The Los Angeles Public Bank provides a public option for handling the City’s finances. Right now, Los Angeles taxpayers pay Wall Street banks over $200 million in fees and over $1.1 billion in interest yearly. This money could instead be reinvested in communities rather than being siphoned by big banks who receive billions in city deposits virtually interest-free. Legally, the banks own and control this money which they have used to finance industries harmful to Angelenos including fossil fuel extraction, private prisons, detention centers, and weapons manufacturing.
The LA Public Bank, capitalized with the deposits that the city now parks in Wall Street banks, will be a key engine for economic recovery—helping people and small businesses rebuild post-pandemic. Public banks, like all banks, are able to multiply the impact of their capital by leveraging it up to ten times in loans. They provide the most efficient means for deploying funds quickly to help recovery efforts, such as the low-interest loans to small- and medium-sized businesses, and reinvestments in historically marginalized frontline communities.
As a wholesale, or “banker’s bank,” the public bank would not have physical branches, ATMs, or any of the associated brick-and-mortar costs of traditional retail banks. A municipal bank would create partnerships with community banks and credit unions to provide services to businesses and consumers. Through this type of public bank, we can cut our borrowing costs in half while doubling our power to invest in our communities.
Support Public Bank Los Angeles and the creation of a city-owned public bank accountable to Los Angeles communities—answerable to the people, not Wall Street. By reconceptualizing banking as a public utility rather than private interest, a public bank provides a rare opportunity for the public sector to cut costs while simultaneously providing social benefits, support investments in low-income housing, critical infrastructure projects, clean energy, and community-centered economic development.
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