In a move bringing Los Angeles closer to establishing its own public bank, the L.A. City Council voted on Tuesday to authorize consultations with contractors to develop a business plan for such an institution.
In other parts of the United States, public banks have functioned to concentrate local economic development by offering area businesses loans for public-oriented projects, such as construction of affordable housing. To date, public banks exist in North Dakota, American Samoa and Puerto Rico.
Other polities considering implementation of their own public banking system include the states of Washington and Oregon and the cities of New York, San Francisco and Philadelphia.
"The opportunity to form a public bank in the city of L.A. is extremely important as the city begins to recover from the COVID-19 pandemic," said Councilmember Curren Price, who chairs the L.A. Economic Development and Jobs Committee, before the vote on Tuesday. "This matter before us now just sets the ball in motion, retaining a consultant to advise us on the pros and cons and the particulars of creating such an institution."
Tuesday's vote came nearly two years after former City Council President Herb Wesson introduced a motion to explore development of L.A.'s first public bank. The vote also followed on the heels of Gov. Gavin Newsom's signing of A.B. 857, a California Assembly bill which allows for establishment of public banks in the state.
Now, the city's Chief Legislative Analyst must draft and release a request for proposals within 60 days, seeking consultant services needed to set up a public bank in L.A. The CLA will report back to the council on the timeline and funding necessary for establishing a bank.
If established, an L.A. public bank's operations would include extending lines of credit to local small businesses, bolstering affordable housing supply and implementing programs for streamlining worker and tenant ownership.
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