In January, we at PBI proposed that 2018 would be the “Year of the Public Bank.” Now midway through the year, we’re delighted to see the idea is indeed proving true. With huge strides forward in so many cities and states — and the tremendous landmark of American Samoa launching the second Public Bank in the U.S. — the energy continues to build for public ownership of the financial institutions entrusted with public funds.
This article in The Progressive, published in February, saw the same potential we did and describes the successes and promising opportunities. It’s amazing to see the progress even since February.
“2018 could be a turning point in the way banking is done in America. The creation of publicly owned banks could save the public millions in fees and interest each year, lead to improved financial infrastructure, and drastically reduce the cost of public projects. ...
More articles pour in, giving additional coverage and power to the burgeoning movement to create Public Banks. The latest from Michelle Chen at The Nation focuses on New York:
“What if a city as a whole decided to create its own bank? The Public Bank NYC campaign calls for a full-fledged bank, owned and operated by and for the city, which could serve as a public trust invested in social justice, accountable to the public.
"Right now, billions of the City of New York’s dollars are being held in commercial banks. That’s a problem, because it’s those same banks that make decisions about whom to lend to, and at what rates. … Those banks are also the same big financial institutions that were deemed “too big to fail” during the last financial collapse, and were only kept afloat during the Great Recession with a huge bail-out, ultimately funded by public money.
“A public bank for the city, on the other hand, would be a publicly operated financial institution that would hold funds belonging to the city and disburse them across public projects and community-based organizations based on citizens’ actual needs. …
In another article in the growing press coverage of the movement, Nonprofit Quarterly tracks the growing momentum for Public Banks on both coasts. This publication reaches many large organizations who are also working for public good. This coverage demonstrates that the Public Bank solution could have broad appeal to many groups that can become partners in a large coalition actively pushing for Public Banks.
“In New York City, there is a push for a community [municipal] bank to manage the city’s funds and distribute them across projects and community-based organizations. Advocates argue that putting the city’s funds in the hands of a transparent, government-run organization that is accountable to the taxpayer will lead to better outcomes for disadvantaged groups and will be more socially oriented. The ideal public bank gets more ambitious. …
“A public bank can, however, mitigate [lending] challenges by acting, as in North Dakota, as a backstop and providing capital for community investment rather than lending directly. In Los Angeles, public bank supporters are clear this is what they advocate. ‘The city-owned Bank of Los Angeles,’ they write, ‘would be a banker’s bank, partnering with local credit unions and community banks, guaranteeing their loans for locally directed economic development, public works financing, and jobs creation.’”
Report: Public ownership, democratizing money, and preparing for the inevitable next financial crisis
Thomas M. Hanna of The Democracy Collaborative has released a compelling new detailed report arguing that we need to start now discussing a viable plan for public ownership — to demand a next financial system — so we are ready to fight for it in the face of the next crisis.
“The next financial crisis is all but inevitable. While its exact timing and severity cannot be predicted, both the accelerating frequency of crises in recent decades and the continued consolidation of the banking sector in an increasingly financialized economy suggest that we should be prepared for a crisis sooner rather than later. …
“Viewed in historical perspective, the ability of the financial sector to use its concentrated wealth to escape or subvert regulations by influencing the political process should come as no surprise. …
“This working paper presents another way forward, grounded in long-term public ownership of financial institutions. … Given the robust success of publicly owned banks both around the world and in the US itself, … during the next crisis, a robust policy response can and should convert failed banks to permanent public ownership. …
“This is not about now. It is about being prepared for when the pendulum swings. It is about having a plan in place when the next crisis occurs.”
Voters in Los Angeles will be the first in the country to choose whether to set up their city’s own Public Bank that has a mandate to serve the people, instead of private interests. The City Council voted June 29th to put a measure on the November ballot that would allow the city to form its own bank. LA’s charter currently prohibits the creation of industrial or commercial enterprises by the city without voter approval.
PBI Chair Ellen Brown writes in her latest article:
“The [Los Angeles] bank is expected to save the city millions, if not billions, of dollars in Wall Street fees and interest paid to bondholders, while injecting new money into the local economy, generating jobs and expanding the tax base. It could respond to the needs of its residents by reinvesting in low-income housing, critical infrastructure projects, and clean energy, as well as serving as a depository for the cannabis industry.”
The push for Public Banks is also moving forward at the state level, as Fiona Ma, who is currently State Board of Equalization Member and running for state treasurer, says California cannot wait on the Fed or the federal government to change their positions on the cannabis cash issue.
