PUBLIC BANKING MOVEMENT GAINS MOMENTUM IN CALIFORNIA

PEOPLE’S WORLD, KEN BANKS — The last few years have seen significant momentum towards the goal of making public, people-owned banks a reality in many parts of the country. This is especially true in California.  In 2019 the governor of California signed a bill allowing counties and municipalities to establish publica banks.

Two years later, Gov. Newsom signed another bill that appropriates funds for a state commission to analyze the prospects and feasibility to establish a state bank that would also function as a commercial bank to provide personal financial services for residents of California.

Recently the Los Angeles City Council voted to allocate funding for a feasibility study to establish a city-managed public bank. This was a huge step forward to the creation of a public bank for Los Angeles. Though other cities and states have moved forward on proposals for a public bank, so far Los Angeles is the only public community to appropriate funds for that purpose.

The idea of a public bank for Los Angeles was under consideration for some time. In 2018 voters in Los Angeles rejected an amendment to the city charter enabling the creation of a public bank, which was heavily opposed by monopoly capitalists and predatory financiers who spent large sums of money to defeat the amendment. Despite this defeat, supporters of public banking would not give up.

This meant that Los Angeles would not have to rely on a referendum vote to establish a city-managed public bank. With support from grass roots community organizations, the Los Angeles City Council passed a law in 2021 to study the feasibility of setting up a public bank. To continue that effort, the City Council voted recently to appropriate $460,000 for funding additional means toward officially establishing a public bank. In doing so Los Angeles became the first city to actually appropriate funds to enable that effort for public finance to succeed.

The initiative to establish a public bank for Los Angeles was inspired by a report issued last May by the Jain Family Institute, a 501(c)(3) nonprofit organization dedicated to applied research for providing funds to public and community improvements. The report emphasizes how a public bank would facilitate providing funds for development and acquisition of affordable housing and public infrastructure.

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