Los Angeles, California, Measure B, Public Bank Charter Amendment (November 2018)

• Text of measure
  • Ballot question
• Path to the ballot
• See also
  • External links
  • Footnotes
• More
  • Local ballot measures
  • State ballot measures
  • Local politics

Measure B: Los Angeles Public Bank Charter Amendment
The basics
Election date:
November 6, 2018
Status:
d Defeated
Topic:
Local government budgets, spending and finance
Related articles
Local government budgets, spending and finance on the ballot November 6, 2018 ballot measures in California Los Angeles County, California ballot measures Local charter amendments on the ballot
See also
Los Angeles, California

A charter amendment to establish a public bank was on the ballot for Los Angeles voters in Los Angeles County, California, on November 6, 2018. It was defeated.

A yes vote was a vote in favor of establishing a public bank in the city of Los Angeles.

A no vote was a vote against establishing a public bank in the city of Los Angeles.

Measure B was designed to add an amendment to City Charter Section 104(g) to authorize the city to form a municipal financial institution. The existing language in City Charter Section 104(g) prior to the election was as follows:

“	The City shall not engage in any purely commercial or industrial enterprise, except upon a majority vote of the voters of the City voting on the question, unless the enterprise was engaged in by the City at the time the Charter becomes effective, or unless engaging in the enterprise is elsewhere specifically authorized in the Charter.	”
—Los Angeles City Charter § 104(g)

Election results

Los Angeles, California, Measure B, Public Bank Charter Amendment (November 2018)
Result		Votes	Percentage
Yes		430,488	44.15%
No		544,498	55.85%

Results are officially certified.

Source

Text of measure

Ballot question

The ballot question was as follows:

“

Shall the City Charter be amended to allow the City to establish a municipal financial institution or bank?

”

Full text

The full text of the measure is available here.

Support

Proponents

Public Bank LA led the campaign in support of Measure B.

A list of endorsements listed by the Yes on B campaign can be found here.

Arguments

The arguments posted on the Yes on B campaign website are below:

“ 1. SAVE MONEY The city of Los Angeles pays $100M a year in banking fees and interest. This could be reinvested into our communities instead of siphoned out by Wall Street. By depositing our public tax dollars into our a publicly owned and accountable financial institution, Angelenos would keep our money in Our City,creating credit from our own revenue, instead of giving that power to Wall Street to finance wars, pipelines, private prisons, among other socially and environmentally harmful projects. Nearly 50% of the cost of all infrastructure projects go towards paying bank interest and fees – if we fund public projects ourselves through a public bank, our we can half the cost of infrastructure, doubling our power to invest in our own communities. The Bank of North Dakota is the nation’s only state-owned and operated bank. It is also the most profitable bank in the United States. With a nearly 17% return on investment, the BND is more profitable than Goldman Sachs, with a better credit rating than JPMorgan Chase. It withstood the economic crash of 2008 because, unlike large private banks, the BND does not engage in high-risk financial schemes. Like the BND, a municipal bank for Los Angeles would be prohibited from unsafe and unsound banking practices. 2. COMMUNITY DEVELOPMENT Private Wall Street banks are responsible for maintaining the stability of their bank system, our tax dollars are used to keep their doors open, instead of it being the other way around. With a public bank, we can focus on the long-term prosperity of our community through low-income housing, green energy infrastructure, co-ops, small businesses, etc. The city-owned Bank of Los Angeles would be a banker’s bank, partnering with local credit unions and community banks, guaranteeing their loans for locally-directed economic development, public works financing, and jobs creation. Fund local projects for low-income housing and neighborhood stabilization efforts by extending credit lines through the public bank’s loan portfolio. The public bank can directly loan money for housing projects below market interest rates; unlike private banks, they won’t be bound by a need to maximize profit margins. Low interest loans or interest free loans for students to invest in education and stimulate the economy. Support small businesses and cooperative ownership structures by increasing the lending capabilities of local credit unions and community banks. Finance transition towards decarbonization and renewable energy. The German Sparkassen public banking networks have funded over 70% of investments for renewable energy infrastructure. Renewables are now Germany’s top source of energy, with one-third of electricity derived from sources including wind and solar. 3. ETHICAL ALLOCATION OF MONEY The municipal public banking movement advocates for banks to be chartered with socially and environmentally responsible mandates. This includes a transparent Board of Directors and an anti-corruption ethos to ensure the bank operates under sustainable and ethical guidelines. The bank’s lending activities would be subject to strict evaluation to determine adherence to its principles and fulfillment of its public policy goals. 4. LOCAL SELF-DETERMINATION The City of Los Angeles pays $3.14B in debt services, which is the cost to borrow money; billions of dollars of our city’s interest payments are redirected into the coffers of Wall Street. A municipal public bank enables the people of the city to recapture public dollars and have a say over the financing of our own community. A chartered public bank maximizes public good within the community rather than maximizing profits globally. With municipal revenues and banking profits being returned to the public, the bank would issue loans to benefit the local economy, not private shareholders. 5. SERVE THE UNBANKED AND UNDERBANKED 3 out of 10 Angelenos do not have either access or adequate access to a checking or savings account and therefore cannot build credit, and are susceptible to theft, fraud, and the predatory practices of financial alternatives such as payday lenders or check cashers. A public bank would help meet the financial needs of the unbanked and underbanked population, largely comprised of minority, working-class communities and immigrant households. A public bank could also provide banking services to the massively growing and unbanked cannabis industry, bringing legitimacy to the finances of this sector. ”

Council motion

City council member Herb Wesson Jr. (District 10) made the following statement in a motion to the council on June 22, 2018:

“	For the past year, the City has been evaluating the possibility of forming a municipal bank to serve the needs of the City’s residents and businesses. A municipally chartered bank would be able to provide financial services to to residents, reinvestment in the City to support the development of affordable housing and local infrastructure, and banking solutions for other local businesses that are not currently served by the commercial banking industry. A municipal bank would apply high standards for social, ethical, and environmental stewardship in its lending and banking services practices, meeting the needs of the residents and businesses of the City both through its services and through its business practices.	”
—Motion by council member Herb Wesson Jr.

Opposition

Media editorials

• The Los Angeles Times editorial board wrote, "Charter Amendment B is one of the most ill-conceived, half-baked ballot measures to come out of City Hall in years, and that’s saying something. There’s been no formal study, no plan, nothing of substance completed to determine whether a Bank of Los Angeles is even feasible, much less a good idea. Voters are being asked to approve a vague concept and put their trust — and their money — in City Hall to figure it all out. [...] Banking is a serious business. So is managing the public treasury. Charter Amendment B is not a serious ballot measure. Voters should say 'no' to its airy promises."

Path to the ballot

See also: Laws governing local ballot measures in California

This measure was put on the ballot through a 12-0 vote of the Los Angeles City Council on June 29, 2018. Three council members were absent from the vote.

See also

Local measures

• Local measures in 2018
• Local government budgets, spending and finance on the ballot
• Local charter amendments on the ballot
• Los Angeles County measures

California

• November 6, 2018 measures in California
• Local ballot measures, California
• Los Angeles, California

News and analysis

• State and local preemption conflicts
• Measures advancing national agendas

External links

Suggest a link

• Search Google News for this topic
• Los Angeles County Elections Office website

Support

• Public Bank LA - Yes on B website
• Public Bank LA - Yes on B Facebook
• Public Bank LA - Yes on B Twitter