California will allow cities and counties to establish public banks under a newly-approved legislation.
On Wednesday, Governor Gavin Newsom signed into law AB 857, the Public Banking Act, which authorizes the lending of public credit and the formation of public banks by local governments.
According to Gov. Newsom, “America should not be held captive by commercial banks and inflated interest rates.” He added that the public banks represent “progress.”
America should not be held captive by commercial banks and inflated interest rates.
Public banks help communities focus on projects like affordable housing and infrastructure without astronomical profit expectations and pressures from bank shareholders.
This is progress. 👊 https://t.co/pHqut0Zbhr
— Gavin Newsom (@GavinNewsom) October 3, 2019
Under AB 857, the primary purpose of a city and county local governments seeking to open a public bank must be to achieve cost savings, strengthen local economies, support community economic development, and address infrastructure and housing needs for localities.