Ellen describes the bill introduced by Ma and State Sen. Bob Hertzberg — Senate Bill 930 — as “a pretty revolutionary idea. ...”
“ ... a closed-loop California banking system that is independent of the Federal Reserve and the federal system. SB 930 would bypass the Feds only for cannabis cash, and the bill strictly limits what the checks issued by these “pot banks” can be used for. But the prospects it opens up are interesting. California is now the fifth largest economy in the world, with 39 million people. It has the resources for its own cashless 'CalPay' or 'CalCoin' system that could bypass the federal system altogether.”
Los Angeles will be voting on a Public Bank this November! Los Angeles City Council on Tuesday, June 25 voted unanimously to start the process to put a measure to create a Public Bank for the city of LA on the ballot in November. The motion went to the Rules committee and back to the full City Council June 29, where the motion passed!
City Council President Herb Wesson brought forward the motion, which was supported by a roomful of Public Bank advocates, including PBI Chair Ellen Brown and Public Bank LA / Divest LA leaders Phoenix Goodman and Trinity Tran, whose group has been instrumental in pushing City Council forward.
Public Banking advocate and grassroots organizer Carlos Marroquin from the Bernie Sanders Brigade and Public Bank LA said, “It’s important for us to start looking for other options to get away from our community’s addiction to and dependency on Wall Street’s money, which has brought nothing but despair and fraud.”
Next City reports on the next steps for Public Banking advocates to build mass support among voters:
"For now, Public Bank LA will be focusing on educating voters on the issue and 'galvanizing support from stakeholders in the community, including grassroots groups, students, community leaders, and labor,' Tran says. 'We need to mobilize for a critical mass of support, to ensure a majority win in November.'”
VIDEO: Laura Flanders interviews #PublicBankNYC campaigners about creating a Public Bank for public good
Laura Flanders interviewed some of the advocates who recently launched the #PublicBankNYC campaign on her recent show.
“What would students in debt, worker coops, and entrepreneurs stand to gain from a public bank in the financial capital of the world? This week, putting communities over commodities w/ leading figures in the fight for a new economy for working people.
“Is a Public Bank in the financial capital of the world possible? And how will that public bank help worker co-ops, students, entrepreneurs, and more? Deyanira del Río from the New Economy Project, Linda Levy of the Lower East Side People's Federal Credit Union and Enlace's Cindy Martinez on why it's more needed than ever — and what they're doing to make it happen. Then, a look at the Public Bank NYC's recent launch action with New York City organizations, including New York Public Interest Research Group; NY Communities for Change; and The Working World.”
The launch of the #PublicBankNYC campaign earlier this month and the ongoing campaigns in California have generated several excellent articles.
Aaron Fernando writes in The Progressive, “The rally on June 5 [in New York] was reminiscent of the Occupy Movement. … But the new movement extends beyond protest to present a practical solution to the problem caused by big banks that continue to fail large segments of society. The rally on Wall Street called for establishing a public bank for New York City, as part of a broader movement to establish public banks in cities and states across the United States. ...
“‘It just made sense that we should be able to control what happens with our public money in our city, to not fund these things that so many of us are concerned about.’ said Hyung Nam, a member of the city’s Socially Responsible Investment Committee.”
Alejandra Molina writes in Next City, “Community organizer Carlos Marroquin, 57, of Hollywood, is a housing advocate who knows of homeless people who are employed but do not make enough to put a roof over their heads. He envisions a city-owned bank that would work directly with community banks and credit unions, ‘providing them the money they need to be able to give reasonable and affordable mortgage rates to people.’”Read more
California Public Banking Alliance forms to create a specialized Public Bank charter CA cities could use
Six local Public Bank grassroots groups came together in San Francisco Saturday June 9 for the first statewide meeting of the newly formed California Public Bank Alliance to advocate for municipal and regional Public Banks. A key goal of the Alliance is to get a bill creating a specific Public Bank charter through the CA state legislature by September 2019. This charter would enable cities or regions to use a specific Public Bank license to create Public Banks. It would also set out some basic values for public control of public money.
Advocates from Los Angeles, Santa Cruz, Santa Rosa, peninsula/south bay, Oakland and San Francisco participated in the meeting. Groups from Eureka and Santa Barbara are part of the Alliance but were not represented at this initial meeting.
To connect and find out more go to californiapublicbankingalliance.org.
Public Banking Institute Board Member Pamela Powers Hannley has announced she is stepping down from our Board to focus on her work as an Arizona State Legislator and Public Bank legislation sponsor in her state. We thank Pam for her insights and contributions to our organization and wish her expanded success in Arizona.