Public Bank LA

Los Angeles manages more than five billion dollars in annual revenue collected from tax, fee and fine payers. The city maintains bank accounts with between $4B and $12B in cash, and manages up to $45B in investments for pensions and other funds. That money is currently held in accounts at commercial banks, where it earns next to zero interest.

The city paid over $109 million in transactional and originations fees to these commercial banks in 2016. Some of these banks have been downgraded by authorities for their risky or fraudulent practices. Many of the city’s investments finance direct harm to the public, including over $70M invested in tobacco companies alone. The firms who help manage these funds seek the highest possible fees for themselves, extracting the financial power of taxpayers to perpetuate bubbles in housing and capital markets, instead of economic development here at home.

In an era of consolidation, where banks have grown too-big-to-fail, any discerning city will soon run out of options of where to put its money. We can and must go a step further. We should learn from the example of municipalities and states which have founded their own public banks. North Dakota, a died-in-the-wool red state, has operated the country’s only public bank for nearly a century, and it is a great success. The German people operate a network of county-level, public banks which provide unique regional benefits to their constituents, while out-performing their commercial competitors in reliability, security, growth and transparency.

The Bank of Los Angeles would be able to accept city deposits and manage all the purchasing and reporting needs the city requires. It would then make targeted loans to the city itself, as well as sectors of the local economy where capital would make a measurable difference in the lives of Angelenos. The bank would be answerable to an independent board of governors made up of elected officials, responsible financial and banking experts, and members of the community including advocates for affordable housing and climate change mitigation. It would follow a strict mandate to safeguard and grow the city’s assets through loans to local businesses and municipal entities. It would operate according to a charter that enables it to act in the interest of the city and its people, and not for any shareholders or executives. A bank whose employees are public servants, and whose mission is to improve the lives of regular Angelenos.

Such an institution will require meticulous planning and strong leadership, as well as appropriate action from the City Council and Mayor’s office, with coordination with the state and its regulatory authorities. We believe the challenges such an effort would face are justified by the benefits it would provide: to grow revenues and cut costs for city government, to safeguard LA’s assets in the event of another financial collapse, and to enable investment in Los Angeles, by Los Angeles.

We can and must take back this money power for the people of the city.

LA Voters to Consider Creating Nation’s First Municipal Public Bank

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By: Dharna Noor. Dharna interviews Phoenix Goodman of Public Bank LA. The Real News Network. DHARNA NOOR: Welcome to The Real News Network, I’m Dharna Noor. A charter amendment that will go before ...

BANKING ON THE FUTURE OF LOS ANGELES: WHY WE NEED CHARTER AMENDMENT B

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By: Trinity Tran & Chris Roth. Occupy.com. The Los Angeles Times editorial board published a denouncement of Charter Amendment B on September 20, 2018. This is a summary of what they got wrong. Leading ...

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

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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 ...