Sacramento, CA – Today, the California State Assembly approved landmark legislation that would guarantee all Californians access to basic banking services without fees or penalties. The California Public Banking Option Act, AB 1177 (BankCal), addresses the inequities in financial services acutely felt by communities that have been hardest hit by pandemic and recession: discrimination, predatory lending, and vicious spirals of debt. AB 1177 is endorsed by SEIU California, California Reinvestment Coalition, California Public Banking Alliance, and 200 racial and economic justice groups, faith-based and climate justice organizations, businesses, and labor unions.

“Struggling families are hit by fee after fee at every corner, and BankCal will help them keep their hard-earned dollars for food and rent,” said Assemblymember Miguel Santiago, lead author of AB 1177. “Providing a public banking option for essential financial services will help close the racial wealth gap. AB 1177 is a key tool to social and economic mobility, and I’m excited to continue pushing to pass this bill in the Senate.”

“We applaud the Assembly for supporting this bill and ensuring access to financial services for all Californians regardless of how much money they make, their zip code, or the color of their skin,” said Bob Schoonover, SEIU California President and SEIU 721 Executive Director. “Limited access to basic banking services like check cashing are a problem that disproportionately impacts low-income communities and communities of color. BankCal is a concrete step in making sure that everyone has the opportunity to recover and come back stronger from the devastation caused by the pandemic.”

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.

“Today’s vote advancing BankCal, moves the state closer to being on the right side of history,” said Paulina Gonzalez-Brito, Executive Director of the California Reinvestment Coalition. “AB1177 carries with it the potential to finally build an alternative to the extractive and exclusive Wall Street banking system that has failed historically low-income communities and Black, Indigenous, People of Color. A banking system that centers people instead of profits is a start toward addressing long-standing racial and economic inequities in the state.”

“Today’s Assembly vote in support of BankCal affirms that banking services are essential in allowing full participation in our economy–it is a necessity, not a luxury,” said Trinity Tran, lead organizer of the California Public Banking Alliance. “The Assembly’s passage of AB 1177 comes at a critical moment for struggling Californians and advances the movement toward a more equitable banking system.”

AB 1177 is modeled from the success of CalSavers and CalKids, similar programs aimed at creating greater financial stability for working families. To study the most effective and efficient way to operate the BankCal program, AB 1177 requires a market analysis. Upon completion of the market analysis and approval by the Legislature, AB 1177 establishes the BankCal program.

The BankCal program would allow Californians to create a BankCal account, use a BankCal debit card, deposit funds, automate bill pay, and set up direct deposit without fees or penalties.

LAist – Millions of low-income Californians might be able to bank free of penalties and fees if state lawmakers approve the latest attempt to create public banking.

AB 1177 would form a state-supported public bank board, which would partner with private banks to offer the free accounts. The program would be called “BankCal.”

“If a rich person earns money, that money makes money,” said State Assemblymember Miguel Santiago (D-LA), the bill’s author. “When a poor person earns money, that money is gouged from every corner you could possibly get it. You get gouged when you go to payday lendings, you get gouged at the banks. You get gouged on every transaction and every fee.”

The California Public Banking Alliance sponsored the measure. Co-founder Trinity Tran said the bill would help bridge the racial wealth in underserved communities:

“Because when poor folks have to pay for their financial services, that means they have fewer opportunities to grow credit, they’re rejected for loans, and that all amounts to a real disadvantage for millions of families.”

Gov. Gavin Newsom signed a bill in 2019 to allow independent municipalities to create their own public banks, but this would create a state-backed banking system.

Correction: A previous version of this article stated that previous California bills allowing public banking option failed. Actually, Newsom signed a bill years ago to allow independent municipalities to create their own public banks.

https://laist.com/news/banking-without-penalties-fees-ab117

By Margot Roosevelt, Los Angeles Time.

Escalating overdraft charges. Minimum balances. High ATM, check-cashing and debit card fees.

Banking can be expensive, especially for low-wage workers.

A score of California lawmakers have signed on to a new bill designed to offer Golden State households free financial services, taking on the state’s powerful banks at a time when easier access to banking services could help families cope with the economic fallout of the COVID-19 pandemic.

If it passes, the California Public Banking Option Act would create BankCal, the first state government program in the nation to offer universal consumer banking, according to financial policy experts. The program would provide no-fee debit cards, direct deposits from employers and government agencies, electronic bill payment and ATM access, directly competing with private banks.

https://www.latimes.com/business/story/2021-04-06/bankcal-california-banking-bill-offer-free-services-covid-19