Public banks can drive the renewable energy revolution by investing in clean energy alternatives, divesting from fossil fuels, and building community wealth. Read “Public Banking for Climate Justice” by the Alliance’s Communications Director, Rick Girling, to learn more. “If we want a future other than ecological collapse, we need to remake the financial system that drives fossil fuel expansion. Public banks are key to this financial reformulation because they can be designed to require that climate action be a central focus of their lending.”
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.
CPBAâs 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, weâve 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.
The latest updates from cities and regions throughout California working to create municipal banks.
Central Coast – People for Public Banking Central Coast are optimistic that Santa Cruz County may soon issue an RFP for a Central Coast Public Bank viability study.
East Bay – The East Bay Viability Study was approved by Richmond in April 2022, and is likely to be approved by Berkeley and Oakland in September. There have been fundraising efforts by SF Foundation and East Bay Community Foundation who hosted two âconveningsâ including an introduction to public banking from David Chiu and Eric Hardmeyerâthe recording is available here. Gary Findley, the East Bay consultant, has vetted most of the bank board candidates and is working on the business plan.
Los Angeles – The RFP for the Los Angeles public bank viability study and business plan has been issued by the City of Los Angelesâs Chief Legislative Analystâs office. Consultant responses are due September 2, 2022. Two think tanks, the Berggruen Institute and Jain Family Institute, have assembled five working groups to analyze aspects of the Los Angeles public bank’s business plan: housing, small business lending, employee ownership, climate-centered lending, and the greater financial ecosystem. The report is expected to be completed by early 2023.
Los Angeles County – There are ongoing discussions on the formation of a Los Angeles regional public bank including the County and multiple cities.
Pomona Valley – The Public Bank Pomona Valley study group have met monthly since 2019, hosted online Town Halls, sent quarterly newsletters to our mailing list, supported the efforts of CPBA, and met with local elected officials and civic groups to educate and inform about public banking efforts. Visit bit.ly/76PBPV to find out more.
San Francisco – There have been 5 meetings of the Reinvest in San Francisco Working Group (RWG), community representatives and financial experts charged with developing a public bank business plan for SF. SFPBC is proposing a governance plan to the Working Group, as well as offering input for community engagement with consultants from Contigo who will convene focus groups with various sectors of the community. The bank plan consultant, HR&A Associates, is moving forward on plans for a revolving loan fund that will transition into a public bank by 2028.The latest updates from cities and regions throughout California working to create municipal banks.
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 countyâs own bills and other expenses, thereâs always some cash left over that doesnât need to be spent right away â though itâs all earmarked for salaries, programs, projects and other costs that come up later. As do most local or state treasurers, Levyâs office invests whatever he doesnât need to spend right away, earning some interest for the county in the meantime.
Right now, Levyâs 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 â assets that donât earn very much interest right now but they are considered âhighly liquid,â 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 countyâs 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 countyâs portfolio â depositing some of that $7 billion in a public bank, meaning a bank thatâs 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 Dakotaâs deposits come from the state government, which is required by law to deposit all of its revenues in the state-owned bank.
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 peopleâs 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 âItâs A Wonderful Life,â 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.
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.
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 â 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. Weâre 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.
SF Gate – March 15, 2022. A vision for a public bank in the East Bay– and possibly only the second one in the country– got a boost Tuesday when Alameda County Supervisors voted to give $75,000 to a group aiming to start one.
Supervisors voted unanimously to give the money to Friends of the Public Bank East Bay, which has already taken steps to start a bank. (Supervisor Richard Valle was excused from the meeting.)
The money from the supervisors is for planning activities, according to a letter to the board from Supervisor Dave Brown. The money is coming from Brown’s fiscal management reward funds.
“A public bank would provide many public benefits to the community,” Brown wrote. “It would create a long-term multigenerational source of capital for East Bay communities, and would cut infrastructure construction costs significantly by providing low-interest loans.”
Brown added that such a bank “would return profit and interest to local communities and bring transparency and democracy to banking and investment of public funds. Lastly, a public bank would help strengthen local banks and credit unions by backing their loans and letters of credit.”
Friends of the Public Bank East Bay have already completed a viability study for a public bank, according to the group’s website. A viability study is a necessary step under the California Public Banking Act.
The California Public Banking Act was established by Assembly Bill 857 and signed by Gov. Gavin Newsom in 2019. The law enables government entities to form public banks.
Friends of the Public Bank East Bay are now working on a business plan, another step in the process required by law.
Public Banking took a huge leap forward this year with many first-in-the-nation accomplishments.
