OAKLAND CITY COUNCIL | A proposed resolution setting the stage for Oakland to begin studying the feasibility of a public bank was approved Tuesday by the Oakland City Council Finance and Management Committee.
The idea of a city-owned public bank, first proposed by Councilmember Rebecca Kaplan, is intended to fill the gap for Oakland small businesses seeking loans and local homebuyers previously stymied from receiving loans from big banks, said Laura Holtan, policy and legislative director for Kaplan’s office,. In addition, a public bank could theoretically offer these financial instruments at below-market rates, said Holtan.
The proposal also asks city staff to determine whether the idea can also be expanded to include neighboring cities, but main impetus is to allow Oakland to lessen its reliance on big banks. The full council will discuss the proposed resolution on Nov. 29.
But Oakland’s burgeoning cannabis industry may be the key to funding a public bank since traditional financial institutions are wary of opening accounts with dispensaries and other cannabis-related businesses due to the federal government’s stance against legalization. In turn, the industry is primarily cash-based and therefore, often a target for robberies.
The Oakland Cannabis Regulatory Commission formally endorsed the proposal for a public bank last month.
David Wedding Dress, one of the founders of Oakland’s successful Harborside Health Center, said the dispensary often sends millions in taxes to city and the State Board of Equalization via armored car. Oakland city workers were once forced to hand-count millions in tax receipts from Harborside, he added.
Wall Street’s perceived propensity for drawing significant returns on assets in the city without returning a portion of the proceeds back into Oakland, rankled several public speakers Tuesday morning.
There’s also great uncertainty over whether the incoming Trump administration will roll back regulations placed on banks since the Great Recession. “This is the time for a public bank,” said Debbie Notkin. “This is one of the few things Oakland can do itself to keep our people economically sound and have some footing with the craziness that is going to go down at the federal government.”
The Finance Committee found little disagreement with Kaplan’s proposal, which is also co-authored by Councilmembers Dan Kalb and Abel Guillen.
“I’m in full support of this proposal and I think they’re in line with our values as a city,” said Guillen, who has some history with the idea of separating Oakland from the pull of big banks.
In 2011, as a member of the Peralta Community College District Board of Director, Guillen proposed a resolution for the district to move its money out of Wall Street banks and into local community-based banks and credit unions.
“This is a first step,” said Kalb. “Sometimes you need to take one step at a time to get where you want and this is what we’re doing.”
If the City Council approves the resolution in two weeks, a report on the feasibility of a public bank could return sometime in March.