REPORT OF THE CHIEF LEGISLATIVE ANALYST AUGUST 2018

This report from the Chief Legislative Analyst reviews gaps in banking services for individuals in Los Angeles; presents CRA data for housing and small businesses, which show a lower rate of lending in certain geographic areasof the City; and identifies gaps in City services related to banking services and proposes several program enhancements that could improve banking services for City residents, as well as areas for additional program development. It examines the "banking deserts" in Los Angeles - geographic areas in LA County where residents do not have access to either a bank or a credit union- and thus susceptible to Alternative Financial Services and predatory payday lending services. Over 600,000 residents are affected. The report notes that home ownership among low-income residents are serious affected by a lack of financial institutions in these banking deserts due to inability to obtain low-interest loans. It concludes that that the lack of access to banking services in the Los Angeles region has serious financial consequences for residents. The CLA also recommends that Council sponsor state legislation that creates a regulatory framework for the formation of public banks in California.

Press Release on Public Bank Ballot Measure Vote

The Los Angeles City Council unanimously approved a resolution for a measure that will appear on the November 6, 2018 ballot, giving Los Angeles voters the power to authorize the formation of a municipal bank under Section 104(g) of the City Charter. With authority provided by the voters, the City will be able to pursue changes in federal and State law needed to achieve the creation of a municipal bank.

Los Angeles City Charter Amendment to allow the City to form a municipal bank

An ordinance calling a Special Election to be held on Tuesday, November 6, 2018, for the purpose of submitting to the qualified voters of the City of Los Angeles a Charter Amendment to address one impediment to establishing a municipal financial institution or bank, and consolidating this Special Election with the State General Election to be held on the same date.

Public Bank LA Press Release on LACDP Resolution Vote

On April 10, 2018, the Los Angeles County Democratic Party (LACDP) unanimously voted to endorse the Public Bank of Los Angeles, taking a position in favor of socially and environmentally responsible, state-chartered public banks. The resolution is a significant milestone for the public banking movement, as the LACDP represents over 2.4 million registered Democrats.

Public Bank LA Letter to LA City Council

As LA City Council continues their process of conducting their own in-house feasibility study, we have addressed several issues associated with forming the Municipal Bank of Los Angeles (MBLA) including: collateral, insurance, city charter amendment, and the state initiative for the Public Bank License. Below is a link to the letter which we sent to various offices at LA City Hall including the: Chief Legislative Analyst, City Administrative Office and the Office of Finance and the Councilmembers on the Ad Hoc Jobs Committee regarding the CLA report on the MBLA.

California Public Banking Coalition Letter to Treasurer John Chiang

Our coalition of public banking organizations in California submitted a letter to State Treasurer John Chiang in response to his Request for Information (RFI) dated January 29, 2018. The letter states our 7 suggestions on topics requested in the RFI. Signed by Public Bank LA and banking advocates in: Santa Cruz, San Jose, Oakland, San Francisco, Santa Rosa, and Eureka. Drafted by Marc Armstrong of Commonomics USA and Sushi Jacobs from the Lawyers' Committee for Civil Rights of the San Francisco Bay Area.

Report from the Office of the City Administrative Officer

Report from the Office of the City Administrative Officer (CAO) providing a general overview of the City’s financing processes, policies, programs, and possible alternatives to pay for the City’s infrastructure needs. This report is intended to initiate discussions about possible options, further research and analysis would be needed to fully develop these options for future consideration.

Report of the Chief Legislative Analyst

Report from the Chief Legislative Analyst providing a review of the California State Treasurer’s report which outlines key issues and potential strategies in four areas: (1) cash handling for the collection oftaxes and fees; (2) expanding cannabis industry access to banking services under current law; (3) the feasibility ofcreating a public or private financial institution to serve cannabis businesses; and (4) developing a strategy to change federal law and remove legal obstacles to cannabis banking. The California State Treasurer’s recommendations regarding the creation of a public financial institution outlines a number of potential issues that could arise if Los Angeles proceeds with the creation of a public bank.

Public Bank LA Forum at LA City Hall

Public Bank LA organized a private forum with international public banking experts and key policymakers at LA City Hall, including the City of Los Angeles Office of Finance and Councilmember Paul Krekorian, Chairman of the Ad Hoc on Comprehensive Job Creation Plan Committee- the committee in which the public banking motion will be heard prior to moving into full council. From left to right: David Jette - Public Bank LA, Ellen Brown - Public Banking Institute, Trinity Tran - Public Bank LA, Phoenix Goodman - Public Bank LA, Marc Armstrong - Commonomics, Wolfram Morales – Sparkasse. The topics discussed included the success and soundness of North Dakota public banks, creating a California public bank licensing charter, how Germany is financing renewable energy investments through public banks, the PBLA charter, and the financial feasibility of creating a public bank in Los Angeles.

LA City Council Public Bank Motion

Motion instructing the City Administrative Officer and the Chief Legislative Analyst (CLA), with the assistance of the Office of Finance/City Treasurer, and the City Attorney, to report back quickly to the Ad Hoc Committee on Comprehensive Job Creation Plan on the feasibility, requirements, legislative barriers, and any other relevant aspects of creating a state-chartered public bank, or other similar such financial institution, named the “Bank of Los Angeles” that would provide banking services to reinvest in the communities, neighborhoods, and residents of the City of Los Angeles primarily through the acquisition, construction, and rehabilitation of affordable and workforce housing, utilizing deposits and providing financial services and products to local businesses, including the cannabis industry.