By Sylvia Chi
Deadline: now and ongoing –
In recent years, a lot more people have started thinking about who’s running their banks, and who’s profiting – and whether they’re the ones who are losing. Now, California Assembly Bill 857 proposes to allow local governments to apply for a banking license from the state, so cities, counties, or regions could establish their own public banks. The legislation is sponsored by the California Public Banking Alliance (CPBA), a statewide coalition of grassroots advocates representing areas ranging from San Diego to Eureka, as well as Lawyers’ Committee for Civil Rights of the San Francisco Bay Area, Beneficial State Foundation, and Friends of the Earth. The East Bay is home to CPBA member Public Bank East Bay (formerly Friends of the Public Bank of Oakland), one of the pioneers of the public banking movement in the United States, and we’re calling on our state legislators to sign on as co-authors of this bill. Scroll down to see what you can do to help!
In short, a public bank is one that’s owned by a government, accountable to the public, and managed by professional bankers. (For a longer description, check out Wikipedia.) In the US, the main example of a public bank is the Bank of North Dakota (BND), a state-owned institution founded in 1919 that holds state and other public deposits. BND functions mainly as a bankers’ bank, partnering with local community banks and credit unions to issue loans. It has few retail functions, but its partnership with local financial institutions makes North Dakota home to one of the most robust local banking sectors in the country.
AB 857 would allow local governments in California to create their own versions of BND, strengthening our local financial institutions and keeping our public money in the local economy. Currently, Wall Street banks are the only option for banking services for most local governments. These banks enjoy record profits and anticipate regulatory rollbacks. But why should our communities support them, since they profit from financing and enabling precisely the same fossil fuels, private prisons, destruction of communities, and other reprehensible activities that our communities are actively fighting? Public banks can be a much-needed alternative to the mega-banks, help counteract the risky trend towards bank consolidation, and serve as a source of strength for local economies. They can even help finance the projects proposed in the Green New Deal.
Public banking is possible right here in the East Bay. The city councils of Oakland, Berkeley, and Richmond, together with the Alameda County Board of Supervisors, authorized a feasibility study for a regional public bank, which reached positive conclusions. After reviewing the study, the Finance and Management Committee of Oakland City Council voted to forward the study to the full City Council, which accepted it. The next step toward creating a public bank for the East Bay is to develop a business plan and apply for a license – which doesn’t exist yet. We need AB 857 to pass so the East Bay can move forward on creating our own local public bank.
AB 857 is gaining support in the state legislature, but the East Bay’s representatives haven’t yet signed on. Let them know you want them to support and co-author AB 857!
What you can do:
Ask your state senator and assemblymember to commit to co-authoring and supporting AB 857. If you don’t know who your state representatives are, enter your address here to find out.
What to say:
My name is _______, I’m a constituent, and I am a member of Indivisible East Bay. I support public banking as a way to strengthen the local economy. We need to pass AB 857 so the East Bay can move forward on creating our own local public bank. A public bank can help the East Bay by providing low-interest loans for underserved small businesses and affordable-housing developers, and for building needed public infrastructure. Please co-author and support AB 857.
- Senator Nancy Skinner (email) 510-286-1333 (district) or 916-651-4009 (Capitol)
- Assemblymember Rob Bonta (email) 510-286-1670 (district) or 916-319-2018 (Capitol)
Assemblymember Buffy Wicks (email) 510-286-1400 (district) or 916-319-2015 (Capitol)
Sylvia Chi is a member of Public Bank East Bay and legislative chair of the California Public Banking Alliance.