By Brett Garrett, Rick Girling, Susan Harman, Debbie Notkin, Trinity Tran
Public banking took a gigantic step forward on Monday as the Senate Governance and Finance Committee under Chair Senator Mike McGuire heard informational testimony for AB 310, which will establish the California state public bank to address the catastrophic economic consequences of COVID-19. This historic hearing confirmed that Treasurer Fiona Ma and Controller Betty Yee will work closely with the California Public Banking Alliance (CPBA) and legislative authors Assemblymembers Miguel Santiago (D-L.A.) and David Chiu (D-S.F.) in the coming months. With their support, the bill is likely to be passed and signed into law during the next legislative session in 2021.
While abbreviated legislative sessions resulting from the pandemic postponed a vote on AB 310 until the next session, the support of the Treasurer, the Controller, and the chair of the Senate Governance and Finance Committee has given public banking advocates and financial experts a chance to refine the proposal to grow its support, popularity and efficacy, and see it passed and signed into law next year.
Assemblymember Miguel Santiago testifies in support of AB 310 in the Senate Governance and Finance Committee.
âAB 310 is about shifting power away from big Wall Street banks and back into the hands of our real shareholders; the taxpayers,â said Assemblymember Santiago. âAs we deal with the ghastly economic crash from the pandemic, we simply do not need to be suckered into the predatory banking practices of Wall Street. The state bank is a direct, efficient, fast way to give small businesses, local governments and the people of California financial peace and justice.â
âWe made history together with AB 857 last year, which made our state the first in 100 years to allow locally-chartered public banks. A state public bank builds on this progress and makes an overdue investment in our financial infrastructure to promote the social good. I look forward to revisiting this conversation next year and continuing to ensure that the publicâs money works for the people,â said Assemblymember Chiu.
Assemblymember David Chiu testifies in support of AB 310 in the Senate Governance and Finance Committee.
In a letter to Chair McGuire, Ma commended the AB 310 authors âfor trying to address the economic impacts due to Covid-19 as well as supporting historically marginalized communities across Californiaâ and said that she looks âforward to working with the advocates over the next 6 months on coming up with a workable solution.â
Within a few weeks of the billâs introduction, AB 310 garnered unprecedented support from over 80 organizations and 220 delegates of the California Democratic Party, including endorsements from United Food and Commercial Workers Western States Council, SEIU California, and Los Angeles County Federation of Labor, AFL-CIO. Union President John Grant made clear labor support for the legislation. âOn behalf of the over 30,000 members of the United Food and Commercial Workers Local 770, we strongly support the creation of a public bank for the State of California. In this moment of crisis, grocery, retail drug and packing house workers are struggling in very basic ways as essential employees. If nothing else, the global pandemic gives us the opportunity to rethink equity and how we best respond to a likely imminent global recession. A public bank is a necessary part of the overall recovery.â
Public banking proponents Sushil Jacob from the Lawyersâ Committee for Civil Rights of SF and Paulina Gonzalez-Brito of California Reinvestment Coalition presented powerful arguments for a state bank. They reminded everyone that communities of color have been the first and hardest-hit victims of the economic crisis with 42% of African-American-owned small businesses shuttered compared to 17% of white-owned businesses. Access to capital is vital to rural and urban municipalities that have been robbed of tax revenue due to business closings and record unemployment. AB 310 reimagines banking by providing California with an alternative to Wall Street banks, keeping funds in the state rather than siphoning money to out-of-state actors. Under AB 310, funds in the state coffers will be efficiently utilized for reinvesting and rebuilding devastated communities, leading to a vibrant and sustainable recovery from COVID-19.
The state bank will provide a counter to the global banks that have mishandled and profited substantially from funds allocated to address the current financial crisis. Wall Street banks gave priority to large corporations in distributing Paycheck Protection Program (PPP) funds, leaving little or nothing for struggling small businesses. The Federal Reserve Bank handed out billions to the largest banks at near-zero interest with no strings attached while making municipalities beg for funds at above-market rates with onerous constraints. As Jacob explained, AB 310 is a better way. âWe can invest our state and local dollars in job creating, income producing and climate-change adapting projects. That is the promise of AB 310.â
AB 310 coalition members speak with California Treasurer Fiona Ma.
Public banking has a long history in growth-oriented economies such as Germanyâs, as well as our own home-grown public Bank of North Dakota celebrating 100 years of successful operation. These are times that require new approaches, and fortunately Treasurer Ma and Controller Yee together with Senator McGuire are contributing their expertise to a collaboration with public banking advocates, California labor, and other stakeholders to find the right solutions for ensuring that Californiaâs money does the most it can to help Californians.
