By Chase DiFeliciantonio, North Bay Business Journal. A bill that would allow some municipalities to establish their own banks in California edged through a state committee Wednesday.

The legislation, Assembly Bill 857, passed the Senate Governance and Finance Committee on a 4-3 vote with the support of Chairman Mike McGuire, D-Healdsburg.

Authored by Assemblymen David Chiu, D-San Francisco, and Miguel Santiago, D-Los Angeles, the bill would allow local governments of a certain size to create publicly owned banks with the goal of divesting from large banks invested in the fossil fuel industry, private prisons, and other industries while investing local tax money back into communities.

Municipalities could also band together to create joint powers authorities under the bill.

Continue reading on North Bay Business Journal.

Nomi Prins leads a panel discussion on big banking featuring Sean Stone, Trinity Tran (California Public Banking  Alliance and Public Bank LA), and David Dayen.

Watch on The Young Turks.

North Bay Business Journal talks with California Public Banking Alliance members Chris Petlock, Shelly Browning and Susan Harman.

Should banks exist to make a profit, a difference, or both?

A bill in the California Legislature allowing municipalities to create their own banks could upend how they handle their money and finance long-term projects. It also has the potential to squeeze out larger financial institutions, replacing them with these so-called “public banks.”

The legislation, Assembly Bill 857, could also have a resounding impact on the North Bay.

Cities and counties could combine to found a bank that would replace larger institutions in underwriting “participation loans” made to projects in partnership with local banks and credit unions, according to Susan Harman of the Public Bank East Bay advocacy group, part of the statewide California Public Bank Alliance.

“We would replace Wall Street banks, offer local rates and the money would stay local,” Harman said. “The public bank would buy that loan essentially, back it, and provide the capital that the credit union or community bank would need.”

There are different visions for how public banks could work and how many municipalities would be involved in one. In the North Bay, some advocates envision a wide-ranging conglomeration of cities and counties participating in the bank.

Under the bill, municipalities could band together to create joint powers authorities, or JPAs, to increase their size and improve the chance of loan profitability.

Continue reading on North Bay Business Journal.

Beverly Press. The Public Banking Act, AB 857, passed its first hurdle in the California Senate on June 19. The measure passed through the Senate Banking Committee and now heads to the Senate Governance and Finance Committee.

Assemblyman Miguel Santiago (D-Los Angeles) said AB 857 has the broad support from labor unions, environmental groups, grassroots activists and municipalities throughout the state, though it’s up against heavy opposition from Wall Street banks.

“Wall Street bankers hate the idea of a public bank because it takes power away from them and gives it back to the people,” Santiago said. “AB 857 gives us the option to invest public dollars for the public good, and I say it’s high time we prioritized the people of California over the profits of billionaire investors.”

Assemblyman David Chiu (D-San Francisco) said the state is “standing up to say the public’s money should be used for the public good.”

Continue reading on Beverly Press.

By Tom Gogola, Pacific Sun. There’s an effort afoot in Sacramento for public banking that’s putting the focus on how localities manage their investment portfolios. A bill that’s currently parked in a Senate committee chaired by North Bay legislator Mike McGuire would, for the first time, allow municipalities or regions to create commercial banks that would function in much the same way as Wall Street banks like JP Morgan Chase and Wells Fargo.

Assembly Bill 857, authored by Assemblymen David Chiu and Miguel Santiago, sets out to create a regulatory framework to allow California to license public banks that would give cities the option to stop doing business with big banks and invest taxpayer money into local communities.

“We don’t have control over our own money supply,” says North Bay public banking activist Shelly Browning, who’s a longtime public bank activist. Her road to advocacy for public banking leads from Egypt’s Freedom Square protests, to the domestic Occupy movement, to the spring-off Occupy effort to get public banks in the public consciousness.

Continue reading on Pacific Sun.

San Jose Inside talks to California Public Banking Alliance organizer Jake Tonkel with South Bay Progressive Alliance.

Silicon Valley Bank opened in 1982 to serve startups shunned by big lenders, which saw the fledgling tech sector as innately risky. But Roger Smith and Bill Biggerstaff, the Wells Fargo defectors who founded the small bank with Stanford University professor Robert Medearis, had deep roots in the derring-do culture that would transform Santa Clara Valley into the world’s innovation capital.

Now with more than $60 billion in assets, Silicon Valley Bank long ago outgrew its provincial status. Still, those early days wove it into a rich tradition of community lenders that make decisions based on nuanced understanding of specialized markets and close relationships with borrowers.

Small banks have since become an endangered breed.

Once awash in neighborhood lenders and credit unions, the South Bay has lost the vast majority to mergers and acquisitions. Beloved local brands such as Saratoga National Bank, Peninsula Bank, San Jose National Bank and the Bank of Santa Clara gradually consolidated out of existence. Cupertino National Bank and Mid-Peninsula National Bank were rolled up into Greater Bay Bancorp in the 1990s. In 2007, the 41 Bancorps branches were slurped up by Wells Fargo. Borel Private Bank & Trust was sold to Boston Private Bank. CEFCU of Peoria, Illinois, acquired Valley Credit Union. The list goes on.

Continue reading on San Jose Inside.

A California bill that would allow San Francisco to open a city-run bank cleared a key state Senate committee on Wednesday.

Assembly Bill 857 paves the path for local jurisdictions to launch a public bank, which San Francisco and other California cities have been exploring for more than a year. It’s been urged forward by the idea to take the city’s $12 billion budget out of major banks that are known to invest in things like private prisons and oil companies and invest in issues like affordable housing, renewable energy, and low-interest student loans.

“The public’s money should serve a public purpose, not line the pockets of Wall Street investors,” said Assemblymember David Chiu, who represents San Francisco and introduced the bill in March. “Time and time again, we have seen big banks invest billions of dollars of our money in institutions most Californians are opposed to.”

Continue reading on SF Weekly.

By Jennifer Wadsworth, Good Times. Silicon Valley Bank opened in 1982 to serve startups overlooked by big lenders, which saw the fledgling tech sector as inherently risky. Roger Smith and Bill Biggerstaff, the two Wells Fargo defectors who founded the small bank with Stanford professor Robert Medearis, had deep roots in a culture that would turn Santa Clara Valley into the innovation capital of the world.

With more than $60 billion in assets, Silicon Valley Bank has long since outgrown its small-bank status. Those early days make it part of a rich tradition of community lenders that make decisions based on deep knowledge of the local market and close relationships with borrowers, but small banks have become a dying breed.

Here in the Monterey Bay, residents do still have Santa Cruz Community Credit Union. And even though Santa Cruz County Bank is merging with Lighthouse Bank to create a local powerhouse with roughly $1 billion in assets and a location in Silicon Valley, it is still not, by any means, a huge conglomerate.

Continue reading on Good Times.