Three Los Angeles City councilmembers are pooling funds to move forward a long-discussed idea: creating a public bank to serve the city’s residents.
Councilwoman Ysabel Jurado is joining two of her colleagues in pledging $15,000 each from their discretionary funds for a study exploring the feasibility of establishing a public bank in L.A.
“Creating a public bank would be a bold step toward reinvesting our public dollars directly into our communities,” Jurado said in a press release. “Tough economic times give us an opportunity to look at ways we can uplift sustainable local economies.”
Public banks are nonprofit lending and depository institutions that are owned by a local agency, such as a city or county, with a public mandate to serve the needs of the community, according to Public Bank LA, a volunteer initiative advocating for a city-owned bank in L.A.
A Los Angeles public bank, the initiative says, could leverage its deposit base and lending power to benefit residents with affordable housing and small business loans.
The city has been exploring the creation of a public bank for years. Back in 2017, Council President Herb Wesson spoke of the creation of a Los Angeles municipal bank in a speech detailing priorities for his final term.
While L.A. voters in 2018 rejected a ballot measure to establish a municipal bank, Gov. Gavin Newsom signed a state law in 2019 that allows California cities to establish public banks.
On Friday, Jurado – along with Councilmembers Eunisses Hernandez and Hugo Soto-Martinez – introduced a motion proposing to release the funds to “contribute the first tranche of money needed to move forward with the feasibility study.”
Their three respective districts, according to the motion, “understand this necessary investment to see the long term benefits of financial independence.”
In 2022, Inclusive Action for the City published a brief noting that a public bank for L.A. can help ease the barriers — such as high-interest predatory loans and inequitable distribution of funds — for small businesses seeking to access capital.
Luz Castro, associate director of policy at Inclusive Action for the City, said a public bank in L.A. is a “powerful opportunity to support small businesses and entrepreneurs.” Castro, in a press release, said it could help “boost access to affordable credit and capital in the communities that need it most.”
