THANK YOU WE HAVE AN AUTHOR AND
PERFECT I THINK AND GREAT
[inaudible]
WE SO I'M GONNA GO AHEAD AND
CALL OUR MEHNDI APRIL TWENTY
SECOND BANKING AND FINANCE A
ASSEMBLY COMMITTEE TO ORDER.
I DO I BEFORE WE ONE TWO THREE
FOUR BEFORE WE CHECK FOR QUORUM --
I A DO YOU WANT TO MAKE AN
ANNOUNCEMENT TO AND NOTE THAT
ITEM NINE ON THE AGENDA AB.
FIFTEEN FIFTY ONE DALY HAS BEEN
PULLED AT THE REQUEST OF THE
AUTHOR SO WE WILL NOT BE HEARING
THAT TO DATE.
I THINK WE ARE SHORT. ONE TWO
FOUR QUORUM.
WE ARE SHORT TO SERVE ANY
MEMBERS -- ARE OUT THERE WE'D
LIKE TO GET TO WE DO HAVE AN
AUTHOR HERE -- SO MAYBE WILL GO
A AHEAD AND START -- AS A
SUBCOMMITTEE.
AND WE WILL HAVE ASSEMBLY MEMBER
JONES SAWYER.
US START.
WITH AB.
FIFTEEN TWENTY FIVE I'VE NEVER
BEEN THIS LUCKY COMING DOWN.
WOW.
WELCOME TO THE BANKING AND
FINANCE.
GOOD AFTERNOON MADAM CHAIR.
AB FIFTEEN TWENTY FIVE AS
PROPOSED TO BE AMENDED I WANT TO
THANK YOUR COMMITTEE.
FOR HELPINGUS WITH THE
AMENDMENT WILL INCREASE ACCESS
TO BANKING FOR CANNABIS
BUSINESSES.
THIS BILL WILL HELP BANKS BETTER
COMPLY WITH FEDERAL REPORTING
REQUIREMENTS IT ALSO CODIFIES
PROTECTIONS UNDER STATE LAW FOR
FINANCIAL INSTITUTIONS THAT
SERVE THE INDUSTRY.
DESPITE THE CONFLICT BETWEEN
FEDERAL AND STATE LAW ON
CANNABIS IT IS POSSIBLE FOR
FINANCIAL INSTITUTIONS PROVIDE
SERVICES TO THE INDUSTRY.
ONLY FOUR HUNDRED AND EIGHTY SIX
BANKS AND CREDIT UNIONS IN THE
NATION ARE CURRENTLY BANKING TO
CABINET ARCADE BANKING TO
CANNABIS BUSINESSES.
INSTITUTIONS THAT CHOOSE TO BANK
FOR CANADA'S BUSINESSES MUST
COMPLY WITH RIGOROUS MONITORING.
AND REPORTING REQUIREMENTS AND
ACCEPT A SIGNIFICANT AMOUNT OF
RISK.
THE FINANCIAL CRIMES ENFORCEMENT
NETWORK ALSO NOTE AS BENSON.
A REQUIRES THAT BANKS SERVING
THE INDUSTRY FILE SUSPICIOUS
ACTIVITY REPORTS TO ENSURE THAT
A BUSINESS DOES NOT VIOLATE ANY
STATE LAW OR IS NOT ENGAGE IN
OTHER ILLEGAL ACTIVITY.
THESE REQUIREMENTS ARE
BURDENSOME AND DEMANDING ON
STAFF RESOURCES AT FINANCIAL
INSTITUTIONS.
AB FIFTEEN TWENTY FIVE WILL
ALLOW THE STATE LICENSING
AUTHORITIES WHAT A CALIFORNIA
CANNABIS.
JOINT POWER JOINT POWER TO PUT
JOINT.
JOINT POWER.
BUT THE WORRY THE TO SHARE A
BUSINESS TRACK AND TRACE
INFORMATION AND OTHER REGULATORY
REQUIREMENT FOR MAKING WITH THE
BUSINESSES.
A BANK AT THE REQUEST OF THE
BUSINESS THE TRACK AND TRACE
SYSTEM TRACKS ALL CAMPUS
PRODUCTSTRUMP'S CULTIVATION THE
SALE.
THIS INFORMATION ALONG WITH
OTHER REGULATORY INFORMATION CAN
BE USED BY FINANCIAL
INSTITUTIONS TO VERIFY THAT
EVERY TRANSACTION ASSOCIATED
WITH THE BUSINESSES.
PRODUCT AS IS LEGAL UNDER STATE
LAW AND EASE THE BURDEN AND
COMPLY WITH PRINCE AND REPORTING
REQUIREMENTS ADDITIONALLY AB
FIFTEEN TWENTY FIVE SIMILAR TO
LEGISLATION PASSED IN WASHINGTON
STATE.
WILL CREATE A STATE HARBOR UNDER
STATE LAW TO PROTECT FINANCIAL
INSTITUTIONS AND ACCOUNTANTS
THAT PROVIDE SERVICES TO THE
INDUSTRY.
WITH ME TO SPEAK IN SUPPORT OF
THIS BILL IS CAR MARKETS AND
FROM THE CALIFORNIA STATE
ASSOCIATION OF COUNTIES MEMBERS
I RESPECTFULLY ASK THREE AYE
VOTE.
GOOD AFTERNOON MADAM CHAIR
MEMBERS OF THE COMMITTEE MY NAME
IS KAREN SOMETIME WITH YOU SUCK
BUT I ALSO SERVE AS THE EGG
EXECUTIVE DIRECTOR OF THE
CALIFORNIA.
CANNABIS AUTHORITY WHICH IS A
JOINT POWERS AUTHORITY -- WE'RE
HERE VERY MUCH IN SUPPORT OF
THIS MEASURE I COUNTIES OVER THE
LAST -- SEVERAL YEARS HAVE BEEN
WORKING IN EARNEST WITH THIS
STATE TO DEVELOP LOCAL
REGULATORY PROGRAMS TO ALLOW FOR
COMMERCIAL CANNABIS ACTIVITY
WITHIN OUR JURISDICTIONS IN FACT.
ALTHOUGH I THINK YOU'VE HEARD
PROBABLY PRETTY WIDELY THAT.
THAT THERE ARE SOME LOCAL
GOVERNMENTS THAT ARE SLOW TO THE
TABLE THERE ARE CURRENTLY THIRTY
COUNTIES THAT ARE ALLOWING SOME
TYPE OF COMMERCIAL ACTIVITY
WITHIN THEIR JURISDICTION BUT
THIS TAKES.
