Governor’s Budget Blueprint Affirms California’s Commitment to Closing Financial Services and Racial Wealth Gap

Sacramento, CA – Members of the community coalition supporting the CalAccount program applauded Governor Newsom’s focus on ensuring all Californians have equitable access to financial services in the May Revision Budget proposal presented on May 13th for fiscal year 2022-23.

The May Revision budget allocates $4 million to complete the market analysis, the first step in the creation of the CalAccount program as required by the California Public Banking Option Act, AB 1177 (Santiago), signed into law in 2021. CalAccount guarantees all Californians a no-fee, no-penalty debit account, with no overdraft fees, no minimum balance requirement, automatic bill pay capacity and free ATM access at participating banks. After approval by the legislature, the CalAccount program would partner with financial institutions to close the widening wealth gap fueled by the exclusion of low-wage communities from basic banking services.

One in four California households are unbanked or underbanked, meaning they lack a bank account or pay a high price for basic financial transactions like cashing their paycheck.

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.

Assemblymember Miguel Santiago (D-Los Angeles), author of the California Public Banking Option Act,

“Thank you to Governor Newsom and Treasurer Ma for recognizing the urgency of analyzing a public banking option. This investment in the CalAccount market analysis will move California one step closer to providing public banking – no-fee, no-penalty banking – to all who want it. I look forward to working with the Legislature to ensure this funding is in the final budget.”

Glenis Murillo, a McDonald’s worker and leader in Fight for 15 and a Union,

“Free banking services make sure that Californians like me will be able to use our hard-earned dollars for food and rent, instead of paying banking fees. Too many Californians are living paycheck to paycheck but are having to pay hundreds of dollars each year just so that we can keep our bank accounts open. We are being penalized for being poor.”

Paulina Gonzalez-Brito, Executive Director, California Reinvestment Coalition,

“The state budget serves as a reflection of Californian’s priorities. The May budget revision affirms Gov. Newsom’s commitment to leveling the playing field and increasing opportunities for Black and Brown communities to participate in a financial system from which they’ve been historically excluded. We applaud Gov. Newsom’s decision to allocate resources to the California Public Banking Option Act, which should serve as a national model for other states looking to provide universal access to basic financial services.”

Trinity Tran, Lead Organizer and Political Director, California Public Banking Alliance,

“This is a major step for universal banking access which will be life-changing for millions of Californians facing barriers to basic banking from high-costs and predatory fees. With the $4M budget allocation, we hope to see CalAccount’s market analysis completed by 2023, enabling this vital program to move forward without delay.”

CalAccount.com