Public Banking Progress around the U.S.

Our one existing public bank

North Dakota has a 100-year-old public bank. It’s no coincidence that North Dakota survived the 2008 recession in much better shape than any other state in the U.S. The Institute for Local Self-Reliance says:

BND functions mainly as a “banker’s bank” — meaning that most of its lending is done in partnership with local banks and credit unions.  About half of the bank’s $3.9 billion loan portfolio consists of business and agricultural loans that are originated by a local financial institution and funded in part by BND.  By participating in these loans, BND expands the lending capacity of North Dakota’s community banks, giving them added strength in competing against big out-of-state banks.

A STATEWIDE ALLIANCE

California public banking activists have joined each other in working for statewide legislation enabling public banks, and also to support each other and help new local groups get started. Check us out.

Activity Around the Country

July, 2018: The City of Los Angeles has initiated a ballot measure for the November 6 election, permitting the city to engage in a “purely commercial enterprise,” which would remove a major obstacle from starting a Los Angeles public bank. If you’re in Los Angeles, vote! If you’re not in Los Angeles, call your friends in Los Angeles and make sure they vote. And be sure to check out @publicbanksy on Twitter and Instagram, and publicbanksy on Facebook. An idea we wish we’d had.

April, 2018: Good news from Missouri; disappointing news from Santa Fe: St. Louis has formed a task force to investigate public banking. Meanwhile, Santa Fe, which was a contender for first public bank in nearly 100 years, has had a major setback:

… the immediate path forward for a financial institution owned and operated by the city appears hazy in light of the task force’s research. The group, still at work finalizing its report, was not able to definitively determine whether a Public Bank of Santa Fe would be viable but posited that startup costs and “daunting legal and regulatory obstacles” might well swamp whatever good might come of a community-centric alternative to corporate banks.

“If limited to the city of Santa Fe’s financial assets, the possible benefits that a public bank might generate are at best marginal and at worst would carry risk of non-viability because of the relatively small scale of the city’s financial means,” reads one draft task force conclusion.

The task force instead “encourage[d] the city to put its efforts toward working with state-level partners on a potential Public Bank of New Mexico.”

March, 2018: Alaska representatives are on board!

Representatives Scott Kawasaki (D-Fairbanks) and Chris Tuck (D-Anchorage) have filed legislation to create a state bank as a public corporation of the State of Alaska.  The Bank of Alaska would create new avenues for long-term economic growth by granting loans to Alaskan-owned businesses and emerging industries…

February, 2018: Okay, it’s not directly related to public banking, but we have to celebrate Janet Yellen’s final act as Federal Reserve chair: placing some real (if insufficient) penalties on Wells Fargo.

Upbraiding Wells Fargo for its chronic bad behavior, the Fed imposed a consent order that prohibits the bank from growing its assets any larger indefinitely, a severe handicap in the competitive financial industry. The Fed’s “cease and desist” order also forces Wells Fargo to replace another four of its board members this year, though it’s not yet clear exactly which directors will depart.

“We cannot tolerate pervasive and persistent misconduct at any bank and the consumers harmed by Wells Fargo expect that robust and comprehensive reforms will be put in place to make certain that the abuses do not occur again,” Yellen said in a statement.

When in living memory has any capitalist enterprise been formally prevented from “growing its assets indefinitely”?

January, 2018: New Jersey has a new governor, and a new banking and insurance commissioner, both of whom support public banking. Two state senators have already introduced a public banking bill in the legislature. Watch the Garden State.

Michigan is joining the movement, and this time the initiative is coming from a Republican legislator. Martin Howrylak.

December, 2018: Los Angeles makes a very strong commitment to divestment from predatory banks, which can only help the move toward public banking.

October, 2017: Los Angeles is moving fast!

Strong steps taken by LA City Council toward a Public Bank for Los Angeles have drawn a good deal of media attention, including coverage by the local CBS affiliate. The Ad Hoc Committee on Comprehensive Job Creation Plan began to debate the issue last Wednesday, Oct 4.

Following the successful Sept 29 meeting that took place between interested Councilmembers, legislative directors and Public Banking experts, Ellen Brown was invited to attend the Ad Hoc Committee and explain how a Bank of Los Angeles can be feasible, profitable and beneficial for the city’s residents.

The Ad Hoc Committee panel included the City’s Attorney Office, City Administrative Officer, Chief Legislative Officer, and PBI’s Ellen Brown.

In Seattle, during the city’s closed door 2018 budget talks, City Councilmember Kshama Sawant introduced a resolution for a $200k feasibility study for a public bank. Seattle supporters are flooding the phones to make sure this gets into the final budget.

July, 2017:  In Los Angeles, the City Council has instructed City Administrator and City Legal Analyst to “report back quickly” on the feasibility of a public bank to be known as the “Bank of Los Angeles,” as well as to sponsor resolutions moving public banking forward on the state level.

The recommendation to move forward comes from City Council President Herb Wesson, who is very interested in solving the cannabis banking issues (though cannabis is not mentioned in the official resolution).

In New York City, the New Economy Project is hiring a full-time organizer to get a public bank initiative off the ground.

June, 2017: Washington D.C. has budgeted $200,000 for a feasibility study for public banking in the District.

May, 2017: The City and County of San Francisco has committed to appoint a volunteer task force to study public banking and report back in six months. The task force was scheduled to start towards the end of June 2017, but is being slow to get started.

Senator Bernie Sanders has spoken out in favor of a Vermont state bank:

At the end of June 2017, the Santa Fe City Council approved the city mayor’s appointments to the public banking task force, which is now beginning its work. Since Santa Fe has previously done extensive studies and a five-year plan, this could be the final step before a public bank is formed. Elaine Sullivan, president of the key public banking advocacy group Banking on New Mexico , is a member of the task force. We eagerly await their results.

According to Nichoe Lichen, another Banking on New Mexico member, the State of New Mexico is also taking public banking seriously.

Portland, Oregon is organizing. As they say, “join the Public Banking Movement that is sweeping the United States.”

In Minneapolis, the Wells Fargo scandal is pushing lawmakers to examine public banking.

[Councilmembers] Cano and Gordon said the city should look at establishing a municipal bank or participating in a publicly owned banking operation.

The State of Pennsylvania is organizing for public banking. At the beginning of May 2017, Philadelphia divested from Wells Fargo, and given a community bank a one-year contract. Philadelphia has been paying attention to public banking for a few years now, and the divestment may help move that project forward.

The State of Colorado has a robust public banking group.

On May 20, at the California State Democratic Party Convention, candidate for governor Gavin Newsom gave Twitter a rallying cry for a public bank in California:

San Diego County, California is in the beginning stages of organizing for public banking, as is Santa Barbara, California.

If you know about more public banking efforts, let us know so we can keep this page up to date.