A TREMENDOUS AMOUNT OF TIME AND
RESOURCES SO WE'VE COME TOGETHER
AS COUNTIES TO FORM A JOINT
POWERS AUTHORITY ARE CALLED THE
CALIFORNIA CAMPUS AT THE ALREADY
FOR THE PURPOSE OF DEVELOPING
AND MANAGING A STATEWIDE DATA
PLATFORM. TO CONSOLIDATE ALL THE
REGULATORY CANNABIS STATE OUT
FROM BOTH THE STATE AND THE
LOCAL LEVEL FIRST THIS IS A TOOL
FOR LOCAL REGULATORS TO ENSURE
THAT BUSINESSES ARE ABIDING BY
THE LAW ON THE UNDERSTAND --
WHAT TYPE OF COMMERCIAL ACTIVITY
IS HAPPENING WITHIN THEIR
JURISDICTION BUT THIS IS ALSO A
TOOL THAT WE ARE USING TO HELP
FACILITATE FINANCIAL SERVICES TO
THE INDUSTRY?
WE FEEL VERY STRONGLY AS LOCAL
GOVERNMENTS THAT IF WE ARE GOING
TO REGULATE AND ALLOW FOR
CANNABIS SALES WITHIN OUR
JURISDICTION WE NEED TO PROVIDE
THESE TOOLS. TO THE TO THE
BUSINESSES THAT WE ARE SERVING
IN US SO THAT THEY CAN FUNCTION
LIKE OTHER BUSINESSES DO WITH
BANK ACCOUNTS WITH WINE AND
CREDITS.
AND SIMPLE -- AND JUST BANKING
SERVICES -- AS WAS MENTIONED
THERE ARE NUMBER OF BANKS
NATIONWIDE THAT ARE WORKING WITH
THE INDUSTRY THERE SOME RISK
INVOLVED CREDIT UNIONS AND BANKS
HAVE TO BE WILLING TO ACCEPT
THAT RISK.
BUT THEIR TOOLS WE CAN GIVE THEM
AS WELL TO HELP SORT OF LESSON
THAT RISK PROFILE AND AND ALSO --
HEIGHTEN THEIR CERTAINTY THAT
EVERY DEPOSIT INTO THEIR
FINANCIAL INSTITUTION IS FROM A
LEGAL TRANSACTION NO ALSO NOTE
THAT IN THE ANNOUNCES IT
REFERENCES THAT IS IT THIS IS A
POTENTIALLY VERY INCREMENTAL
STEP TOWARDS A LARGER SOLUTION
AT THE FEDERAL LEVEL BUT WHAT WE
CURRENTLY HAVE.
UNDER FEDERAL LAW IS GUIDANCE
GUIDANCE WITHIN SAID IN A FORMER
GUIDANCE UNDER THE COAL MEMO BUT
THIS ALLOWS FOR FINANCIAL
INSTITUTIONS THAT ARE AGAIN
WILLING TO ACCEPT THIS REST. TO
WORK WITH THE INDUSTRY WELL
WE'LL WORK ON LARGER FEDERAL
SOLUTIONS AND THAT'S WHAT WE
REALLY SEE THIS BILL DOING AS
PROVIDING GUIDANCE TO STATE AND
LOCAL GOVERNMENTS AS THIS IS A
MECHANISM FOR SHARING DATA AND
THIS CAN HELP MOVE THE BALL.
AND PROVIDE FINANCIAL SERVICES
TO THE INDUSTRY WE ASK FOR YOUR
SUPPORT ON THIS MEASURE THANK
YOU.
ANY OTHER WAY WITNESSES IN
SUPPORT.
IF YOU CAN PLEASE COME TO THE
MICROPHONE AND JUST STATE YOUR
NAME AND AFFILIATION AND YOUR
POSITION NO COMMENT THANK YOU.
THANK YOU AND WE ACT ON BEHALF
OF THE CALIFORNIA COULD YOU LINK
IT'S PART.
THANK YOU CHAIR MEMBERS AT A
FRANK ON THE HAVE THE CALIFORNIA
CANNABIS INDUSTRY ASSOCIATION
SUPPORT THANK YOU.
JEFF NOON CHAIR MEMBERS BLAKE
JOHNSON HOW ABOUT THE STATURE
FILMA HERE IN STRONG SUPPORT.
THANK YOU ANY WITNESSES IN
OPPOSITION.
ALL RIGHT SEEN NO WITNESSES IN
OPPOSITION MEMBERS ANY QUESTIONS
OR COMMENTS WE ARE STILL WAITING
FOR ONE MORE MEMBER TO SHOW UP --
SO WE CAN GET QUORUM.
IRATE SO NO COMMENTS OR
QUESTIONS FROM.
ASSEMBLY MEMBER CHOI.
THANK YOU CHAIR -- I CAN SEE
SOME SOME BENEFITS OUT OF THIS
TO BE A LOT FOR SHARING HOWEVER
IF -- NO LEGITIMATE THE BUNK --
BANKING ACTIVITIES -- ALLOW THE
HOW CAN THEY SHE HAS.
A SUCH INFORMATION INFORMATION
CAN BE SHARED.
WHAT INFORMATION I TALKING ABOUT?
I'M HAPPY TO ANSWER THAT SO --
AS I MENTIONED FINANCIAL
INSTITUTIONS MAKE THEIR OWN
DECISION ABOUT WHO TO SERVICE
AND THERE IS OBVIOUSLY A RISK
ASSOCIATED IF THEY'RE WILLING TO
ACCEPT.
A CANNABIS CLIENT BECAUSE THERE
IS CURRENTLY A CONFLICT AT THE
FEDERAL LEVEL BUT THE FINANCIAL
CRIMES NETWORK -- AND FORMER AYE
GUIDANCE UNDER DEPARTMENT OF
JUSTICE DOES PROVIDE GUIDANCE TO
FINANCIAL INSTITUTIONS JUST LIKE
WE HAVE A LEGAL PROGRAM IN
CALIFORNIA THEY ARE AND THAT'S A
OPPOSING ESSENTIALLY FEDERAL LAW
THEY'RE PROVIDING GUIDANCE TO
THEIR MEMBERS OR THEIR REGULATED
ENTITIES WITHIN THE STATES THAT
HAVE LEGALIZED PROGRAMS IF
THEY'RE GOING. TO WORK WITH THE
INDUSTRY BECAUSE OF THE
GUIDELINES THAT THEY HAVE TO
FOLLOW AND WHAT THEY NEED TO
FOLLOW THOSE GUIDELINES IS
ACCURATE AND ACTIONABLE DATA SO
WHAT I HEAR FROM YOU IS THAT THE
RIGHT NOW THERE ARE BANKING
INDUSTRY -- OF WHICH ARE DOING --
OR SERVICING THIS -- CAN WAS TO
INDUSTRY THERE ARE A LIMITED
NUMBER I THINK.
