Public Bank News: Oakland and More

More Public Banking News Already

We should have mentioned in the last update post that incoming New Jersey governor Phil Murphy, a public banking advocate, has appointed his banking and insurance commissioner, Marlene Caride.

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.

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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.”

2017 Changes to 2018: Public Banking Surges

Next City calls public banking the best urban trend of 2017

Bye Wells Fargo, Hello Public Banks
In the wake of former Wells Fargo CEO John Stumpf’s disastrous 2016 testimony before the U.S. Senate, Philadelphia began exploring divestment. This year, the city joined the ranks of Oakland, Berkeley, Richmond and San Francisco in moving forward with a public bank model. New York City also began the process of moving city deposits away from the disgraced entity earlier this year, citing its failing grade on a recent Community Reinvestment Act examination. And Los Angeles is also looking toward alternative models for the 2018 date when its contract with Wells Fargo expires.

In a very strong move (also referred to above), the Los Angeles City Council voted to divest with rigid criteria:

Together this council must take a stand against corporate greed, unfair business practices and a pervasive atmosphere that has poisoned the trust of Angelenos as well as millions of Americans across this great country,” said City Councilman Mitch O’Farrell, who asked city staffers to examine divesting from Wells Fargo earlier this year. …

The City Council also voted to draft a new law that would impose similar requirements on any future banking contracts, mandating that the city give lower scores to banks if they have flouted state or federal regulations.

Under the proposed rules, L.A. also would require banks to reveal if they have been the target of enforcement actions by regulatory agencies or the courts, affirm that they have rules to protect whistleblowers and certify that illegal and “predatory” practices are not used as the grounds for paying or promoting employees.

In addition, financial institutions would have to certify whether they set sales goals for consumer financial services and whether they use sales to decide what employees are paid or whether they are promoted, a requirement championed by Councilwoman Nury Martinez.

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We would have liked this Examiner article to have mentioned us, but hey, Oakland’s just a suburb of San Francisco anyway. And it’s a good article.

“This ongoing public banking discussion is coming at an important moment in our community,” [San Francisco Supervisor Malia] Cohen said last week. “This month, the San Francisco Retirement Board is expected to finally discuss the vote on fossil fuel divestment. This week, in Washington, the Trump administration is working to diminish the power of the Consumer Financial Protection Bureau, thus limiting the oversight of big banks on Wall Street.”

People Are Talking about Public Banking!

Ellen Brown, President, Public Banking Institute

The amazing Ellen Brown has been talking about public banking for years. She has published two excellent brand-new articles in the last couple of weeks.

How Public Ownership Could Revive Community Banks: You don’t expect Ellen Brown (or any of us) to be favorably quoting the current Treasury Secretary, Stephen Mnuchin, but for once we are all in agreement:

At his confirmation hearing in January 2017, Treasury Secretary Stephen Mnuchin said, “regulation is killing community banks.” If the process is not reversed, he warned, we could “end up in a world where we have four big banks in this country.” That would be bad for both jobs and the economy. “I think that we all appreciate the engine of growth is with small and medium-sized businesses,” said Mnuchin. “We’re losing the ability for small- and medium-sized banks to make good loans to small and medium-sized businesses in the community, where they understand those credit risks better than anybody else.”

Brown breaks down how that happened, and what the problems are, and looks to (no surprise!) North Dakota for an alternative success story.

In an article a few days later, Brown points out how public banks are “safer, local, and half the cost.”

With a loan fund, a dollar invested is a dollar lent, which must return to the bank before it can be lent again. By contrast, as the Bank of England acknowledged in its 2014 paper, “banks do not act simply as intermediaries, lending out deposits that savers place with them.” A chartered depository bank can turn one dollar of capital into ten dollars in bank credit, something it does simply by creating a deposit in the account of the borrower. If the bank’s books don’t balance at the end of the day, it borrows very cheaply from other banks, the Federal Home Loan Banks, or the repo market. It borrows at bankers’ rates rather than retail rates, and that is one of the many perks that a publicly-owned bank can recapture for local governments. Borrowing from banks rather than the bond market actually expands the circulating money supply, stimulating the local economy.

In this article, Brown spends some time talking about Phil Murphy, likely to be elected governor of New Jersey next Tuesday, and a huge supporter of public banks. She’s not the only one looking at Murphy’s public blank platform plank. , feature this topic at The Hill:

… momentum has picked up with a proposal by Phil Murphy, a leading New Jersey gubernatorial candidate, for a public bank as a centerpiece of his economic platform. This proposal was received favorably by the state’s largest newspaper, The Star-Ledger.

New Jersey has approximately $12 billion of public funds invested in large banks such as Wells Fargo, Capital One and Bank of America. In 2015, Bank of America made only three small business loans in the state. Characterizing New Jersey as “the most under managed asset I’ve ever seen,” Murphy wants public deposits reinvested in the state. This plan is one component of Murphy’s broader objective to stabilize state finances and revive New Jersey’s reputation as an investment hub for technology and innovation.

All eyes are on the New Jersey (and Virginia) elections for many reasons, and from our perspective, this is one key issue.

