Just days before the election, a substantial event occurred for public banking as Representatives Rashida Tlaib and Alexandria Ocasio-Cortez introduced The Public Banking Act, HR 8721. Similar in intent to California’s AB857, the bill would not create a federal public bank but would set up a common framework for states and municipalities pursuing state charters of their own public banks. The bill defines public bank membership in the Federal Reserve, provides seed money to get public banks started, removes barriers to their creation, establishes liquidity and credit facilities, and sets up federal regulatory guidelines at the Securities and Exchange Commission (SEC) and the Federal Deposit Insurance Corporation (FDIC).
Although the bill does not establish public banks, it encourages and supports the creation of public banks across the country, increases national awareness of the benefits of public banking, and provides additional legitimacy to local public bank movements. In a highly favorable article in Vox, Rohan Grey, law professor at Willamette University and a chief contributor to the bill’s creation, explained that while this proposal is comprehensive and supportive, there is still work ahead. He said:
“It’s not that tomorrow you’re going to see 1,000 of these across the country; it’s still going to be a hill-by-hill, city-by-city battle.”
More to come about this important legislation.