When Craig Brandt marched into the City Council chambers in Oakland, California, in the summer of 2015, he was furious about fraud.
The long-time local attorney and father of two had been following the fallout from the Libor scandal, a brazen financial scam that saw some of the biggest banks on Wall Street illegally manipulate international interest rates in order to boost their profits. By some estimates, the scheme cost cities and states around the country well over $6 billion. In June of 2015, Citigroup, JPMorgan Chase, and Barclays, among other Libor-rigging giants, pleaded guilty to felony charges related to the conspiracy and agreed to pay more than $2.5 billion in criminal fines to US regulators. But, for Brandt, that wasn’t enough. He wanted the banks banished, blocked from doing business in his city.
“I was totally pissed about it,” he says. “It was straight-up fraud.”
So, in a small act of stick-it-to-the-man defiance, Brandt drafted a resolution that barred the municipality from working with any firm that had either committed a felony or had recently paid more than $150 million in fines. He presented the homespun and eminently reasonable legislation to city officials and urged them to adopt it.
“The city councilors said they couldn’t do it,” Brandt says. “If they did, they wouldn’t have a bank left to work with. They said there wouldn’t be any bank big enough to take the city’s deposits.” Oakland, it seemed, was hopelessly dependent on ethically dubious and occasionally criminal financial titans. Brandt, however, was undeterred.
After the City Council turned him down, he started looking for other ways to wean Oakland off Wall Street. That’s when he fell in with a group of locals who have been nursing an audacious idea. They want their city to take radical action to combat plutocracy, inequality, and financial dislocation. They want their city to do something that hasn’t been done in this country in nearly a century, not since the trust-busting days of the Progressive Era. They want their city to create a bank—and, strange as the idea may seem, it’s not some utopian scheme. It’s a cause that’s catching on.
Across the country, community activists, mayors, city council members, and more are waking up to the power and the promise of public banks. Such banks are established and controlled by cities or states, rather than private interests. They collect deposits from government entities—from school districts, from city tax receipts, from state infrastructure funds—and use that money to issue loans and support public priorities. They are led by independent professionals but accountable to elected officials. Public banks are a way, supporters say, to build local wealth and resist the market’s predatory predilections. They are a way to end municipal reliance on Wall Street institutions, with their high fees, their scandal-ridden track records, and their vile investments in private prisons and pipelines. They are a way, at long last, to manage money in the public interest.