The California Bankers Association Response to Signing of AB 857

Press release

SACRAMENTO, Calif. – The California Bankers Association (CBA), issued the following statement today in response to Governor Newsom signing Assembly Bill 857 into law:

“We are disappointed that the governor signed AB 857 into law today. Despite the rhetoric from public bank advocates, Californians are not clamoring for a public bank option. A poll conducted earlier this spring by FM3 Research, revealed that 60 percent of Californians do not support a public bank, and nearly 90 percent are satisfied with their current banking options. Voter disdain for a public bank option was also validated last November when the voters in Los Angeles soundly rejected the idea.

“By signing this measure into law, taxpayer dollars have been potentially put at risk, a fact validated by every single public bank feasibility study conducted to date. In a report issued by the San Francisco Municipal Bank Feasibility Task Force, all financial models forecasted losses in the millions of dollars for decades.

“AB 857 also risks taking local agency deposits away from commercial banks. Commercial banks, particularly community banks, use local agency deposits as a source of liquidity which is then used to make loans into their communities.

“California’s banking community remains committed to serving the needs of our communities, and helping to support economic growth and vitality. We remain opposed to the concept of public banks, and hope that community leaders and elected officials will take note of the risks associated with establishing a municipal bank, before opting to explore this unnecessary and unwanted public option.”