By Edwin J. Viera, Producer
The New York State Legislature is considering a bill to allow the creation of public banks. The New York Public Banking Act would authorize municipal and other local governments to form and control public banks through ownership interests such as capital stock. The hope is these banks will invest in community endeavors rather than interests in line with making the bank profit. A report from the Rainforest Action Network said some of the largest banks in the nation are heavily invested in the fossil-fuel industry despite world policy shifts to renewable energies.
Mike Sandmel, senior campaign organizer with New Economy Project, said public banks present benefits to municipalities invested in them.
“Broadly speaking, it is a great tool for investing in infrastructure. This is a great tool for investing in affordable housing; for investing in small business creation,” he said.
The recent turmoil following the failure of Signature Bank has influenced interest in public banking. Numerous organizations and elected officials across the state signed a letter to the Majority Leader of the State Senate and the Speaker of the Assembly supporting the bill.
Primary opposition to the bill, currently under review by the Senate Banking Committee, has come from Wall Street banks trying to keep the business these cities bring, Sandmel said.
Previous versions of the bill were brought before the Legislature in the past two sessions, but never advanced beyond the Banking Committee. Sandmel is hopeful it will pass this year, but even if it does, work remains to outline local government’s terms for a public bank, he said.
“We have to have conversations in local communities about is this something we want to do? Is this something we think we can pull off? What does our business plan look like? What does our application look like? You have to pass legislation, locally, right. Through city councils or county legislatures. To authorize actually doing that work of putting that business plan together,” he said.
Other actions are being taken to make banks more accountable to the people whose money they hold, outside of this bill. New York City’s Banking Commission will include a public comment process for their public hearing to designate banks eligible for holding deposits of city funds.