{"id":12403,"date":"2019-07-19T11:56:15","date_gmt":"2019-07-19T18:56:15","guid":{"rendered":"http:\/\/occupysf.net\/?p=12403"},"modified":"2019-07-19T11:57:22","modified_gmt":"2019-07-19T18:57:22","slug":"wall-street-beware-the-public-banking-movement-is-coming-for-you","status":"publish","type":"post","link":"http:\/\/occupysf.net\/index.php\/2019\/07\/19\/wall-street-beware-the-public-banking-movement-is-coming-for-you\/","title":{"rendered":"Wall Street Beware: The Public Banking Movement Is Coming for You"},"content":{"rendered":"\n
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Members of the San Francisco Public Bank Coalition rally at San Francisco City Hall to demand the creation of a public bank.<\/figcaption><\/figure>\n\n\n\n

BY Robert R. Raymond<\/a>,\u00a0Truthout.org<\/a> July 5, 2019<\/a><\/p>\n\n\n\n

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It may not come as a surprise to hear that the majority of Americans don\u2019t trust the banking system in this country. Only 27 percent of those surveyed in a 2016 Gallup poll<\/a> said they had \u201ca great deal\u201d or \u201cquite a lot\u201d of confidence in the institution \u2014 less than half of the record high set in 1979. And the lack of trust is spread relatively evenly across the political spectrum \u2014 it\u2019s not just liberals or those on the left: Almost everyone is fed up with the banks.<\/p>\n\n\n\n

And if banking institutions don\u2019t exactly spark joy, their lead characters \u2014 morally bankrupt investment bankers<\/a> whose greed and arrogance almost singlehandedly collapsed the entire country\u2019s economy \u2014 certainly don\u2019t spark joy either. It\u2019s an old story: Bankers made obscene amounts of money destroying the economy, we bailed them out, they walked away from it all without a shred of accountability and there\u2019s nothing anyone can do about it. But that\u2019s not where the story has to end. Spurred by the need for an alternative to the for-profit, extractive model of finance exemplified by Wall Street, there is a budding movement in the United States that is working to reimagine banking as an institution that truly serves the public.<\/p>\n\n\n\n

Public banking is an old idea, but it has never been very common in the United States. The first and only public bank in the country was founded exactly 100 years ago in North Dakota, and it wasn\u2019t until relatively recently that the idea has begun to find new life in cities and states across the country. Growing largely out of the need for more democratic ownership over capital, the aim of this budding movement is to create a robust public banking infrastructure across the nation that is rooted in the principles of economic, environmental, racial and social justice.<\/p>\n\n\n\n

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The renewed interest in public banking really took off right after the financial collapse in 2008 as people began exploring the option of moving their money into alternative banking institutions, such as local credit unions and community banks. But despite being useful for small-scale, personal banking, these institutions do not operate on a scale where they are able to handle a city or state\u2019s financial assets \u2014 they\u2019re just too small. What was needed was a much larger institution with a clearly defined charter that could take in the municipal deposits of a state \u2014 or even a city like San Francisco, whose budget topped $10 billion<\/a> in 2018.<\/p>\n\n\n\n

As public banking advocates began exploring larger-scale solutions, the Bank of North Dakota quickly became a potentially replicable option. Founded by the Nonpartisan League in 1919 during the Midwest\u2019s agrarian populist period, the Bank of North Dakota is the only public bank in the mainland U.S. (American Samoa also has a public bank<\/a>.) Intended to free the state\u2019s farmers from predatory lenders, the Bank of North Dakota survived a Wall Street boycott and has since become institutionalized within the state\u2019s banking ecosystem.<\/p>\n\n\n\n

The Bank of North Dakota has many functions: By law, all state deposits and revenue must go through the bank, which then works with community banks and credit unions throughout the state to provide a number of services, from liquidity and loan guarantees to low-cost student lending to disaster-relief lending and more. It\u2019s proven to be a very successful model.It\u2019s not just liberals or those on the left: Almost everyone is fed up with the banks.<\/p>\n\n\n\n

\u201cThe state of North Dakota experienced the financial crisis very differently from any other state,\u201d Thomas Hanna<\/a> of The Democracy Collaborative<\/a>, a national research institute dedicated to developing new strategies for a more democratic economy, told Truthout<\/em>. \u201cIt had a low rate of foreclosures, it was the only state in the country that didn\u2019t have a single bank collapse, it had a lower unemployment than many other states and had a better fiscal outlook for state government.\u201d<\/p>\n\n\n\n

Of course, the statewide public bank was not able to completely mitigate the effects of the financial crisis in North Dakota. The state\u2019s unemployment rate did rise in 2009, for example. And yet \u2014 and this is key to public banking advocates like Hanna \u2014 it still remained significantly lower<\/a> than the national average at that time. Hanna and many others believe that the state bank\u2019s model was responsible for many of the less severe outcomes experienced in North Dakota, and it was around this time that the public banking movement began to explore bringing a similar model to states and municipalities around the country.<\/p>\n\n\n\n

