Updates

By: Trinity Tran & Chris Roth. Occupy.com. The Los Angeles Times editorial board published a denouncement of Charter Amendment B on September 20, 2018. This is a summary of what they got wrong.

Leading the nation on progressive policies is what we do as Angelenos. From setting the boldest mass transit and electric vehicle targets in the nation to divesting the city’s funds from Wells Fargo, Los Angeles is not only the tip of the spear of the West Coast resistance to Donald Trump, but a place where some of the most enlightened measures are emerging to lead our country forward.

Why, then, should the city’s leadership to establish a public bank in Los Angeles be any different?

In his monthly column for the The Los Angeles Times, Harold Meyerson, editor-at-large of the American Prospect, penned an October 3 editorial in support of public banking (“Why Los Angeles should start a public bank”). But in a September 20 piece, the paper’s editorial board widely missed the mark (“Charter Amendment B is one of the most ill-conceived, half-baked ballot measures in years. Vote no”).

Which side should voters believe?

The editorial board came down solidly on behalf of Wall Street, offering a full-throated defense of the Big Bank status quo. But Angelenos are no longer interested in business-as-usual politics. They want to see progressive reforms in the people’s best interest — and creating a city bank run by the people of Los Angeles is the clearest example of that.

First, the problem: Los Angeles taxpayers currently pay Wall Street banks over $200 million in fees and over $1.1 billion in interest every year. The giant banks that extract wealth from Los Angeles — JPMorgan Chase, Wells Fargo, Bank of America, etc. — are the same ones regularly in the headlines (of the Los Angeles Times no less) reaching out-of-court settlements and paying billions in fines for perpetually defrauding the public.

By: Emily Alpert Reyes and James Rufus Koren. Los Angeles Times.

Los Angeles voters will decide next month whether to nudge along the budding movement to create a public bank owned by the city.

The choice is a seemingly modest one: whether to alter the City Charter to allow L.A. to create a “purely commercial” enterprise.

City Council President Herb Wesson, who first floated the idea of a municipal bank more than a year ago, said the ballot measure is simply a way to gauge whether Angelenos want officials to explore a public bank before the city goes to the trouble of hammering out a detailed plan.

“If people say, ‘We don’t want you to do this,’ then we don’t move forward with it,” Wesson said.

But public banking advocates nonetheless see Charter Amendment B as a potential watershed moment — one that could help shape the debate about public banks for years to come.

If the ballot measure passes, advocates say it would bring fresh momentum to the public banking movement, as Los Angeles could be the first jurisdiction in the U.S. where voters have signed off on the idea.

There are only two public banks in the United States and its territories: the Bank of North Dakota, which was founded nearly a century ago, and the recently formed Territorial Bank of American Samoa, which was created after commercial banks decided to stop doing business in the seven-island territory.

Economic justice groups and other advocacy organizations have backed the idea of financial institutions owned by cities or states as an alternative that could save money on banking fees, avoid risky financial schemes and predatory lending, refinance public debt at lower rates and generate profit that could be invested to help the community.

By: Romy Varghese. Bloomberg.com. A ballot measure to create a public bank could designate funds for investment within city limits.

When revenue from sales taxes and parking fines comes in, the city of Los Angeles does what every other local government in America does: deposits it in safe, boring bank accounts or invests it in safe, boring short-term securities. The city has about $11 billion deposited with or managed by the country’s biggest banks, which use the capital for their own needs and ultimately their own profit. This arrangement has Los Angeles and some of its more adventurous brethren considering an alternative. Why not create a public bank that would support investment within city limits, backing such things as small-business loans and affordable housing instead of sending the money out?

On Nov. 6, Los Angeles will hold a referendum to ask voters just that. If the answer is yes, the city will amend its charter and become the first U.S. metropolis to take this step toward creating a public bank, giving a big boost to similar campaigns around the country.

The only public bank in the 50 states is Bank of North Dakota. Established in 1919 to support North Dakota’s agriculture industry, it returns profits to the state for reinvestment and works with other financial institutions to stimulate local economies. Outside the 50 states, American Samoa won the Federal Reserve’s approval to tap into its payment system for a public bank earlier this year. The impetus there was pragmatic and urgent: The territory needed a replacement after the commercial Bank of Hawaii said it would close its branches there.

The path to the ballot in Los Angeles began with environmental protests about two years ago, when activists from the group Divest LA descended on city hall to lobby officials to stop doing business with Wells Fargo & Co., a major financier of the Dakota Access Pipeline. Then last year, following revelations that the San Francisco-based bank opened millions of unauthorized customer accounts, organizers began considering wider issues as well. Soon they formed an advocacy group called Public Bank LA, proposing that Los Angeles form an institution using Bank of North Dakota and local banks in Germany as models.