Caride, who is Cuban-American, is leaving her position in the New Jersey Assembly to take this job. She is Cuban-American, and supports a state-run bank. Rather than coming from a banking background, she was a personal injury and general attorney before being elected to the Assembly.
Murphy is a Goldman Sachs alumnus, so we’re disinclined to trust him, but Caride isn’t his only good appointment, and we’d love to see a New Jersey state bank.
The newest entry in the public banking news comes from Fast Company.
The article focuses on the changes in Los Angeles:
“This started as a divest campaign,” says Phoenix Goodman, cofounder and policy director for the activist group Revolution LA, which runs both Divest LA and Public Bank LA. “I was tasked with doing research on alternatives and what that would entail financially, and in looking into it, I realized, wait a minute, we have so much money that the only other banks that can handle our accounts are other huge Wall Street firms, all of which are complicit in this same system, more or less. …
A public bank, they realized, could be designed to bar unethical business practices. It could also save the city money. Los Angeles, for example, paid private banks more than $100 million in fees in 2016. Instead of taking out loans for infrastructure projects from major banks, and sending fees and interest outside the city, a public bank could handle the city’s needs itself. Public banks can be set up to hold government deposits and give loans to the government and work as a “banker’s bank” for smaller community banks; in another model, they can also be set up to take consumer deposits. The initial capitalization can come from a variety of sources, including long-term investments, bonds, and crowdfunding.
The article also features a good analysis of the cannabis situation from our own Susan Harman (we know how to spell Susan’s name!):
In California, marijuana legalization is providing another push for public banks. Other banks won’t give dispensaries accounts because of discrepancies with federal law. “The whole situation is ridiculous,” says Susan Harmon, an advocate with Friends of the Public Bank of Oakland. “It’s absurd. The cannabis industry in Oakland pays taxes to the city in cash. They deliver huge bags of cash in armored cars to the city.” Harmon says that it takes city staff five hours to count taxes from Harborside, one large dispensary.
Once the city takes the cash to Chase, the bank can accept it; having a city-owned bank would remove the need to use cash at all. “The DOJ hasn’t come down on Chase for money laundering,” Harmon says. “So there’s something about the magic hand of government touching this cash that launders it, in a good way. It somehow cleans it up and makes it respectable, and lets Chase accept it as a deposit, even though they wouldn’t if Harborside went directly to Chase to try to open an account.”