We are a coalition of public banking activists working towards creating socially and environmentally responsible municipal and regional banks. We believe that state legislation is required to instruct the California Department of Business Oversight to issue a special license for charter cities to form public banks.
The currently available commercial and credit union licenses do not provide the adequate parameters and principles to require public banks to be responsive to local economic development. Commercial banks and credit unions are also subject to Federal Deposit Insurance Corporation (FDIC) requirements that would not be satisfied by a public guarantee. The public bank charter license would establish a regulatory framework for a system of public banks in the state and provide the terms, legal exceptions and constraints for cities to operate within.
We aim to coordinate political and legislative strategy with local grassroots organizers across the state to pass the Public Bank License bill in the State Senate and Assembly for the 2019 legislative session. The charter city and regional alliance will work in close alignment with the California state public banking efforts, and experts at the Public Banking Institute and Commonomics USA.
Our objective is to develop a new type of bank- publicly owned, local, and ethical. Every bank would support the economic development of their region and follow socially responsible investment guidelines.
The need to develop a state chartered municipal bank license provides us with a unique and powerful opportunity to influence it to reflect principles of social good, sustainability, accountability and transparency, in addition to the structural technicalities.
As the formation of each bank will be up to local activists and elected officials, we are developing a legislative framework to create a standardized approach for public banks through a charter. The charter will explicitly define the regulatory barriers, purpose and structure, oversight, capitalization, implementation, investment principles, and governance for the networks of public banks in California.
A Public Bank Charter License Bill would establish a regulatory framework for a system of public banks in the state that includes: a socially responsible charter, prohibiting the bank from opening retail locations, anti-corruption clauses, 100% transparency, a board of directors that includes persons associated with community development as well as financial experts, and prohibiting the bank from competing with community banks and credit unions. These safeguards will ensure the best bank possible.
The legislative path to creating a city-owned public bank typically includes commissioning a city-sanctioned report on feasibility and determining the details of the design of the bank based on each region’s unique challenges and values.
By coordinating our efforts through this coalition, we aim to facilitate the development of municipal public banks across the state through three primary objectives:
1) Coordinate the public banking network of activists.
Cities and regional areas across California are exploring local public banking and each will face similar challenges in the process. Rather than allow each movement to develop in isolation, we will provide a central network for activists and their counterparts in other cities to exchange ideas, provide guidance, and coordinate political and social efforts. By connecting through our organization, public bank organizers can gain and give invaluable advice and tools to other organizers.
2) Develop a California municipal public bank license to be administered by the California Department of Business Oversight.
We will draft the proposed legislation of the public bank charter, organize statewide lobbying efforts to identify key legislators in both chambers, and successfully pass the legislation through the California State Legislature- State Senate and Assembly. We will provide templates, tools and guidance for activists and elected officials in other states to lobby their state governments on the proper development of these licenses.
3) Expand the movement.
This is only the beginning. Our vision is for socially responsible local public banks to spring up across the nation. We will be activating networks in new cities and campaigning to inspire activists and elected officials to develop public banks. Outreach campaigns will identify potential organizers through coalition networks and provide them with the orientation and tools to organize a public bank campaign in their city.