Mehrsa Baradaran via Skype. Photo by Suzanne O’Keeffe.
On Friday, January 24, Take on Wall St, a campaign of Americans for Financial Reform, hosted an illuminating symposium in Washington D.C. to examine public banking and related ideas that could transform our financial system. Among the wide-ranging proposals discussed were a plan for postal banking, individual Fed accounts, and a National Investment Authority that would create a “public Blackrock.”
Public banking successes and challenges were shared by Trinity Tran and David Jette of the California Public Banking Alliance and Ali Issa of Public Bank NYC. UC Irvine Law Professor Mehrsa Baradaran, a member of the Public Banking Institute Advisory Board, spoke about postal banking and how it could service the needs of the unbanked. In attendance and participating in the afternoon roundtable discussions were Thomas Hanna, another PBI Advisory Board member, as well as PBI’s Development Director Marc Armstrong and Communications Coordinator Suzanne O’Keeffe.
Panelists brought to light many innovative ideas and raised compelling issues. Raul Carrillo of Demand Progress and Americans for Financial Reform suggested at one point the meeting was the Alt-Davos.
Marcus Stanley, Policy Director of Americans for Financial Reform, brought perspective to the conditions creating the need for this symposium, among them that the gap in geographic inequality has grown much wider since the financial crash.
Saule Omarova, Cornell Law Professor, spoke of the rationale for a National Investment Authority, which she and her colleague Robert Hockett, another PBI Advisory Board member, have proposed. She explained that the NIA would be a hybrid, patterned in part after the New Deal era Reconstruction Finance Corporation, which would create funds of private money managed by the public devoted to financing proposals serving public needs.
Lev Menand, Columbia Law Academic Fellow and Lecturer, described a FedAccount proposal he helped devise along with Morgan Ricks and John Crawford, under which the Fed would allow individuals to hold accounts at the central bank and benefit from the same higher interest payments, instant clearing of payments, and other perks that banks alone currently receive.
Mehsra Barandaran and Steve Dematteo, Executive Assistant to the President of the American Postal Workers Union, discussed the urgent need for postal banking, which could save unbanked or underbanked families the exorbitant fees they’re currently forced to pay for simple check cashing services. Low income people spend $89 million yearly on financial services, more even than the US government spends on SNAP programs. Post offices are ubiquitous — there are more post offices than Starbucks and McDonald’s outlets combined — and every post office is already connected to the world’s post office payment remittance network, which could be turned on tomorrow.
Raul Carrillo discussed the surveillance system built into the financial system FinTech is constructing with efforts such as Libra, with the intent of harvesting the data of users of their private digital cash system. We need instead a public option that provides real privacy.
In the community organizing arena, California Public Banking Alliance advocates Tran and Jette emphasized the role of coalition building in their recent legislative success. Public Bank NYC advocate Issa echoed that sentiment and discussed how social justice needs in New York City are driving a growing interest in alternatives to the current financial system. As example, he discussed 12 community land trusts have started in NYC in the past few years.
The proposals and issues are exciting developments that speak to the expanding effort to turn our financial system from one catering only to the ultra wealthy into a democratic system operated for the benefit of our communities.