Letter to the Hon. Nancy Pelosi, Speaker of the House, the Hon. Mitch McConnell, Majority Leader, the Hon. Kevin McCarthy, Republican Leader, and the Hon. Chuck Schumer, Minority Leader - Progressive Members of Congress Urge Leadership to Include Public Banking in COVID-19 Response

Letter

Dear Speaker Pelosi and Leader McCarthy,
We urge you to prioritize economic stabilization and recovery measures that would invest in
local communities. Specifically, we ask that you consider providing a public banking option to
state and local governments who are on the front lines of responding to the COVID-19
pandemic.
The global pandemic has exposed rampant inequality and the constant disinvestment in public
institutions. One of the clearest examples of this economic and racial inequality is the lack of
access to bank accounts. The CARES Act authorized $1,200 in relief checks to millions of
Americans, yet many of those most in need of this urgent relief will wait longer for these funds
because they lack access to functioning bank accounts. The CARES Act does not go far enough
to address the hemorrhaging of resources in our local communities and lacks the structural
change required during this critical time.
Right now, cities and states are forced to rely on money in big banks, allowing those banks to
leverage our public funds in order to enrich their investors through risky maneuvers and
predatory lending within the financialized speculative economy rather than reinvesting them in
our communities. Cities and states should have the option of controlling their public dollars and
leveraging resources to remain in their own communities through public banking.
Public banks are controlled by and principally funded by a government body rather than by
private investors. Globally, about 20 percent of banks are publicly owned, and we have a history
of utilizing them here in the US. The U.S. Post Office ran the Postal Savings System from 1911
to 1967, and this brought affordable banking services within the reach of Americans nationwide.
In North Dakota, their 100-year-old Bank of North Dakota is widely credited with helping the
state's economy weather the 2008 recession far better than other states.
For decades, profit-motivated decisions have driven bank branches to disappear from rural areas
and low-income communities, creating banking deserts that are dominated by predatory cashadvance stores. Given that the goal of public banks would be to serve all individuals, these
locally controlled banks would not need to weigh their servicing decisions on profitability alone.
Instead, by partnering with local lenders, public banks would expand lending capacity to enter
bank deserts while pushing back against traditional private financers.
Public banks have a unique ability not only provide financial stability but to also address the
economic inequalities and structural racism prolonged by the lending practices and credit
decisions made by Wall Street. Demos reported that public banks could offer lower debt costs to
city and state governments, fund public infrastructure projects, and encourage entrepreneurship
by providing loans to small businesses at lower interest rates and with lower fees. In addition,
public banks would fund the types of transformative change our communities desperately need--
housing for all, improvements for our hospitals and community clinics, healthcare needs, disaster
preparedness--and they would help us usher in the cleaner, environmentally responsible future
we need by funding local Green New Deal projects.
By allowing cities and states to offer public bank accounts, Congress can help localities address
immediate problems. In the short term, public banks would be a seamless and effective way to
deliver relief funds to all eligible recipients. In the longer term, public banks would remedy longstanding systemic problems with our banking system that have disproportionately burdened lowincome communities, ultimately bringing about transformational change to the American
monetary-financial system.
Access to payments and safe deposits shouldn't be an afterthought in the next stimulus package.
Congress should consider providing municipal finance stimulus and public banking options to
ensure that cities, states, and local financial institutions have enough resources necessary to
coordinate a just and equitable economic recovery