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News Release

New Jersey Department of
Banking and Insurance

Acting Commissioner Justin Zimmerman

For Immediate Release:
February 6, 2024

For Further Information:
Dawn Thomas - E-mail
Teresa Sicard-Archambeault - E-mail
(609) 292-5064

Public Bank Implementation Board Provides Final Recommendations to Governor on Creation of New Jersey Public Bank

TRENTON — The New Jersey Public Bank Implementation Board, chaired by New Jersey Department of Banking and Insurance Acting Commissioner Justin Zimmerman, today submitted its final recommendations on the development of a New Jersey public bank to Governor Phil Murphy. The Public Bank Implementation Board unanimously approved the report on January 30.

“The board is proud to provide this report to guide New Jersey’s work in creating a public bank,” said Acting Commissioner Zimmerman. “On behalf of the board, I thank Governor Murphy for his confidence in the members and our work.  I also want to extend my appreciation and gratitude to the entire board membership for their dedication and hard work to advance the Governor’s innovative initiative that will benefit residents across our state.”

“Treasury has been proud to be a part of the Public Bank Implementation Board and of the hard work that led to the development of the recommendations now being made,” said State Treasurer Elizabeth Maher Muoio, member of the New Jersey Public Bank Implementation Board. “The public bank has been a vision of Governor Murphy’s since the earliest days of the Administration and this is an exciting step toward seeing that vision become reality.”

Chief among the report’s numerous recommendations are:

  • New Jersey’s public bank should be developed as a State-funded and partially State-controlled community development bank that is designed to play multiple roles in accelerating the investment of impactful capital in underserved New Jersey communities.
  • Structured as a private entity and overseen by a combination of State appointees, private sector representation, and community members within the state, the public bank entity should operate independently of existing State agencies.
  • To maximize the socially beneficial impact of the public bank’s investments and below-market rate lending, it should not operate at a profit initially, and should rely instead on patient capital supplied by State and philanthropic investors that accept returns on these investments which may fall below risk-adjusted market rates. However, the public bank should be required to leverage State funds to attract private capital and reduce its reliance on State funding over time.
  • The public bank entity should not be a depository institution but should seek funding from a diverse range of investors and non-depository investment vehicles to avoid bank regulations specifically focused on liquidity requirements that could reduce its opportunity to fulfill its mission.
  • The public bank’s core mission should be to work through and with existing financial institutions as much as possible, neither competing with nor replicating existing efforts.
“The board has provided Governor Murphy with a blueprint that will enable him to significantly improve the lives of New Jersey residents while prompting national discourse with elected officials, government administrators and the public on the concept of public banking,” said Phyllis Salowe-Kaye, current Executive Director of the Communities First Initiative, former Executive Director of NJ Citizen Action, and a member of the New Jersey Public Bank Implementation Board. “Governor Murphy has taken a giant step in delivering on a promise he made before he was even elected: the creation of a socially motivated public financial vehicle that will act as a multiplier for public financing and expand the number of solutions to our state’s most pressing social and economic problems. The recommendations we have provided him with are exactly the kind of alternative finance mechanisms that are needed in low- and moderate-income communities across New Jersey.”

“We’re very grateful to Governor Murphy for fulfilling his promise to create a public bank for New Jersey. This initial stage of that process will prove the merits of the concept and create the governance and financial infrastructure to later transition into a full-scale bank. That process of bank creation is formally underway and off to a fine start,” said Joan Bartl, Co-Director, Banking on New Jersey and member of the New Jersey Public Bank Implementation Board.

“These recommendations demonstrate that New Jersey possesses the creativity and commitment to address unmet needs in our communities,” said Tim Castano, Former President, New Start New Jersey and member of the New Jersey Public Bank Implementation Board. “While much works remains, the board has outlined an innovative path toward delivering catalytic capital to consequential endeavors.”

“I’m excited for the release of this report and proud of the work we have done,” said NJEA President Sean M. Spiller, member of the New Jersey Public Bank Implementation Board. “This is in an important step on the road to creating a public bank that will open up new opportunities for New Jersey residents and bring greater equity and economic justice to communities across our state.”

Prior to creating this report, the board recommended an initial entity to address areas in need of investment through a temporary financing structure. This suggestion resulted in the creation of the New Jersey Social Impact Investment Fund (SIIF), which Governor Murphy first proposed in his Fiscal Year 2024 budget and subsequently created when he signed bill S3977/A5670 into law, in June 2023 (P.L. 2023, c-67), along with a $20 million appropriation for seed funding to address three market gaps in impact capital. The SIIF will deploy below-market-rate capital for critical investments in affordable housing, infrastructure, and early childhood education facilities and will be managed by a private fund manager that will blend public and private investment.

The State engaged Next Street, an independent mission-driven advisory firm, to create the report with guidance and input from the Public Bank Implementation Board.

The Public Bank Implementation Board was created by Governor Murphy through Executive Order No. 91 in November 2019.

To view the Public Bank Implementation Board’s report visit: https://www.nj.gov/dobi/pressreleases/recommendpublicbanknjjan2024.pdf
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