The Sacramento Bee – October 4, 2021. California set a course to offer the nationâs first zero-cost, public option platform for personal financial services, under a new law signed by Gov. Gavin Newsom. Assembly Bill 1177, authored by Assemblyman Miguel Santiago, D-Los Angeles, calls for the state to conduct a market analysis of a state-backed program that would give Californians a public option for banking services like debit cards. The study would aim to determine with that service would be viable within six years. The commission must complete the analysis by July 1, 2024. Then, the Legislature could decide whether to launch a public banking program.
Black and Latino families are more likely to lack access to commercial banks than white and Asian households, a trend that Santiago aims to reverse with a public bank. âCreating a public option for banking and closing the racial wealth gap isnât only a moral imperative, but is necessary to foster greater financial security for all of our communities. This bill is a much-needed step to address the needs of the unbanked and underbanked and moves us closer to building a more equitable economy after the pandemic,â Santiago wrote in a statement urging lawmakers to pass his bill.
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September 10, 2021 – Rick Girling, Steve Sittig, Trinity Tran, California Public Banking Alliance.
Today the California State Legislature approved landmark legislation guaranteeing universal free banking access to all Californians. AB 1177 sets into motion the creation of the CalAccount program guaranteeing all California residents access to basic banking services without fees or penalties. The California Public Banking Option Act addresses the inequities in financial services acutely felt by communities that have been hardest hit by the pandemic and recession, inequalities such as discrimination, predatory lending, and vicious spirals of debt.
Californians are demanding banking reform because Wall Street banks have historically failed low-income communities of color. The State Legislatureâs approval of AB 1177 paves the way for a banking system centered on people instead of profits. In just a few months, AB 1177 has garnered extraordinary support in the effort to assure that all Californians gain access to banking services. The California Public Banking Alliance, along with AB 1177 co-sponsors, SEIU California and the California Reinvestment Coalition, gained endorsements from over 230 labor, community, and environmental justice groups to extend financial services to unbanked and underbanked residents. This broad support paid off handsomely as the legislation moved through the State Legislature and now heads to the Governorâs desk.
A public option for essential financial services can replace exploitative alternatives to traditional banking, reducing the wealth gap and helping Californians to avoid catastrophic debt. As many AB 1177 supporters have explained, itâs very expensive to be poor. Minimum balance requirements, late fees, overdraft fees, higher interest rate charges for loans to the financially insecure, as well as check cashing and money order fees add up to substantial financial burdens placed on those least able to pay. As Mayron Payes testified to the State Assembly, âA lot of street vendors donât have a banking relationship because of the high fees and couldnât maintain the minimum balance. Many of them are operating on a cash basis and couldnât open a bank account.â This law would provide a banking card to all residents who request one that will enable them to have access to free banking services essential to everyday living.
There is a broad basis of support for this needed financial reform. The stateâs largest union, SEIU California with 700,000 members, is the primary proponent. Other labor unions such as the California Labor Federation and UFCW Western States Union have joined in. Community activist groups are showing strong support. Indivisible CA: StateStrong and 350.org chapters throughout the state are mobilizing their members to advocate for AB 1177. Environmental activists such as Friends of the Earth and Greenpeace International see the benefits of making financial services available to all.
