Oakland City Council’s Finance and Management Committee announced yesterday that it will need at least two more months before it can assess the feasibility of setting up a city-owned bank. Some councilmembers support the idea, but observers perceive foot-dragging and opposition at City Hall.
Proponents believe a public bank could promote saving, infrastructure investment and extend access to financial services for the city’s burgeoning cannabis industry.
On February 9, Councilmembers Rebecca Kaplan, Dan Kalb and Abel Guillén — along with backers from Berkeley and Richmond — held a forum with advocacy group Friends of the Public Bank of Oakland (FPBO); in that session, Kaplan said a staff report on the feasibility study’s cost would be delivered yesterday.
Instead, the committee received a staff report with an update on the process of soliciting bids to perform the study; reportedly, only two parties expressed interest in the job. Earlier this month, Kaplan said she’d bring a resolution to authorize the study after the committee receives a cost estimate.
“The process could speed up a little more –- thirty days instead of sixty,” said Craig Brandt, an FPBO attorney.
Kaplan, who backs the public bank concept, told reporters that it took “several years” for a group of East Bay cities to establish a Community Choice Aggregation consortium, essentially a public-sector electric utility competing with Pacific Gas and Electric Co.
Advocates see public-sector banks as a way for jurisdictions to fund public works projects and offer low-interest loans to homebuyers, students and small businesses, reducing reliance on private-sector banks. North Dakota operates a public bank, and FPBO activist Susan Harman said the group was “reaching out” to advocates in Santa Rosa, Philadelphia, Santa Fe, Minneapolis, Seattle and Washington.
Public banking could also give cannabis industry participants a transaction base that federal laws prevent private-sector banks from providing; cannabis product sales in most U.S. locales are cash-only. Harborside Heath Center, the city’s largest pot dispensary, does $10 - 20 million dollars in cash transactions each year.
It’s unclear whether the public bank is supported by others in City Hall; sources say Mayor Libby Schaaf is taking a wait-and-see stance, and representatives with the Oakland Metropolitan Chamber of Commerce could not be reached for comment.
The City Council “has not put forward a specific proposal for a public bank. All that is before the council is a request for a feasibility study to determine if a public bank would be possible in Oakland,” said Erica Derryck, the mayor's Communications Director. “As such, Mayor Schaaf has not yet taken a position.”
One City Hall insider, speaking on condition of anonymity, told Hoodline that city administrators see a public bank as “a pipe dream.”
Chamber of Commerce spokesperson Julia Lehman said her organization is "still in the very early stages" of discussing the public bank, but representatives have attended meetings. Because the project is still conceptual, the Chamber is waiting to review the actual "proposal through its lenses of public policy and economic development," she said.