https://www.commondreams.org/news/2019/10/03/stunning-rebuke-predatory-wall-street-megabanks-california-gov-signs-law-allowing
Published on Thursday, October 03, 2019
by Common Dreams
'Stunning Rebuke to Predatory Wall Street Megabanks' as California Gov.
Signs Law Allowing Creation of Public Banks
"The people of California just went up against the most powerful
corporate lobby in the country—and won."
by Jake Johnson, staff writer
California Gov. Gavin Newsom on Wednesday signed into law historic
legislation that would allow the state's cities and counties to
establish public banks as an alternative to private financial
institutions, a move advocates hailed as a "stunning rebuke to the
predatory Wall Street megabanks that crashed the global economy in 2007-08."
Trinity Tran, co-founder of Public Bank LA, said Newsom's decision to
sign the Public Banking Act (A.B. 857) despite fervent opposition from
the state's business lobby "is a testament to the power of grassroots
organizing."
"The people of California just went up against the most powerful
corporate lobby in the country—and won," Tran said in a statement. "Now
is our moment in history to lead the nation by re-envisioning finance
and recapturing our money to benefit our local communities by building a
new system that works for the greater good."
The Public Banking Act—which was backed by a diverse coalition of labor
unions, climate justice groups, and civil rights organizations—makes
California the second state in the U.S. after North Dakota to allow the
creation of public banks.
BREAKING: PUBLIC BANKS SIGNED INTO LAW!! On behalf of Californians
& advocates nationwide, thank you @GavinNewsom for your leadership on
#AB857! CA has enabled its cities to determine how tax revenues are
invested to empower our communities. Leading the nation is what we do.
pic.twitter.com/ZvFN065tIn
— California Public Banking Alliance (@calpba) October 2, 2019
As the Los Angeles Times reported:
Public banks are intended to use public funds to let local
jurisdictions provide capital at interest rates below those charged by
commercial banks. The loans could be used for businesses, affordable
housing, infrastructure, and municipal projects, among other things.
Proponents say public banks can pursue those projects and support
local communities' needs while being free of the pressure to obtain
higher profits and shareholder returns faced by commercial banks.
Support for public banks also has grown since the financial crisis a
decade ago and since Wells Fargo & Co. was embroiled in a slew of
customer-abuse scandals in recent years.
The new law sets into motion a pilot program allowing 10 public bank
charters in the state over seven years. "These banks can invest in local
projects like affordable housing, small businesses, resilient
infrastructure, and clean energy, giving communities a voice in their
own economic futures," said the California Public Banking Alliance.
Sushil Jacob, senior economic justice attorney with the Lawyers'
Committee for Civil Rights of the San Francisco Bay Area, said the law
represents the "first step toward repairing communities that were
immensely harmed by the 2008 recession, especially communities of color."
"Today, California's communities of color remain disproportionately
harmed by Wall Street's predatory practices," said Jacob. "Public banks
can make all of our communities whole with equitable lending and
non-extractive investing."
In a column for Common Dreams earlier this year, Ellen Brown, founder of
the Public Banking Institute, applauded states like California and
Washington for pursuing legislation to create state-level public banking
systems and said their passage could prove a game-changer for the
nation's economy.
"The implications are huge," Brown wrote at the time. "A century after
the very successful Bank of North Dakota proved the model, the time has
finally come to apply it across the country."
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