PBEB Viability Study

 
 

PLEASE NOTE:

The Viability Study was published in spring of 2022. The financial model in the study was strong at the time but is now out of date. We will release more current financials when we make our draft business plan public; please do not use the viability study financials for analysis. Contact us if you need more current financials for some reason.

A case for Public Banking

This Viability Study demonstrates that Public Bank East Bay (“PBEB”), a cooperative venture among the cities of Oakland, Berkeley, and Richmond and Alameda County, is a viable entity which can:

  • Achieve fiscal stability within the first three years

  • Provide loan support to under-resourced sectors of the local economy

  • Address local infrastructure needs

  • Reduce local government dependency on Wall Street banks

  • Decrease local fossil fuel and other harmful investments

  • Partner with local financial institutions to the economic and social benefit of all

  • Mitigate economic inequity in the region

  • Serve as a model for public banks around the state and the country

Summary

This Study and the accompanying financial projections show that the PBEB can achieve these goals while operating in a conservative and secure way, minimizing the financial risk to its sponsor governments.

The PBEB will be a low-overhead enterprise, with a small staff to run lending programs in partnership with existing local financial institutions. The lending programs will include:

  • making loans to local small businesses, in cooperation with local community development financial institutions (CDFIs) and local banks;

  • providing nimble capital to non-profit affordable housing developers for property acquisition, bridge financing, or foreclosure prevention, as well as financing for rehabilitation projects;

  • extending credit to help the East Bay do its part to ameliorate the climate emergency, financing building electrification as well as small-scale renewable energy installations;

  • supporting municipal finance, by providing modest credit to the member governments for small projects.

As the Bank grows and adds capacity, it will also be able to provide an alternative to Wall Street banks for cash handling for the member governments. Through careful management of these programs, the PBEB can deliver benefits worth many times the initial investment, and provide a vibrant institution that is a vital part of the East Bay economy for decades to come.