THE AUTHOR MOTION FOR HOME.
HOW MANY ARE ALLOW A MINUTE ARE
DOING THAT THE BUSINESS -- WITH
THE CANNABIS INDUSTRY IN
CALIFORNIA.
BUT THAT'S A SMALLER A MUCH
SMALLER SUBSET OF THAT NUMBER
YES MUCH MORE.
IF YOU IF YOU WANT TO GET THAT
EXACT NUMBER WILL BE HAPPY TO
GET THEM A NUMBER FOR YOU AND
COMMITTEE.
SO YOU MEAN -- THOSE OF BANKS
WHICH ARE CURRENTLY SERVING --
WOULD BE ALLOWED TO SHARE.
THEIR INFORMATION WITH THE US
SERVING.
WILL COME UP BY THE MOVE SAY OR
SAID THEY ARE SERVING.
IS THAT THE TYPE OF INFORMATION
SHARING YOU ARE REQUIRING.
I THINK WE'RE LOOKING MORE LIKE
REGULATORY INFORMATION SO THE
DAY.
THAT WE KEEP TRACK AND TRACE WE
CAN MAKE SURE THAT THAT'S A
LEGITIMATE BUSINESS THE MONIES
THAT COME IN ARE COMING FROM
FOREIGN BANKS ARE FROM.
YOU KNOW PEOPLE DOING FROM
ELECTIVE ATTY IT'S MORE OF WHAT
A REGULAR BANK WE KEEP TRACK OF
THAT NECESSARY SHARING
INFORMATION WITH OTHER BANKS
BECAUSE I DON'T THINK.
DIFFERENT BANCSHARES.
ACROSS INFORMATION LET'S
SOMETHING IS CHANGED.
ALTHOUGH BANG SO RIGHT NOW --
CURRENTLY -- NOW SERVICING --
CANNABIS THE INDUSTRY -- THE
FEDERALLY CHARTERED BANKS WAS
STATE CHARTERED BANKS.
I CONTEND THAT MOST OF THEM ARE
PROBABLY CREDIT UNIONS AND THEY
ARE REGULATED BY THEIR OWN
FEDERAL REGULATORS.
CREDIT UNIONS ARE MOSTLY -- TO
CHARTER ON DAY.
I BELIEVE SO I'M NOT REPRESENTED
FROM THE CREDIT NOT REALLY SURE
BUT WE BUT AGAIN THAT'S
SOMETHING ELSE WE CAN FIND OUT
FOR YOU.
HELLO STATE.
THE CREDIT UNION ARE REGULATED
AND YEAH EVEN THOUGH THERE ARE
SOME SOME VALUE IS ABOUT THAT OF
A TO TRACK DOWN THE ACTIVITIES
UP BUT THE RIGHT NOW IS IS -- IS
A NOT FOR THE ENDORSED BY THE
STATE OR FEDERAL I'M NOT SURE.
WHAT THIS BILL WILL DO OKAY
THANK YOU?
MEMBERS ANY OTHER QUESTIONS OR
COMMENTS WE AT I I WILL SAY THAT.
OUR CREDIT UNIONS ARE BOTH -- OR
THEY BOTH HAVE FEDERAL AND STATE --
AUTHORIZATIONS -- AS WELL AND I
THINK THAT THE BILL IN THE BILL
ANALYSIS SPECIFICALLY TALKS
ABOUT TRACK AND TRACE DATA SO
IT'S NOT ALL DATA.
ON THAT BUT I KNOW THAT I
REPRESENT AT AT ONE COUNTY THAT
HAS A LOT OF CULTIVATION AND SO
WHEN YOU THINK OF THE BUSINESSES
AND WHERE IT'S GROWING -- THAT
WOULD BE IF I'M CORRECT THAT
TYPE OF DATA THAT WOULD BE
INCLUDED IN THE TRACK AND TRACE
DATA THAT WAS.
DISCUSSED.
GRANNY AND OTHER QUESTIONS OR
COMMENTS MEMBERS WE DO HAVE FORM
SO I AM LIKE EAGER TO TO TAKE
ROLE IF YOU WILL GIVE ME A
SECOND SO THAT WE CAN VOTE ON
YOUR BILL SO -- IF WE WE'RE
GOING TO GO AHEAD AND CALL ROLE
PLEASE.
NAME ON HERE HIM ON HERE CHEN
HERE.
CHEN HERE BEAR CAM.
CAN HEAR BURKE [inaudible]
CERVANTES [inaudible]
CHOI PRESIDENT.
CHOI HERE GABRIEL YOUR CABLE
HERE GRAYSON [inaudible]
MELENDEZ.
STONE.
STONE HERE WEBER.
WICKS HERE WICKS HERE.
RIGHT SO WE HAVE QUORUM -- WITH
NO OTHER QUESTIONS OR COMMENTS.
THANK YOU WE HAVE A MOTION AND A
SECOND.
COMEY PLEASE CALL THE ROLL FOR
A. B. FIFTEEN TWENTY FIVE EIGHT
HAS.
A DOOM MOTION FOR BUSINESS AND
PROFESSIONS YES.
DO PASSED NEW PATH WITHOUT DOING
THE MISSION THANK YOU.
IF SOMEONE NAY WERE MOTION TO
PASS REFERRED TO COMMITTEE ON
BUSINESS AND PROFESSIONS
[inaudible]
LEóN.
HI NAME ON I CHEN.
CHEN NOT VOTING [inaudible]
ERA CAN.
WHERE CAN I BURKE [inaudible]
CERVANTES [inaudible]
CHOI.
CHOI NOT VOTING GABRIEL
[inaudible]
CABLE I GRAYSON [inaudible]
MELENDEZ.
STONE.
STONE I WEBER.
WICKS.
WHAT I?
ALL RIGHT TO US SO THE BILL HAS
FIVE VOTES.