\u201cThe movement has really taken off like wildfire since then,\u201d Hanna told Truthout<\/em>. \u201cMany cities in California, cities in Washington, Oregon, Pennsylvania, New York and various other places all across the country are making real advances.\u201d<\/p>\n\n\n\n

What makes public banks different from traditional banks is that they are actually accountable to the public<\/a> \u2014 they\u2019re democratic. So the public can not only decide what services the bank provides and where their taxpayer dollars are invested, but they also have a say in what kinds of investments are off limits.North Dakota experienced the financial crisis very differently from any other state. Many believe that the state bank\u2019s model was responsible for the less severe outcomes.<\/p>\n\n\n\n

\u201cIt was during the Dakota Access Pipeline<\/a> resistance when many people began to focus on the role that Wall Street plays in financing pipelines and climate change,\u201d Hanna told Truthout<\/em>. \u201cPeople started realizing that their money, their local tax dollars were being used to invest in destroying their communities and destroying the planet. So instead of having our money going to purposes that are antithetical to our values, public banking is a way to move toward a more equitable and sustainable economic system.\u201d<\/p>\n\n\n\n

Despite gaining traction on both the national and state levels, the push for public banking has really taken off on a municipal level, with cities like San Francisco leading the way.<\/p>\n\n\n\n

\u201cWe see the need for public banking all over the country right now, but there\u2019s no better example of it anywhere else than in San Francisco, which is one of the wealthiest cities in the world but also one of the most unequal in terms of income,\u201d Kurtis Wu, an organizer with the San Francisco Public Bank Coalition<\/a>, told Truthout<\/em>. \u201cWe have 7,000 unhoused residents on the streets of San Francisco. Rent is now approaching $4,000 for a one-bedroom apartment. Our infrastructure is crumbling, our public transit system is embarrassing. We see public banking as a mechanism that can really start to redirect capital toward these things.\u201d<\/p>\n\n\n\n

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Members of the San Francisco Public Bank Coalition march to San Francisco City Hall to demand the city divest from Wall Street and create a public bank.<\/figcaption><\/figure>\n\n\n\n

The push for a municipal public bank in San Francisco originally came out of the Occupy movement, but really gained momentum during the Standing Rock resistance efforts that targeted the financial institutions responsible for funding the Dakota Access Pipeline. This effort was led by the organization SF Defund DAPL<\/a>, whose efforts eventually persuaded the city\u2019s Board of Supervisors to pass numerous resolutions<\/a> calling for a public bank and which compelled the Office of the Treasurer to explore its feasibility<\/a>.<\/p>\n\n\n\n

But the San Francisco Public Bank Coalition isn\u2019t planning to just wait around while the policy seeds for a public bank slowly make their way through City Hall \u2014 the group has taken the lead in building a grassroots movement around the initiative. They\u2019ve assembled a broad coalition of groups \u2014 including the San Francisco chapter of the Democratic Socialists of America, the northern chapter of the California Nurses Association, the San Francisco Tenants Union and many more \u2014 to build public support.We need to do something about the big Wall Street banks, because they\u2019re going to be a massive impediment to anything that we want to do in terms of economic democracy.<\/p>\n\n\n\n

But there are still major roadblocks on the state level that would have to be lifted in order to allow California cities like San Francisco to create municipal banks. At the moment, the only banking licenses available in the state are for commercial banks or credit unions \u2014 there are actually no licenses for public banking.<\/p>\n\n\n\n

This might change very soon, however, as a bill that would pave the way for municipalities to create their own public banks makes its way through the state legislature. Designed by the California Public Banking Alliance<\/a> and authored by Assembly members David Chiu (D-San Francisco) and Miguel Santiago (D-Los Angeles), AB 857 passed in the Democrat-dominated state assembly in May and is now making its way through a number of committees<\/a> before it comes to a final floor vote in the state senate.<\/p>\n\n\n\n

\u201cIf the state bill successfully passes, we will likely push for the creation of a public bank through a ballot initiative,\u201d Wu told Truthout<\/em>. \u201cSo, putting this issue directly to the voters \u2014 so it\u2019s ultimately decided by the people. There\u2019s a fierce urgency to this, and we want to make sure that the timeline keeps up with that. I think that it\u2019s possible for a fully-fledged and operating public bank to be created in five years.\u201d<\/p>\n\n\n\n

The movement toward municipal banking is an important part of the push toward a more democratic and accountable banking sector in the United States, but it\u2019s just one component of what advocates see as a broader set of reforms that must be made.<\/p>\n\n\n\n

