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CONGRESS OF THE
COMMONWEALTH OF REDMONT
A BILL TO
Establish the Bank of the Commonwealth as a state-owned corporation providing public retail banking, independent of the Federal Reserve Bank
The people of the Commonwealth of Redmont, through their elected Representatives in the Congress and the force of law ordained to that Congress by the people through the constitution, do hereby enact the following provisions into law:
PART I - PRELIMINARIES
1. Short Title, Enactment, Purpose and Definitions
(1) This Act may be cited as the 'Bank of the Commonwealth Act', enacted immediately upon its signing.
(2) This Act has been authored by Speaker of the House xXTheoryXx and co-sponsored by Deputy President of the Senate TrueDarkLander.
(3) This Act amends the Legal Entity Act.
(4) Residents of Redmont, particularly newcomers and those without access to a private bank, lack a safe public option for holding money. Operating a public retail bank through the FRB would overextend its mandate and overwhelm its transaction capacity. This Act establishes a separate state-owned corporation to resolve that bottleneck and give the public a properly resourced national bank.
(5) In this Act:
(a) National Bank, or "the Bank" - the state-owned corporation established under this Act, operating as "Bank of the Commonwealth".
(b) FRB - the Federal Reserve Bank of Redmont.
(c) Department - the Department of Commerce.
(d) Board - the Board of Directors of the National Bank established under Section 3.
(e) Retail Account - a deposit account held by an individual citizen with the Bank.
(f) Eligible Person - any natural person who is a registered citizen of the Commonwealth of Redmont.
(g) Eligible Institution - a financial institution registered under the Banking Act or any succeeding acts and in good regulatory standing with the Department, as determined by the Department based on compliance with applicable banking regulations.
(h) LEA - the Legal Entity Act.
(i) Operating Costs - staff wages, transaction processing costs, regulatory compliance costs, and other expenses directly necessary to the Bank's day-to-day functions, as documented and published by the Board.
(j) Surplus Capital - funds held by the Bank in excess of its Operating Costs, loan obligations, reserve requirements, and stability reserve, as calculated at the close of each reporting period.
(k) Excess Reserves - funds held by the Bank from capitalised funds or operating surplus that are not required to back depositor balances, meet the stability reserve requirement, or satisfy outstanding loan obligations. Excess Reserves shall not include depositor funds.
(l) Inactive - a player who has not logged into the server for 30 or more consecutive days.
PART II - ESTABLISHMENT AND MANDATE
2. Establishment, Status and Mandate
(1) There is hereby established the Bank of the Commonwealth as a state-owned corporation, wholly owned by the Commonwealth of Redmont, distinct from the FRB, with its own accounts, balances, and books.
(2) The Bank may sue and be sued, hold property, and contract in its own name under LEA Part I Section 1(2). The Bank is a governmental entity under LEA Part II Section 1(1)(b). Notwithstanding LEA Part II Section 1(3), the Bank shall not be exempt from taxation imposed on registered financial institutions by any Act of Congress.
(3) The Bank shall provide simple, secure deposit accounts and basic banking services to Eligible Persons on a not-for-profit basis. Revenue shall be applied in the following order: first to Operating Costs; second to the stability reserve under Section 7(2); third to replenishment of the Starter Loan pool under Section 6(3)(e); with any remaining Surplus Capital returned to the DCGovernment account.
(4) The Bank shall hold client deposits to a minimum of 80% and shall not engage in lending or speculative investment except as expressly authorised by this Act or a future Act of Congress.
PART III - GOVERNANCE AND STAFFING
3. Governance and Staff
(1) Board and Managing Director. The Bank shall be governed by a Board of Directors, chaired by a Managing Director appointed by simple majority vote of both chambers of Congress for a term of one year, renewable once. The Managing Director shall be responsible for day-to-day operations. Where the position is vacant, the most senior member of staff shall serve as Acting Managing Director with all powers except bond issuance and capital market decisions, until Congress makes an appointment.
(2) Removal. The Managing Director may be removed by a simple majority vote of both chambers of Congress, or by the Department upon a finding of misconduct, negligence, or material conflict of interest. Once appointed, the Managing Director answers to the Congressional Committee established under Section 7(4).