IN FAVOR WE WILL HOLD IT WE NEED
TO MORE VOTES AT TWO EIGHT
EFFORT TO GET -- MOVE FORWARD
AND WE WILL HOLD THAT FOR
MEMBERS WHO ARE NOT HERE THANK
YOU THANK YOU AND WE NOW HAVE
ASSEMBLY MEMBER MCCARTY WHO HAS
TWO BILLS AB.
NINE FOUR FIVE AS WELL AS A BE
SIX EIGHT NINE I DO WANT TO TAKE
A CHURCH POINT OF PRIVILEGE AT
THIS MOMENT TO WISH THE VICE
CHAIR HAPPY BIRTHDAY.
WITH THE NINE FOUR FIVE FIRST
FEELING WHEN YOU.
OKAY THANK YOU.
SO NO AMENDMENTS RIGHT.
NOW NOT A NIGHT THAT THE
COMMITTEE AMENDMENTS.
THERE ARE NO PROPOSED OKAY LET'S
CLARIFY.
YES.
LIKE THAT'S TO MY BRAIN FRAWLEY
OTHER COMMITTEES RIGHT YES.
YES.
GOOD YES I'M HERE TO PRESENT AB
NINE FOR FIVE A MEASURE WHICH
WOULD ALLOW ALLOW LOCAL AGENCIES
TO INCREASE THE AMOUNT OF THEIR
SURPLUS FUNDS.
THEY MAY INVEST IN SECURE
FINANCIAL INVESTMENTS CALLED.
RECIPROCAL DEPOSITS THIS BILL
DOESN'T REQUIRE ENTITIES TO DO
SO PROVIDES THEM WITH AN OPTION
CURRENT LAW PLACES MANY
RESTRICTIONS ON THE TYPES
INVESTMENT THAT SURPLUS FUNDS.
FROM LOCAL AGENCIES MAY BE --
INVESTED IN THESE RESTRICTIONS
INCLUDE -- PROVISIONS THAT STATE
INVESTMENTS MUST HAVE HIGH
LIQUIDITY AND DON'T POSE A
HIGHER RISK TO THE LOCAL AGENCY.
THE BILL DOESN'T CHANGE ANY OF
THESE RESTRICTIONS BUT SIMPLY
INCREASES THE AMOUNT.
BY 20% THAT AGENCY SURPLUS FUNDS
MAYBE INVESTED FROM 20% 250%.
CALIFORNIA IS THE ONLY STATE IN
THE NATION WHICH HAS SUCH A CAP
ON RECIPROCAL DEPOSITS AND WE
UNDERSTAND THE NEED FOR CAUTION
WHEN IT COMES TO LOCAL AGENCIES.
BUT IN THIS CASE ARE ENOUGH
SAFEGUARDS IN PLACE THAT LIFTING
THIS CAP SLIGHTLY WILL NOT PLACE
ANY UNDUE RISKS ON LOCAL FUNDS
ARE CITY OF SACRAMENTO HERE AND
SOME OF OUR LOCAL BANKS HAVE
BEEN TALKING ABOUT THIS ISSUE.
WITH ME A TEST OF FIRE TO LOCAL
CEOS STEPHEN FLEMING CO RIVER
CITY BANK AND JAMES BACK WITH CO
TWO FIVE STAR BANK.
THANK YOU.
THANK YOU ASSEMBLYMAN MCCARTY ON
JAMES BACK WITH ON THE PRESIDENT
AND CEO OF FIVE STAR BANK.
BY MADAM CHAIRIN AND COMMITTEE
MEMBERS -- REALLY APPRECIATE THE
OPPORTUNITY TO COME TESTIFY IN
FAVOR FOR THIS -- FOR A. B..
NINE FORTY FIVE I RUN A
COMMUNITY BANK -- WERE LOCATED
HERE IN THE CAPITAL REGION AND
PUBLIC FUNDS ARE A SIGNIFICANT
SOURCE -- OF FUNDING FOR OUR
LOANS IN WHICH WE MAKE HERE
LOCALLY.
THIS PARTICULAR PROVISION IS
GOING TO ALLOW US TO INCREASE
LOCAL LENDING.
WE HAVE A PROGRAM THAT WE PUT IN
PLACE ABOUT A YEAR AGO THAT I
BELIEVE SOME OF YOU MEMBERS OF
HER BEFORE IT'S CALLED RISE.
RESPONSIBLE INVESTMENTS FOR A
STRONG ECONOMY.
SIMPLY PUT THAT PROGRAM ALLOWS
FOR REQUIRES THAT -- IN ORDER TO
FOR US TO MAKE LOCAL LOANS WE
TAKE PUBLIC DEPOSITS PUBLIC
DEPOSITS EITHER FROM SPECIAL
DISTRICTS.
FROM MINUTES APOLOGIES ARE
COUNTIES THERE'S THREE DISTINCT
WAYS I THINK AS YOU KNOW THAT
YOU COULD COLLATERALIZED PUBLIC
FUNDS WHICH IS THE STATE LAW
REQUIREMENTS.
JEANNIE EITHER DO IT WITH
APPROPRIATE INVESTMENT
SECURITIES.
YOU CAN DO IT WITH A LETTER OF
CREDIT FROM THE FHL BE OF SAN
FRANCISCO.
OR YOU CAN PLACE THOSE FUNDS AND
RECIPROCAL DEPOSIT RELATIONSHIP
WHICH ENSURES THAT THOSE FUNDS
ARE COMPLETELY 1100% INSURED BY
THE FULL FAITH AND CREDIT.
OF THE UNITED STATES GOVERNMENT
BY FDIC INSURANCE.
SO WE'RE ASKING THE COMMITTEE TO
CONSIDER.
MOVING THE LIMITATION WHICH IS
30% A SURPLUS RIGHT NOW UP.
TO FIFTY THAT COULD BE A MAKE A
MATERIAL.
POSITIVE CHANGE FOR OUR ABILITY
TO MAKE LOANS LOCALLY --
SPECIALLY WHEN WE CONSIDER SOME
OF THE SPECIAL DISTRICTS THAT
WERE WORKING WITH THROUGHOUT.
IN CASE OF OUR BANK THROUGHOUT
NORTHERN CALIFORNIA.
SO WE WOULD LIKE YOU TO CONSIDER
DOING THIS -- AS ASSEMBLYMAN
MCCARTY MENTION.
THIS RESTRICTION DOES NOT EXIST
IN ANY OTHER PLACE IN THE UNITED
STATES ONLY IN CALIFORNIA.
SO WE WOULD ASK FEW -- TO TO
MOVE THIS ON TO HELP LOCAL
LENDING TO HELP US DO OUR JOB IS
COMMUNITY BANKS IN CALIFORNIA.
