LOS ANGELES (KABC) -- Whether you're paying sales tax on products bought in Los Angeles or just putting money in the meter, the city is currently set up like most businesses in that money is deposited in a bank.
But on Nov. 6, voters will decide whether they want L.A. to create a public bank.
"JP Morgan Chase, Wells Fargo, Bank of America - these banks also reach out of court settlements and pay billions in dollars in fines for perpetually defrauding the public. Instead of billions of our tax dollars sitting in Wall Street banks, we can fight to keep that money here," said Trinity Tran, the co-founder of Public Bank L.A.
The city of Los Angeles pays $1.1 billion each year to Wall Street banks. In a public bank, supporters say that money would go toward getting the homeless off the streets, addressing the housing crisis and rebuilding the city's infrastructure.
The only other public banks in the country can be found in American Samoa and the bank of North Dakota, which was established in 1919. But, the opposition includes the California Bankers Association, which says the bank of North Dakota isn't an accurate model for L.A.
"The bank in North Dakota does not compete directly at all with existing financial institutions. They don't do consumer lending at all, which is something the city officials in Los Angeles have said that they would look for this bank to do," said Beth Mills, with the California Bankers Association.
Mills also said the city is underestimating the costs associated with running a bank.
"We think there's a lot of risk that comes with establishing a public bank. There's 70 other FDIC insured institutions in the city of Los Angeles well positioned to meet the city's needs. City officials need to make sure they're being prudent with tax payer dollars. When they look at establishing a bank, they need to look at all the compliance costs that go along with that," Mills said.
But supporters said a not-for-profit public bank would have lower operating costs than a Wall Street bank. It would also offer lower interest rates, which would encourage lending. The city council and Mayor Eric Garcetti support Measure B.
"We don't want the voters of this city to think that this is going to be voted on Tuesday, Nov. 6 and then on Friday, there are banks. I do think this is about getting their OK to move forward and make some investments that we need to get answers to the questions," City Council President Herb Wesson said.
Measure B would allow Los Angeles to create a public bank