Public Banking — Major Development in California

Introducing the Idea of a Public Bank License: the Public Banking Movement has a new “Ask”

Commonomics USA News Alert 005, November 28, 2017

From addressing climate change mitigation, with a video and paper in Spanish, to explaining how a public bank can help with disaster recovery, Commonomics USA has been defining the role and value of public banks. The initiative we show is effective — it’s moved public banking to the center of many public policy discussions.

Our most recent news is kind of a big deal. With direction provided by Commonomics USA, one of the most prestigious law firms in the country has written a legal memo that suggests developing legislation in California that will establish a new bank charter, or “license.” We hope that this license will serve as a standard approach to establishing public banks in potentially every county in California. It will eventually result in a network of public banks, each with its own territory, and will go a long way to address governance, liquidity, solvency, economies of scale, and other public banking matters.

Thanks to Susan Harman’s outreach, the Lawyers Committee for Civil Rights of the San Francisco Bay Area arranged for the Davis Polk & Wardwell law firm to provide us with pro bono legal support by researching and writing a legal memo on bank regulatory considerations and public banking in California. Their legal memo, which you may download here, reviews state constitutional authority, banking regulation, and cannabis, matters that we have been involved with for years. Their concluding recommended actions include establishing statutory authority for of a new kind of banking charter, or “license,” in the state of California.

This Public Banking License portends to be a way to effectively address and remove many of the issues that inhibit the adoption of public banking. The Divest LA group leading LA’s highly effective public banking endeavor and Women’s Intl. League for Peace and Freedom (WILPF) are spearheading the state legislative effort to establish a Public Bank License. They see the value of a network of public banks and an accompanying association that will serve to standardize what we hope will be the eventual widespread adoption of public banking in California.

Following my sign off, the next section in this newsletter is a list of other developments we’ve steered throughout the course of the year.

Five of us have done all this with a budget of less than $35,000 during 2017, thanks to the generosity of two major donors and a small but increasing number of Sustaining Members who simply pay $10 each month. You can be a part of making public banking happen by becoming a Sustaining Member. Your financial contributions go a long way towards making public banking work throughout the USA.

We plan to do more public banking work throughout the USA, particularly in New Jersey where Governor-elect Phil Murphy is committed to public banking, and in Virginia, with 15 new progressive state delegates who were successful against incumbents. Please help by making a tax deductible donation to support our important work as we continue with our efforts to establish public banking in all fifty states of the USA.