Subscribe

New California law allows local governments to form banks

The "Follow This Story" feature will notify you when any articles related to this story are posted.

When you follow a story, the next time a related article is published — it could be days, weeks or months — you'll receive an email informing you of the update.

If you no longer want to follow a story, click the "Unfollow" link on that story. There's also an "Unfollow" link in every email notification we send you.

This tool is available only to subscribers; please make sure you're logged in if you want to follow a story.

Please note: This feature is available only to subscribers; make sure you're logged in if you want to follow a story.

Subscribe

SACRAMENTO. — A new state law in California lets local governments form their own banks to handle taxpayer money.

Gov. Gavin Newsom announced Wednesday that he signed Assembly Bill 857, a law co-authored by Assemblymen David Chiu of San Francisco and Miguel Santiago of Los Angeles.

They argued that because public banks don’t have to worry about shareholder profits, they can invest in things commercial banks are reluctant to provide, including affordable housing and infrastructure.

But they warned the approval process will be rigorous. Local governments would need a business plan and state-approved insurance. The law only allows for 10 public banks in the state, with no more than two licenses issued each year.

The law takes effect Jan. 1.

The California Bankers Association said public banks would be unfair competition for community banks.

Show Comment

Our Network

Santa Rosa Press Democrat
Sonoma Index-Tribune
Petaluma Argus Courier
Sonoma Magazine
Bite Club Eats
La Prensa Sonoma
Emerald Report
Spirited Magazine