The San Francisco Chronicle discusses the proposal to create the nation’s first municipal public bank in San Francisco to address the city’s housing crisis and economic challenges. Modeled after the Bank of North Dakota, the plan aims to fund housing projects for low- and middle-wage workers, support small business recovery, and promote a carbon-neutral future. The bank would partner with private banks rather than compete with them, generating funds that enable community banks to provide financing at lower interest rates. The benefits of a public bank include facilitating affordable housing and jump-starting small businesses. The article quotes Sylvia Chi, the Alliance’s Legislative Co-Director and member of the San Francisco Public Banking Working Group: “If we’re going to redevelop the Westfield Mall into something, they should use green building techniques and make sure it’s as efficient and sustainable as possible,” Chi said.” Although the bank’s cash reserves would be modest at first, it could grow to channel significant funds into community initiatives over the next decade. The proposal has been sent to the Board of Supervisors for examination and approval, and it aligns with California’s authorization for cities to explore public banking. The Bank of North Dakota’s success and impact on various sectors provide insights into how a public bank could benefit San Francisco.

Read the article in the San Francisco Chronicle.

The Los Angeles City Council has voted to fund the first phase of a public bank that would empower communities and support projects driven by public interest. A public bank would be more beneficial than private banks in serving Los Angeles’ Black and Latino communities, small businesses, green energy initiatives, and affordable housing projects. To tackle our housing crisis, the LA public bank could build or preserve over 17,000 affordable housing units within 10 years, assist with construction loans, convert housing into affordable stock, provide mortgage assistance, and prevent the conversion of affordable housing into upscale homes. Low-income communities of color stand to benefit greatly from a public bank, as it would offer lower-cost debt, free banking, alternative credit scoring methods, and help employees purchase small businesses. It’s a chance to create targeted wealth and job stability for neglected communities. The LA public bank would be funded by deposits from the city, pension funds, and green mutual funds, bypassing expensive Wall Street middlemen. This means more direct access to funds for local government projects. The LA Times interviews key figures, discussing the far-reaching impact of the public bank on communities across Los Angeles, including CPBA and PBLA co-founder Trinity Tran.

Read the coverage in the LA Times.

California cities, from Los Angeles to San Francisco to the East Bay, are moving full steam ahead on public banking! LA recently approved funding for Phase 1 to plan and implement Public Bank Los Angeles, SF Public Bank is working to fund a Municipal Finance Corporation that will scale up to a public bank, and Public Bank East Bay is making moves on a business plan for a regional public bank. California leads the way in the movement to reclaim public funds from Wall Street banks and reinvest them in local communities.

Read the article on Next City.

CAL
ACCOUNT

Thanks to your support in 2021, we successfully advanced the California Public Banking Option Act (AB 1177) toward implementation. This crucial bill aims to address financial exclusion among unbanked and underbanked Californians. Today, we are reaching out to you to request your support for an important matter.

AB 1177 seeks to establish the CalAccount program that will provide free essential financial services to individuals with limited or no access. Services like check cashing, bill payment, and debit card functionality will be offered by a state-administered bank account to improve financial security for marginalized communities.

We have been closely monitoring the CalAccount program’s progress and are concerned about the lack of transparency and community input in the bidding process to select a firm to conduct the market analysis. On June 21, the CalAccount Blue Ribbon Commission plans to select a contractor for the analysis, but the details and evaluation process have not been shared with the public.

Transparency is vital for building trust and effectively implementing the CalAccount program. We kindly request your support in signing a letter to California State Treasurer Fiona Ma urging a postponement of the contractor selection until community input and transparency are assured. This will allow the most impacted communities to review the process, share their experiences and expertise, and have an opportunity to express concerns.

Your endorsement of CalAccount AB 1177 is invaluable, contributing to a program that serves historically excluded individuals. To be included in our letter, please reply to this email (calpba@gmail.com) with your Name, Title, and Organization by 12pm PST, Tuesday, June 20.  If you prefer your organization to be removed from the endorsers’ list, kindly let us know. For individual supporters, please send us your full name and city.

Letter to CA State Treasurer and CalAccount Commissioners

If you would like to join us at the committee hearing, it will take place at the Paul Bonderson Building, 901 P Street Room 102, Sacramento, CA 95814 at 1:30 pm on Wednesday, June 21. The meeting agenda is here.

Interested members of the public may use this number to call in to listen to and/or comment on items before the Commission. Public Participation Call-In Number: (877) 411-9748 Access Code: 3790012.

Thank you for your ongoing support and commitment to financial inclusion for all Californians.

The California Public Banking Alliance and Public Bank East Bay organizer Susan Harman started a women’s public banking group with Women’s International League for Peace and Freedom to encourage women activists across the country to get involved in the public banking movement and promote the idea of a more equitable and locally-focused banking system that serve the needs of the community, prioritizing accessibility, transparency, and sustainability.

Read in Ms Magazine: Why Banking for the Public Good is no Pipe Dream.

Trinity Tran’s article, “Transcending Finance with Public Banking,” part of the Institute for the Future’s “Imagining Equity: Explorations into the Future of Enterprise” series, discusses the public banking movement’s goal to address longstanding issues in the financial system, including fraudulent activities by big banks like Wells Fargo and JPMorgan Chase. Instead of relying on big banks, cities and states are turning to public banks to invest in their communities, with California passing legislation allowing for the creation of city and regional public banks. Public banks prioritize community needs, such as affordable housing, clean energy, and public transit, while also offering cost savings to taxpayers and expanding banking services for those with limited options. With several California cities and counties exploring the creation of their own banks and federal legislation in the works, the public banking movement is gaining momentum. Building a network of public banks at the local and state levels can help create a more equitable financial system.

