May 11, 2021
Today the Economic Development and Jobs committee is considering a report related to the creation of a public bank in LA.
What exactly is a public bank, and why would it be a big step towards a more just Los Angeles?
A public bank is similar to any other bank except that it’s a non-profit owned by a local government. As a result, it can consider more than just profit maximization and prioritize lending for things like affordable housing projects and small and BIPOC-owned businesses.
In addition, a public bank could aid in reaching the 3 in 10 Angelenos who lack access to bank accounts, can’t build credit, and are vulnerable to predatory lending.
Finally, all the profits could be reinvested in our city instead of getting pocketed by multinational banks.
Public banks have worked successfully in several places, including North Dakota and Germany — but it took state law AB 857, spearheaded by State Assemblymember Miguel Santiago, to make it possible for cities in CA to set up their own.
The first step for LA, which will be considered today, is to hire an independent consultant to develop a plan for the bank.
It’s important that a system of governance be devised that will make the bank both accountable to the people and free from political interference.
Down the road, the city will have to commit capital so the bank can start making loans, but for now it’s all about getting that planning process underway.
Like most big changes, we’re at the beginning of a long road, but I look forward to seeing this one through to completion!
See the original Twitter thread here.