Although his efforts to lead the creation of a public bank in Los Angeles fizzled out when voters rejected the proposal in November, City Council President Herb Wesson expressed support Monday for state legislation that seeks to develop a public banking system in California.
During a news conference outside Los Angeles City Hall, Wesson rallied with a group of several dozen supporters of public banking and state Assemblyman Miguel Santiago, D-Los Angeles, who co-introduced a bill Monday that would establish a charter allowing local governments to form their own local or regional public banks.
Wesson said he envisioned that a local public bank would “give small loans to small entrepreneurs, a bank that’s main bottom line is going to be to make our community a better place.”
The push to create a public bank was first proposed by Wesson in 2017, and a City Council committee held several meeting on the topic before the question was put to Los Angeles voters in November but only received about 44 percent support.
Many of the key details on how or if the city could actually create its own bank remained unanswered going into the November election. Wesson’s City Council motion on creating the bank acknowledged the uncertainty, noting, “There are many milestones that must be met in order to achieve the formation of a municipal bank. Changes in federal and state law are necessary and significant decisions regarding the governance structure of a municipal bank must be made.”
Santiago’s bill, which is co-authored by Assemblyman David Chu, D-San Francisco, would allow public banks to engage in both banking and real estate activities, but the public bank would be required to partner with a private bank to provide retail services.
The public bank could provide affordable loans and lines of credit to local businesses and nonprofits, and fund public infrastructure projects such as rebuilding after wildfires, Santiago’s office said.
“It is pretty obvious that the Wall Street system of wealth distribution has created an income inequality crisis,” Santiago said. “And nowhere is that more visible than right here in my district, where luxury condos loom over Skid Row. Instead of making rich men even richer, our resources should be invested in community development — parks and green spaces, free community college, new schools, smooth roads, and cleaner air.”
No city in America has its own bank, and the only public bank in the nation is the Bank of North Dakota, which was created in 1919.
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