(3) Disclosure and Conflicts. Prior to appointment, the Managing Director candidate shall submit a full financial disclosure in accordance with the Conflict of Interest Standards Act. Where the disclosure reveals a material conflict of interest, the appointment shall not proceed unless the conflict is resolved to the satisfaction of Congress prior to confirmation.
(4) Board Powers and Duties. The Board shall set the Bank's policies, fees, and account terms consistent with this Act. The Managing Director is the director of the Bank for LEA Part II Section 1(4). The Board and each of its members are subject to the fiduciary duty obligations in LEA Part III Section 3, applied with necessary modifications to a governmental entity.
(5) Staff. The Managing Director may hire staff as a recognised government job to operate the Bank. Staff shall be granted in-game permissions to process deposits, withdrawals, and transfers for the Bank's own accounts only, independent of and without access to FRB balances. All staff are agents of the Bank under LEA Part I Section 3(s).
(6) Staff Conflicts. No staff member, including the Managing Director, shall hold any ownership interest, directorship, officership, or executive position in any financial institution, investment firm, or entity engaged in financial services for the duration of their employment. Any staff member who acquires such an interest after appointment shall divest or resign within 14 days. Failure to do so shall result in immediate termination.
PART IV - BANKING OPERATIONS
4. Accounts, Deposits and Fees
(1) Accounts. Any Eligible Person may hold one Retail Account at any given time. An Eligible Person may upgrade or downgrade their account tier but may not hold accounts at multiple tiers simultaneously. The Bank shall not deny an account to any Eligible Person except where required by a court order, a sanctions ruling, or an order of the Department. Retail Accounts shall offer, at a minimum, the ability to deposit, withdraw, and transfer funds.
(2) Deposits and Backing. All funds deposited in Retail Accounts shall be backed to a minimum of 80% and available for withdrawal on demand. The Bank shall hold its reserves at the FRB. Where the FRB pays interest on those reserves, such interest forms part of the Bank's operating revenue. Where the FRB does not pay interest, the Board shall report the revenue shortfall to Congress in the next monthly report and may propose fee adjustments to compensate.
(3) Balance Caps. The Board may set and publish a per-account balance cap by tier. The basic tier balance cap shall not be set below $10,000.
(4) No Tax Exemption for Depositors. The Bank's governmental status confers no tax exemption on depositors. All taxes applicable to a depositor under any Act of Congress remain their personal liability and are not reduced, deferred, or extinguished by virtue of funds being held at the Bank.
(5) Fees and Interest. The Board may pay interest on Retail Account balances at a published rate, provided the Bank remains not-for-profit. The Board shall publish a fee schedule covering all services. The Board may impose a flat administrative fee, not exceeding $100, on transfers above a threshold it sets, published in advance.
(6) Account Tiers. The Board may establish tiered accounts, provided that a basic tier account is available to all Eligible Persons at no ongoing cost with full access to deposit, withdrawal, and transfer functions. Premium tier accounts may be offered with higher balance caps or additional features for a published monthly fee. No Eligible Person shall be denied a basic account because they do not wish to hold a premium account. Premium fees may generate a modest surplus above the cost of premium services, treated as operating revenue under Section 2(3).
PART V - REVENUE OPERATIONS
5. Revenue Operations
(1) Fee-Based Services.
(a) Escrow. The Bank may act as a neutral escrow agent, holding funds pending satisfaction of agreed conditions, for a fee published by the Board. Escrow arrangements shall not exceed 90 days unless all parties agree in writing to an extension. Where conditions remain unresolved at expiry, either party may apply to a court for a release order, or the Bank shall return funds to the depositing party pending resolution.
(b) Payroll Processing. The Bank may process payroll disbursements on behalf of government departments and, where capacity permits, other employers. The Board shall publish its fee structure for this service.
(c) Notarisation and Certification. The Bank may issue certified proof of funds statements, certify financial documents, and provide official certification of deposit records, for a fee published by the Board.
(d) Dormancy Fees. The Board may impose a monthly dormancy fee on accounts with no transactions for 30 or more consecutive days. Dormancy fees shall not apply to accounts with a balance below $500 or opened within the preceding 30 days, and shall not reduce any balance below zero.
(e) Property Trading Services. The Bank may facilitate property transfers by acting as a neutral intermediary, holding purchase funds in escrow pending transfer of title, issuing certified transaction records, and providing proof of transaction documentation, for a fee published by the Board. All property transactions facilitated by the Bank shall be documented in writing in accordance with the Contracts Act. The Bank shall not provide binding property valuations; valuations are the responsibility of the parties.
