By CHARLOTTE KRAMON for Los Angeles Times | JULY 6, 2023
Photo: Assemblyman Miguel Santiago, left, presents Assemblyman David Chi a sign after Chiu’s measure to let California cities create their own public banks was approved by the Assembly in 2019. (Rich Pedroncelli / Associated Press)
Los Angeles is taking another step toward opening a city-owned public bank that would support projects driven by public interest.
The City Council voted last week to fund a feasibility study for the bank after advocates argued it would do better than private banks to serve Black and Latino communities, small businesses, green energy initiatives and affordable housing projects.
The move was the council’s first financial investment in the long process toward launching the bank.
The idea of a public bank has floated around the City Council for several years. In 2018, voters rejected a proposal that would have amended the city charter to allow the bank’s formation. One year later, Gov. Gavin Newsom signed a state law that allows all cities and counties to establish public banks, putting the idea back on the table in Los Angeles.
The City Council voted in October 2021 to study the viability of forming a city-owned bank and to create a business plan for doing so. With new political leadership and support from a number of community organizations, the city is now preparing to devote $460,000 toward the study’s first phase.
A public bank’s decisions would be driven by the needs of Los Angeles communities rather than private shareholders, advocates say, leading to investments in projects and people normally disregarded by Wall Street.
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Corporate banks “don’t give back to our community,” said Gisele Mata, an organizer at the Alliance of Californians for Community Empowerment (ACCE) Action. “In fact, they just take. We have no way to move our communities out of predatory lending unless we create our own, because banks do not operate in a way that gives back to their communities.”
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