Friends of the Public Bank Join #DivesttheGlobe

On Monday, October 23, several of the Friends of the Public Bank joined the Divest the Globe – Huichin action in downtown Oakland,  sponsored by our friends at Defense of Mother Earth–Huichin, as part of a three-day global action timed to coincide with the meeting of 92 major global banks in São Paolo, Brazil. The intent is to get as much money as possible out of the banks that support pipelines, fracking, and other prioritizing of oil over water, so we can KEEP IT IN THE GROUND.

Over 100 people gathered at Oscar Grant Plaza (formally known as Frank Ogawa Plaza) for prayer, information, and teaching three songs in indigenous North American languages. Then we marched to three local big banks.

At the first stop, Citibank, the group performed a round dance. At the second stop, Wells Fargo, DOME-Huichin led a teach-in while some people went in to divest. And at the third stop, Chase (where the City of Oakland banks) Amazon Watch and others provided a skit where they convinced a “banker” that masaska (money) talks. Back at OGP, resources for moving your money, and ideas about where to move it (including Self-Help Federal Credit Union and Beneficial State Bank) were provided.

The crowd was engaged, the activities were powerful, and the passersby were interested. An extremely successful event; thanks again to DOME-Huichin for all they do.

 

Oaktoberfest Loves Public Banking

All of our outreach events get good attention and support, and we still think the results of our table at Oaktoberfest are special. Friend of the Public Bank Mary was featured in two video blogs by Zennie62:

Here’s Zennie62 interviewing Mary:

Key quote: “[The public banks] don’t care what we say, but they do care about our money. And if there’s a way that I can take a dollar out of their pocket, I will.”

and here’s Zennie62 videotaping (and participating in) a conversation about public banking, retail banking, and the needs of the people of Oakland for banking services.

Plus, we gathered over 400 petition signatures. We’re on the move!

Public Banking Funds Sustainable Energy

On September 25 at 7:00 p.m. in Oakland’s City Council Chambers, 14th and Broadway, Councilmembers Dan Kalb and Rebecca Kaplan sponsored a great event, organized by us and Local Clean Energy Alliance.

Watch the whole evening here:

Wolfram Morales, Chief Economist for Sparkasse, the association of local public banks in Germany, spoke at some length about the structure of public banks in Germany (hundreds of them!), and the role of these institutions in speeding the development of local renewable resources such as solar and wind.

Joining Wolfram were: Nicolas Chaset, CEO of East Bay Community Energy (Alameda County’s soon-to-launch Community Choice energy program), Greg Rosen, Founder and Principal of High Noon Advisors (member of the East Bay Community Shared Solar Collaborative), and Jessica Tovar, Organizer for East Bay Clean Power Alliance. Pennie Opal Plant of Idle No More SF Bay, spoke at the beginning to remind us  of our debt and obligation to Mother Earth.

 

New Jersey Candidate for Governor, Phil Murphy, Supports a Public Bank

Phil Murphy looks like he might be the next governor of New Jersey. Here‘s what he has to say about a New Jersey public bank:

This money belongs to the people of New Jersey. Phil will bring that money home, so it can build our future. Instead of investing $1.5 billion in foreign banks, a public bank will invest in New Jersey’s main streets — in our infrastructure, our communities, our students, and our small businesses. And it will provide capital to communities that, for too long, have been ignored by the financial system, whether they be women-owned businesses, businesses owned by people of color, or small businesses with big ideas who have up to now only had doors slammed in their faces.

It will operate as a strictly independent entity and follow commercial principles. It will work in tandem with our community banks and credit unions – serving as a partner not a competitor. And its profits will be returned to the people of New Jersey as non-tax revenue, not lost in fees to Wall Street.

Gayle McLaughlin Supports A Public Bank

Gayle McLaughlin, former mayor of Richmond, is running for Lieutenant Governor of California, and public banking is on her platform. McLaughlin says a public bank …

can save money and finance public-works projects and priorities, such as affordable housing, infrastructure repair, roads, schools and hospitals, and assist non-traditional industries. … I will make it a priority for California to have a Public Bank! Our money, Our power!

Public Banks Power Local Renewables

Come hear how they do it in Germany!

Monday, September 25, 7-9 pm–Free

Oakland City Hall, 3rd floor, 1 Frank Ogawa Plaza

Wolfram Morales, Chief Economist for Sparkasse, the association of local public banks in Germany, will explain the role of these institutions in speeding the development of local renewable resources such as solar and wind, at this panel discussion in City Hall.

Joining Wolfram will be: Nicolas Chaset, CEO of East Bay Community Energy (Alameda County’s soon-to-launch Community Choice energy program), Greg Rosen, Founder and Principal of High Noon Advisors (member of the East Bay Community Shared Solar Collaborative), and Jessica Tovar, Organizer for East Bay Clean Power Alliance. Pennie Opal Plant of Idle No More SF Bay, will lead an opening ceremony.

The event is hosted by Oakland City Councilmembers Dan Kalb and Rebecca Kaplan, and organized by us and our friends at  Local Clean Energy Alliance.

Find out how a public bank in Oakland could help fund local renewable energy for our new Community Choice program, and bring jobs and economic benefits to communities throughout Alameda County.