September 5, 2018 (friendsofpublicbankofoakland.org)
The public banking Feasibility Study commissioned by the City of Oakland was released to the City Council and the public last week, and has been submitted to the City Council Finance Committee with a report from the City staff. (Full Study text and report here.) Unfortunately, the Study does not address or provide specific input on many key issues related to public banking. Thus, the City staff, the City Council, and the public aren’t getting the full picture of the benefits the Public Bank of Oakland will provide.
The Friends of the Public Bank of Oakland have been firewalled out of the Study process from the beginning, and thus have been unable to share our knowledge of the subject. We understand that the failings of the feasibility study put the City staff into an untenable position. Nonetheless, the City Council should not make its decisions based on incomplete and misleading information. You can help us make our case to the Finance Committee and the City Council.
We are especially disturbed that the feasibility study does not address two of the most pressing reasons for a public bank: divestment from Wall Street’s agenda, and local reinvestment in the needs of the city and surrounding region. The Friends of the Public Bank of Oakland do regular outreach in our city’s farmers’ markets, street fairs, and other events. The overwhelming consensus of voters and general public opinion supports divestment from earth-destroying projects in favor of reinvestment in local projects for the good of our communities.
Oakland City Council voted to divest from fossil fuels on June 17, 2014, more than four years ago. On March 9, 2017, the Council voted to sever the City’s relationship with JP Morgan Chase, largely to protest the bank’s involvement in the Dakota Access pipeline and private prisons. The same night, the Council voted to resume its relationship with Chase for one year. Since then, it has committed to shifting to MUFG Union Bank, a subsidiary of Mitsubishi UFJ Financial Group. (MUFG’s fossil fuel investment grade, as set by Banking on Climate Change, is an F.) On June 17, 2017, the Council voted to divest from banks violating Indigenous sovereignty.
When the City divests from Wall Street, as it has committed to do, where can it put its funds, other than public banks?
The interest and fees we currently pay to Wall Street can be far better used to support local reinvestment, including: jobs and job training, affordable housing, new small businesses and worker co-operatives, infrastructure improvement, climate-change mitigation, and community-centered disaster assistance.
In addition to the central issues of divestment and local reinvestment, the Friends of the Public Bank of Oakland call the City’s attention to the following points overlooked by both the Feasibility Study and the staff report:
1) We have a simple, clear roadmap and list of key steps to public banking: The two essential milestones are getting a bank license/charter issued by California’s Department of Business Oversight and a master account number from the Federal Reserve Bank of San Francisco (like the one provided this year to the public Territorial Bank of American Samoa). Both of these milestones will be reached by submitting a detailed business plan that lays out the details of capitalization, investment policy, bank governance, and other pertinent information.
2) Oakland is not alone. The City of Oakland asked the Friends of the Public Bank of Oakland to bring in financial support for the Study. We brought in contributions from Berkeley, Richmond, and Alameda County. Thus, the Council has an obligation to these contributing partners to move forward, despite a faulty feasibility study and a negative staff report.
3) California legislative obstacles are being cleared. The California Public Banking Alliance was formed in mid-2018. This coalition of eight regions (Los Angeles, San Francisco, Oakland, Santa Rosa, San José, Santa Cruz, Santa Barbara, and Eureka) is actively and constructively engaged in advancing legislation that will remove legal obstacles to public banking, such as deposit insurance requirements and access to electronic payment systems. The CPBA’s proposed bill already has two co-authors in the California state legislature.
4) Public banking has both statewide and national momentum. In April 2018, the Federal Reserve provided the Territorial Bank of American Samoa, the nation’s second public bank, with access to the U.S. payments system. Phil Murphy, elected governor of New Jersey in 2018, has jump-started public banking legislation in his state. Additional public banking efforts, ranging from pending legislation through task forces and feasibility studies to grassroots activism. are ongoing in Washington, Oregon, New Mexico, Colorado, Minnesota, Missouri, Michigan, New York, Pennsylvania, New York, and the District of Columbia.
Waiting for eventual progress from Santa Fe, Los Angeles, and San Francisco (as recommended by city staff operating on incomplete information) will not solve Oakland’s problems, will not fulfill Oakland’s responsibilities to Berkeley, Richmond, and Alameda County, and will not satisfy Oakland’s voters—who are eager to divest and ready to move forward with the only plausible option: accept the study, put this stage to bed, and begin the process of building the business plan.
The time is now.
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What You Can Do NOW: Come to City Hall! We need as many constituents as possible to attend the City Council’s finance committee meeting on Tuesday, September 11, at 9:30. We’ll have PBO t-shirts available and signs for you to hold up.
Finance Committee Meeting
Tuesday, September 11, 9:30am
Oakland City Hall, first floor
Also, please call City Council especially the Finance Committee members! At this point, a massive outpouring of public support is critical. Then tweet, post, email, call—any way you can, enlist your friends and neighbors to call as well. Here’s the message: say that you support establishing the Public Bank of Oakland and you want to see the business plan RFP issued as soon as possible. When you call the councilmember who represents your district, be sure to mention you’re a constituent.
District 1: *Dan Kalb 510-238-7001
District 2: *Abel Guillén 510-238-7002
District 3: Lynette Gibson McElhaney 510-238-7003
District 4: *Annie Campbell Washington 510-238-7004
District 5: *Noel Gallo 510-238-7005
District 6: Desley Brooks 510-238-7006
District 7: Larry Reid 510-238-7007
At-large: Rebecca Kaplan 510-238-7008