We are a coalition of public banking activists working towards creating socially and environmentally responsible municipal and regional banks. 
What is a public bank?
A public bank is one which is owned by the public of a city (county). It is:
  • Owned and operated by the city.
  • Chartered by the state of California.
  • Governed by laws passed by the city.
  • Operated by banking professionals.
  • Serves only the needs of the city.
What is the purpose of a public bank?
A commercial bank is in business to make profits to enrich shareholders, whereas a public bank is in business to make and leverage money to serve the needs of the people of the city and to make low cost loans to finance civic needs.
A public bank has the same privilege a commercial bank has – to make loans for up to nine times its actual deposits. It can also borrow money through the Federal Reserve system at very low interest rates. This allows it to make low cost loans for many civic projects.
How does a public bank serve the city?
A Public Bank would benefit a city in many ways:
  • Rather than deposit its money in commercial banks and borrowing money at high interest rates and fees, a city can deposit some or all of its money in its own bank. The bank can use those deposits to leverage loans back to the city at rates of 1% or 2% for a variety of public purposes. Half of the total cost of some current infrastructure projects, for instance, goes simply to cover bank interest and fees on loans.
  • Whereas commercial banks can invest in any projects they choose, a public bank would invest only in loans serving the needs of the city and its people.
  • It would not compete with local community banks, except when invited to co-partner in loan by a community bank.
  • A public bank could immediately start saving money for a city by refinancing current debt as a start.
Do other public banks exist now?
The Bank of North Dakota is the largest of a few public banks in the United States and a good example for new public banks. Founded in 1919, it manages the state income and lends it to serve the needs of the people of North Dakota. However, it also regularly makes the highest return on equity of all U.S. banks. It regularly transfers these profits to the people of the state through low interest loans, increased services or regular deposits to the state general fund (which decreases taxes). It is structured differently than a city public bank would be, but it would contribute to the financial and real well-being of its citizens as seen below.
What types of benefits might a public bank provide for a city?
A public bank would provide any benefits to the city the legislature chooses, for example:
  • Low-interest loans for city infrastructure projects.
  • Low-interest loans for public housing, both new construction and capital improvements.
  • Online depository banking services to under-banked and unbanked residents where private banking has not met their needs.
  • Commercial loans to businesses, but only in partnership with Community Banks and Credit Unions.
  • Creating and supporting Community Development Financial Institutions (CDFIs) to drive community revitalization.
  • Other community redevelopment goals and benefits to the city’s people the legislature chooses.
About California Public Banking Alliance

Public banks will allow California cities and counties to create sound investments that will save them money and allow them to invest their public deposits in fiscally, socially and environmentally responsible activities. Public banks can save taxpayer funds that are currently going to big banks to instead finance affordable housing, renewable energy, rebuilding after natural disasters, and local infrastructure including roads, parks and schools. In partnership with local banks and credit unions, public banks can provide affordable loans and lines of credit to local small businesses, land trusts, and cooperatively-owned enterprises. The best way to do this is through municipal and regional public banks. Our approach to public banking is based on the Bank of North Dakota, which holds the state’s public deposits and partners with community banks and credit unions to issue participation loans.

Eight cities and regions, including Los Angeles, San Francisco, Oakland, and Silicon Valley have come together to form the California Public Banking Alliance. All Alliance members are at various stages of starting public banks. There is significant public momentum for public banking across the state and the country, including in New York City, Philadelphia, Seattle, and Washington, D.C. The California Democratic Party has also adopted a resolution supporting the creation of state-chartered public banks.

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