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Public Bank LA Intro

PUBLIC BANK LA: INVESTING IN LA'S FUTURE

The Los Angeles Public Bank is a city-owned 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, the LA Public Bank is designed to support local priorities by providing a sustainable, community-controlled financial option.

By using its deposit base and lending capacity, the bank can provide low-cost financing for affordable housing, small businesses, and modern infrastructure. It gives the City a way to invest directly in its residents, while strengthening long-term economic stability and reducing dependence on Wall Street.

Right now, Los Angeles pays more than $340 million in interest and fees and $1 billion in debt service to private financial institutions each year. Over $2 billion in city funds are parked in multinational and petrochemical banks that finance fossil fuel projects and other harmful industries. A public bank gives Los Angeles the ability to reclaim control of these funds and reinvest them into what the city actually needs: clean energy, neighborhood development, and financial tools for underserved communities.

The LA Public Bank will be guided by a public mission focused on social and environmental responsibility. It will keep public dollars circulating locally and return profits and interest to the City, rather than sending them to shareholders. That means more money for housing, jobs, and infrastructure, and less reliance on extractive financial systems.

Public ownership also brings oversight. The bank will be governed by a board accountable to Los Angeles residents, with transparent decision-making centered on public input. This ensures that financial decisions reflect the city’s values, not corporate interests.

The Los Angeles Public Bank puts community needs first. It gives the city a tool to build a fairer economy, support local investment, and make sure our money stays where it belongs, with the people.

Our money. Our values. Our bank.

ADVANTAGES OF THE LOS ANGELES PUBLIC BANK

A public bank can save the City money by reducing borrowing costs
A public bank gives the City of Los Angeles the ability to borrow from its own municipal institution. This reduces reliance on costly bonds and cuts down on fees and interest payments to private banks. With lower borrowing costs, the City can redirect more funds to public services like education, healthcare, and infrastructure improvements.

Public banks expand access to credit for small businesses
California public banks will work in partnership with community banks, credit unions, and Community Development Financial Institutions (CDFIs). By boosting their cash flow, public banks help these institutions provide affordable loans to small businesses, especially those in underserved areas that struggle to qualify for traditional financing.

A public bank simplifies affordable housing finance
Affordable housing developers often face delays and high costs due to a complex mix of funding sources. A public bank can consolidate financing and deliver the capital needed to acquire, preserve, and build housing more quickly and efficiently. This allows projects to move forward with fewer barriers and less overhead.

Keeping money local strengthens LA’s economy
The LA public bank will ensure that local dollars stay in the community instead of going to out-of-state shareholders. It will focus on lending to local businesses and infrastructure, helping to build sustainable economic growth. Loan repayments will remain in the city and generate revenue that supports future investments.

Public banks are transparent and accountable to the community
Public banks are owned by local governments and guided by a public mission. They operate with community oversight and clear accountability measures. Because they are not driven by profit, public banks can prioritize the needs of residents, local businesses, and public agencies, ensuring that financial decisions serve the public interest.

THE PUBLIC BANK OF LOS ANGELES WILL:

  • The Los Angeles Public Bank will strengthen our communities by maximizing public funds. The Los Angeles Public Bank will leverage funds up to 10 times to maximize its impact. With a capitalization of $150 million, it will have the capacity to provide $25,000 in loans to 10,000 small businesses and funding for the development of 50,000 units of affordable housing, using a ratio of a $1 million predevelopment loan per 50 units. By investing in local businesses and housing, the public bank will help to build local wealth and support economic stability in the community, while providing flexible, low-interest loans to affordable housing developers to quickly acquire and preserve existing affordable housing.
  • It will invest in a sustainable future by aligning city funds with long-term goals. The Los Angeles Public Bank will ensure that the city’s financial resources align with its values and priorities, through targeted, long-term investments in sustainable infrastructure such as green transportation networks. This will also enable large-scale goals like the development of 50,000 affordable housing units by providing efficient and streamlined financing options. The bank will also help to multiply local wealth across generations through public pension funds that are invested in the local community.
  • The LA Public Bank will embed democracy and equity into its structure and decision-making. The Los Angeles PublicBank will be a democratically controlled institution, with a governance structure that prioritizes the needs of low-income communities and communities of color in its operations and long-term strategy. Through transparent, public platforms for guiding the use of city funds, the LA public bank will provide a powerful tool for civic engagement and participatory budgeting, allowing community members to have a direct say in how public money is used, and promoting accountability and transparency in decision making.

BUSINESS AS USUAL IS NOT WORKING:

  • The City of Los Angeles spends more than $2 billion of city funds to invest in petrochemical companies and multi-national banks. Our City is supporting private profits at a public cost.

  • Municipal bonds are historically considered safer investments compared to even triple-A-rated commercial debt, as rated by agencies such as Moody’s. By issuing and purchasing its own debt, the City of Los Angeles can save up to 50% on debt-related expenses, compared to exporting taxpayer money to large corporations. By investing locally, the City can ensure that public funds are directed toward the benefit of its residents and fulfill its fiduciary duty to invest in the best interest of the community.

  • Affordable housing developments in the City of Los Angeles often require multiple sources of capital to purchase and construct a site, typically from various local public agencies. This complex financing process can make affordable housing more expensive and regularly cause delays in the project.

  • Small and micro-businesses, particularly those owned by people of color, face barriers in accessing loans and financial services, compared to larger businesses. These businesses are often neglected by traditional banks due to a lack of incentives from federal and state regulations to serve the needs of low-income and marginalized communities.

  • The City of Los Angeles currently lacks a direct banking relationship with the federal government, making it fully dependent on commercial banks to finance its operations. This can lead to higher costs and less predictability, particularly in times of crisis. A public bank, such as the LosAngeles Public Bank, would provide a reliable and cost-effective alternative, by creating a public financial infrastructure that the City can rely on.

NEXT STEPS FOR THE LA PUBLIC BANK:

The California Public Banking Act, signed into law by Governor Gavin Newsom in 2019, enables cities and regions to establish public banks. The process involves conducting a viability study and creating a business plan for the proposed bank, which must be approved by the state’s regulatory agency before a public bank charter can be granted.

The Los Angeles City Council awarded the winning bid for its public bank Request for Proposal (RFP) in 2023. The RFP, first released in June 2022, sought consultants to conduct a full feasibility study and develop a business plan for the proposed Los Angeles Public Bank. This work builds on the Council’s unanimous vote in October 2021 authorizing the city to move forward with study and planning.

As of July 2025, the coalition working to establish the bank is focused on securing full funding for the feasibility study. Six councilmembers have stepped up by contributing from their own discretionary funds to help cover the remaining costs and keep the project moving forward.

Under the authorizing legislation, the consultants chosen by the City will work closely with community members to define the priorities and principles that will guide the bank. The completed business plan will form the basis of Los Angeles’ application for a state bank charter, a critical step in making the public bank a reality.