BY FURTHERING ECONOMIC
DEVELOPMENT DEVELOPMENT IN OUR
LOCAL COMMUNITIES THANK YOU.
THANK YOU JAMES THANK YOU FOR
GIVING US THE OPPORTUNITY TO
SPEAK TODAY MY NAME'S STEVE
FLEMING ON THE PRESIDENT AND CEO
OF RIVER CITY BANK.
WHICH HAS BEEN BASED HERE IN
SACRAMENTO SINCE -- NINETEEN
SEVENTY THREE LIKE FIVE STAR
BANK WERE A COMMUNITY BANK WHICH
MEANS THAT WE PROVIDE SERVICES.
TO CONSUMERS AND SMALL
BUSINESSES WITHIN A MORE --
DEFINED -- MORE LIMITED
GEOGRAPHIC AREA THAN THOSE AT
LARGE AND NATIONAL BANKS OF
BRAND NAMES YOU WOULD HAVE HEARD
OF FOR US THE PUBLIC SECTOR --
IS A KEY PART OF OUR CLIENT BASE --
WILL PROBABLY.
THE TWO THOUSAND EIGHTEEN SO
LAST YEAR THE CITY DAVIS -- MADE
THE DECISION TO MOVE THEIR
BANKING RELATIONSHIP TO RIVER
CITY BANK FROM ONE OF THE THE
BRAND NAMES WHO'S BEEN IN THE
THE NEWS A LOT OF LATE -- WE'RE
ALSO PROUD OF THE FACT THAT WE
ARE THE LEADING BANK IN THE
STATE OF CALIFORNIA -- FOR THE
COMMUNITY CHOICE AGGREGATION
INDUSTRY WHICH PROVIDES A CLEAN
ENERGY AT A FORMAL PRICING FOR
OUR COMMUNITIES -- WHERE THE
BANK FOR FIFTEEN OF THOSE TWENTY
ENTITIES THROUGHOUT THE STATE --
THE AND THAT MANY OF WHICH ARE
JOINT POWER AUTHORITIES.
AB NINE FORTY FIVE IS
PARTICULARLY IMPORTANT TO US AS
IT ALLOWS US TO OFFER HIGHER
RATES OF INTEREST -- TO OUR
EXISTING CUSTOMER BASE AND
POTENTIALLY NEW CUSTOMERS WITHIN
THE PUBLIC SECTOR.
SO THAT ON BEHALF OF TAXPAYERS
THEY CAN EARN MORE INTEREST.
THESE DEPOSITS GO INTO EITHER
MONEY MARKET ACCOUNTS OR CD'S
THAT'S A CHOICE OF THE TREASURER
OF THE ENTITIES THAT WE WORK
WITH.
BUT THEY'RE COMPLETELY LIQUID IF
THEY THEY WANT TO BE THAT'S A
CHOICE THAT THE PUBLIC SECTOR
ENTITY GETS TO MAKE.
BROWN'S MOST IMPORTANT -- THEIR
100% INSURED BY THE FDIC I WHICH
MEANS THERE ARE COMPLETELY SAFE
AS LONG AS YOU BELIEVE THE
FEDERAL GOVERNMENT WILL HONOR
ITS OBLIGATIONS.
AND THEN LASTLY.
AS JAMES MENTIONED -- ALLOWS US
TO LEND MORE INTO THE
COMMUNITIES WHICH WE SERVE.
I WHICH IS GOOD FOR ECONOMIC
DEVELOPMENT GOOD FOR JOB
CREATION WITH THE CURRENT
CONSTRUCT -- WE'RE LIMITED TO BE
ABLE TO TAKE ONLY 30% OF THOSE
DEPOSITS AND LEND THEM OUT INTO
THE COMMUNITY BECAUSE WE HAVE TO
GO OUT AND BUY SECURITIES. FOR
THE OTHER 70% WE HAVE TO ROUTE
THAT MONEY INTO -- OBLIGATIONS --
INVESTMENT OBLIGATION OUT OF OUR
LOCAL COMMUNITIES BY TAKING US
FROM 3250% HE GIVES US THAT MORE
CAPACITY TO SUPPORT THE GROWTH
IN OUR LOCAL COMMUNITIES.
THANK YOU AGAIN FOR YOUR TIME
AND WE ASK FOR YOUR SUPPORT.
MADAM CHAIR AND MEMBERS KEVIN
pGOLD WITH THE CALIFORNIA BANKERS
ASSOCIATION FOR THE SPONSOR OF
THE MEASURE.
WE RESPECTFULLY OR DRIVER.
GREAT WE HAVE A MOTION AND A
SECOND -- THE MOTION MADE BY AS
A MEMBER CHOI AND A SECOND.
BY A ASSEMBLY MEMBER CERVANTES.
AT ANY WITNESSES IN SUPPORT
[inaudible]
PLEASE COME.
FAMILY I CAN HAVE THE CALIFORNIA
CREDIT UNION LEAGUE IN SUPPORT.
ANY OTHER WITNESSES IN SUPPORT.
ANY WITNESSES IN OPPOSITION.
PLEASE COME UP.
AND YOU CAN COME HERE TO THE
TABLE [inaudible]
YEAH.
I COULD HAVE TO MADAM CHAIR --
THINK STEPPING TO BE HERE THIS --
TREATED WITH -- BUTTE COUNTY I'M
THE THE TREASURER TAX COLLECTOR
FOR BE COUNTY.
AND I'M REPRESENTING THE
CALIFORNIA ASSOCIATION OF COUNTY
TREASURER'S -- WE ARE CURRENTLY --
OPPOSED TO THIS BILL.
THE WAY IT'S WRITTEN -- WE'D
LIKE TO SEE WAS POSSIBLY BE
AMENDED.
WE LIKE TO ELIMINATE THE SUNSET.
IN THE MEASURE RESTORE
LIMITATION OF FUNDS BEING
DIRECTED -- IT WORKING WHAT WAS
COUNTY IS THAT WORK WITH -- IN --
YOU KNOW AND THROUGHOUT THE
STATE WE HAVE RESTRICTED
VESTMENT GUIDELINES.
WE IS -- SAFETY LIQUIDITY.
AND INVEST RETURN ARE VERY
CRITICAL [inaudible]
SO -- THIS PROGRAM IS IS REALLY
A WHAT WE CALL SEE DOORS.
IT'S BEEN AROUND FOR A LONG TIME.
