Public Banks for Communities
Small businesses and everyday people need access to the capital and credit that public banks can provide. Public banks are a practical solution to this challenge because they provide the necessary systems and tools to make banking convenient and safe for those who patronize them. Below we cover information that defines what exactly public banks are, examples of efforts to bring public banking into operation today, and legislation that was introduced in 2020 to bring public banking to the forefront.
Enter public banks.
A public bank is owned by people through a city or state and takes deposits, for example from tax revenues. The bank then reinvests its profits back into that community. Whereas investor profits are the top priority for private banks, citizens can exercise oversight over a public bank’s practices. Public banks can save municipalities and states money, create jobs and boost the local economy, and lend counter-cyclically to blunt the impact of Wall Street booms and busts. As the Public Banking Institute puts it, public banks “allow communities to declare their independence from risky, expensive, for-profit banks, and keeps taxpayers’ money working at home.”
Our mission is to inspire, enable, and support public bank initiatives, returning control of money and credit to states and communities. Our vision is that a network of publicly-owned banks will be established that create affordable credit and allow communities to declare independence from Wall Street’s high-risk, expensive, unaccountable private banking system.
The Public Bank NYC Coalition believes public money should work for the public good, not private gain. We are pressing for the creation of a public bank for NYC, as part of a broader vision for economic and racial justice. We believe a public bank, with a clear mission to serve critical neighborhood needs, will help achieve economic security and shared prosperity for all New Yorkers. Through direct actions, political advocacy and other joint efforts we will make this dream a reality!
California Public Banking Alliance (CPBA) is a coalition of public banking activists in California working to create socially and environmentally responsible city and regional public banks. Eight cities and regions, including Los Angeles, San Francisco, Oakland, and Silicon Valley have come together to form the California Public Banking Alliance. All Alliance members are at various stages of starting public banks. The California Democratic Party has also adopted a resolution supporting the creation of state-chartered public banks.
Public Bank LA focuses on the fact that Los Angeles manages more than five billion dollars in annual revenue collected from tax, fee and fine payers. The city maintains bank accounts with between $4B and $12B in cash, and manages up to $45B in investments for pensions and other funds. That money is currently held in accounts at commercial banks, where it earns next to zero interest. We can and must take back this money power for the people of the city.
Public Banking Act of 2020 (H.R.8721)
H.R. 8721 establishes legislation to allow for the creation of state and municipal public banks across the country. Among other things, the bill:
- Allows public banks to become members of the Federal Reserve
- Establishes loan facilities for public banks
- Prohibits the investment in fossil fuels by public banks
- Allows for the establishment of securities issued by public banks
- Provides for the establishment of public banks at U.S. post offices
- Provides grants for the formation, chartering, and capitalization of public banks