100+ Community And Labor Groups Back Groundbreaking Bill To Make Public Banking A Reality In New York
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Campaign to enact the “NY Public Banking Act” heats up, as communities pursue bold strategy for racial equity and a just recovery
Today, more than 100 community, labor, and cooperative groups and community development financial institutions from across New York State delivered a letter to state legislative leaders, urging swift passage of the “New York Public Banking Act” (S1762A/A5782) as an urgent strategy to advance racial equity and ensure a just recovery for all New Yorkers.
The move follows last week’s introduction of the bill by Assemblymember Victor M. Pichardo, Chair of the NYS Assembly Banks Committee. Senator James Sanders, Jr., Chair of the NYS Senate Banks Committee, is the lead sponsor in the NYS Senate. The bill would create a regulatory framework for New York cities, counties, and regions seeking to establish local public banks.
“The coronavirus pandemic has devastated our economy. Public banks offer a way to rebuild and prevent businesses, especially small businesses, from closing. Public banks also benefit underserved communities who have been, and continue to be, denied financial resources due to redlining. Local public banks would give long-suffering communities the chance to thrive and gain relief from crippling debt,” said NYS Senator James Sanders, Jr. “The New York Public Banking Act would create the structural framework for municipalities to create public banks within their jurisdictions and allow the Department of Financial Services (DFS) to issue special-purpose public bank charters. It is time to serve the interest of the community, not just shareholders. It is time to advocate for a new normal that includes public banking.”
“COVID-19 has completely devastated poor and underserved communities, and the New York Public Banking Act is no longer just necessary, it’s absolutely critical to our recovery. I cannot stress enough the impact that the Public Banking bill will have on all New Yorkers, and I urge my colleagues to join us as we demand swift passage of this act in both houses,” said NYS Assemblymember Victor M. Pichardo. “I want to thank the New Economy Project, the many impassioned activists, organizations, and my colleague in the Banks committee, State Senator James Sanders, Jr. New York State needs public banks now.”
A growing number of state legislators have endorsed the bill, throwing their support behind a broad-based, statewide movement to establish local public banks–financial institutions created by cities and counties, and accountable to the people. Through public banking, local governments can leverage public deposits to support community-controlled economic development, including affordable housing, green jobs, equitable financial services, renewable energy, and more.
“For far too long, hardworking people of color were locked out of traditional banking methods. Now, when so many are struggling, it’s more critical than ever to open those doors,” said Henry Garrido, Executive Director, District Council 37, AFSCME. “We must put hardworking New Yorkers at the center of New York City’s recovery – and a public bank is a great way to invest in communities that need it the most. Thank you Senator Sanders and Assemblyman Pichardo for prioritizing racial, economic and environmental justice through legislation that would allow for the creation of public banks. I hope to see this bill move through the legislature swiftly.”
The public banking movement continues to build momentum in New York, with active campaigns from Rochester to New York City and beyond. A similar effort succeeded in California in 2019, and several cities, including San Francisco, are now in the early stages of establishing municipal banks. As local governments in New York seek new ways to promote economic resilience and opportunity–particularly in communities hardest-hit by COVID-19–pressure is mounting on the state to deliver needed support and consistent statewide guidance for public banking.
“It’s high time New York stop depositing our public money in banks that are actively harming New Yorkers and New York communities. For starters, New York must divest from Wall Street banks that have systematically redlined Black and brown neighborhoods for decades, and that continue to extract wealth from New Yorkers and New York communities of color. Many banks that hold our money, including JPMorgan Chase and Citibank, finance destructive industries, from fossil fuels to the city’s worst landlords. The list goes on,” said Sarah Ludwig, Founder and Co-Director of New Economy Project. “The New York Public Banking Act paves the way for local jurisdictions to establish public banks that will accountably hold our public funds, with a clear public purpose and mandate to advance racial and economic justice.”
“Genesee Co-op FCU joined the Rochester Public Banking Coalition and supports the New York Public Banking Act because this legislation is good for community based financial institutions, like ours,” said Melissa Marquez, CEO of Genesee Cooperative Federal Credit Union. “A public bank in Rochester can partner with local financial institutions through participation loans that finance important public initiatives. This legislation is forward thinking and will be so important for cities like Rochester, especially as we deploy public funds for the public good to create a just, post-pandemic recovery that ensures all people and neighborhoods prosper.”
“Throughout history, private banks have actively prevented communities of color from building wealth, through redlining and predatory lending practices. Not only must we tax billionaires to close the gap in our state budget, we must also put that money in public banks, where it can be equitably, transparently, and democratically invested communities hardest hit by COVID-19,” said Jonathan Westin, Executive Director of New York Communities for Change. “I urge our legislators to support the New York Public Banking Act and divest from predatory Wall Street banks that perpetuate poverty and racial inequality.”
“The New York Public Banking Act is critical to a just recovery in the months ahead and to equitable economic development in the years to come. Tax revenue is public money that should be deposited in a public entity, one that serves the community by investing in permanently-affordable housing, green energy, public infrastructure, basic financial services for unbanked communities, and a host of other public projects long neglected by commercial banks,” said Deborah Wright, Political Director for UAW Region 9A. “UAW Region 9A proudly supports this effort to make municipal finance democratic and an engine for local economic growth.”
“The COVID-19 crisis has underscored how we desperately need bold policies, like public banking, to address the expanse of disinvestment across New York. In a time of financial instability, to keep our communities whole, public banking is a solution we should invest in,” said Kathryn Franco of the Western New York Law Center. “In a city like Buffalo—one of the nation’s poorest and most segregated—public banking would allow for the use of public funds for the public good, while providing a level of accountability to residents that speaks to community reinvestment needs beyond existing policies like the federal Community Reinvestment Act. We need the New York Public Banking Act.”
“Even though they benefit from our public money, Wall Street failed New Yorkers as the pandemic raged on,” said Tousif Ahsan, Civic Engagement Coordinator for the New York Public Interest Research Group (NYPIRG). “New York State must aid localities in taking back their money, and their power, by passing the New York Public Banking Act.”
“The New York Public Banking Act will lay the foundation for a public bank in New York City and other cities and counties across the State,” said Danny Hanson, Core Team Member of Sane Energy Project. “These public institutions would play a vital role in divesting public funds from fossil-fuel-lending Wall Street while investing in community-led renewable energy and other essential community needs. This type of investment is what our City and State need to recover equitably from Covid-19 and create a racially and economically just future.”