The Los Angeles Public Bank will not be run by City Council or elected officials. It will operate as a separate, nonprofit financial institution with its own independent board, professional management, and strong regulatory oversight. It will not function as another city department. Instead, it will be governed like a real bank, regulated at the state and federal levels, including oversight by California’s Department of Financial Protection and Innovation and potentially the FDIC.

Board members will be selected for their financial expertise, public service experience, and commitment to the bank’s mission. Unlike private banks, where board members are often major investors earning large payouts, the public bank’s board will be accountable to the public, with fair compensation and high transparency standards.

The bank’s governance structure will be shaped through community, expert, and public input during the development of the business plan and will follow these core principles:

– It will be governed by an independent board made up of community members and professionals with backgrounds in public finance, banking, affordable housing, and climate-related investments.
– It will be strictly regulated by the State of California and the FDIC, with safeguards to protect and grow municipal assets.
– It will be required to serve the public interest, not private shareholders or executive profit.

This is not about growing government or spending more. It’s about putting the city’s existing funds to better use. Los Angeles currently spends over $1.4 billion a year on debt service, with hundreds of millions in interest and fees going to Wall Street. A public bank would keep more of that money circulating locally, helping the city avoid budget shortfalls, tax hikes, and cuts to essential services. It gives the city long-term financial tools that are publicly accountable and built to serve local needs.