Los Angeles Needs a Public Bank

August 2017 - Los Angeles has 44 departments and bureaus who manage $5,549,000,000 in annual revenue collected from tax, fee and fine payers, as much as the whole country of Iceland.

At any given time, there is an average of $45 billion in public money sitting in various operational accounts, reserve funds or short- and medium-term investments. That money is currently held in accounts at commercial banks, where it earns next to zero interest. The city paid over $109 million in annual and transactional fees to these commercial banks last year. The banks then use these deposits to bolster their own lending activity, earning interest for their shareholders.

Commercial banks are under no obligation to lend money to businesses within the city of Los Angeles, or to extend credit to projects which aim to make a positive impact on its residents and communities. Instead, the power and resources we give to banks is used in the most profitable lending sectors, where they add to artificially high housing prices, subsidize industries with harmful externalities like fossil fuels and defense, and even engage in widespread fraud against their customers, all in the interest of greater shareholder profit.

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