Gavin Newsom signs bill to study California public bank
California has set a goal of offering the nation’s first zero-cost public options platform for personal financial services, under a new law signed by Governor Gavin Newsom.
Assembly Bill 1177, drafted by Assembly Member Miguel Santiago, D-Los Angeles, calls on the state to conduct a market analysis of a state-backed program that would give Californians a public option for banking services like debit cards.
The study would aim to determine with this service would be viable within six years. The commission must complete the analysis by July 1, 2024. Then the legislator could decide whether or not to launch a public banking program.
Black and Latino families are more likely not to have access to commercial banks than white and Asian households, a trend Santiago aims to reverse with a public bank.
“Creating a public option for banking and closing the racial wealth gap is not only a moral imperative, but is necessary to foster greater financial security for all of our communities. This bill is an essential step in meeting the needs of the unbanked and underbanked and brings us closer to building a more equitable economy after the pandemic, ”Santiago wrote in a statement urging lawmakers to adopt his bill. of law.
His bill was part of a package of consumer financial protection bills the governor promulgated on Monday.
“With the nation’s strongest consumer financial protection watchdog and these new measures, California continues to hold its back to working families recovering from the pandemic,” Newsom said in a statement.
The governor’s signature was greeted by supporters of the public bank, including Trinity Tran, lead organizer of the California Public Banking Alliance.
“Universal banking access would be life-changing for millions of Californians who face barriers to opening or maintaining a bank account and generating billions in local spending through savings on high fees and interest,” Tran said in a report. communicated.
The bill was supported by SEIU California, whose president, Bob Schoonover, said in a statement: “Gov. Newsom does more than create the basis for a public banking option by signing AB 1177 into law. It lays the foundation for rebuilding a stronger and more inclusive economy. A significant proportion of black, Latino, and low-income Californians – many of whom are essential workers doing difficult and dangerous jobs – have had to pay a disproportionate amount of their paychecks to access essential banking services. “
Schoonover said Law AB 1177 “puts the solution within our grasp, but it is only the beginning”.