(f) Item Trading Services. The Bank may hold in-game items in trust on behalf of parties to a transaction pending fulfilment of agreed conditions, for a fee published by the Board. Items shall be held for a maximum of 90 days unless all parties agree in writing to an extension or a court order directs otherwise, after which items are returned to the depositing party. The Bank bears no liability for item loss caused by server events, bugs, or administrative actions beyond its control.
(g) Vault Services. The Bank may hold in-game items in its own vault for a monthly fee published by the Board. Return of those items may only be made to accounts with no outstanding vault-based debts. Where such debt exceeds 3 months, the holder shall be notified at the start of each month. Following the third such notice, the Bank may sell the items to settle the outstanding debt and shall reimburse one tenth of any remaining proceeds to the original holder.
(2) Interbank Lending.
(a) The Bank may lend Excess Reserves to Eligible Institutions at a rate no lower than the FRB's published reserve rate and no higher than 200% of that rate.
(b) Outstanding interbank loans shall not exceed 15% of the Bank's total Excess Reserves, measured at the close of each business day.
(c) Interbank loans shall have a maximum term of 30 days, renewable no more than twice. A borrower requiring continued credit after two renewals must retire the existing loan in full before a new loan may be agreed.
(d) Where an Eligible Institution fails to repay by the due date, the Bank shall notify the Department immediately. The balance shall be recovered through the Department's enforcement powers under applicable banking legislation. The defaulting institution shall be ineligible for further interbank lending for 90 days.
(e) All interbank lending rates, outstanding balances, and defaults shall be included in the Bank's monthly report under Section 7.
(3) Capital Market Operations.
(a) FRB Instrument Investment. The Bank may invest up to 20% of its Surplus Capital in instruments issued or guaranteed by the FRB. Depositor funds shall not be used. Holdings shall be reported monthly under Section 7.
(b) Item Investment. The Bank may purchase and hold in-game items as investment assets using Surplus Capital, with the intent to sell at a higher value. Item investment shall not exceed 25% of Surplus Capital. Depositor funds shall not be used. Holdings, purchase prices, and realised gains or losses shall be reported monthly under Section 7. Losses are recorded as operating losses and do not affect depositor balances.
(c) Property Investment. The Bank may purchase and hold in-game property as investment assets using Surplus Capital, with the intent to sell at a higher value. Property investment shall not exceed 30% of Surplus Capital. Depositor funds shall not be used. Holdings and gains or losses shall be reported monthly under Section 7. The combined value of item and property investments shall not exceed 40% of Surplus Capital at any time.
(d) Deposit Insurance. The Bank may administer a formal deposit insurance scheme on behalf of the Commonwealth, collecting premiums from Eligible Institutions in exchange for the government deposit guarantee. The premium rate shall be set by the Board in consultation with the FRB and published in advance. Premiums shall be held in a dedicated insurance reserve fund, separate from the Bank's operational accounts, maintained at no less than 5% of the total value of insured deposits. The Commonwealth remains the primary guarantor; the Bank's fund is supplementary. A valid claim arises from the confirmed insolvency or closure of a participating Eligible Institution, as determined by the Department. Claims shall be adjudicated by the Department within 14 days of submission.
PART VI - STARTER LOAN PROGRAM
6. Starter Loan Program
(1) Purpose and Eligibility. The Bank shall administer a Starter Loan Program providing low-interest loans to new players. An Eligible Borrower is a player who:
(a) Has no less than 6 and no more than 48 hours of total playtime;
(b) Has not previously received a Starter Loan under this Act; and
(c) Has submitted a written statement of purpose approved by the Board. Approved purposes include property purchase, business startup, and trade equipment. The Board shall publish the list of approved purposes. Applications not meeting an approved purpose shall be rejected. The Board shall require evidence of use within 30 days of disbursement; misuse of funds constitutes an event of immediate default.
No player may hold more than one Starter Loan at any time.
(2) Loan Terms. The Bank shall offer one Starter Loan to each Eligible Borrower on application. The principal shall not exceed $20,000. The Board may lower this cap without congressional approval; any increase requires a resolution of Congress on recommendation of the Board. Starter Loans carry interest on par with the FRB rate at the time of disbursement. Repayment shall be made in equal daily instalments over 60 days, beginning 14 days after disbursement.