âĒ Passage of first-in-the-nation bill for universal free banking services. The California Public Banking Alliance (CPBA) and our allies pushed the California Legislature to enact Assembly Bill 1177 in order to provide financial services for unbanked or underbanked Californians. On October 4, 2021, Governor Gavin Newsom followed up by signing the California Public Banking Option Act (AB 1177) into law.AB 1177, authored by Assemblymember Miguel Santiago, authorizes a commission of financial access experts, community members, and government representatives to begin implementing the CalAccount program. Upon securing final approval from the Legislature, the program will create a state-sponsored retail banking option offering a zero-fee, zero-penalty debit card enabling direct deposit from employers and public benefits, automatic bill pay, and many other financial services to every Californian.
California Public Banking Alliance joined with SEIU CA, California Reinvestment Coalition, public banking advocates, unions, and community organizations across California to pass this landmark legislation that will help close the racial wealth gap fueled by the exclusion of low-wage communities of color from basic banking services.
âĒ The California Public Banking Option Blue Ribbon Commission is getting underway. The Governor, Treasurer, and Senate and Assembly Leadership are now in the process of selecting and seating the CA Public Banking Option Blue Ribbon Commission to begin operations in 2022, as required by AB 1177. CPBA is working to make sure it fulfills its promises.
In the months ahead, the CalAccount Blue Ribbon Commission will convene to conduct a market analysis and to determine the best way to implement the CalAccount program. There will be opportunities for advocates to take part in shaping the CalAccount program and co-hosting public outreach forums.
âĒ CPBA local affiliates are establishing the nation’s first municipal banks. Local public banking advocates are busy in San Francisco, Los Angeles, the East Bay, the Central Coast, Pomona Valley, San Diego, North Coast, and Humboldt County, working with their representatives getting their local public banks up and running. This is no small task. There is much work to be done to fulfil the requirements of AB 857, the California Public Banking Act passed in 2019.
âĒ City and county representatives need to pass enabling legislation.
âĒ Publicly-minded banking experts need to be located and summoned to fulfil the requirements of AB 857.
âĒ Money needs to be allocated.
âĒ Business plans need to be drafted.
âĒ Banking managers and administrators need to be identified Read our status updates on California Public Banking Alliance cities and regions.
âĒ On the Federal level and across the nation, public banking is sprinting ahead. On the Federal level and across the nation, public banking is sprinting ahead. The House Committee on Financial Services, chaired by Californiaâs Maxine Waters, held one of its first hearings on public banking. During the hearing on ââBanking the Unbanked: Exploring Private and Public Efforts to Expand Access to the Financial System,â Reps. Rashida Tlaib and Alexandria Ocasio-Cortez discussed the Public Banking Act of 2021 to foster the creation of public banks across the country by providing a pathway to establishing an infrastructure for liquidity and credit facilities via the Federal Reserve, and setting up federal guidelines for regulation.
Additionally, public banking advocates in New York, New Jersey, Massachusetts, Philadelphia, and many other states and cities throughout the US are pursuing establishing public banks.
The many accomplishments of 2021 will build momentum for the coming year and lay the foundation for our next steps in 2022 and beyond: Getting control of our money out of the hands of Wall Street banks, providing financial services to those most in need, and getting our municipal public banks up and running so our cities and counties can provide permanently-affordable housing, support small and worker-owned businesses, enable community solar, and meet other critical needs.
ABC7 News – October 8, 2021. Los Angeles might be the first major metropolitan city to create a public bank. A public bank would be owned and operated by the city.
Los Angeles City Council voted unanimously to take the first steps in seeing the viability of a public bank. According to city councilmembers, it aims to help low-income communities and could provide investment opportunities at a local level. And they say the bank operations would include:
Credit access for small businesses Financing for affordable and social housing Plus, opportunities for green energy investments
Continue reading and watch the video on ABC 7 News.
The basic functions of investment are too important to be left in the hands of private banks only interested in accruing profits. We need public banks â something the Public Banking Act, introduced by Reps. Alexandria Ocasio-Cortez and Rashida Tlaib, would provide.
While only a few dozen people across the country might tune in to a Wednesday morning subcommittee hearing under the House Financial Services Committee on solutions to increase access to our nationâs banking system, millions have now seen the viral clip of Rep. Alexandria Ocasio-Cortez taking her colleagues to task for failing to read the legislation on which they were commenting. And if youâd read the bill before hearing their comments, itâd be clear as day.
The Public Banking Act, introduced in October 2020 by Representatives Ocasio-Cortez and Tlaib, mirrors legislation that has been introduced in several states and passed in California, establishing a federal regulatory framework to oversee and service publicly owned banks at the municipal and state levels that place communitiesâ needs over corporate greed. After all, if private banks have FDIC insurance, access to the Federal Reserve and Treasury, and are (insufficiently) regulated by governments, then why wouldnât public banks?
