Senate Committee Passes AB 1177, the California Public Banking Option Act, which Provides Californians No-Fee, No- Penalty Banking Services

(Sacramento, CA) – Today, the California State Senate Appropriations Committee approved landmark legislation to study how the state can create a public banking option to guarantee all Californians access to basic banking services without fees or penalties. The California Public Banking Option Act will address the inequities in financial services acutely felt by communities that have been hardest hit by pandemic and have a history of discrimination, predatory lending, and vicious debt spirals. Supporters of AB 177 include SEIU California, California Reinvestment Coalition, California Public Banking Alliance, and over 200 racial and economic justice groups, faith-based and climate justice organizations, businesses, and labor unions.

“When a rich person makes money, that money makes money; but when a poor person makes money, it’s gouged from every corner,” said Assembly Member Miguel Santiago (D-Los Angeles), lead author of AB 1177. “AB 1177 will provide a no-fee, no-penalty public banking option so all Californians can protect their paycheck and use essential banking tools to help build wealth.”

“There has long been a gap in banking services in low-income communities,” said Assembly Member David Chiu (D-San Francisco). “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.”

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 program, AB 1177 requires a market analysis to study how California can offer a no-fee, no-penalty debit card account that allows users to deposit funds, automate bill pay, and set up direct deposit. The bill will be voted on the Senate and Assembly Floor before September 11th.

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.