(3) Default, Recovery and Funding.
(a) A Starter Loan is in default after 14 consecutive days of missed payment. The Bank shall issue a 3-day notice before commencing recovery. The Bank may recover any outstanding balance through standard collection procedures. No criminal liability attaches to a good-faith default.
(b) Where a borrower becomes Inactive, the Bank shall issue a 3-day notice, after which the outstanding balance becomes immediately due and the Bank may recover it from the borrower's in-game balance.
(c) Where a borrower is subject to the Pruning Tax, any outstanding Starter Loan balance shall be deducted from the pruned balance and returned to the Bank before the remainder transfers to the DCGovernment account.
(d) Where the borrower's balance is insufficient to satisfy the outstanding loan in full, the Bank shall recover whatever is available and write off the remainder as a loss. Courts shall give preference to the Bank in such enforcement proceedings, including speedy proceedings where possible.
(e) Starter Loans shall be funded from the Bank's capitalised funds as appropriated by Congress under Section 7. Where the pool falls below 20% of its most recently appropriated amount, the Bank shall notify Congress within 7 days and request replenishment. The Board may suspend new applications until replenishment is approved.
PART VII - FINANCES AND OVERSIGHT
7. Finances, Oversight and Regulations
(1) Capitalisation. The Bank shall be capitalised by such funds as Congress appropriates or are held by the Bank. The Bank shall maintain its own accounting records, separate from the FRB and from general government accounts.
(2) Stability Reserve. The Bank shall maintain a stability reserve of no less than 10% of total deposits, funded from operating revenue, which shall not be counted as Surplus Capital. The stability reserve may, by majority vote of the Board, be drawn upon to allow withdrawals in cases of extreme financial stress. Such a draw must be reported to the FRB immediately, and the Managing Director must reach an agreement with the FRB Governor on a recovery strategy. Any Surplus Capital remaining at the end of each taxation period shall be transferred to the DCGovernment account and documented in the Bank's monthly report.
(3) Oversight. The Bank shall be subject to oversight by the Department, which may conduct audits, require reporting, and apply administrative sanctions consistent with this Act. The Department may not revoke the Bank's authorisation to operate except by recommending to Congress that this Act be amended or repealed. The Board shall publish the Bank's aggregate balances and account totals no less than once per month.
(4) Congressional Committee. Congress shall establish a Congressional Committee to oversee the Board and the financial health of the Bank. The Committee may issue recommendations or warnings on the operations of the Bank and the Board. The Managing Director shall answer to this Committee following appointment.
(5) Independent Audit. The Bank shall be subject to an independent audit no less than once every 6 months, conducted by an auditor appointed by Congress. The audit report shall be published within 14 days of completion.
(6) Regulations. The Board may issue regulations to give effect to this Act, covering account opening, balance caps, interest, fees, account closure, interbank lending, and capital market operations. Regulations affecting monetary policy or the broader financial system shall be issued in consultation with the FRB. All regulations shall be consistent with this Act and published before taking effect.
PART VIII - CONSEQUENTIAL AMENDMENTS
8. Amendment of the Legal Entity Act
(1) Part II Section 1(5) of the Legal Entity Act is amended as follows:
(5) For the avoidance of doubt, the existing entities are:
(a) The executive departments;
(i) The Secretary of a department is the director of that department.
(b) Towns;
(c) Town departments and other entities created by a town bylaw or constitution;
(d) The Federal Reserve Bank
(i) All members of the FRB Board shall be considered directors of that public entity.
(e) The Judiciary
(i) The judiciary shall be regarded as a single governmental entity
(ii) All justices of the Supreme Court shall be directors of the governmental entity
(f) The House of Representatives
(i) The Speaker of the House shall be the director of the House of Representatives.
(g) The Senate
(i) The President of the Senate shall be the director of the Senate.
(h) Congress
(i) The presiding officer of the House of Representatives and the Senate are the directors of Congress.
(i) The Bank of the Commonwealth; the Managing Director appointed under the Bank of the Commonwealth Act shall be the director of the National Bank.
(j) Any other existing entities defined by the avenues of governmental entity formation.
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