Public Banking Act Clears Assembly

Thursday, May 30, 2019

Los Angeles, CA – In an historic move, the California State Assembly this morning upheld a bill to allow cities and counties to start their own public banks and divest from big Wall Street banks. This marks the first time in California history the legislature of the 5th largest economy in the world has moved forward a bill enabling local governments to create their own public banking option. The measure, joint-authored by Assemblymember Miguel Santiago (D-Los Angeles) and David Chiu (D-San Francisco) passed on a 41 to 29 vote.

“Big banks have had a chokehold on California communities for far too long,” Assemblymember Santiago said. “This historic vote sends a clear message to billionaires on Wall Street that we’re going to change the paradigm and put people over profits – not the other way around. I’m grateful for the outpouring of support from inside and outside the Legislature to get AB 857 over the finish line.”

“California is standing up to say the public’s money should be used for the public good,” said Assemblymember David Chiu. “Today’s vote is a huge step towards creating public banks in California and reinvesting our money in our local communities. Thank you to our Assembly colleagues and our coalition for moving this policy forward.”

“Thank you to the California Assembly for their leadership on AB 857,” Trinity Tran, founding member of the California Public Banking Alliance, added, “Today's vote reflects the voices of millions across the state in the need for an alternative to Wall Street. This is California’s moment to take the lead in creating a banking option that will strengthen rather than extract profit and resources from our communities.”

For municipalities in California, banking with Wall Street means their local revenues are used to bolster industries – like Big Oil and the NRA – that run contrary to many of the state’s deeply-held values. A public banking option would allow those local governments to invest instead in infrastructure projects, environmental justice initiatives, low-interest home and student loans, and other projects that benefit their communities.

AB 857 would not mandate the creation of a state bank. AB 857 also does not mandate how local governments must spend their resources. Instead, it opens the door for municipalities across the state to responsibly explore a public banking option with transparency and oversight.

Under The Public Banking Act, all public deposits will be fully insured and collateralized, and all banks must be approved by both state and federal regulators as well as local governing bodies.

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

  • SEIU California
  • Cooperative Center Federal Credit Union
  • American Postal Workers Union
  • County of Santa Cruz
  • California Nurses Association / National Nurses United, AFL-CIO (CNA)
  • AFSCME Council 57
  • 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)
  • City of Los Angeles
  • City of Oakland
  • City of San Francisco
  • City of San Jose
  • 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
  • SEIU California
  • 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.

 

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