Vision
How is Public Banking Different?
Why
It is utterly ridiculous and indefensible that our tax money goes through big banks, is loaned out to fossil fuel companies, private prisons, weapons manufacturers, and other forces that work against livable communities.
Worse, the money big banks make from those loans goes into the pockets of billionaire oligarchs who are doing their best to own the country.
Even worse, that money could be in our hands, doing the work we need to live good lives in thriving neighborhoods.
What
A public bank is a bank which puts public money—the taxes and fees we already pay to our governments—to work for our community’s needs.
Public banks are not yet common in the United States but roughly one-third of the world’s money is invested in public banks. It is a banking model that works for the people, by the people.
The singular exception in the US is the century-plus old and extremely successful Bank of North Dakota, founded by farmers and blue-collar workers.
The Bank of North Dakota has protected its state from many crises, including the 2008 financial crisis and the misuse of Paycheck Protection Plan funds during the COVID-19 pandemic.
A public bank brings in revenue from the governments in its region and loans that money out to the people it serves, partnering with local financial institutions. This keeps community needs front and center, interest rates fair, and money circulating for public good, rather than disappearing into shareholder profits.
Banks are the only institutions that can legally and safely loan up to 10x the money they have available. Thus, $1 million in a public bank is enough to power up to $10 million in local loans to improve quality of life and meet community needs.
A public bank can be a retail bank. However, Public Bank East Bay will be a wholesale bank.
Wholesale public banks keep costs remarkably low because they do not offer individual accounts, branches, or ATMs.
We will receive deposits from local governments and mission-aligned foundations, unions, and pensions to help Local Financial Institutions (LFIs) fund community-wide projects.
Where
There is a growing movement across the country to establish public banks including New York State, Massachusetts, Washington State, Philadelphia, and Florida.
Grassroots work by advocates–including PBEB–resulted in a landmark law in 2019 describing the pathway to build local public banks in our state.
Who
PBEB and public banks in general are a community benefit and a community effort.
Advocates: essential to move governments to do the right thing.
Board of Directors: bankers, financial experts, community leaders, and government officials who have the necessary knowledge and skills, and are committed to the values and vision of a circular sustainable local economy.
Staff: an experienced bank CEO, backed up by top executives and a small, fairly compensated team. The government does not run the public bank, bankers do.
Partners: local financial institutions (community banks, credit unions, and community development financial institutions) who work with the public bank to identify, fund, and manage the loan portfolio.
Watchdogs and supporters: community members who attend board of directors meetings, review annual reports, and help ensure that the PBEB is following its mission and serving the community.
You: where do you fit in?
When
Once necessary capital is committed, the regulatory process can take a year or more. If everything is in place when the charter is granted, a chartered public bank can open very quickly and start making locally productive loans on Day 1.