By A.P. Joyce
Could the city best known as the home of Wall Street divest from major corporate banks and start its own public bank? That’s the vision that a new network of activist groups hope see in the near future.
On Tuesday, a coalition of progressive organizations in New York City gathered in front of the New York Stock Exchange to launch a new effort to get the city to divest from Wall Street banks and create a new public bank for the public good.
“It’s a really simple concept: New York City has billions of dollars of public money every year that flow through the city coffers, and that money by law has to be held at Wall Street banks,” Sarah Ludwig, founder and co-director of the New Economy Project, said. “And the Wall Street banks that are holding the public’s money are actively harming New Yorkers, harming New York communities, harming the planet, etc.”
The new movement, which calls itself the Public Bank NYC Coalition, includes at least 15 different local community and activist groups including the New York Working Families Party and New York Communities for Change.
The coalition argues that New York City should withdraw the public money it currently has deposited with some of the largest private banks, like J.P. Morgan Chase, and instead use that money for a public bank that could provide credit to local community projects and underserved parts of the city.
They believe that such a bank would effectively kill two birds with one stone: end public support for Wall Street’s most questionable practices and investments while also creating an entity that can help bring credit to the people who need it most.
“It’s a perfect solution,” Ludwig said. “Charter a bank that’s owned by the city, that is controlled by the city and that has the mission of serving the public.”
The bank envisioned by the coalition would not serve as a commercial bank, competing with other private banks for individual deposits, but would instead use the public money to provide credit for things like affordable housing and workers cooperatives.
Public banking may seem like a wildly ambitious move, even for a progressive city like New York, but the idea has been around for a long time and has recently gained traction with some mainstream politicians.
For nearly 100 years the state of North Dakota has operated a public bank that helps struggling farmers and other North Dakotans. More recently, the newly elected Democratic governor of New Jersey, Phil Murphy, voiced support both on the campaign trail and as governor for creating a public bank in his state.
The public bank being proposed by New York activists would go farther than either of those examples, with an explicit mandate to try to help everyone, from struggling New York renters to small businesses and worker-owned cooperatives.
“We’re interested in public banking because we see a lot of potential in how a public bank could help worker-owned cooperatives and other community wealth-building institutions,” said Scott Trumble, director of programs at the Working World, an organization that supports worker co-ops and is part of the new coalition. “I see it as a very strategic way to grow the social and solidarity economy of New York City.”
Others in the coalition see the bank as a way to help communities most affected by New York City’s high housing costs.
“I’m paying over $2,000 for rent and if I were a member of a public bank I believe they would be able to help me own something for myself and my family,” Winsome Pendergrass, a member of New York Communities for Change.
“The other banks — even if you have $5,000 [deposited] with them, they don’t think that’s enough to trust you with a mortgage. But I think a public bank would be of service to the community. Just because we’re living in an underserved community doesn’t mean we don’t have goals and aspirations and don’t want our families to succeed.”
Though the coalition is still in its infancy, they’re coming together at a time when progressive economic policy ideas are on the rise all across the country.
Since Donald Trump’s election, a number of high-profile members of Congress have begun embracing bold new plans for policies like a universal job guarantee and a postal bank (a federal version of a public bank that serves basic commercial functions).
Meanwhile, at the local level, cities like Stockton, California, are experimenting with new, expanded safety net ideas like a universal basic income.
If the coalition succeeds in building support across New York City for a public bank, the city could become the next big test case in progressive economic policy.