\u201cOn the one hand, we should have this robust, local movement for public banking \u2014 we should build, from the ground up, small, local banks at the city-county level, at the state level,\u201d Hanna told Truthout<\/em>. \u201cBut I also think that we need to do something about the big Wall Street banks, because they\u2019re going to be a massive impediment to anything that we want to do in terms of economic democracy more broadly.\u201d<\/p>\n\n\n\n

This top-down approach is also something that\u2019s being discussed across the country as well, and has gained quite a bit of momentum thanks to high-profile contenders for the Democratic presidential nomination, like Sen. Bernie Sanders (I-Vermont) and Sen. Elizabeth Warren (D-Massachusetts), who have made breaking up the big banks key components of their economic policies. And along the same lines, Senator Sanders and Rep. Alexandria Ocasio-Cortez (D-New York) just recently announced legislation<\/a> that would build and expand post office banking services while imposing a 15 percent federal cap on interest rates.Public banking can never be a success unless it is underpinned by economic, social, racial and environmental justice.<\/p>\n\n\n\n

\u201cIf this movement is going to be successful, we\u2019re going to have to see political action on public banking from the top down as well,\u201d Hanna said. \u201cWe\u2019re going to need politicians like Sanders and Ocasio-Cortez to be on board so that if and when we\u2019re able to get into positions of power nationally, we have candidates who are committed and who understand what needs to be done to enable public banking at the federal level.\u201d<\/p>\n\n\n\n

Of course, any public bank is only going to be as progressive as the government under which it operates. For example, the fact that the Bank of North Dakota provided a $7 million loan<\/a> to fund the state\u2019s brutal treatment of Water Protectors during the Dakota Access Pipeline resistance is not lost on organizers like Wu and Hanna. They understand that public banking can never be a success unless it is underpinned by a diverse grassroots movement that puts economic, social, racial and environmental justice front and center.<\/p>\n\n\n\n

\u201cPublic engagement and community input in this process are critical because there\u2019s no guarantee that a public bank will fund issues like environmental, racial and economic justice,\u201d Wu said. \u201cSo we need to create levers for accountability, transparency and self-determination. That\u2019s the only way we\u2019re really going to be able to address these things.\u201d<\/p>\n\n\n\n

There are a number of ways to ensure that accountability and transparency are embedded into a public bank from the start, including creating a charter that clearly details what the bank can and cannot invest in, or ensuring that there is community representation on the bank\u2019s board of directors.<\/p>\n\n\n\n

Of course, transforming the banking system into one that puts people and planet before profit is a lofty ambition. And as it continues to grow, the public banking movement will likely come into direct conflict with those who are currently profiting from the predatory and extractive banking system. So far, organizers have been focusing much more on the municipal level because they can operate more freely there, somewhat under the radar of the powerful banks whose interests public banking is in direct conflict with.<\/p>\n\n\n\n

But at some point, it seems inevitable that the two opposing interests will confront each other in a real and direct way. Will a mobilized, grassroots movement be able to stage a successful insurgency against the forces of concentrated wealth and influence? It\u2019s still very much an open question \u2014 one that has come to define much of the 21st century.<\/p>\n\n\n\n

Robert Raymond is the co-producer and creative director of the \u201c<\/em>Upstream Podcast<\/em><\/a>,\u201d and senior producer, designer and creative director of\u00a0\u201c<\/em>The Response<\/em><\/a>.\u201d He is passionate about exploring the intersections of sound design, storytelling and eco-socialist principles to help ease our way out of these tumultuous times.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

BY Robert R. Raymond,\u00a0Truthout.org July 5, 2019 It may not come as a surprise to hear that the majority of Americans don\u2019t trust the banking system in this country. Only 27 percent of those surveyed in a 2016 Gallup poll said they had \u201ca great deal\u201d or \u201cquite a lot\u201d of confidence… Continue reading → <\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"_links":{"self":[{"href":"http:\/\/occupysf.net\/index.php\/wp-json\/wp\/v2\/posts\/12403"}],"collection":[{"href":"http:\/\/occupysf.net\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/occupysf.net\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/occupysf.net\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/occupysf.net\/index.php\/wp-json\/wp\/v2\/comments?post=12403"}],"version-history":[{"count":2,"href":"http:\/\/occupysf.net\/index.php\/wp-json\/wp\/v2\/posts\/12403\/revisions"}],"predecessor-version":[{"id":12405,"href":"http:\/\/occupysf.net\/index.php\/wp-json\/wp\/v2\/posts\/12403\/revisions\/12405"}],"wp:attachment":[{"href":"http:\/\/occupysf.net\/index.php\/wp-json\/wp\/v2\/media?parent=12403"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/occupysf.net\/index.php\/wp-json\/wp\/v2\/categories?post=12403"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/occupysf.net\/index.php\/wp-json\/wp\/v2\/tags?post=12403"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}