It’s time for a Public Bank in DC

DC Wells Fargo rally

Jeremiah Lowery of Sierra Club DC speaks at a rally last year urging the DC government to cut ties with Wells Fargo. Photo courtesy of DC ReInvest coalition.

 

Washington DC has had three of four public meetings about Public Banking — the fourth one will be held tonight July 25th (see meeting details here.) Kim Lehmkuhl, an activist with DSA and DC ReInvest, writes in a powerful opinion piece in The DC Line that key District decision-makers have been diverting the focus away from the benefits of Public Banks, including servicing unmet local banking needs, saving District funds, and avoiding the existential risk posed by our current banking system as another financial crisis looms.

“Ten years ago, generations of black wealth were wiped out when whole communities lost their homes to aggressively marketed subprime mortgages. Today, illegal modern-day redlining continues apace. Affordable housing has essentially disappeared from the marketplace, as global capital preservation strategy drives needless luxury development, and private equity securitizes our rent payments. Resulting housing precarity drives displacement, and a homelessness crisis subjects DC residents to utterly inhumane living conditions.

“Wall Street financial institutions have proved over and over they can’t help but pursue ever-wilder speculation schemes, no matter the cost to our communities. The big banks are most certainly not interested in what the public actually needs to survive. …

“The [public] bank would become a powerful tool not just for meeting vulnerable residents’ most critical material needs, but also for advancing important public values and policy goals that otherwise get short shrift in the face of persistent market failures (or funding shortfalls from an antagonistic federal government).”

Lehmkuhl continues:

“A useful point of comparison on how much the District might save by ending its relationship with Wells Fargo comes from a community responsive banking analysis commissioned by the San Francisco Board of Supervisors. It found that San Francisco could retain and reinvest $864,000 annually from the fees on its short-term cash management accounts alone. A public banking bill to be introduced this fall will be guided by the work of San Francisco’s 16-member Municipal Bank Feasibility Task Force, which includes relevant city, state and regional agencies; civil rights and social justice advocates; community lenders; and legal and policy experts.

“This is in sharp contrast to the closed, consultant-led process currently taking place mostly under the radar in DC. The Department of Insurance, Securities and Banking rejected a Freedom of Information Act request seeking any documents related to the public bank feasibility study, including communications with the DC Council and its own Statement of Work, claiming a trade secrets exemption. This means that the stakeholders who manage to learn of the department’s poorly advertised and hastily thrown together public meetings (the final one is this Wednesday) are flying blind about the scope of its study, including whether it’s even aligned with the affordable housing, environmental sustainability and cultural-infrastructure goals outlined by the council.”

[Read the full article]

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