The first spread: Banks today get to keep the difference between the 2% they pay you for your savings and the 5% they charge for loaning your savings out.
The second spread: Banks today get to loan out 33 times their savings, or $33,000 for every $1,000 you save! What is the banker doing for all that money? Just entering the borrower’s info into a program which accepts or rejects the loan and sets the rate. You will be able to do that in your online account with the click of your mouse. And you won’t get an “inquiry” (which today hurts your credit), and there will be no Credit Reporting Agencies. You’ll receive a considerably higher rate for your savings, and pay a considerably lower rate on your loans.
The third spread: Banks today get to keep the interest on money waiting to be made “available” as it transits from one account to another. How long can it take in the era of high speed trading?
Fourth, Citizens additionally pay all the costs of physical bank branches: land, parking, buildings, utilities, supplies, equipment and payroll.
The Valentine Constitution’s public utility bank saves us all the costs of physical branches and the three “spreads”, and instead gives savers and borrowers fair interest rates.