ICBA opposes Calif. public banking bill

ICBA and other groups expressed opposition to a bill in the California legislature that would establish a government banking system in the state.

The Bill: Assembly Bill 1177 would establish the BankCal program within the state treasurer’s office and require employers with five or more employees to provide direct deposit into the fund.

Opposition: In a joint letter, ICBA, the California Community Banking Network, and others said BankCal would put Californians at risk without remedying the use of high-cost payday lenders.

Alternatives: The groups urged California policymakers to instead join the BankOn movement encouraging expanded use of existing depository institutions and to help capitalize Community Development Financial Institutions.

ICBA Position: ICBA opposes the formation of any new public banks—whether owned by states, municipalities, or the U.S. Postal Service—which would create undue taxpayer risk and divert deposits from local communities.