The California Public Banking Alliance (CPBA) received the Equitable Futures Award at the California Reinvestment Coalition award gala. Our important work in public banking and commitment to creating a more just and equitable economy for Californians was recognized in a stellar ceremony held in Los Angeles on November 3, 2022.

CPBA’s lead organizer, Trinity Tran, accepted the award on behalf of our all-volunteer statewide coalition for our work establishing two historic public banking bills in the California State Legislature, paving the way for the national public banking movement.The passage of the California Public Banking Act (AB 857) made California the first state in the nation to authorize the chartering of local public banks. CPBA followed that the next year by securing passage of the California Public Banking Option Act (AB 1177) which will provide universal financial services to unbanked and underbanked Californians.

These legislative victories will bring responsible banking services to municipalities and the general public, ensuring that cities can reroute scarce public dollars to fund essential services while enabling people to determine the future economic development of their communities. Additionally, these measures will aid in removing racial and economic inequities by making essential banking services accessible to all.

CPBA was recognized alongside our coalition compatriots SEIU California State Council, the largest public sector union in the state, and Assemblymember Miguel Santiago for championing progressive legislation, including the two public banking bills. The Alliance joined community members, allies and banking partners to celebrate the impact of our collective work on local communities.

Our coalition of public banking activists throughout California was founded in 2018 to create socially and environmentally responsible city and regional public banks. Since then, we’ve expanded our focus to make free basic banking services like check-cashing, direct deposit, and debit card accounts available to all Californians, removing barriers to financial stability that stand in the way of many working families.

Read our latest newsletter on our Equitable Futures Award and sign up on our home page to stay connected the California public banking movement.

Sacramento, CA – Members of the community coalition supporting the CalAccount program applauded Governor Newsom’s focus on ensuring all Californians have equitable access to financial services in the May Revision Budget proposal presented on May 13th for fiscal year 2022-23.

The May Revision budget allocates $4 million to complete the market analysis, the first step in the creation of the CalAccount program as required by the California Public Banking Option Act, AB 1177 (Santiago), signed into law in 2021. CalAccount guarantees all Californians a no-fee, no-penalty debit account, with no overdraft fees, no minimum balance requirement, automatic bill pay capacity and free ATM access at participating banks. After approval by the legislature, the CalAccount program would partner with financial institutions to close the widening wealth gap fueled by the exclusion of low-wage communities from basic banking services.

One in four California households are unbanked or underbanked, meaning they lack a bank account or pay a high price for basic financial transactions like cashing their paycheck.

Seventy-eight percent of unbanked households make less than $30,000 annually and 42% make less than $15,000 annually. Nearly half of all Black-identifying households and Hispanic-identifying households in California are unbanked or underbanked.

Assemblymember Miguel Santiago (D-Los Angeles), author of the California Public Banking Option Act,

“Thank you to Governor Newsom and Treasurer Ma for recognizing the urgency of analyzing a public banking option. This investment in the CalAccount market analysis will move California one step closer to providing public banking – no-fee, no-penalty banking – to all who want it. I look forward to working with the Legislature to ensure this funding is in the final budget.”

Glenis Murillo, a McDonald’s worker and leader in Fight for 15 and a Union,

“Free banking services make sure that Californians like me will be able to use our hard-earned dollars for food and rent, instead of paying banking fees. Too many Californians are living paycheck to paycheck but are having to pay hundreds of dollars each year just so that we can keep our bank accounts open. We are being penalized for being poor.”

Paulina Gonzalez-Brito, Executive Director, California Reinvestment Coalition,

“The state budget serves as a reflection of Californian’s priorities. The May budget revision affirms Gov. Newsom’s commitment to leveling the playing field and increasing opportunities for Black and Brown communities to participate in a financial system from which they’ve been historically excluded. We applaud Gov. Newsom’s decision to allocate resources to the California Public Banking Option Act, which should serve as a national model for other states looking to provide universal access to basic financial services.”

Trinity Tran, Lead Organizer and Political Director, California Public Banking Alliance,

“This is a major step for universal banking access which will be life-changing for millions of Californians facing barriers to basic banking from high-costs and predatory fees. With the $4M budget allocation, we hope to see CalAccount’s market analysis completed by 2023, enabling this vital program to move forward without delay.”