The desperately needed California state public bank will allow us to thrive again sooner, setting the pace for the nation.
The California Public Banking Alliance (CPBA) is a coalition of public banking activists in California working to create socially and environmentally responsible city and regional public banks.
April 17, 2020 – The Hill. Rick Girling of the California Public Banking Alliance and Isaiah Poole with Next System Project lays out the case for why public banks are a necessary engine for economic recovery.
At least 90 percent of the nationâs cities are facing a budget crisis because of the economic shutdown in response to the COVID-19 pandemic, according to a mid-April report by the U.S. Conference of Mayors and the National League of Cities. Because municipal governments cannot run deficits, they will have to respond by cutting staff and programs, which will worsen the economic conditions of the cities they serve.
If cities had public banks, they would be much better equipped to deal with these budget shortfalls and maintain the services and staff most vital to their economic recovery. Thatâs why state and local political leaders should use emergency powers to rapidly create public banks that can serve as key engines of a just and sustainable economic recovery.
Public banks are new to most of us in America, but they have been a proven institution globally for the past few hundred years. The one place in America where public banking is not new is North Dakota, where the 100-year-old Bank of North Dakota is widely credited with helping the stateâs economy weather the 2008 recession far better than other states.
In 2019, the California Public Banking Alliance ushered through the California legislature historic legislation, AB 857, The Public Banking Act. This law for the first time allows municipalities across the state to set up public banks in their communities. An increasing number of states and localities are considering following Californiaâs lead.
A public bank, capitalized with the deposits that cities now park in Wall Street banks, will be a ready source of funds to help people and businesses sustain themselves through these hard times and rebuild. Public banks, like all banks, are able to multiply the impact of their capital by leveraging it up to ten times in loans. They provide the most efficient means for expeditiously deploying funds quickly to help recovery efforts, such as the low-interest loans to small- and medium-sized businesses to help them get back on their feet.
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At least 90 percent of the nationâs cities are facing a budget crisis because of the economic shutdown in response to the COVID-19 pandemic, according to a mid-April report by the U.S. Conference of Mayors and the National League of Cities. Because municipal governments cannot run deficits, they will have to respond by cutting staff and programs, which will worsen the economic conditions of the cities they serve.
If cities had public banks, they would be much better equipped to deal with these budget shortfalls and maintain the services and staff most vital to their economic recovery. Thatâs why state and local political leaders should use emergency powers to rapidly create public banks that can serve as key engines of a just and sustainable economic recovery.
Public banks are new to most of us in America, but they have been a proven institution globally for the past few hundred years. The one place in America where public banking is not new is North Dakota, where the 100-year-old Bank of North Dakota is widely credited with helping the stateâs economy weather the 2008 recession far better than other states.
In 2019, the California Public Banking Alliance ushered through the California legislature historic legislation, AB 857, The Public Banking Act. This law for the first time allows municipalities across the state to set up public banks in their communities. An increasing number of states and localities are considering following Californiaâs lead.
A public bank, capitalized with the deposits that cities now park in Wall Street banks, will be a ready source of funds to help people and businesses sustain themselves through these hard times and rebuild. Public banks, like all banks, are able to multiply the impact of their capital by leveraging it up to ten times in loans. They provide the most efficient means for expeditiously deploying funds quickly to help recovery efforts, such as the low-interest loans to small- and medium-sized businesses to help them get back on their feet.
Imagine the difference it will make when a network of public banks exists to partner with the Small Business Administration to help execute the Paycheck Protection Program authorized by Congress. Instead of small businesses being frustrated trying to work with the commercial banks to obtain the loans, and having no place to turn when the agency announced the program ran out of funds on April 16, public banks would be there to stand in the gap.
SF Bay View – January 17, 2020. About 500 people gathered in the Pauley Ballroom on the University of California-Berkeleyâs campus for the second annual meeting of the California Progressive Alliance (CPA) on Jan. 12. Trinity Tran of the California Public Banking Alliance spoke to Diana Cabcabin:
âPublic banking is an idea that we introduced into the California State Legislature in 2019. It took a considerable amount of work to build political capital behind this bill and move the public banking conversation into the political mainstream. We are not the first organization to pass a state public banking bill [AB 857], but what we accomplished was extraordinary.
