Priya PatelThe public banking movement in California is gaining momentum as cities and states work towards establishing their own publicly owned banks. In 2019, the governor of California signed a bill allowing counties and municipalities to establish public banks. More recently, the Los Angeles City Council voted to allocate funding for a feasibility study to establish a city-managed public bank. San Francisco has also taken steps towards creating a city-owned bank. The goal of these public banks is to provide financial services for low-income borrowers, disadvantaged groups, small businesses, and community organizations who may not have access to credit from for-profit commercial banks. These public banks would operate primarily by utilizing municipal deposits, public pension funds, and ESG investment funds. They would aim to increase the availability of affordable housing and prevent gentrification in low-income neighborhoods. The public banking movement is not limited to California; other states like New Jersey and cities like Philadelphia are also pursuing the establishment of public banks. These initiatives are inspired by the desire to counter the concentration of financial resources in a few large multinational banks and create democratic finance that prioritizes public benefit over private profit.
Despite the progress made so far, there is still work to be done. Cities and states must continue to build political will and secure funding to establish and operate public banks. The success of public banking in North Dakota serves as a model for other states and local governments. The Bank of North Dakota has been providing loans and financial credit to farmers, small businesses, and community organizations for over a century.
