Los Angeles City Council voted unanimously to take the first steps in seeing the viability of a public bank.
HOLLYWOOD (KABC) -- Los Angeles might be the first major metropolitan city to create a public bank.
A public bank would be owned and operated by the city.
According to city councilmembers, it aims to help low-income communities and could provide investment opportunities at a local level. And they say the bank operations would include:
Credit access for small businesses
Financing for affordable and social housing
Plus, opportunities for green energy investments
"It's time for local control of our public dollars based on our values. It is time for a public bank of Los Angeles," said activist Trinity Tran of the California Public Banking Alliance.
Gov. Gavin Newsom signed a bill in early October that allows California cities and counties to set up public banks, and the City Council's vote was unanimous to conduct an analysis and study the feasibility of a public bank.
"By having a public bank fund infrastructure project, L.A. is going to be able to cut costs significantly, as we will no longer have to rely on major financial institutions," said City Councilmember Curren Price.
But Beth Mills with the California Bankers Association believes a public bank in L.A. is risky.
"Would it be free from political influence? That's one potential challenge that we might see for a public bank," said Mills.
Mills also said that making it easier to get a loan could make it easier for that loan to never be paid back.
"That's taxpayer money that's just either going out the door or you're putting at risk for the potential that it might not be able to be paid back," said Mills.
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