California Public Banking Option Act Advances to Governor’s Desk

(Sacramento, CA) – The California State Legislature approved AB 1177, the California Public Banking Option Act and it has been sent to the Governor’s desk. AB 1177 is landmark legislation to study how the state can guarantee all Californians access to basic banking services without fees or penalties. Endorsers of AB 1177 include SEIU California, California Reinvestment Coalition, California Public Banking Alliance, and 230 racial and economic justice groups, faith-based and climate justice organizations, businesses, and labor unions.

“Today California took a huge step toward a more equitable financial system. AB 1177 will help Californians stay protected from overdraft fees and penalties and give them an opportunity to save money and build wealth,” said Assembly Member Miguel Santiago, lead author of AB 1177. “California is leading the nation’s public banking movement and we must keep up the fight to provide no-fee banking services to all Californians.”

“Today California is leading the way in the fight for a more equitable economy. Lack of access to affordable financial services can have a lasting and damaging impact on families’ ability to save and participate in our economy,” said Assembly Member David Chiu (D-San Francisco). “By passing AB1177, our state will be able to make sure that thoughtful and well-informed investments are made to tackle the critical issue of the unbanked and underbanked, ensuring that every Californian has a chance at economic stability.”

“COVID-19 exposed what working Californians already knew long before the pandemic: Low income families and communities of color struggle to make ends meet, and inequitable access to banking causes them to fall even further behind. Latino families – like the ones I represent in Northeast and East Los Angeles - makeup 41 percent of our state’s unbanked and underbanked households. Black Californians, and persons with disabilities, are disproportionately unbanked and underbanked as well. To truly create a California For All, not just a California for some, we must remove institutional roadblocks financial stability. BankCal (AB 1177) puts us on a path to systemic transformation,” said Assembly Member Wendy Carrillo (D-Los Angeles).

“Universal access to essential financial services will level the playing field and remove roadblocks that have been placed in communities of color for far too long,” said Assembly Member Mike Gipson (D-Carson). “AB 1177 takes the necessary steps to advance racial and economic equity and provides opportunities to build generational wealth by making banking accessible to all.”

“I’m grateful my colleagues recognize the need for a public banking option that will create jobs, help people save money, and provide low-income families with a means of wealth creation,” said Assembly Member Ash Kalra (D-San Jose). “I urge the Governor to sign AB 1177 to dismantle barriers and increase economic opportunity for all Californians.”

"The people deserve a public option for their banking needs," said Assembly Member Alex Lee (D-San Jose). "Overdraft fees punish low-income residents and trap them in a vicious cycle of incurring these charges while attempting to cover basic needs. I applaud Assemblymember Santiago’s commitment to guarantee all Californians access to basic banking services without fees or penalties.”

“I’m excited to see California explore a public banking option. For too long, the fees charged at financial institutions have crippled the budgets of working families. It’s time to look for an alternative that better serves communities,” said Assembly Member Phil Ting (D-San Francisco).

“Banking services are essential for participation in our economy — and in turn, Californians’ economic recovery from the pandemic,” said Assembly Member Buffy Wicks, (D-Oakland). “This bill arriving on the Governor’s desk brings us one step closer to eliminating systemic inequities in our financial system, and it couldn’t come at a more important time. It’s absolutely critical that poor banking access doesn’t keep Californians from getting back on their feet.”

AB 1177 studies a model based on 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 must be acted on by the Governor by October 15th. 

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.