Interest in public banks has increased over time due to the public’s unrest over irregularities in the banking industry. Since 2008, a few incidents have fueled the public’s desire to restrict the power of Wall Street. These incidents include the financial crisis, the Ferguson uprising, the fake accounts scandal at Wells Fargo, and divestment movements that keep growing every day. All involved parties are calling for a banking institution that is geared towards reinvesting funds into the community.
Oakland joins the list of cities that are, for the concept, a public bank. Citizen’s intent to build a public bank that will represent Oakland, Richmond, Alameda, and Berkeley. The fact that there are no existing city-owned public banks in the United States has not slowed Oakland’s citizens from pursuing the idea. The city has modeled its public bank after the Bank of North Dakota. North Dakota’s bank was founded nearly a century ago.
The bank’s founders envisioned the bank as a source of quality sound financial services that promoted agriculture, commerce, and industry. Previous reports revealed that the bank earned a profit of 136 million dollars for the state last year. The bank has recorded consecutive gains for thirteen years in a row. Each year, the bank is registered to provide the state’s coffers with over 40 million dollars. These funds are directed towards low-interest student loans, disaster relief programs for ranches, education, and infrastructure.
Advocates of Oakland’s city-run and owned public bank hope to hit similar targets. Private Banks often operate in the interest of self-preservation and growth for investors, contrary to a public bank that is expected to act in service of the public. Because a public bank’s interest is in the welfare of the people, the bank is expected to provide funding for projects that improve the living conditions of Oakland’s population. Some of the highlighted projects include alternative energy, infrastructure, medical facilities, and affordable housing.
The city’s bank could even look into making savings for the bank. The city bank would have the ability to waive off excessive transaction fees paid to commercial banks each year. In addition, the public bank wouldn’t charge ridiculous debt service fees which cost the city millions of dollars each year. Based on the overwhelming benefit to the city’s financial health, the idea has garnered massive support from the Oakland city council. In September of 2020, the Friends of the Public Bank of Oakland tabled a study that favored the bank. The study was drafted to examine the feasibility of the Public Bank of Oakland.