- Author: Piper French
- Full Title: Banks for the People
- Category: articles
- Document Tags: #humans
- URL: https://www.noemamag.com/banks-for-the-people
Highlights
- Though it is replete with check cashers, pawn shops and other “alternative lenders” profiting off the fact that poor communities of color generally have difficulty accessing their own money, the Bronx was already severely underbanked before the pandemic. (View Highlight)
- In the broadest possible definition, public banks are financial institutions owned and run by the government. They store money for the state, not individual consumers, and their transformative potential lies in the simple fact that they can have a purpose other than the single-minded pursuit of profit for shareholders. This creates a wealth of possibilities: lower-interest loans, investments in green energy and affordable housing and in the neighborhoods that big banks tend to exploit or ignore (View Highlight)
- Soon after, they helped launch the California Public Bank Alliance, made up of over 200 organizations. The coalition then worked closely with legislators, fending off bank lobbyists all the while, to produce the Public Banking Act, which Governor Gavin Newsom signed in 2019.
The act is the first of its kind to become law in the U.S. It created a regulatory framework for municipalities across the state to establish public banks of their own, opening the door for up to 10 local public banks in California by 2028. (View Highlight)
- The bank has proved more than capable of weathering crises: It funded recovery efforts after natural disasters, and as the big private banks floundered in 2008, necessitating a costly government life raft, the Bank of North Dakota sailed by — the state even had a sizeable budget surplus at the end of the year. Its structure helped the state withstand the pandemic. “Because of the Bank of North Dakota and the network of financial institutions that are able to thrive as a result of its existence, there was a faster distribution of PPP loans to the right people in the first tranche than like any other state in the entire country,” Syrop told me. Throughout the pandemic, it has remained profitable. (View Highlight)
- Marois, the public banking expert, considers the Banco Popular in Costa Rica as the most democratic public bank in the world. It’s owned by workers from a wide range of sectors, including labor, artisans, co-ops and the informal economy; it is partially run by an Asamblea de Trabajadores*,* or Workers’ Assembly, a 290-person governing body that represents the bank’s 1.2 million customers. Though the Banco Popular was created in 1969, the assembly didn’t come into being until 1986, when the bank was at a crossroads. “The easy option would have been to shut it down — or maybe privatize it,” said Karina Valverde Salas, who works for the assembly. “But there was political will to keep it public.” The president at the time, she said, was a strong advocate for creating this worker’s assembly — which “remains unique, something that can’t be found at any other bank in the world.” (View Highlight)
- To marshal public banks in service of transformative change, Mookim says it’s important to make it explicit from the beginning what the bank will fund, and to make certain the terms of its loans are not extractive. It’s critical, he said, “to ensure that the public bank is sufficiently accountable to the community groups that fought for it.” (View Highlight)
- Though it is replete with check cashers, pawn shops and other “alternative lenders” profiting off the fact that poor communities of color generally have difficulty accessing their own money, the Bronx was already severely underbanked before the pandemic. (View Highlight)
- In the broadest possible definition, public banks are financial institutions owned and run by the government. They store money for the state, not individual consumers, and their transformative potential lies in the simple fact that they can have a purpose other than the single-minded pursuit of profit for shareholders. This creates a wealth of possibilities: lower-interest loans, investments in green energy and affordable housing and in the neighborhoods that big banks tend to exploit or ignore (View Highlight)
- Soon after, they helped launch the California Public Bank Alliance, made up of over 200 organizations. The coalition then worked closely with legislators, fending off bank lobbyists all the while, to produce the Public Banking Act, which Governor Gavin Newsom signed in 2019.
The act is the first of its kind to become law in the U.S. It created a regulatory framework for municipalities across the state to establish public banks of their own, opening the door for up to 10 local public banks in California by 2028. (View Highlight)
- The bank has proved more than capable of weathering crises: It funded recovery efforts after natural disasters, and as the big private banks floundered in 2008, necessitating a costly government life raft, the Bank of North Dakota sailed by — the state even had a sizeable budget surplus at the end of the year. Its structure helped the state withstand the pandemic. “Because of the Bank of North Dakota and the network of financial institutions that are able to thrive as a result of its existence, there was a faster distribution of PPP loans to the right people in the first tranche than like any other state in the entire country,” Syrop told me. Throughout the pandemic, it has remained profitable. (View Highlight)
- Marois, the public banking expert, considers the Banco Popular in Costa Rica as the most democratic public bank in the world. It’s owned by workers from a wide range of sectors, including labor, artisans, co-ops and the informal economy; it is partially run by an Asamblea de Trabajadores*,* or Workers’ Assembly, a 290-person governing body that represents the bank’s 1.2 million customers. Though the Banco Popular was created in 1969, the assembly didn’t come into being until 1986, when the bank was at a crossroads. “The easy option would have been to shut it down — or maybe privatize it,” said Karina Valverde Salas, who works for the assembly. “But there was political will to keep it public.” The president at the time, she said, was a strong advocate for creating this worker’s assembly — which “remains unique, something that can’t be found at any other bank in the world.” (View Highlight)
- To marshal public banks in service of transformative change, Mookim says it’s important to make it explicit from the beginning what the bank will fund, and to make certain the terms of its loans are not extractive. It’s critical, he said, “to ensure that the public bank is sufficiently accountable to the community groups that fought for it.” (View Highlight)
- Marois, the public banking expert, considers the Banco Popular in Costa Rica as the most democratic public bank in the world. It’s owned by workers from a wide range of sectors, including labor, artisans, co-ops and the informal economy; it is partially run by an Asamblea de Trabajadores*,* or Workers’ Assembly, a 290-person governing body that represents the bank’s 1.2 million customers. Though the Banco Popular was created in 1969, the assembly didn’t come into being until 1986, when the bank was at a crossroads. “The easy option would have been to shut it down — or maybe privatize it,” said Karina Valverde Salas, who works for the assembly. “But there was political will to keep it public.” The president at the time, she said, was a strong advocate for creating this worker’s assembly — which “remains unique, something that can’t be found at any other bank in the world.” (View Highlight)
- Every public bank in the world may be contested in some way, but Valverde Salas told me that the Banco Popular has proven more resistant to cooptation than Costa Rica’s other public banks precisely because of its democratic structure, its identity as a worker’s bank and its relative autonomy from the government. “The Bank of Costa Rica is under explicit threat of privatization right now,” she said. “The difference is that, while the Banco Popular is also a public bank, it’s not a state bank, so the state has no power to interfere directly.” (View Highlight)