âThis was a high profile and controversial bill facing heavy opposition from nine big financial firms but, without any corporate funding, we coordinated strategy with activists and supporters from across the state and got it passed. We built an endorsement list of 200 statewide regional and community organizations, including national organizations like Our Revolution and national figures like Sen. Bernie Sanders, who backs this bill.â
The editorial staff gathered 19 of the yearâs best ideas into their Solutions of the Year print magazine. Rounding out the top 19 solutions is the California Public Banking Alliance’s AB 857 Public Banking Act!
Oscar Perry Abello reports on California’s adoption of Assembly Bill 857, which creates a legal pathway for public banks owned by city and county governments. Proponents envision a network of public banks that will leverage local public deposits in support of policy priorities such as affordable housing, clean energy, small business lending and alternatives to payday loans. âPart of why our message resonated with so many âĶ was because everyone understands intuitively that Wall Street is extractive, is predatory,â says Trinity Tran, the California Public Banking Allianceâs lead organizer on the bill. âWhy are we using our tax dollars to harm communities when we could use it to help our communities?âÂ
This 80-page special issue highlights the programs, people, and projects that are making cities more equitable and sustainable. Continue reading at Next City.
NextCity, December 3, 2019: Watch guest presenters, Trinity Tran and Sushil Jacob of the California Public Banking Alliance, discuss how they organized citizens to help pass public banking legislation in California. This webinar is the second installment of our 2019 Solutions of the Year webinar series.
November 5, 2019. Glenn Daigon with Who.What.Why talks with Assemblymember David Chiu and the Alliance’s Trinity Tran. From successful legislating to overcoming the clout of big finance, California’s new public banking law is reverberating across the country.
For only the second time in 100 years, a people-powered coalition overcame the stiff opposition of the banking lobby to successfully pass a law that legalizes public banking. Governor Gavin Newsom (D-CA) signed a bill into law last month allowing California cities and towns to establish public banks.
FAIR’s Janine Jackson interviews Trinity Tran on AB 857.
The October 2 Fresno Beereported that California Gov. Gavin Newsom signed a law allowing cities in California to start their own public banks, to make it easier to fund projects in the public interest. Atypically for such a story, the Bee led with opponentsâ argument that âsuch ventures are risky and impractical,â before offering supportersâ successful view, and a statement from the billâs author, which the story then undercut with the reporterâs claim that âanalysesâ determined public banks âcould reduce state tax revenue.â Followed by a statement from the California Bankers Association that public banks could âharm local banks,â put taxpayer dollars at risk, and âarenât always in the best interest of the public.â Before closing with the words of the head of the Howard Jarvis Taxpayers Association that the commercial banking industry already provides any services public banks could, and âgovernment tends to mess up most of the things it touches.â
While that story was almost humorously negative, donât expect a lot of corporate media love for public banks, precisely to the extent that they represent, as David Dayen wrote recently, âa radical shift in understanding money, what it represents, and how it can work collectively.â Of course, thatâs exactly why the idea, and this historic step, is so exciting. Joining us now to talk about what just happened in California is Trinity Tran. Sheâs the co-founder and lead organizer for Public Bank LA, and a founding member of the California Public Banking Alliance. She joins us by phone from Los Angeles. Welcome to CounterSpin, Trinity Tran.
Oscar Perry Abello of NextCity talks with Sushil Jacob and Trinity Tran with the California Public Banking Alliance, Long Beach Mayor Robert Garcia and Kat Taylor with Beneficial Bank on AB 857, the historic bill that will “set in motion massive structural economic change” in California and could change the future of finance!
A bill to set in motion massive structural economic change could easily be hundreds, maybe thousands of pages long. AB 857 â which creates a legal pathway in California for public banks owned by city and county governments, where cities and counties would deposit public dollars â clocks in at a mere 29 pages.
âWhat we wanted to do was create a very lightweight bill that grafts public banks onto the existing state banking law rather than create a standalone financial code section that only covers public banks,â says Sushil Jacob, who played a lead role in drafting the bill as the legislative committee co-chair for the California Public Banking Alliance, a coalition of grassroots groups hailing from ten cities across the state.
Keeping the bill relatively short and sweet was essential, Jacob says, to crafting something that legislators and legislative staff and lawyers and consultants could digest, deliberate over, and ultimately pass in the same year it was introduced.
Of course it was also crucial that, since the billâs introduction in February, the alliance rallied support for AB 857 from over 180 organizations across the state, including 17 city and county governments. The governor has until October 13 to sign it into law.
