THE PEOPLE’S BANK: WHAT'S THE LA PUBLIC BANK?
The Los Angeles Public Bank (Municipal Bank of Los Angeles or MBLA) is a proposed nonprofit, city-owned, tax-exempt financial institution created to serve the people of Los Angeles. Its mission is to put public funds to work for public needs. Unlike private banks that prioritize profits for shareholders, the LA Public Bank will be publicly accountable and structured to meet the city’s needs. It will not offer retail services like checking accounts or ATMs. Instead, it will manage the City’s funds and partner with local lenders to expand access to affordable housing, sustainable infrastructure, small business lending, and economic opportunity.
Los Angeles faces overlapping crises: a severe housing shortage, worsening climate disasters, aging infrastructure, and entrenched racial and economic inequities. At the same time, the City loses more than $1.4 billion every year to debt service and financing costs, according to the 2024–2025 City budget. Over $300 million of that amount is paid in interest and fees to Wall Street banks and financial firms, while more than $2 billion in city funds are parked in multinational and petrochemical banks that finance fossil fuel projects and other harmful industries. These public dollars could instead rebuild neighborhoods, fund disaster resilience, and support communities that have been historically excluded from traditional sources of investment.
The LA Public Bank will give the City a powerful tool to manage its own financial resources, reduce costs and risk, and keep public dollars in Los Angeles. By using its deposit base and lending capacity, the bank can provide low-cost financing for affordable housing, small businesses, and modern infrastructure. This will save millions annually and increase the impact of every public dollar through tools like fractional reserve lending, which allows each dollar deposited to support up to ten dollars in new loans.
One of the most urgent areas of need is affordable housing. Today’s financing process requires navigating more than a dozen separate sources of capital, driving up costs and delaying projects for years. The LA Public Bank can cut through this maze by providing flexible, low-interest loans that consolidate funding and speed up development. Financial models show the bank could fund more than 17,000 affordable units in its first decade, while reinvesting profits into housing, schools, parks, and other local priorities.
The bank will also play a critical role in disaster response and climate resilience. It will give Los Angeles the ability to fund fire-resistant grids, landslide prevention, and other infrastructure projects without waiting for uncertain federal disaster aid. It can provide emergency financing to small businesses and families impacted by wildfires or extreme weather events, helping communities recover faster and more equitably.
Public banks have a proven track record. The Bank of North Dakota, founded in 1919, has shown that public banks can succeed at scale. Over the past century, it has returned more than $1 billion to the state’s general fund, funded small business development, and supported public services, all while earning a strong credit rating and an 18% return on equity in 2023.
The MBLA will be governed by an independent board and managed by financial experts, separate from City Hall, and subject to strict regulatory oversight at the state and federal levels. Every investment will be evaluated based on how well it serves the City’s equity, sustainability, and economic development goals.
Public banks like MBLA make it possible for cities to fund long-term priorities without raising taxes or taking on high-interest debt. By recycling public funds into projects that benefit local residents, from energy-efficient affordable housing to climate-ready infrastructure. MBLA will help build a stronger, just, and livable Los Angeles.
Our money. Our values. Our bank.
THE ADVANTAGES
Lower borrowing costs and maximize public funds
Public banks give cities the ability to borrow from their own municipal institution instead of relying on expensive Wall Street bonds. This saves millions in fees and interest each year and allows more public money to stay in the budget for priorities like schools, healthcare, infrastructure, and disaster resilience. The LA public bank will be able to leverage deposits up to ten times their value, meaning every $1 on deposit could generate $10 in community loans. $1 million deposited in the public bank could create up to $10 million in lending power, significantly expanding its impact. With $150 million in capitalization, the bank could support 10,000 small business loans and help finance 50,000 units of affordable housing.
Streamlined affordable housing finance
Affordable housing developers currently face a maze of more than a dozen funding sources, slowing projects and increasing costs. A public bank can consolidate financing and offer flexible, low-interest loans to help developers acquire, preserve, and build affordable housing more efficiently.
Expand access to small business credit
California public banks will partner with community banks, credit unions, and Community Development Financial Institutions (CDFIs) to strengthen local lending capacity. This allows more small and micro-businesses, especially those in underserved neighborhoods, to access affordable loans and stay open.
Keep profits local and build economic stability
Instead of sending profits to out-of-state shareholders, public banks reinvest earnings into community priorities. Loan repayments stay in Los Angeles, strengthening local businesses, infrastructure, and long-term economic growth.
Embed democracy, equity, and accountability
Public banks are publicly owned and governed with oversight and transparency. The Los Angeles Public Bank will center the needs of low-income communities and communities of color in its operations and long-term strategy. Through public decision-making platforms and citizen input, it will strengthen civic engagement and ensure investments align with community values.
Address the racial wealth gap and support economic justice
Public banks can direct capital to historically excluded communities, countering banking deserts and predatory lending. Public Bank LA and the California Public Banking Alliance co-sponsored Assembly Bill 1177 (CalAccount) in 2021 to guarantee all Californians access to basic banking services without fees or penalties. By supporting small businesses owned by women, immigrants, worker co-ops, and people of color, public banks help level the playing field and build community wealth.
How public banks expand access to affordable credit for small businesses
California public banks will work with community banks, credit unions, and Community Development Financial Institutions (CDFIs) to expand access to low-cost credit. These partnerships strengthen the cash flow of local lenders, allowing them to serve small businesses that conventional banks often overlook, especially those in underserved neighborhoods.