Los Angeles’ left-leaning City Council is moving to examine the creation of a government-owned bank even as the city confronts a projected $100 million budget shortfall. The proposal prompted a sharp rebuke from Councilmember Traci Park, who questioned whether City Hall is capable of managing its own finances.
The council voted 11-3 Wednesday to allocate $460,000 for a feasibility study into establishing a city-owned bank. The funding revives an initiative that had previously been pulled back into city reserves as officials grappled with budget pressures.
Socialist-backed Councilmembers Eunisses Hernandez, Ysabel Jurado and Hugo Soto-Martinez have led the push. The trio introduced a motion last year calling for the city to begin financing the feasibility review.
The proposal also has the backing of Councilmember Nithya Raman, who is running for mayor. But Westside Councilmember Park strongly criticized the plan during Wednesday’s meeting.
“We can’t even manage our own damn finances,” Park said.
“Who in their right mind would do their financial businesses and banking with the Bank of the City of LA? Absolutely no one,” she added.
Supporters say a public bank could steer lending toward affordable housing, small businesses and infrastructure projects while keeping more public funds within Los Angeles.
Opponents remain concerned about the financial exposure involved in creating a municipal banking institution, as well as whether residents and businesses would trust the city to safeguard and manage their money.
IN CASE YOU MISSED IT: Wedding Venue Refuses $16K Refund After Woman’s Fiancée Dies
Jurado argued that the proposal would allow taxpayer dollars to serve community priorities instead of generating profits for private financial institutions.
“A public bank has the potential to finance affordable housing, supporting small businesses, and invest in infrastructure that serves instead of private profit,” she said.
Under Wednesday’s action, city officials must identify money for the feasibility study. Possible sources include discretionary funds controlled by individual council offices.
The concept has circulated at City Hall for years. Councilmembers unanimously voted in October 2021 to study a city-owned bank, followed by a 12-0 vote in 2023 approving $460,000 for HR&A Advisors to carry out the feasibility analysis.
The money was later returned to city reserves, bringing the effort to a halt.
Raman has previously said a public bank could help address shortcomings created by Los Angeles’ dependence on commercial lenders.
Her office confirmed that she supported Wednesday’s vote to advance the study.
Raman’s council district also contributed $15,000 in discretionary funding to the initiative last year.
