On Monday, February 4, ten activists from the California Public Banking Alliance went to Sacramento to attend a hearing on public banking, convened by Assembly Member Monique Limón (chair of the Assembly Banking and Finance Committee) and Assembly Member Cecelia Aguiar Curry (chair of the Assembly Local Government Committee).
Before the hearing, we had several meetings with people concerned with public banking, including a very productive long meeting with a key staff member in State Treasurer Fiona Ma’s office.
The hearing itself featured two speakers from state government (Department of Business Oversight Commissioner Jan Lynn Owen and Treasurer Fiona Ma), both of whom spoke about exercising fiduciary care and responsibility in managing taxpayer money and licensing all banks, including public banks.
They were followed by two public bank advocates — our own Sushil Jacob, and Dick Mazes, an advocate for transforming California’s Infrastructure and Economic Development Bank (the “iBank”) into an entity that could take deposits from cities and counties, and handle them the way it currently handles about $500 million in state money. The iBank is not really a bank, but a revolving loan fund providing loan guarantees and conduit bonds to California projects needing funding.
The third panel consisted of two bankers and two county treasurers. The representative of the California Bankers Association (the voice of the big banks) claimed that governments can’t handle the security and compliance requirements that banks deal with every day. (He neglected to mention the problems with security and massive disregard of compliance which the Wall Street banks are known for.) The county treasurers of Yuba and San Francisco counties both spoke about careful management of taxpayer money and the requirement to avoid risk. And a representative from the California Community Banking Network (who also sits on the California Bankers Association board) spoke approvingly of the help the state of California currently provides to community banks.
Public comment was short, and very positive about public banking.
We find it notable that while every speaker was concerned with minimizing or eliminating risk and protecting public funds, the only speaker who actively disagreed with the concept of public banking came from the California Bankers’ Association. And when Assembly Member Limón asked him if the banks were willing to engage in self-reflection about why so many Californians are dissatisfied with the current state of banking, all he could say was “We’re willing to learn more about that.” And he heard some answers in public comment, such as “stop investing in fossil fuels” and “stop prioritizing shareholders and profits over the people who are giving you their money to handle.”
In the immediate wake of our positive experience in Sacramento, the San Francisco Board of Supervisors unanimously passed a resolution calling on the Sacramento legislators to pass a resolution clearing the way for the Department of Business Oversight to give charters to public banks.