Public Banking took a huge leap forward this year with many first-in-the-nation accomplishments.
• Passage of first-in-the-nation bill for universal free banking services. The California Public Banking Alliance (CPBA) and our allies pushed the California Legislature to enact Assembly Bill 1177 in order to provide financial services for unbanked or underbanked Californians. On October 4, 2021, Governor Gavin Newsom followed up by signing the California Public Banking Option Act (AB 1177) into law.AB 1177, authored by Assemblymember Miguel Santiago, authorizes a commission of financial access experts, community members, and government representatives to begin implementing the CalAccount program. Upon securing final approval from the Legislature, the program will create a state-sponsored retail banking option offering a zero-fee, zero-penalty debit card enabling direct deposit from employers and public benefits, automatic bill pay, and many other financial services to every Californian.
California Public Banking Alliance joined with SEIU CA, California Reinvestment Coalition, public banking advocates, unions, and community organizations across California to pass this landmark legislation that will help close the racial wealth gap fueled by the exclusion of low-wage communities of color from basic banking services.
• The California Public Banking Option Blue Ribbon Commission is getting underway. The Governor, Treasurer, and Senate and Assembly Leadership are now in the process of selecting and seating the CA Public Banking Option Blue Ribbon Commission to begin operations in 2022, as required by AB 1177. CPBA is working to make sure it fulfills its promises.
In the months ahead, the CalAccount Blue Ribbon Commission will convene to conduct a market analysis and to determine the best way to implement the CalAccount program. There will be opportunities for advocates to take part in shaping the CalAccount program and co-hosting public outreach forums.
• CPBA local affiliates are establishing the nation’s first municipal banks. Local public banking advocates are busy in San Francisco, Los Angeles, the East Bay, the Central Coast, Pomona Valley, San Diego, North Coast, and Humboldt County, working with their representatives getting their local public banks up and running. This is no small task. There is much work to be done to fulfil the requirements of AB 857, the California Public Banking Act passed in 2019.
• City and county representatives need to pass enabling legislation.
• Publicly-minded banking experts need to be located and summoned to fulfil the requirements of AB 857.
• Money needs to be allocated.
• Business plans need to be drafted.
• Banking managers and administrators need to be identified Read our status updates on California Public Banking Alliance cities and regions.
• On the Federal level and across the nation, public banking is sprinting ahead. On the Federal level and across the nation, public banking is sprinting ahead. The House Committee on Financial Services, chaired by California’s Maxine Waters, held one of its first hearings on public banking. During the hearing on “Banking the Unbanked: Exploring Private and Public Efforts to Expand Access to the Financial System,” Reps. Rashida Tlaib and Alexandria Ocasio-Cortez discussed the Public Banking Act of 2021 to foster the creation of public banks across the country by providing a pathway to establishing an infrastructure for liquidity and credit facilities via the Federal Reserve, and setting up federal guidelines for regulation.
Additionally, public banking advocates in New York, New Jersey, Massachusetts, Philadelphia, and many other states and cities throughout the US are pursuing establishing public banks.
The many accomplishments of 2021 will build momentum for the coming year and lay the foundation for our next steps in 2022 and beyond: Getting control of our money out of the hands of Wall Street banks, providing financial services to those most in need, and getting our municipal public banks up and running so our cities and counties can provide permanently-affordable housing, support small and worker-owned businesses, enable community solar, and meet other critical needs.