Under a proposal from a Los Angeles lawmaker, a statewide, publicly-owned bank could be created to help with economic recovery as California continues to grapple with the coronavirus pandemic.
Assembly Bill 310 would set up a banking system owned and operated by the state rather than private investors. Initially, it would operate using existing funds from "I-Bank," a state entity that issues bonds for infrastructure and private development projects.
Assemblyman Miguel Santiago, who co-authored the bill, says the bank would fill a void where Wall Street and the federal government have failed small businesses and underserved communities.
"Let's take 10% of the money that California already holds in its checking account, and let's help Main Street. We can structure a bank that actually is accountable to the people and does what the people want it to do."
Los Angeles voters rejected a measure to create a city-operated bank in 2018, but a law signed by Gov. Gavin Newsom last year now allows California cities and counties to form their own public banking systems.
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