What does it not do? Establish a national bank (the Federal Reserve is our central bank), take over private banks, create a single public bank, or funnel unlimited amounts of taxpayer revenue into high-risk loans, as Republicans on the committee claimed. Nevertheless, they insisted that a public-banking option would usher in an economic apocalypse and the death of American industry and innovation.
The hearings on public banking are the same every time. With every opportunity, Wall Street lobbyists and think-tank pundits â consistently the sole critics of public banking â pop up to repeat the same tired talking points: âHave you been to a DMV?â or âBig Brother is coming to crush competition and steal our freedoms and property!â These claims come despite legislation in numerous cities, states, and now Congress explicitly stating otherwise, and primarily serve to muddy the waters.
The CATO Institute and Competitive Enterprise Institute (both directly funded by the Charles Koch and fossil-fuel corporations, among others) and the American Bankers Association (the lobbying arm for Wall Street megabanks) have blatantly lied and misrepresented what public banking legislation clearly states to protect a status quo of private banks that have failed to invest in socioeconomic and environmental crises when theyâre not deemed profitable. While Republicans in Congress didnât bother to read the bills, they had no problem memorizing the talking points fed to them by the bankers and their think tanks.
What is public banking and why is it so scary? All one has to do is look to the Bank of North Dakota (BND), a bank owned and operated by the State of North Dakota. BND partners with credit unions and community banks across the state to increase lending capacity to the residents of North Dakota at more affordable rates, rather than letting Wall Street giants price gouge North Dakotans to maximize profits.
The result? North Dakota has more credit unions and community banks per capita than anywhere else in the country, and BND routinely returns its surpluses into the stateâs general fund to increase funding for public projects. Most impressively, through its requirements to make safe and sound investments, it was one of only a few banks in the country to operate in the black throughout the 2008 financial crisis and the 2020 recession sparked by COVID. Additionally, it has been a shining example and processed more PPP loans to North Dakotans than any financial institution in the country.
Over the past several years, weâve seen what looks like an apocalypse as wildfires left Californiaâs skies bloodred and choked by smoke, entire towns reduced to rubble, nearly all of which were found to be directly due to mismanaged infrastructure by the stateâs largest energy corporations. For decades, hurricanes have been leaving cities across the South underwater and ravaged after hurricanes.
Every year sees more carnage across the world as the clock to complete climate catastrophe ticks toward zero. The only path forward to save humanity is to face these crises head-on and build a new economic foundation capable of overhauling our energy grid to 100 percent renewable, building sustainable and truly affordable housing and transit systems and much more. Itâs vital that our governments are equipped with every tool possible to mobilize the resources needed.
Thanks to the work of grassroots organizers in cities up and down the state, 2019 saw the first public-banking legislation in a century pass in California, creating a regulatory framework and pathway for municipalities to establish public banks. Through the creation of public banks in California, cities like San Francisco, Los Angeles, New York, Philadelphia, Seattle, Chicago, San Diego, and many more would have additional tools to invest their public revenues and assets into large projects like public infrastructure, renewable energy, affordable housing, and partnering with local banks to further increase their lending capacity and spur more affordable investment in small business, housing, education, and more.
The for-profit megabanks have almost completely monopolized public finance and failed miserably to provide the services needed by the communities theyâre chartered to serve. Due to a lack of public options, every city in the country is forced to turn to Wall Street titans for banking services, held hostage by the banksâ profit margins and predatory practices. Millions across the country lack access to most basic financial services such as a checking or savings account, which the for-profit banking industry has continuously failed to provide, forcing the most vulnerable residents across the country to turn to payday lenders and the check-cashing industries that charge up to 400 percent interest rates. And their investments have accelerated environmental destruction and wealth inequality by directly financing fossil fuels, weapons manufacturers, and private prisons.
Amid all of this, there is virtually no mechanism to hold such banks accountable for their crimes, let alone democratize our financial sector. It seems like common sense to many. We pay taxes to a government and expect them to use those funds to provide services to residents and improve quality of life. Yet the reality is that the taxes we pay are shipped off to Wall Street and used to underwrite loans to finance oil pipelines, defense contractors, and overpriced student loans.
These conditions call for immediate governmental intervention, ironically creating the competition that reactionary politicians cry for as a driver of progress and innovation, failing to realize that a robust network of public banks is the very competition that can set a new industry standard by charging lower interest rates on public infrastructure and providing capital to credit unions and community banks to more affordably meet the needs of local economies.
For-profit giants have branded themselves âtoo big to fail,â yet continuously fail to meet the most basic needs of the communities theyâre tasked with investing in. Itâs time to embrace the opportunity to build a better, more equitable alternative â one thatâs accountable to the public and will uplift and empower the communities left behind by Wall Street. As Rep. Rashida Tlaib argues, itâs not that the banks are too big to fail, but that the people are too important to fail.