Read the essay on IFTF.

Read on Medium.

The Alliance’s Rick Girling penned an op-ed discussing the banking system’s shortcomings following Silicon Valley and Signature Banks’ collapse. Advocates propose public banks to offer fair services and break the cycle of bank failures and bailouts.

Read the article on El Tecolote
Artwork: Mural Doctor

The Alliance’s Julian LaRosa’s latest piece in Jacobin. Silicon Valley Bank’s collapse was no aberration: hundreds of private banks in the US have failed since the Great Recession. For a more stable financial system that actually meets ordinary people’s needs, we need to expand public banking.

One of the great philosopher-artists of the 2000s and 2010s (though maybe not so much in recent years) once said, “No one man should have all that power,” and this nugget of wisdom has been ringing in my head over the past two weeks. In a Slack chat among prominent VCs and startup execs, Silicon Valley venture capitalist Peter Thiel orchestrated the beginnings of a bank run against one of the most influential banks and the financial backbone of the Bay Area tech scene, Silicon Valley Bank (SVB), ultimately bringing the bank to its knees within days.

What happened with Silicon Valley Bank? Because banks don’t keep all their deposits on hand — deposits are used to provide loans or to buy various securities like bonds — they rely on depositors not all coming for their bags at once. But occasionally, a wave of withdrawals leads to banks panicking and liquidating their assets to cover newly withdrawn deposits — sparking further hysteria as everyone races to get their money out. Then down goes the bank, sending shockwaves across the economy.

This is more or less what happened to Silicon Valley Bank after Thiel advised his portfolio companies to pull their deposits out of SVB. Over the weekend, the Federal Deposit Insurance Corporation (FDIC) intervened, closing the nation’s sixteenth-largest bank and forcing it to liquidate its assets and make depositors whole. In a couple days, we saw the largest bank failure since the Great Recession and the collapse of Washington Mutual.

Following the collapse of SVB, spooked depositors at Signature Bank rushed to withdraw $10 billion, triggering a federal closure of both banks to contain the potential contagion. Stocks across the financial sector then plummeted throughout the United States and across the pond. The year had already been a rough one for Credit Suisse, its stock price slumping even before the SVB-induced crash. But once the heat turned up and depositors started fleeing, the Swiss Central Bank stepped in to provide a $54 billion bailout to keep Switzerland’s largest bank afloat.

In the subsequent days, the press watched the situation like a hawk. Who would be next? Were we in for another Great Recession? Would workers be able to get their next paychecks?

Yet the corporate media missed a key point: banks, when left to their own devices, will fail. SVB certainly wasn’t the first, and it won’t be the last. Since the Great Recession over 560 banks have failed in the United States, often followed by Wall Street titans swallowing up their assets. Banks that were too big to fail in 2008 have grown still larger as the financial sector becomes more and more concentrated. Regulations meant to constrain financial chicanery have proven too weak to the task.

So the question is, what do we do moving forward? Do we continue to let the vultures prey on their dying competitors? Will the government keep having to bail out reckless banks?

Continue reading in Jacobin.

March 18, 2023. Trinity Tran, Truthout.

We have a pivotal opportunity to reshape our financial system for the benefit of all.

The recent collapse of Silicon Valley Bank (SVB) and Signature Bank — the second and third largest bank failures in U.S. history respectively — has laid bare the vulnerability of the private banking sector.

With over 563 federally insured banks toppling between 2001 and 2023, it’s impossible to ignore: The status quo is unsustainable. Amid this financial turbulence, the need for public banking has never been more pressing. It’s high time we seriously consider public banking as a stable, transparent, and accountable alternative that would firmly anchor public interest at the heart of the financial system. After all, banking should be a public utility that benefits everyone, not a high-risk game played by bankers trying to score big profits.

The failures of SVB, Signature and Silvergate banks can be traced back to poor management decisions and high-risk strategies. SVB invested in long-term government securities amid concerns about rising interest rates as well as the volatile venture capital industry, while Signature and Silvergate banks ventured into speculative cryptocurrencies. All three banks shared one common problem: massive uninsured deposits from a handful of ultra-wealthy customers.

When the banks teetered on the edge of collapse, the Biden administration, FDIC, and Treasury swooped in with a bold bailout. They created a “systemic risk exception” to protect all deposits, even those beyond the $250,000 threshold. Ironically, all depositors were “made whole” from the Deposit Insurance Fund — the very fund that Silicon Valley Bank had previously lobbied against, arguing that increased contributions would hurt their bottom line.

This intervention raises a crucial question: If the government is ultimately responsible for ensuring the banking system’s stability, why not opt for public banks designed to serve the public interest from the outset?

Continue reading on Truthout.

In California, 81% of unbanked individuals earn less than $15/hr, hitting low-income families and people of color the hardest.

“We can’t create a stable economy when financially underserved households spend an average of 10% of their take-home pay in fees and interest, just to access their own money and pay bills,” Assemblymember Miguel Santiago said. “Creating a public option for banking and closing the racial wealth gap isn’t only a moral imperative, but it also creates greater financial security for all of our communities.”

This is where our CalAccount bill AB 1177, the CA Public Banking Option Act passed by the legislature in 2021, comes into play. By Summer 2024, a market analysis for the program will be completed, paving the way for a universal debit account for all Californians with zero fees or penalties.

Read the article on CalMatters.