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A vision for a public bank in the East Bay — and possibly only the second one in the country — got a boost last week when Alameda County supervisors voted to give $75,000 to a group aiming to start one.
Four supervisors voted unanimously March 15 to give the money to Friends of the Public Bank East Bay, which has already taken steps to start a bank. (Supervisor Richard Valle was excused from the meeting.)
The money from the supervisors is for planning activities, according to a letter to the board from Supervisor Dave Brown. The money is coming from Brown’s fiscal management reward funds.
“A public bank would provide many public benefits to the community,” Brown wrote. “It would create a long-term multigenerational source of capital for East Bay communities, and would cut infrastructure construction costs significantly by providing low-interest loans.”
Brown added that such a bank “would return profit and interest to local communities and bring transparency and democracy to banking and investment of public funds. Lastly, a public bank would help strengthen local banks and credit unions by backing their loans and letters of credit.”
Friends of the Public Bank East Bay have already completed a viability study for a public bank, according to the group’s website. A viability study is a necessary step under the California Public Banking Act.
The California Public Banking Act was established by Assembly Bill 857 and signed by Gov. Gavin Newsom in 2019. The law enables government entities to form public banks.
Friends of the Public Bank East Bay are now working on a business plan, another step in the process required by law.
A public bank in the East Bay as envisioned by the group would be a cooperative venture among the entities of Oakland, Berkeley, Richmond and Alameda County.
Other California cities and counties have begun work toward establishing public banks in their areas.
In October, the city of Los Angeles voted to have a consultant write a business plan for a public bank. Also, the San Francisco Board of Supervisors less than a year ago enacted an ordinance to create a working group to create a business plan.
Monterey and Santa Cruz counties along with Watsonville and Capitola have passed resolutions to have a viability study done to form a Central Coast Public Bank.
According to Brown’s office, only one public bank exists in the U.S. and was formed in 1919. The Bank of North Dakota “manages the state’s funds and provides funding to small businesses and infrastructure projects through partnerships with community banks.”
Very glad to see support for a public bank in the East Bay.
Not sure what the benefit of a public bank is.
Some questions:
How do rates differ from for profit banks and non profit credit unions?
Who funds the bank? -taxpayers?
Private bank loans backed by public bank? How does that work?
Sounds like a solution looking for a non-problem that will cost taxpayers funds that could be better used elsewhere. Not enough debate or info on this signed 2019 law. Who sponsored/benefits from these banks? Why is the government getting into the banking business?
Oh, I forgot. The shiny news ball this week/month is Ukraine. Never mind vaccine injuries/deaths, inflation, COVID suddenly a non news item coincidentally as Pfizer vaccine approval data is released, Hunter’s laptop, and the rest of Brandon’s policies that have left us where we are. I have to get back to reading my 1984 to make sure I know what’s coming next.