Mike Prysner reporting for The Real News Network. In a special report, Mike Prysner speaks to organizers and experts calling for Los Angeles residents to vote ‘yes’ on ballot measure B, which would establish a public bank that could set nationwide precedent for municipalities to divest from Wall Street.
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Chris Roth of Public Bank LA responds to a piece in the Hill written by Rob Nichols, the president and CEO of the American Bankers Association.
Rob Nichols is the president and CEO of the American Bankers Association. The byline of his piece over at The Hill on Friday probably should have lead with that so readers could prepare themselves for the misleading ideas about public banking he was peddling.
Rob claims “a scattered business focus, undue political influence and lack of oversight” are the top risks involved with the creation of a municipal bank. The organizers supporting Measure B wholeheartedly agree. That is why all three of those areas have been at the forefront of the discussions with state regulators regarding the eventual structure of the Municipal Bank of Los Angeles. If Nichols had bothered to learn about what has been discussed he would have known this.
The proposed Municipal Bank of Los Angeles would be a “bankers bank” and would not compete with local community banks or credit unions. It would not seek to compete with those institutions in providing banking services directly to Angelenos, but rather help those very institutions expand their services by partnering with them to increase the supply of capital that is available to invest in the local economy. The Municipal Bank of Los Angeles would focus on providing the same kinds of services to the City of Los Angeles that the Bank of North Dakota provides to its namesake, through the same kind of scrupulous and conservative investment strategies that have served North Dakotans so well over the last century.
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By: Dharna Noor. Dharna interviews Phoenix Goodman of Public Bank LA. The Real News Network.
DHARNA NOOR: Welcome to The Real News Network, I’m Dharna Noor.
A charter amendment that will go before Los Angeles voters on November 6 could put LA on track to create the nation’s first municipal public bank. If created, the bank would put public dollars, that’s things like tax dollars and electric bills, into the hands of public officials. Proponents of the historic measure say that unlike for profit banks, which finance things like weapons manufacturers and fossil fuel extraction, the public bank would make loans to LA for things like public education and transit and invest in solutions to issues like homelessness and climate change.
Now joining me to talk about this ballot initiative is Phoenix Goodman. He’s a co-founder of Public Bank LA, an organization which evolved from Divest LA, you may know them for successfully lobbying LA City Hall last year to support divesting its accounts from Wells Fargo. He’s also a co-founder of California Public Banking Alliance, a coalition of municipal public bank organizations in California. Thanks so much for joining us today.
PHOENIX GOODMAN: My pleasure, thank you.
DHARNA NOOR: So, let’s start with the very basics. What exactly is a public bank? I mean, obviously it’s a bank which is publicly owned, in this case by the municipality of Los Angeles. But what does that concretely change about it, and why is it better than a privately owned bank like Wells Fargo, which you pushed LA to stop doing business with?
PHOENIX GOODMAN: Well, Wells Fargo and similar banks on Wall Street have one impetus, and that’s to maximize profits on a quarterly basis. And so, they’re not bound by any ethical guidelines in how those dollars are spent and what they do with their investments. What we want to create is something more than just a public sector bank, but really a people’s bank that takes us this immense power of banking, which is to create money and decide where the flow of funds goes into our economy and put that into publicly accountable hands to democratize the economy itself.