LOS ANGELES (CBSLA) – Voters in November will be asked whether Los Angeles should create the first ever city-owned bank in the United States.
The L.A. City Council Friday unanimously approved an ordinance which calls for placing a ballot measure before voters asking whether the city should form its own bank.READ MORE: Movement Started To Stop Hate Crimes Towards Asians As LA Sees 114% Increase
The motion was put forward by Council President Herb Wesson last year. It’s unclear exactly what would happen if Angelenos voted in favor of the idea.
Wesson has said the bank could be used to finance local entrepreneurs and affordable housing while also providing a safe avenue for cannabis businesses to do banking, although he has since backed off somewhat from the cannabis idea due to potential legal issues it could raise with the federal government.
In his motion, Wesson wrote that 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.”
Wesson cited the only current publicly-owned bank in the nation, the Bank of North Dakota, as a successful model for L.A.READ MORE: CA Updates Face Mask Guidance, Joins CDC In Suggesting Double-Masking
The Bank of North Dakota “was created in 1919 in a populist wave when farmers there were unhappy with decisions being made by major banks heavily influenced by railroads and out-of-state agricultural interests,” Wesson wrote.
BND, which in 2016 reported 12 straight years of record profits, does not have ATMS or debit and credit cards. It has only one location. Among its services, BND offers low-interest student and school construction loans.
In December of last year, lawyers with the City Attorney’s Office told the Ad Hoc on Comprehensive Job Creation Plan Committee that the public bank would be subjected to the same laws that any other bank is when it comes to marijuana businesses, and that because marijuana is still a Schedule 1 drug at the federal level, accepting deposits from cannabis businesses could violate the Banking Secrecy Act and open the city and employees at the bank to potential liability.
Wesson isn’t alone in his thinking. California gubernatorial candidate and current Lt. Gov. Gavin Newsom last year floated on Twitter the idea of a state bank which would “build our infrastructure, construct new health care facilities, provide student loans, & build 3.5 million new housing units by 2025.”MORE NEWS: State Prioritizing COVID Vaccine Distribution To Most Vulnerable Communities
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