News Release

Public Banking Gaining Traction in California

MICHAEL BRENNAN, mryanbrennan@gmail.com@mrbrnn
Brennan is a research fellow for The Democracy Collaborative and just published the report “Constructing the Democratic Public Bank: A Governance Proposal for the Los Angeles Public Bank.” They also published a Public Banks policy kit for the Democracy Policy Network. Last year, Brennan had an op-ed in the Washington Post on the need for public banks in response to the pandemic.

Brennan explains: “In 2019, California passed AB-857, allowing the state to charter ten local public banks. The grassroots group Public Bank Los Angeles has been organizing since 2017 to advance public banking, and legislation to create a business plan for the public bank in Los Angeles is currently pending before the City Council. In June, San Francisco’s Board of Supervisors passed an ordinance mandating a task force create the business and governance plans for a public bank, and the California State Assembly passed AB-1177, which would create a free retailing banking public option. Ten cities and counties in central California have recently passed resolutions to begin the process of creating a joint regional public bank.

“The emerging California public banks have the potential to address a host of economic, social, and ecological crises, and public banking efforts across the country are looking to California’s cities and regions to lead the way. State and local governments need public financial infrastructure to recapture the public’s money being extracted by private banks and bond investors. The economic recovery from COVID-19 must be equitable. The ongoing housing crisis demands better tools to keep tenants and the public in control of housing and real estate development. To address the climate crisis, the financial sector must embed social values beyond profit. Economic development needs a paradigm shift toward community wealth building, especially as part of strategies for reparations for Black and Indigenous peoples.

“But with public banks moving now to a question of ‘how,’ rather than ‘if,’ movements have to begin critically considering the governance design of these banks. Because banking, finance, and policymaking are intentionally obscure and technocratic terrains, ensuring the new public banks are designed to address these crises requires ongoing popular education and engagement.”