FOR IMMEDIATE RELEASE
July 9, 2020
Sam Lew, 415-272-8022, firstname.lastname@example.org
California Public Banking Alliance
Lawyers’ Committee for Civil Rights of the San Francisco Bay Area, Communications Manager
Fermin Vasquez, 213-924-7661,email@example.com
California Reinvestment Coalition, Communications Strategist
California Public Banking Alliance and Assemblymembers Santiago and Chiu Introduce Groundbreaking Bill to Create a California State Bank
AB 310 will direct billions in economic relief loans to local governments and small businesses hard hit by COVID-19
SACRAMENTO — On Thursday, Assemblymembers Miguel Santiago and David Chiu introduced the Bank on California Bill, a historic challenge to Wall Street domination of municipal finances. The bill, AB 310, will convert the California Infrastructure and Economic Development Bank (IBank) into the nation’s second state bank, while expanding its existing lending capacity by billions to support local governments and small businesses struggling to survive during the coronavirus pandemic.
“The effect of the pandemic on our communities has been devastating. Local governments are being forced to cut crucial services such as schools, food programs, and public health. At the same time, small businesses are being forced to close,” said Sushil Jacob, Senior Attorney at the Lawyers’ Committee for Civil Rights of the San Francisco Bay Area and founding member of the California Public Banking Alliance. “However, AB 310 can alleviate the economic catastrophe by providing direct loans to local governments and alternative financing for small businesses to bolster economic recovery.”
The bill will dramatically expand the IBank’s capacity to support economic recovery of local governments through direct lending, expanding its bond issuance and purchase program for local governments. The bill also expands the IBank’s ability to provide access to capital and credit for disadvantaged business owners in urban and rural settings through credit unions, banks, and Community Development Financial Institutions (CDFIs).
“AB 310 is a game changer to begin to right the history of redlining in communities of color and the inherent structural racism in the current banking system that has led to decades of disinvestment in Black and Brown communities, and that most recently reared its ugly head when the overwhelming majority of small businesses in low income neighborhoods were left out of PPP federal stimulus relief,” said Paulina Gonzalez-Brito, Executive Director of the California Reinvestment Coalition. “If California is serious about addressing racial and income inequities, we must create a banking system that centers people not profits.”
Funding for this expansion of the IBank’s lending comes by investing approximately $9.9 billion (10%) of the state’s Pooled Money Investment Account (PMIA) into the IBank. AB 310 will expand the IBank into a state public bank for California. This depository bank will provide a long-term source of stable financing for local governments and small businesses, and redirect existing investment funds into the state economy.
The bank will also accept deposits and handle accounts for California local agencies and governments, functioning for local agencies similarly to a credit union for individuals. Wall Street banks will no longer have uncontested freedom to exploit public dollars through high fees and interest.
“Times of crisis are when change happens—to fuel California’s economic recovery, we need a bank designed to stabilize the economy and invest back into our communities,” said Trinity Tran, co-founder of the California Public Banking Alliance and Public Bank LA. “The California State Public Bank will mobilize state resources, extend credit to the underserved, and keep California’s dollars at home where they are most urgently needed.”
AB 310 is a direct route to more and better jobs for Californians, to a greener and more regenerative economy, and to keeping California money in our state where it was earned, and where it belongs.
The California Public Banking Alliance (CPBA) is a coalition of public banking activists in California working to create socially and environmentally responsible city and regional public banks.
The Lawyers’ Committee for Civil Rights of the San Francisco Bay Area (LCCRSF), one of the West Coast’s oldest civil rights organizations, protects and promotes the rights of people of color, immigrants, and low-income people in California.
The California Reinvestment Coalition (CRC) is the largest statewide community reinvestment coalition in the country, with over 300 member organizations across California that provide services to tens of thousands of low- income residents. CRC members include affordable housing developers, community development financial institutions, housing counseling agencies, small business technical assistance providers, legal services agencies, and community-based organizations.