Tlaib, Ocasio-Cortez Introduce Public Banking Act

WASHINGTON D.C. — Today, Congresswoman Rashida Tlaib (MI-12) and Alexandria Ocasio-Cortez (NY-14) introduced the Public Banking Act of 2023, which facilitates the creation of state and local public banks. The bill establishes a robust federal regulatory framework, grant programs, and financial infrastructure to promote public banks and ensure their success. The bill also mandates minimum standards for public banks relating to environmental justice, tenant protections, labor standards, democratic governance, and consumer data privacy.

“Wall Street-run banks are failing to serve many of my residents who are struggling to make ends meet,” said Congresswoman Tlaib. “It’s long past time to open doors for people who have been systematically shut out. We must provide a better option for those grappling with the costs of simply trying to participate in an economy that has been rigged against them with discriminatory and predatory practices. We need a financial system that is democratically accountable and puts the livelihoods of our residents ahead of private profits.”

“Public banks are uniquely able to address the economic inequality and racial wealth gap exacerbated by the banking industry’s predatory practices and discriminatory policies,” said Congresswoman Ocasio-Cortez. “The creation of public banks will also facilitate the use of public resources to construct additional public goods, including affordable housing and local renewable energy projects. Public banks empower states and municipalities to establish new channels of public investment to help solve systemic crises.”

Investment decisions shape the future by deciding how today’s resources will meet tomorrow’s needs. Instead of concentrating such decision-making power in private hands, public banks allow investment decisions to be democratically responsive. Instead of serving Wall Street, public banks can offer lower cost debt to city and state governments, fund public infrastructure projects, and encourage entrepreneurship by providing loans to small businesses, at lower interest rates and with lower fees. Unlike our existing financial system that excludes millions of individuals, public and postal banks can ensure everyone has access to basic financial services. Public banks can facilitate the transformative changes our communities desperately need—like affordable housing for all, disaster preparedness, financial inclusion, and a clean energy future.

Over 900 public banks exist worldwide—in countries like Germany, France, and Switzerland—and hold $49 trillion in assets. Here in the United States, the Bank of North Dakota has successfully operated for over a century, contributing millions of dollars annually to the state’s general fund, while partnering with community banks to lower costs for borrowers. During the 2008 financial crisis, the Bank of North Dakota maintained liquidity while the rest of the financial system was in free-fall, helping the state achieve the lowest foreclosure and credit card default rates in the nation.

The Public Banking Act would allow communities across the country to take advantage of these international and domestic precedents by creating a supportive regulatory and institutional framework for the creation of public banks. It would:

• Provide federal charters for public banks;
• Provide public banks a pathway to membership at the Federal Reserve, allowing public banks additional access to capital and loans;
• Establish a “Public Bank Primary Liquidity Facility” that provides liquidity to public member banks;
• Establish a public banking grant program, to facilitate bank formation, capitalization, and operations, among other purposes; and
• Establish a public banking incubator program for technical assistance and start-up support.

This legislation is cosponsored by: Representatives Ayanna Pressley (MA-07), Barbara Lee (CA-12), Jan Schakowsky (IL-09), and Ilhan Omar (MN-05).

“The Public Banking Act ends the era of privileging unaccountable private banks over the public interest,” said Michael Brennan, Leadership Committee member for Public Money Action. “By providing a comprehensive framework for local public banks to join the federal financial system, this legislation is a north star for the US public banking movement. We are proud to join with organizations across the country to work to turn this bill into law.”

“The Public Banking Act provides much needed federal recognition and guidance for public banks,” said Trinity Tran, Lead Organizer for the California Public Banking Alliance. “Public banking is key to unlocking economic transformation for communities often overlooked or exploited by our current financial system, charting a path for cities and states to build a sustainable future that prioritizes environmental justice, tenant protections, democratic governance, and strong labor and workers’ rights.”

“For too long, the big banks have maintained a lucrative monopoly on public deposits, making obscene profits as they continue to perpetuate racial and economic injustice. With public banking, we can start to flip the script, taking back our public deposits and reinvesting in low-income communities and communities of color,” said Tousif Ahsan of New Economy Project, which coordinates the Public Bank NYC coalition. “The Public Banking Act will create a bold national framework for public banking. We laud Representatives Ocasio-Cortez and Tlaib for introducing this important bill in Congress and for shining a light on public banking, as we continue to advance the New York Public Banking Act in our state capital to create a similar framework for local public banking here in New York.”

This legislation is endorsed by: Public Banking Institute, Center for Popular Democracy, National Housing Law Project, Detroit Action, Detroit People’s Platform, Wayne Metro Community Action Agency, Friends of the Earth, The Democracy Collaborative, Public Money Action, CA Public Banking Alliance, Public Bank NYC, New Economy Project, Take on Wall Street, People’s Action, Jobs with Justice, Climate and Community Project, Demos, U.S. Federation of Worker Cooperatives, For the Many, Strong Economy for All, NYS Community Equity Agenda, New York Communities for Change, Cooper Square Committee, Genesee Co-op Federal Credit Union, Ethical Humanist Society of Long Island, Multicultural Solidarity Long Island, Long Island Progressive Coalition, Episcopal Diocese of Long Island, WESPAC Foundation, Inc., Center for NYC Neighborhoods.

The full text of the bill is available here.

###