Public banks in California will be insured and regulated like other financial institutions. They will be required to apply for deposit insurance through the Federal Deposit Insurance Corporation (FDIC), which protects public deposits up to established limits. To qualify, public banks must meet the same safety, soundness, and compliance standards as private banks.

In addition to FDIC insurance, public banks will be regulated by California’s Department of Financial Protection and Innovation (DFPI). This includes regular examinations, capital requirements, and risk management standards. These protections are in place to make sure public funds are safeguarded and that the bank operates responsibly over the long term.

Some public banks may also choose to insure funds through private deposit insurers or through collateralization agreements, where deposits are secured by high-quality public assets. These options provide an extra layer of protection for funds held at the bank.

The goal is to ensure that public banks maintain strong oversight, protect public money, and meet the regulatory requirements needed to operate with long-term stability and trust.