L.A. voters will decide whether to eliminate a barrier to a public bank

by Public Bank LA
in Updates
Hits: 933

By: Emily Alpert Reyes and James Rufus Koren. Los Angeles Times.

Los Angeles voters will decide next month whether to nudge along the budding movement to create a public bank owned by the city.

The choice is a seemingly modest one: whether to alter the City Charter to allow L.A. to create a “purely commercial” enterprise.

City Council President Herb Wesson, who first floated the idea of a municipal bank more than a year ago, said the ballot measure is simply a way to gauge whether Angelenos want officials to explore a public bank before the city goes to the trouble of hammering out a detailed plan.

“If people say, ‘We don’t want you to do this,’ then we don’t move forward with it,” Wesson said.

But public banking advocates nonetheless see Charter Amendment B as a potential watershed moment — one that could help shape the debate about public banks for years to come.

If the ballot measure passes, advocates say it would bring fresh momentum to the public banking movement, as Los Angeles could be the first jurisdiction in the U.S. where voters have signed off on the idea.

There are only two public banks in the United States and its territories: the Bank of North Dakota, which was founded nearly a century ago, and the recently formed Territorial Bank of American Samoa, which was created after commercial banks decided to stop doing business in the seven-island territory.

Economic justice groups and other advocacy organizations have backed the idea of financial institutions owned by cities or states as an alternative that could save money on banking fees, avoid risky financial schemes and predatory lending, refinance public debt at lower rates and generate profit that could be invested to help the community.

Read more

Los Angeles Weighs Bringing Its Wall Street Cash Home

by Public Bank LA
in Updates
Hits: 805

By: Romy Varghese. Bloomberg.com. A ballot measure to create a public bank could designate funds for investment within city limits.

When revenue from sales taxes and parking fines comes in, the city of Los Angeles does what every other local government in America does: deposits it in safe, boring bank accounts or invests it in safe, boring short-term securities. The city has about $11 billion deposited with or managed by the country’s biggest banks, which use the capital for their own needs and ultimately their own profit. This arrangement has Los Angeles and some of its more adventurous brethren considering an alternative. Why not create a public bank that would support investment within city limits, backing such things as small-business loans and affordable housing instead of sending the money out?

On Nov. 6, Los Angeles will hold a referendum to ask voters just that. If the answer is yes, the city will amend its charter and become the first U.S. metropolis to take this step toward creating a public bank, giving a big boost to similar campaigns around the country.

The only public bank in the 50 states is Bank of North Dakota. Established in 1919 to support North Dakota’s agriculture industry, it returns profits to the state for reinvestment and works with other financial institutions to stimulate local economies. Outside the 50 states, American Samoa won the Federal Reserve’s approval to tap into its payment system for a public bank earlier this year. The impetus there was pragmatic and urgent: The territory needed a replacement after the commercial Bank of Hawaii said it would close its branches there.

The path to the ballot in Los Angeles began with environmental protests about two years ago, when activists from the group Divest LA descended on city hall to lobby officials to stop doing business with Wells Fargo & Co., a major financier of the Dakota Access Pipeline. Then last year, following revelations that the San Francisco-based bank opened millions of unauthorized customer accounts, organizers began considering wider issues as well. Soon they formed an advocacy group called Public Bank LA, proposing that Los Angeles form an institution using Bank of North Dakota and local banks in Germany as models.

Read more

Why Los Angeles should start a public bank

by Public Bank LA
in Updates
Hits: 837

By: Harold Meyerson, Los Angeles Times. Harold Meyerson is executive editor of the American Prospect. He is a contributing writer to Opinion.

With all that’s at stake in the midterm elections, Los Angeles voters would be forgiven for overlooking Charter Amendment B, a referendum that would amend the city charter to conform with an ordinance the City Council enacted earlier this year.

But Charter Amendment B is no municipal snoozer. It proposes the most fundamental change to our economic system that Angelenos have ever had the opportunity to vote on. The amendment would allow for the creation of a Bank of Los Angeles: a public bank to be operated by and for the city.

Currently, when L.A. collects tax revenue, that revenue does not immediately flow back out to pay city employees. Instead, the revenue is deposited into one of several mega-banks, to be withdrawn when the city needs the funds. This spring, the city’s portfolio came to $9.5 billion. We’re not talking chicken feed.

L.A. has already withdrawn its funds from Wells Fargo, whose steady stream of abusive and fraudulent practices compelled the bank to pay billions in fines in recent years. But the alternatives — the other Wall Street behemoths that brought us the 2008 crash and saddled us with the Great Recession — also have a deference to shareholders and commitment to bonuses that exceed any interest they may have for the well-being of L.A.

Last year, a group of concerned Angelenos who’d formed an advocacy organization, Public Bank LA, began talking to the City Council about establishing a municipal bank. They pointed to North Dakota, which since 1919 has had a state-owned bank that is used to make loans to businesses and farms.

Read more

Lend your skills and talents to put an end to Wall Street greed and join the historic efforts to create the Public Bank of Los Angeles and the first municipal public bank in the nation! 

Fill out our Organizer Form.