AND WE JUST.
IT'S DIFFICULT -- FOR FOR THIS
MATTER WHETHER INVESTMENT
GUIDELINES BECAUSE WE DON'T KNOW
WHAT WHAT ALL INSTITUTIONS ARE
BEING INVESTED.
VESTED WITH -- YES SOME OF THE
LOCAL INSTITUTIONS THAT'S GREAT.
BUT THEY WANT HIM THEY SPREAD IT
OUT WE A VERY LARGE INVESTMENT
POOLS.
MANY COUNTIES HAVE MUSCLE PULLS.
UP TO OVER OVER BILLION DOLLARS.
SO WHEN YOU'RE INVESTING IN
THESE TYPES OF VEHICLES.
IT'S VERY DIFFICULT TO KNOW
WHERE THE FUNDS ARE GOING -- WE
INVESTED VERY HEAVILY IN FUNDS
LIKE WAVE -- CAMP.
WHICH ARE LOCAL ESTATE
INVESTMENT POOLS -- AND THEN WE
ALSO WORK WITH OBVIOUSLY WITH
OUR INVESTMENT GUIDELINES AS FAR
AS BROKERS.
WITH -- TRADE REASONINGS LIKE
THAT SO SAFETY AND SECURITY
LIQUIDITY.
IS VERY CRITICAL OF MYSELF
ESPECIALLY BEING FROM ABOUT YOU
COUNTY HAVE THAT LIQUIDITY IN
AVAILABILITY FUNDS IS CRITICAL.
NOW WE HAVE AS YOU KNOW WE HAVE
THE THE CAN OF CAMPFIRE RECENTLY
UP IN OUR AREA.
AND HAVING THAT LIQUIDITY AND
AND SAFETY IS IS VERY CRITICAL.
THANK YOU.
I ANY ADDITIONAL WITNESSES IN
OPPOSITION PLEASE COME TO THE
MICROPHONE.
SCENE NINE MEMBERS ANY QUESTIONS
OR COMMENTS.
SOME MEMBER TRYING.
IT FOR INCREASING OUR THE
PERCENTAGE OF A SURPLUS FUNDS SO
AND ARE TO BE INVESTED BY LOCAL
AGENCIES 250% IS GOOD THE OUR
WHY THIS A LIMIT THAT WHY 50% IS --
LIMIT THAT THAT THE YOU ARE
CHOOSING INSTEAD BY 70% 75%.
ARE YOU ASKING TO MAKE A MOTION%
TO GO TO A 100%.
AND I I THINK THIS IS A
REASONABLE.
STEP WERE OF COURSE --
ADDRESSING THE SUNSET ISSUE AND
IN INCREASING UP 250% AND
CERTAINLY WE CAN EVALUATE THAT
OVER A NUMBER OF YEARS AND COME
BACK I KNOW.
OUR TREASURES HAVE -- SOME
CONCERNS THAT I RESPECT THEIR
THEIR POSITIONS AND I THINK THAT
THIS WILL BE AND FOUND THAT I
THINK WILL BE OPPORTUNITY FOR US
TO COME BACK IN A FEW YEARS AND
GO UP EVEN HIGHER LIKE. FIFTY
FOUR NINE EARLIER FOR THE
STATE'S TO ACROSS THE COUNTRY.
ANY OTHER QUESTIONS OR COMMENTS.
RIGHT SEEN AN WE DO HAVE A
MOTION AND A SECOND THIS.
BILL DOES HAVE A DO PASS
RECOMMENDATION -- AND WE WILL GO
AHEAD AND TAKE A VOTE ON IT.
LIMON HI LIMON I CHEN ALL RIGHT
CHEN I CAN'T.
WHERE CAN I BURKE?
CERVANTES SERVANT CERVANTES AYE
CHOI.
CHOI I GABRIEL [inaudible]
GRAYSON.
MELENDEZ MELENDEZ AYE STONE
[inaudible]
WEBER [inaudible]
WICKS [inaudible]
I THE BILL HAS A SEVEN VOTES IN
SUPPORT IT DOES AND MOVE FORWARD
BUT WE WILL LEAVE THE ROLE OPEN
FOR ABSENT MEMBERS.
THANK YOU THANK YOU.
AND A SUMMER MCCARTY YOU HAVE A
SECOND BILL.
WITH US.
AB SIX ST NINE MUNICIPAL UTILITY
DISTRICT ACT.
NON STOCK SECURITY.
THANK YOU MADAM CHAIR AND
MEMBERS THIS IS THAT DISTRICT
BILL.
WE HAVE A LOCAL UTILITY TO
SECURE SMAD IN THIS ALLOW SMUD
TO RECEIVE NON STOCK EQUITY IN A
COMPANY THEY'RE WORKING WITH
THIS IS SOMETHING THAT.
INVESTOR OWNED UTILITY
SHAREHOLDER ENTITIES CAN ALREADY
DO IN CALIFORNIA A SMART OF
COURSE IS OUR PUBLIC POWER HERE
IN SACRAMENTO -- FOCUSING ON LOW
RATES AND RESPONSIBLE EMPLOYERS
CIVIC CLEAN GAUGE AND THERE THE
FOREFRONT OF D. CARBON ISING
MARGARET.
A RIGHT NOW SMUD WORKS WITH
BUSINESSES BY OFFERING THEIR
EXPERTISE ELECTRICITY AND POWER
MANAGEMENT THIS IS VERY HELPFUL
FOR THE START UP COMPANIES GREEN
TECHNOLOGIES.
THAT ARE ARE AND THAT ARE
ENTERING THIS MARKET PLACE HERE
IN SACRAMENTO.
IF THEY'RE PURCHASED BY ANOTHER
COMPANY -- SMUD WILL BE ABLE TO
REALIZE A RETURN ON THE VALUE
THAT EQUITY WHICH WOULD HELP OUR
RATE PAYERS.
WITH THEIR STRUCTURED RATES DOWN
THE ROAD AS WELL AS HELP THE
ENTITIES THRIVE HERE IN
SACRAMENTO IN THE STATE CAPITAL
THIS IS A TOOL BENEFIT OF
ENCOURAGING DEVELOPMENT OF OUR
GREEN TECHNOLOGIES AND OF COURSE --
FOCUSING ON THAT HELPING OUR
RATEPAYERS IN THE REGION AS WELL
IS A FAIRNESS ISSUE AS WELL OUR
SMART RATE PAYERS DON'T HAVE THE
SAME OPPORTUNITY TO PARTICIPATE
IN THESE AT THESE ARE THE TEASE
LIKE P. JEANNIE.