California Public Banking Alliance (Co-Sponsor) SEIU California (Co-Sponsor) California Reinvestment Coalition (Co-Sponsor) Action Center on Race and the Economy (ACRE) Active San Gabriel Valley Alameda County Democratic Party All Rise Alameda Alliance for a Just Recovery, Sonoma County Alliance of Californians for Community Empowerment Action (ACCE) Alloy Asian Pacific Environmental Network (APEN) Asian Pacific Islander Small Business Program Bay Area Regional Health Inequities Initiative (BARHII) Black Arts Movement Business District Community Development Corp. of Oakland (BAMBD, CDC) Bay Area-System Change Not Climate Change Beneficial State Foundation Building the Base Face to Face California Asset Building Coalition California Association for Micro Enterprise Opportunity (CAMEO) California Coalition for Worker Power California Community Land Trust Network California Democratic Party California Democratic Party Delegates â 204 Delegates California Employment Lawyers Association California Labor Federation, AFL-CIO California Low-Income Consumer Federation California Progressive Alliance California River Watch Center for Farmworker Families Center for LGBTQ Economic Advancement & Research (CLEAR) City and County of San Francisco City of Berkeley City of Burbank City of Long Beach City of Los Angeles Climate Protection and Recovery Fund Cloverdale Indivisible CodePink Women for Peace Committee for Better Banks Communities for a Better Environment (CBE) Community Financial Resources Community RePower Movement Consumer Federation of California Consumers for Auto Reliability and Safety Contra Costa Move On Converging Storms Action Network Cooperation Humboldt Cooperative Center Federal Credit Union Courage California Culver City Vice Mayor Daniel Lee DSA Ecosocialists Democratic Socialists of America, San Francisco Democrats of the Desert Dreams for Change Duende Consulting EcoChoices El Cerrito Progressives Feel the Bern Democratic Club, Los Angeles Feel the Bern San Fernando Valley Feminists in Action Fight For 15 Fight for 15 LA Fight for 15 NorCal Fossil Free California Fresno County Democratic Party Friends Committee on Legislation of California Friends of Public Banking Santa Rosa Friends of the Climate Action Plan Friends of the Earth U.S. Green Lining Institute Green Party Humboldt County Green Party of Santa Clara County Greenpeace International Ground Game LA Hanmi Bank Haven Neighborhood Services Hillcrest Indivisible HOPE for All: Helping Others Prosper Economically Housing and Economic Rights Advocates (HERA) Hull Professionals Inclusive Action for the City Independent Indivisible Indivisible 30/Keep Sherman Accountable Indivisible 36 Indivisible 39 Indivisible 41 Indivisible 43 Indivisible 52 Indivisible Auburn Indivisible Beach Cities Indivisible CA -7 Indivisible California Green Team Indivisible California: StateStrong Indivisible East Bay Indivisible Lorin Indivisible Los Angeles Indivisible Marin Indivisible OC 46 Indivisible of Sherman Oaks Indivisible Petaluma Indivisible Sacramento Indivisible San Bernardino Indivisible San Diego â Persist Indivisible San Francisco Indivisible San Jose Indivisible Santa Barbara Indivisible Sausalito Indivisible Sebastopol Indivisible SF Peninsula and CA-14 Indivisible Simi Valley Porter Ranch Indivisible Sonoma County Indivisible South Bay Indivisible South Bay LA Indivisible Stanislaus Indivisible Ventura Indivisible Windsor Justicia Digna LA Forward Lassen County Democratic Central Committee Lawyersâ Committee for Civil Rights of San Francisco Bay Area Liberty Tree Foundation for the Democratic Revolution LITE Initiatives Livermore Indivisible Los Angeles Alliance for a New Economy (LAANE) Los Angeles City Councilmember Kevin de LeÃģn Los Angeles City Councilmember Curren Price Los Angeles City Councilmember Nithya Raman Los Angeles County Democratic Party Malonga Arts Residents Association March and Rally Los Angeles Marin Sunshine Realty Mayor Pro Tem G. Muir Davis, City of La Verne Mayor Robert Garcia, City of Long Beach Mayor Tim Sandoval, City of Pomona Mayor Jennifer Stark, City of Claremont McGee-Spaulding Neighbors in Action Media Alliance Mendocino County Public Banking Coalition Mendocino Womenâs Political Coalition Mill Valley Community Action Network Mobility Capital Finance, Inc. (MoCaFi) Mothers Out Front CA Mountain Progressives National Domestic Workers Alliance NextGen California New Economics for Women North Bay Jobs with Justice North Bay Labor Council Northridge Indivisible Occupy Sonoma Valley Orchard City Indivisible Orinda Progressive Action Alliance Our Revolution