CalAccount.com

NextCity – Twice a year, when property owners pay their local property tax bills, Alameda County Treasurer Hank Levy sees a huge influx of cash into county coffers. After paying off the county’s own bills and other expenses, there’s always some cash left over that doesn’t need to be spent right away — though it’s all earmarked for salaries, programs, projects and other costs that come up later. As do most local or state treasurers, Levy’s office invests whatever he doesn’t need to spend right away, earning some interest for the county in the meantime.

Right now, Levy’s office holds an investment portfolio of around $7 billion. About half of that is invested in U.S. Treasury Bonds or other securities backed by the Federal Government — assets that don’t earn very much interest right now but they are considered “highly liquid,” meaning Levy can sell them easily to other investors when the county needs the cash. Another 20% of the portfolio is invested in certificates of deposit at banks, which Levy can schedule out to mature on a fixed timeline that matches up with the county’s cash flow needs. Levy recently moved $200 million into certificates of deposit at 10 local banks that committed to lend at least the same amount to Alameda County residents and businesses.

A group of local activists want to give Levy a new option for the county’s portfolio — depositing some of that $7 billion in a public bank, meaning a bank that’s owned by a unit of government, holds cash from those governments, and whose lending policies and priorities are set democratically by constituents.

Friends of a Public Bank East Bay formed in 2017 to push for such a bank. It released a blueprint in March for a bank that would be jointly owned by Alameda County as well as the Cities of Oakland, Berkeley and Richmond. The blueprint envisions the bank would make loans to support more deeply and permanently affordable housing, for small businesses owned by Black, indigenous and other people of color, and potentially even do some infrastructure lending for municipalities. It would be modeled in part on the Bank of North Dakota, established in 1919 and until recently the only state-owned bank in the country. Nearly all of the Bank of North Dakota’s deposits come from the state government, which is required by law to deposit all of its revenues in the state-owned bank.

Continue reading on NextCity.org.

People’s World – For too long a handful of corporate banks have controlled the financial destiny of the overwhelming majority of Americans. Throughout American history, a commercial oligarchy was responsible for feeding corporate greed and when markets collapsed from too much debt and not enough resources to adequately fund it, countless millions of workers and their families paid the price for other people’s folly and suffered disastrous consequences.

In recent years there have been severe recessions, collapsing financial markets, and subsequent government bailouts of corporate banks, protecting the interests of stockholders at the expense of depositors and helpless debtors.

There are alternatives to corporate banking though there are very few available to consumers.

The traditional savings, or building and loans, prominently featured in the Christmas classic “It’s A Wonderful Life,” are being swallowed up and taken over by larger corporate banks as a direct result of banking deregulation in the 1980s.

Recently there have been proposals in various states to authorize the creation of state-owned banks. There is already one state-owned bank in North Dakota that has been in existence for nearly a century and has been very successful in providing loans and other means of financial support to small farmers and business owners, as well as consumers.

The Governor of New Jersey, Phil Murphy, has also proposed a state-owned bank and made it part of his campaign platform when he ran for governor in 2017. In 2018 a bill to establish such a bank was introduced in the state legislature, and in 2019 Murphy signed an executive order creating a commission, known as the Public Bank Implementation Board, to provide exact details on how the bank would be established.

That same year California Governor Gavin Newsom signed into law the Public Banking Act which empowers county and municipal governments to establish their own community owned banks, and last year the New York Public Banking Act was introduced in the New York State Assembly, and the State Senate. Unfortunately, the recent pandemic, and fierce opposition from corporate banking and business interests, have delayed and frustrated attempts to proceed with successfully establishing publicly owned banks.

Continue reading on People’s World.

Public banking is on a roll! On Wednesday March 30, 2022, over 170 community members joined the California Public Banking Alliance (CPBA) Town Hall featuring elected officials from cities and regions actively working to form public banks. People across the nation are turning out to learn more about public banking — and Californians are at the forefront of making public banks a reality for the first time in generations.

Public banking activists, politicians and financial experts are busy producing viability studies and business plans so that public banks can come online in the near future. Public banks are a powerful tool to keep taxpayer dollars reinvested in local communities. We’re grateful for the leadership provided by legislators from five cities (Los Angeles, San Francisco, Long Beach, Richmond, and Santa Cruz) joining us to discuss their commitment to making public funds work for the public by their courageous efforts to establish local public banks.

If you missed last week’s town hall, tune in to the replay.

Thank you to all participants for joining in a robust town hall chat. We’ve added answers to your questions and comments in this document.

Read our event wrap-up on the CPBA Medium page.