AND OTHER -- VESTRON UTILITIES
DO SO WITH THAT ASK FOR YOUR AYE
VOTE WITH ME TODAY ARE A SMART
REPRESENTATIVE IN THE CALIFORNIA
VISIBLE UTILITIES ASSOCIATION.
THANK YOU -- MADAM CHAIR VICE
CHAIR MEMBERS OF THE COMMITTEE
MY NAME'S MARK RAWSON I AM THE
MANAGER OF NEW -- BUSINESS
DEVELOPMENT FIRST MUD.
WE'RE THE NATION'S SIX LARGEST
COMMUNITY ON ELECTRIC SERVICE
PROVIDER SECOND LARGEST IN
CALIFORNIA WE SERVE ABOUT A
MILLION AND A HALF.
RESIDENTS HERE IN SACRAMENTO
COUNTY AND SMALL PORTIONS OF
JOINING PLASTER IN YELLOW
COUNTIES. ONE THANK YOU FOR THE
OPPORTUNITY TO ADDRESS THE
COMMITTEE ON A. B..
SIX EIGHTY NINE A BILL THAT
WOULD ALLOW SMALLER THE OPTION
TO HOLD SECURITY OR EQUITY
INTEREST IN A CORPORATION OTHER
THAN STOCK.
SMART HAS LONG WORKED WITH
COMPANIES AND VARIOUS PRODUCTS
AND SERVICES THE PROVIDE
INNOVATIVE SOLUTIONS TO ADDRESS
ENERGY AFFORDABILITY AND
RELIABILITY.
UP AND WILL CONTINUE TO DO SO AS
A SUBSTANTIAL INVESTMENT WILL BE
NEEDED NEW TECHNOLOGIES GRID
MODERNIZATION ENERGY RESOURCES
AN ELECTRIC TRANSPORTATION. TO
ME CALIFORNIA'S CAR REDUCTION
AND CLEAN ENERGY GOALS. FOR SOME
OF THESE PRODUCTS AND SERVICES
SMUD PROVIDES ACCESS TO ITS
INTELLECTUAL PROPERTY.
DEVOTE SUBSTANTIAL STAFF TIME
AND PROVIDES CRITICAL FIELD
TESTING OF THESE TECHNOLOGIES
AND PRODUCTS.
THE COMPANIES WE PARTNER WITH
THEN CAPITALIZE ON OUR
CONTRIBUTIONS BY MARKETING THESE
PRODUCTS OR SERVICES TO OTHERS
UTILITIES.
AT A SIGNIFICANT FINANCIAL
PROFIT TO THEM BUT NOT
NECESSARILY THIS MUD OR ITS
CUSTOMERS. FOR INSTANCE YEARS
AGO INVESTED TIME AND EFFORT
WITH THE COMPANY DEVELOP A
SIGNIFICANT SOFTWARE PRODUCT.
THAT ANALYZES OF ELECTRIC METER
DATA TO COMPARE CUSTOMERS ENERGY
USAGE.
THIS COMPANY WAS ACQUIRED BY
ANOTHER COMPANY FOR MILLIONS OF
DOLLARS AND **** CUSTOMERS ROOF
REALIZE NO BENEFITS FROM THAT.
IF IF WE DIDN'T AGO SHE HAD A
SECURITY OR IN EQUITY INTEREST
IN THAT COMPANY OUR CUSTOMERS
WOULD HAVE BENEFITTED.
FROM ANY FINANCE RETURN PAGES
MUD FOR CONTRIBUTIONS TO THE
DEVELOPMENT OF THAT PRODUCT --
AND THE SUCCESS OF THAT KIND OF
COMPANIES.
THE TIME IS PARTICULAR RIGHT
FIRST MONTH INVESTMENT TO BE
FAIRLY COMPENSATED AS SMART AS
PLANNING TO SPEND ABOUT SIX
BILLION DOLLARS SIX BILLION
DOLLARS.
FROM NOW UNTIL TWENTY FORTY TWO
CHIU ACHIEVE OUR NEW NET ZERO
CARBON EMISSIONS GOAL AS
OUTLINED IN OUR INTEGRATED
RESOURCE PLAN.
THIS WILL RESULT IN RATE
INCREASES FOR OUR CUSTOMERS.
THE OPTION FOR SMALL TO HOLD THE
SECURITY INTEREST IN THE COMPANY
UNDER CIRCUMSTANCES WERE SMART
CONTRIBUTES TO THE SUCCESSFUL
COMMERCIALIZATION OF
TECHNOLOGIES.
THAT MEETS OUR BUSINESS NEEDS
WILL HELP STAYS STABILIZE --
THESE RATE INCREASES AS ANY NEW
REVENUES WELL WOULD BE PUT BACK
INTO OUR COMMUNITY.
I THANK YOU FOR YOUR TIME AND
I'M HAPPY TO TAKE QUESTIONS.
THANK YOU.
PATRICK WELL TO THE CALIFORNIA
MUNICIPAL UTILITIES ASSOCIATION
IN SUPPORT OF THE BILL AS YOU'VE
HEARD **** IS MAKING SIGNIFICANT
INVESTMENTS IN REDUCING CARBON
IN THE COMMUNITY.
AND THIS BILL WOULD HELP THEM
REALIZE RETURN.
ON SOME OF THE PARTNERSHIPS OF
THE DEVELOPING TELL TO REDUCE
SOME OF THE COSTS TO RATEPAYERS
JUST AS ONE EXAMPLE **** IS
TAKING A LEADERSHIP ROLE IN
DEVELOPING A CALIFORNIA MOBILITY
CENTER EXPLORING THAT HERE -- IN
THE SACRAMENTO REGION THAT'S
GONNA LOOK AT ELECTRIC VEHICLES
ECONOMIST VEHICLES AND THEY
ANTICIPATE DEVELOPING A NUMBER
OF PARTNERSHIPS AS A RESULT OF
THAT.
AND SO IS THAT MOVES FOR THIS
BILL WOULD HELP ALLOW THEM TO TO
THE SENSHI MONETIZE SOME OF
THEIR VALUE FROM THAT AND RETURN
THAT TO THEIR RATE PAYERS AS
THEY WORK TOWARDS ARE NOT ZERO
CARBON GOALS WE URGE YOUR
SUPPORT ON THE BILL.
