing on HB 2966 on Jan. 28 to create a State Public Finance Task Force to study public-finance tools for housing, infrastructure and disaster recovery, and to evaluate whether a future bill to establish a publicly owned state bank would be warranted.

Supporters told the committee the task force would examine ways to keep more public dollars in Oregon and lower long‑term financing costs for local governments, housing projects and disaster recovery. "What this bill does is it sets up a task force to explore the possible means of public finance for everything from housing to critical infrastructure," Representative Mark Gamba said in testimony. He and other supporters pointed to the Bank of North Dakota as an example of a public institution that provided countercyclical lending during the 2008–09 crisis.

The bill’s supporters described a range of possible outcomes of the study. "A public bank, on the other hand, would almost entirely work for the benefit of Oregonians," Rep. Gamba said, and could "offer low interest loans to local governments to literally cut in half the financing costs for public infrastructure projects like water treatment plants or libraries," Representative Tom Anderson added. Senator Lou Frederick said he supported starting the work even though a proposal to address the cannabis industry was removed from the current draft: "We need to get the ball rolling on this, but I hope and I ask that future steps include how we can directly serve consumers, industry, and small businesses that have literally no banking options right now."

Opponents warned of legal and financial risks. Scott Bruhn, president and CEO of the Oregon Bankers Association and Community Banks of Oregon, urged rejection or caution, saying the Oregon Constitution restricts state authority to "establish or incorporate any bank or banking company or moneyed institution," and arguing the idea is costly and exposes taxpayers to risk. "A state bank would place taxpayers at risk for capital and liquidity requirements, depositor protections and guarantees, and credit losses," Bruhn said.

Witnesses from nonprofit and advocacy groups said Oregon communities face infrastructure and climate‑related financial pressures that additional public‑finance options could help address. Kelly McWilliams, executive director of Cultivating Solutions, told the committee that many smaller Oregon towns "are at a breaking point" with crumbling water systems and limited access to state funds unless they raise rates, a step that can push vulnerable residents out of their homes. Several other presenters — including legal academic Rowan Gray, Madeline West of the Oregon Public Banking Alliance, Willamette University Professor Emeritus Susan Leah Smith and Katherine Thomason of Mobilizing Climate Action Together — supported the task force as a measured step to study public options.

Proponents provided examples and figures. Rep. Gamba said Oregon paid about $581,000,000 in annual interest on some bond payments in 2019 and that combined schools, cities and counties paid about $700,000,000 in interest that year — figures offered to illustrate potential savings if profit margins were removed from certain public financing. Supporters emphasized participatory lending models that would partner a public institution with community banks and credit unions.

Committee staff signaled there may be a technical amendment from the state treasurer’s office. No committee vote or motion was recorded during the hearing; the event was a public hearing only.

Actions taken: the committee received testimony and closed the public hearing on HB 2966. No formal action or vote was recorded during the hearing.

The committee moved next to a separate public hearing on HB 2561 after closing testimony on HB 2966.