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Indybay FeatureRelated Categories: East Bay | Drug War | Global Justice and Anti-Capitalism
A Public Bank of Oakland Could Provide Financial Services to Cannabis Industry
Oakland will spend $75,000 on a study to examine the feasibility of establishing a public bank in that city. Most corporate banks do not conduct business with the cannabis industry, even where cannabis operations are legal, pay taxes and hire employees. The study will hopefully prove that a public bank would be able to provide financial services to the cannabis industry.
Whereas private banks operate in their own private interest and are concerned their shareholders' requirements for quarterly profits and a healthy stock price, an established public bank would follow social values established by the city, such as directing profits back into the community. Members of the advocacy group Friends of the Public Bank of Oakland say there are many reasons to establish a public bank. Nearly all large banks are involved in unethical practices of one kind or another whether it be prisons, fossil fuel projects, or weapons manufacturing. People who want to withdraw their money from large corporate banks to protest these practices often move their money to credit unions.
While credit unions are certainly better than large banks like Wells Fargo, Bank of America and J.P. Morgan Chase, they are not full service banks. Both public banks and cooperatively-owned credit unions are ways to create more democratic approaches to banking but, thanks to the banking lobby, federal law prohibits credit unions from making commercial loans that exceed 12.25% of their total assets. This is a significant limitation that keeps credit unions out of the core business of banks: issuing credit.
The Public Banking Works campaign is primarily focused on California and especially the charter cities of Oakland and Santa Rosa. Resolving the lack of banking services provided to the cannabis industry is a priority, as is ensuring that affordable credit is extended to small businesses, students and infrastructure projects that serve communities.