New Yorkers are known for speaking their minds, but can they put their money where their mouth is? A new campaign is underway to make one of the richest cities into the world reclaim local wealth and make the banking system work for people who actually live here, by putting people over profits.
Community banks and neighborhood credit unions have been around for decades as a way for communities to build assets, launch mom-and-pop businesses, and help keep money in the hands of working people, rather than lining the pockets of international financial institutions. But what if a city as a whole decided to create its own bank? The Public Bank NYC campaign calls for a full-fledged bank, owned and operated by and for the city, which could serve as a public trust invested in social justice, accountable to the public.
Right now, billions of the City of New York’s dollars are being held in commercial banks. That’s a problem, because it’s those same banks that make decisions about whom to lend to, and at what rates—not just on Wall Street but in everyday Main Street businesses and neighborhoods as well. Those banks are also the same big financial institutions that were deemed “too big to fail” during the last financial collapse, and were only kept afloat during the Great Recession with a huge bail-out, ultimately funded by public money.
A public bank for the city, on the other hand, would be a publicly operated financial institution that would hold funds belonging to the city and disburse them across public projects and community-based organizations based on citizens’ actual needs. Its lending decisions would be undertaken through a transparent, City-run authority, accountable to taxpayers. By managing all city taxes, fees, and local revenues (which are currently spread around various accounts with corporate banks), the public bank would aim to provide an alternative, socially oriented financial resource for the city’s economy.
The public bank envisioned by advocates would also work to increase banking options for all New Yorkers, by providing loans and funding for community credit unions, local development associations, and other community-oriented enterprises. Guided by principles of social justice, the investments would seek to “support low- and extremely low-income housing, union and living-wage jobs for New York City residents, democratically controlled clean energy,” and maybe help fix up the streets through community-driven small-scale infrastructure financing. The potential redistribution of resources would help remedy the financial damage of the recession, which sacrificed generations of Main Street wealth to Wall Street’s speculative feeding frenzy.