The Los Angeles City Council today will consider authorizing the Chief Legislative Analyst to seek contractors or consultants to help the city create a public bank. The vote comes nearly two years after former City Council President Herb Wesson introduced a motion aimed at establishing the city's first public banking institution.
In summary
Lawmakers should look hard at both sides of the ledger sheet of a possible public banking option before approving AB 1177.
By Kerry Jackson, Special to CalMatters
Kerry Jackson is a fellow with the Center for California Reform at the Pacific Research Institute, kerryjacksonPRI@gmail.com.
Nearly 200 local and national banks operate more than 6,500 branches in California. But lawmakers believe the state needs one more. A bill in Sacramento establishes a public bank with “a zero-fee, zero-penalty public option for basic financial services.”
Assembly Bill 1177, the California Public Banking Option Act, would create BankCal. BankCal would strengthen “the financial stability of the state’s most vulnerable residents,” “unbanked and underbanked,” who tend to be minorities, and “pay proportionally more for their financial services, lack secure means of saving, have fewer opportunities to build credit, and are rejected for loans at far higher rates.”
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Banking can be expensive, especially for low-wage workers.
A score of California lawmakers has signed on to a new bill designed to offer Golden State households free financial services, taking on the state’s powerful banks at a time when easier access to banking services could help families cope with the economic fallout of the COVID-19 pandemic.
If it passes, the California Public Banking Option Act would create BankCal, the first state government program in the nation to offer universal consumer banking, according to financial policy experts. The program would provide no-fee debit cards, direct deposits from employers and government agencies, electronic bill payment and ATM access, directly competing with private banks.
California banking bill to offer free services amid COVID-19 - The San Diego Union-Tribune sandiegouniontribune.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from sandiegouniontribune.com Daily Mail and Mail on Sunday newspapers.