State legislation prompts San Diego to explore creating a city-owned ‘public bank’

State legislation prompts San Diego to explore creating a city-owned ‘public bank’

San Diego Union-Tribune – February 2, 2020. The San Diego Union-Tribune talks with Jeff Olson with Public Bank SD and the California Public Banking Alliance on the next steps for a San Diego Public Bank.

SAN DIEGO —  New state legislation allowing cities to establish government-run “public banks” has prompted San Diego officials to begin exploring the idea, including four City Council members who want to spend $250,000 on a feasibility study.

San Diego would join Los Angeles, Oakland and several other cities that have begun analyzing the pros and cons of public banks, which aim to boost city revenue and direct more capital to priorities like affordable housing.

If approved, San Diego would launch its public bank, which could happen as soon as next year, using hundreds of millions of dollars from city reserves that it now keeps at Bank of America.

By cutting out a commercial bank as the middle man, the city could replace the small interest payments it receives from B of A — currently about 1 percent — with interest revenue as high as 20 percent from loans it would make, supporters say.

Continue reading on The San Diego Union-Tribune.

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