Public Bank LA advocates at Los Angeles City Hall on Tuesday, June 26, when the city council voted to place a public bank measure on the ballot. (Courtesy of Public Bank LA)
The Los Angeles City Council is moving forward with a proposed ballot measure that would ask voters this fall whether they want to create a publicly owned bank.
In a unanimous vote, council members on Tuesday, June 26, gave the go-ahead to begin the process of adding a measure on the November 2018 ballot that would amend city charter in order to create a city-owned bank. The city’s code currently prohibits it from entering into a “purely commercial venture,” unless it’s approved by voters.
To advocates, this move is a historic one that can set the tone for other public banking movements happening across the nation.
“The outcome will reflect the pulse of the national movement,” says Trinity Tran with the Public Bank LA campaign.
In New York City, dozens of residents and community organizers in early June gathered in front of the New York Stock Exchange to launch the Public Bank NYC Coalition, a group calling for the creation of a New York City-owned bank. Oakland and San Francisco are exploring the idea. New Jersey and Michigan are also considering setting up state-owned banks.
A city- or state-owned bank would, for example, hold tax dollars and other fees or income for local or state governments. The Bank of North Dakota, created in 1919, holds all state government deposits and some local government deposits. Instead of competing with other banks for loans, it primarily makes participation loans — lending alongside other banks that don’t have the cash on hand to meet the credit needs of their clients. The model has allowed North Dakota to strengthen its local banks, resulting in having the highest number of banks per capita than any other state, according to the Institute for Local Self-Reliance.
“We would have more autonomy and more say in how our city resources are invested. San Francisco is one of the hottest real estate markets in the world but we’ve got an affordability crisis. Why are we not investing our dollars to solve that?” San Francisco Board of Supervisors member Malia Cohen told Next City. “What I’m also envisioning is how a municipal bank could better support small businesses, financing small businesses run by minorities, women, veterans — those who don’t have access to the same level of capital.”
In L.A., the city government has been exploring the creation of a public bank since Council President Herb Wesson spoke of the idea in a July 2017 speech detailing his priorities for his final term. Wesson said municipally owned banks can help develop affordable housing and handle the money flowing from the newly legal recreational marijuana market.
It has quickly picked up momentum with city officials and Public Bank LA advocates working hand-in-hand.
The Public Bank LA campaign is part of part of Revolution LA, the organization that also ran Divest LA, which pressured the city to stop doing business with Wells Fargo, reported to hold more than $40 million in securities for the city. Divest LA urged Los Angeles city elected officials to divorce the city from Wells Fargo over the bank’s phony accounts scandal and support of the Dakota Access Pipeline.
To Read The Rest Of This Article By Alejandra Molina on Next City
Published: June 29, 2018