Long Beach Partnership for Working Families Peace and Justice Center of Sonoma County People for Public Banking Central Coast PODER (People Organizing to Demand Environmental & Economic Rights) Pomona City Councilmember John Nolte, District 1 Progress Noe Valley Progressive Alliance of the Inland Empire Progressive Asian Network for Action (PANA) Prosperity Now Public Bank East Bay Public Bank Long Beach Public Bank Los Angeles (PBLA) Public Bank Pomona Valley Public Banking Institute Public Counsel Public Law Center Ready to Help LA Renaissance Entrepreneurship Center River Watch Romero Institute Rose Foundation for Communities and the Environment San Diego County Democratic Party San Fernando Valley Young Democrats San Francisco Berniecrats San Francisco Board of Supervisors San Francisco County Treasurer JosÃĐ Cisneros San Francisco Public Bank Coalition San Francisco Supervisor Dean Preston San Jose Nikkei Resisters San Mateo Labor Council Sanctuary Santa Cruz Santa Cruz Climate Action Network Santa Cruz County Democratic Party Santa Cruz Indivisible SaverLife SEIU 1021 SEIU 721 SEIU International SFV Indivisible Shoreline Study Center Silicon Valley Rising Action Sister-to-Sister 2 SoCal 350 Climate Action Social Eco Education Sonoma County Climate Activist Network (SoCoCAN) Sonoma County Climate Mobilization Sonoma County Democratic Party Sonoma County Pachamama Alliance South Bay Progressive Alliance South Sacramento Seniors for Systemic Equality SouthBayCan Southern Poverty Law Center Strategic Actions for a Just Economy Strike Debt Bay Area Sunrise Movement LA Tehama Indivisible Thai Community Development Center The Climate Center The Cobb Institute The Future Left The Greenlining Institute Together We Will â San JosÃĐ Together We Will Contra Costa Together We Will/Indivisible â Los Gatos UFCW (United Food and Commercial Workers) Western States Council UFCW Local 5 UFCW Local 770 United Farm Workers UXO Architects Vallejo-Benicia Indivisible Venice Resistance We The People SD Western Center on Law & Poverty Wild Solar Wilshire Center Koreatown Neighborhood Council Women For: Orange County Womenâs Alliance Los Angeles Working Group for Emergency Climate Action Now Working Partnerships USA Worksafe Yolo Indivisible 350 Butte County 350 Chico 350 Conejo / San Fernando Valley 350 Marin 350 Silicon Valley 350 Sonoma 350 South Bay Los Angeles
Assemblymember Miguel Santiago, author Assemblymember David Chiu, author Assemblymember Ash Kalra, author Assemblymember Alex Lee, author Assemblymember Wendy Carillo, author Assemblymember Eduardo Garcia, author Assemblymember Mike Gipson, author Assemblymember Lorena Gonzalez, author Assemblymember Adrin Nazarian, author Assemblymember Phil Ting, author Assemblymember Buffy Wicks, author Senator Maria Elena Durazo, co-author Senator Ben Hueso, co-author Senator Lena Gonzalez, co-author Senator Josh Newman, co-author Senator Scott Wiener, co-author Assemblymember Laura Friedman, co-author Assemblymember Luz Rivas, co-author Assemblymember Reggie Jones-Sawyer, co-author
Originally posted on the California Public Banking Alliance’s Medium page.
Sacramento, CA â 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.
âStruggling families are hit by fee after fee at every corner, and BankCal will help them keep their hard-earned dollars for food and rent,â said Assemblymember Miguel Santiago, lead author of AB 1177. âProviding 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 Iâm excited to continue pushing to pass this bill in the Senate.â
âWe 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,â said Bob Schoonover, SEIU California President and SEIU 721 Executive Director. âLimited 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.â
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.
âTodayâs vote advancing BankCal, moves the state closer to being on the right side of history,â said Paulina Gonzalez-Brito, Executive Director of the California Reinvestment Coalition. âAB1177 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.â
âTodayâs Assembly vote in support of BankCal affirms that banking services are essential in allowing full participation in our economyâit is a necessity, not a luxury,â said Trinity Tran, lead organizer of the California Public Banking Alliance. âThe Assemblyâs passage of AB 1177 comes at a critical moment for struggling Californians and advances the movement toward a more equitable banking system.â
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.
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 stateâs 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.
