Public Banking Act Crosses First Major Hurdle in Assembly Banking & Finance Committee

Monday, April 22, 2019

Los Angeles, CA – AB 857, the Public Banking Act, passed its first test this afternoon in the Assembly Banking and  Finance Committee. The measure passed with 7 votes in favor.

I’m proud to have the Banking Committee’s support as the call for a public banking option has grown louder,” said Assemblymember Miguel Santiago (D-Los Angeles), joint-author of the bill. “AB 857 is our chance to send a message to Wall Street that the status quo of private profit over public good isn’t working. We are now in lock-step with Californians across the state who are leading the charge to take back their financial freedom.”

Joint-author of AB 857, Assembymember David Chiu (D-San Francisco) said, “Public resources should serve a public good, not line the pockets of rich Wall Street investors. Time and time again, we have seen big banks invest billions of dollars of our money in institutions most Californians are opposed to. I am grateful for the committee’s support of our effort to reinvest the public’s money in our local communities.”                                                                        

California and Wall Street are clearly not on the same page,” said Trinity Tran, founding member of the California Public Banking Alliance. “Since we cannot rely on billionaire CEOs to prioritize people over their bottom line, with AB 857 we’re going to cut out the Wall Street middle man and put our communities' interests first.”

Assembly Bill 857 does not mandate the creation of a statewide public banking system. Instead, it establishes a charter that would allow local governments to form their own local or regional public banks. Those entities would be able to engage in both banking and retail activities that are not already provided by existing local financial institutions, barring the public banking system from competing with existing community banks or credit unions.

This comes on the heels of an op-ed penned by Nomi Prins – a former Goldman Sachs executive – about the need in California for the Public Banking Act:

Here, on the front lines of the climate crisis, it is crucial to have public banks that can divert funds to rebuilding homes and businesses and helping residents get back on their feet, rather than relying on disaster relief funds from the Trump Administration...Our own tax dollars are underwriting Wall Street’s most reckless investments – from the oil companies warming our climate to the private prisons jailing our kids to the gun manufacturers who have turned our schools into free-fire zones.                                                                                              

“This is why it is more important than ever to create public banks tasked with using state and local funds for public good, not private profit.”

The bill will be heard next in the Assembly Local Government Committee on Wednesday, April 24th at approximately 1:30pm.

Unprecedented Support for AB 857 (The Public Banking Act):

  • SEIU California
  • California Nurses Association / National Nurses United, AFL-CIO (CNA)
  • AFSCME Council 57
  • City of Los Angeles
  • City of Oakland
  • City of San Francisco
  • City of San Jose
  • Alliance of Californians for Community Empowerment Action (ACCE)
  • Alliance for Community Transit (ACT-LA)
  • American Indian Movement Socal (AIM)
  • Asian Pacific Environmental Network
  • Backbone Campaign
  • Beneficial State Foundation
  • California Environmental Justice Alliance (CEJA)
  • California Faculty Association, San Francisco State University
  • California for Progress
  • California Progressive Alliance
  • California Reinvestment Coalition
  • Campaign for Sustainable Transportation – Santa Cruz
  • Center for Community Action and Environmental Justice (CCAEJ)
  • Communities for a Better Environment
  • Community Financial Resources
  • Cooperation Humboldt – Eureka
  • Courage Campaign
  • Democratic Party of San Fernando Valley (DPSFV)
  • Democratic Socialists of America – Los Angeles
  • Divest LA
  • Fossil Free California
  • Friends of Public Banking Santa Rosa
  • Friends of the Earth
  • Green Party of California
  • Green Party of Santa Clara County
  • Ground Game LA
  • Healthcare for All - California
  • Idle No More - San Francisco Bay
  • Indivisible CA-33
  • Indivisible California Green
  • Indivisible Los Angeles CA-43
  • Indivisible East Bay
  • Lawyers’ Committee for Civil Rights of the San Francisco Bay Area
  • Local Clean Energy Alliance
  • Los Angeles County Democratic Party (LACDP)
  • NAACP - Santa Cruz
  • Orange County Public Banking Coalition
  • Our Revolution Long Beach
  • People for Public Banking Santa Cruz
  • People Organizing to Demand Environmental and Economic Rights
  • Progressive Asian Network for Action
  • Public Bank East Bay
  • Public Bank Los Angeles
  • Public Bank San Diego
  • Public Bank Santa Barbara
  • Public Banking Institute (PBI)
  • Revolution LA
  • San Francisco Berniecrats
  • San Francisco Public Bank Coalition
  • Santa Cruz Climate Action Network
  • Santa Cruz for Bernie
  • SoCal 350
  • 350 Bay Area Action
  • 350 Conejo / San Fernando Valley
  • 350 Riverside
  • 350 Santa Cruz
  • 350 Silicon Valley
  • 350 South Bay Los Angeles
  • South Bay Progressive Alliance
  • Sunrise Movement Los Angeles
  • Sustainable Economies Law Center
  • The Resistance - Northridge, Indivisible
  • United Educators of San Francisco
  • We The People- San Diego

More Information:
Fact Sheet
Bill Language
California Eyes Public Banks as Break from Wall Street

Assemblymember Miguel Santiago is the Chair of the Assembly’s Communications and Conveyance Committee, and a member of both the Assembly Public Safety Committee and the California Latino Legislative Caucus. He represents the 53rd District composed of the cities of Los Angeles, Huntington Park, and Vernon.