- Jaspreet Johl
- (916) 335-8871
- Jaspreet.Johl@asm.ca.gov
(Sacramento, CA) – Today the California State Assembly approved landmark legislation that would guarantee all Californians access to basic banking services without fees or penalties. The California Public Banking Option Act, AB 1177 (BankCal), addresses the inequities in financial services acutely felt by communities that have been hardest hit by pandemic and recession: discrimination, predatory lending, and vicious spirals of debt. AB 1177 is endorsed by SEIU California, California Reinvestment Coalition, California Public Banking Alliance, and 200 racial and economic justice groups, faith-based and climate justice organizations, businesses, and labor unions.
“Struggling families are hit by fee after fee at every corner, and BankCal will help them keep their hard-earned dollars for food and rent,” said Assemblymember Miguel Santiago, lead author of AB 1177. “Providing a public banking option for essential financial services will help close the racial wealth gap. AB 1177 is a key tool to social and economic mobility, and I’m excited to continue pushing to pass this bill in the Senate.”
“There has long been a gap in banking services in low-income communities. To fill that gap, we passed AB 857 in 2019 to allow local governments to create their own public banks and reinvest in our local communities. AB 1177 is the next step forward in our people-centered public banking movement. By creating the BankCal Program, we can provide basic banking services for all Californians,” said Assemblymember Chiu (D-San Francisco), joint author of AB 1177.
“Access to banking services are essential for participation in our economy – and in turn, our post-pandemic recovery,” said Assemblymember Buffy Wicks (D-Oakland). “The Assembly’s passage of AB 1177 brings us one step closer to eliminating systemic inequities in our banking system, and ensuring that a lack of banking access doesn’t stand in the way of Californians’ recovery from the pandemic.”
“We can’t have two California’s: one banked and the other unbanked; one group who has access and the other who are denied access. AB 1177 ensures that all Californian’s have access to basic banking services without fees or penalties,” said Assemblymember Gipson (D-Carson), joint author of AB 1177.
"While countless people across our state struggle to keep themselves afloat during the pandemic induced economic downturn, the private banking system continues to profit at the expense of Californian families” said Assemblymember Kalra (D-San Jose). “This bill will not only help keep dollars local, but it will create jobs, offer loans at reasonable rates, and provide local governments with a stable source of financing.”
"This measure to provide all Californians with an accessible, no-cost banking option is long overdue. AB 1177 invests in underbanked communities like mine to ensure working families can actually access basic banking services like direct deposit, build their credit, and save for the future," Assemblywoman Gonzalez (D-San Diego) said.
“We applaud the Assembly for supporting this bill and ensuring access to financial services for all Californians regardless of how much money they make, their zip code, or the color of their skin,” said Bob Schoonover, SEIU California President and SEIU 721 Executive Director. “Limited access to basic banking services like check cashing are a problem that disproportionately impacts low-income communities and communities of color. BankCal is a concrete step in making sure that everyone has the opportunity to recover and come back stronger from the devastation caused by the pandemic.”
Seventy-eight percent of unbanked households make less than $30,000 annually and 42% make less than $15,000 annually. Nearly half of all Black-identifying households and Hispanic-identifying households in California are unbanked or underbanked.
"Today's vote advancing BankCal, moves the state closer to being on the right side of history," said Paulina Gonzalez-Brito, Executive Director of the California Reinvestment Coalition. "AB1177 carries with it the potential to finally build an alternative to the extractive and exclusive Wall Street banking system that has failed historically low-income communities and Black, Indigenous, People of Color. A banking system that centers people instead of profits is a start toward addressing long-standing racial and economic inequities in the state."
“Today’s Assembly vote in support of BankCal affirms that banking services are essential in allowing full participation in our economy--it is a necessity, not a luxury,” said Trinity Tran, lead organizer of the California Public Banking Alliance. “The Assembly’s passage of AB 1177 comes at a critical moment for struggling Californians and advances the movement toward a more equitable banking system.”
AB 1177 is modeled from the success of CalSavers and CalKids, similar programs aimed at creating greater financial stability for working families. To study the most effective and efficient way to operate the BankCal program, AB 1177 requires a market analysis. Upon completion of the market analysis and approval by the Legislature, AB 1177 establishes the BankCal program. The BankCal program would allow Californians to create a BankCal account, use a BankCal debit card, deposit funds, automate bill pay, and set up direct deposit without fees or penalties.
Assemblymember Miguel Santiago is the Chair of the Assembly Committee on Communications and Conveyance Committee and the Assembly Select Committee on Los Angeles County Homelessness. He also sits on the Assembly Committee on Health, Public Safety, Higher Education and Utilities and Energy. He represents the 53rd District composed of the cities of Los Angeles, Huntington Park, and Vernon.