California cities and counties will be allowed to establish public banks under a controversial bill signed into law Wednesday by Gov. Gavin Newsom, making California only the second U.S. state to allow such institutions.
Proponents say public banks can pursue those projects and support local communities’ needs while being free of the pressure to obtain higher profits and shareholder returns faced by commercial banks. Support for public banks also has grown since the financial crisis a decade ago and since Wells Fargo & Co. was embroiled in a slew of customer-abuse scandals in recent years.
For example, the city or county would have to establish a separate corporation with an independent board of directors, and it would have to obtain approval from the Federal Deposit Insurance Corp. to obtain deposit insurance, Jacob said.
These 'public banks' are for the pot industry. Will the banks be insured by the FDIC? The pot industry can afford to lose money if the bank folds in another crash, the general public using the banks can't.
These public banks are actually for the pot industry to have banks to put all their money in. That industry has wanted state banks for awhile. They can't put their money in regular banks, because pot is still illegal at the federal level and banks have to follow federal laws.
So how will the loans get repaid if used for public projects such as schools and parks as the article suggest? Seems like a way to deficit spend without dealing with deficit limits set by state law. Bad idea.
Poor People Banks & Rich People Banks..
GavinNewsom will sign anything that’s put on his desk.
Good deal! Undercut the commercial banks whenever and however you can. Read up on the Wells Fargo scandal if you want to know why you should pull your money and go elsewhere!