THANK YOU THANK YOU -- MEMBERS
JOHN WHITE WITH A CLEAN PAIR
CAMPAIGN WERE COALITION OF
RENEWABLE ENERGY COMPANIES AND
ENVIRONMENTAL NGOS AND WE'RE IN
SUPPORT OF THE BILL GREAT THANK
YOU.
ANY ADDITIONAL WITNESSES IN
SUPPORT.
REMEMBERS FROST BUCKLEY ON
BEHALF OF THE SEA OF SACRAMENTO
AND ON BEHALF OF MERITOR
STEINBERG AND SUPPORT.
HELLO NOT HER MOM ON BEHALF OF
THE CALIFORNIA ELECTRIC SHINS
TRANSPORTATION COALITION AND
SUPPORT.
THANK YOU.
ANY WITNESSES IN OPPOSITION.
SEE NO WITNESSES IN OPPOSITION
MEMBERS ANY QUESTIONS OR
COMMENTS. TO HAVE A MOTION A
SECOND WITH.
THANK YOU WE HAVE A MOTION MADE
BY SOME MEMBER OF OUR CAN AND A
SECOND BY ASSEMBLY MEMBER SAID
ABOUT THIS.
ALRIGHT SO WE THE MOST THE BILL
DOES HAVE A DO YOU PASS I
APPRECIATE I THINK IT'LL BE
INTERESTING TO SEE THE THREE
PILOT THAT POTENTIALLY.
THREE ITEMS THAT WOULD BE PART
OF THE PILOT PROGRAM -- IN VERY
MUCH LOOKING FORWARD TO SEE WHAT
KIND OF RETURNS IT HAS ON THE
REPAIRS -- I THINK INNOVATION
AND TECHNOLOGY IS ABSOLUTELY
PART OF THE FUTURE OF ENERGY AND
THE CURRENT IN THE PRESENT OF
ENERGY AND SO -- OF FINDING A
WAY THAT SOMEBODY COULD BE PART
OF THE INNOVATION WHILE ALSO
HELPING THE REPAIRS THEY THINK
IS THE INTERESTING AND GOOD IDEA
SO THANK YOU FOR BRINGING THIS
FORWARD THANK YOU.
WE'LL GO AHEAD AND CALL THE ROLL.
THE ONE I LIMON HI CHEN.
CHEN I CAN'T.
WHERE CAN I BURKE [inaudible]
CERVANTES.
CERVANTES I CHOI.
JOINT NOT VOTING [inaudible]
GABRIEL [inaudible]
GRAYSON [inaudible]
MELENDEZ [inaudible]
STONE [inaudible]
WEBER.
WICKS.
WICKS I THE BILL HAS -- FIVE
VOTES ON A NEEDS TO MORE VOTES
TO MOVE OUT OF COMMITTEE WE WILL
LEAVE THE ROLE OPEN FOR ABSENT
MEMBERS -- WHILE WE WAIT FOR
AUTHORS WE HOPE THAT AUTHORS OUT
THERE AT COULD COME TO THE
COMMITTEE.
AND WE WILL GO AHEAD AND DO THE
CONSENT AGENDA -- THE CONSENT
AGENDA HAS TWO ITEMS AB THIRTEEN
OH FIVE OBERNOLTE AND AB
FOURTEEN TWENTY EIGHT CALDERON.
WE HAVE A MOTION BY
ASSEMBLYMEMBER CHOI AND A SECOND
BY ASSEMBLY MEMBER OF
BAUER-KAHAN.
AND WE'LL GO AHEAD AND CALL THE
ROLL FOR CONSENT.
LEóN I LIMóN I CHAN.
CHEN I CAN'T WHERE CAN I BURKE
[inaudible]
CERVANTES.
CERVANTES I CHOI.
CHOI I GABRIEL [inaudible]
GRAYSON [inaudible]
MELENDEZ [inaudible]
STONE [inaudible]
WEBER.
WICKS.
WICKS I ALRIGHT SO WE HAVE
CALLED ALL THE AUTHORS WE HAVE
THREE MORE BILLS THAT
[inaudible]
DURING COMMITTEES -- WE HAVE
THREE MORE BILLS WILL WAIT A
COUPLE [inaudible]
MINUTES [inaudible]
AND
THE
A LITTLE
[inaudible]
YEAH [inaudible]
I PROBABLY [inaudible]
YEAH [inaudible]
OKAY
[inaudible]
ALRIGHT
[inaudible]
YEAH [inaudible]
YEAH YEAH [inaudible]
RIGHT.
YEAH.
YOU KNOW
[inaudible]
YEAH [inaudible]
NOTHING
[inaudible]
HI.
THERE ARE MANY
[inaudible]
YEAH [inaudible]
YEAH
[inaudible]
YEAH [inaudible]
SORRY
[inaudible]
YEAH [inaudible]
I TOLD
[inaudible]
YEAH YEAH [inaudible]
YEAH
[inaudible]
YEAH [inaudible]
YEAH
[inaudible]
YEAH
[inaudible]
YEAH
[inaudible]
RIGHT [inaudible]
THANK YOU
.
THE FIGURE THAT OUT [inaudible]
YEAH
[inaudible]
BUT
SHE'S BILL [inaudible]
YEAH [inaudible]
YOU KNOW
-- WE WILL BEGIN AT
HEARING AB EIGHT FIVE SEVEN
ASSEMBLY MEMBER CHOOSE AND
SANTIAGO ARE HERE TO PRESENT
THAT BILL THANK YOU.
THANK YOU MADAM CHAIR.
LET ME FIRST START BY THANKING
YOU FOR YOUR DEEP ENGAGEMENT ON
THIS ISSUE AND YOU AND YOUR
STAFF -- NOT ONLY FOR YOUR GAUGE
MEANT BUT FOR YOUR SUGGESTED
AMENDMENTS WHICH WE ARE HAPPY TO
ACCEPT.
ALSO WANNA THANK YOU REMEMBER
THIS COMMITTEE FOR YOUR DEEP
ENGAGEMENT.
ON THIS ISSUE.
LET ME FIRST START BY EXPLAINING
WHAT THIS BILL IS AND WHAT IS
NOT.
AB EIGHT FIFTY SEVEN WHAT
ESTABLISH A PROCESS FOR A LOCAL
JURISDICTION TO CHARTER A LOCAL
BANK.
WHAT THIS BILL DOES NOT DO IS IT
DOES NOT ESTABLISH REPUBLIC BANK
IT ONLY CREATES THE PROCESS FOR
THE CHARTERING WHICH IS A MULTI
YEAR PROCESS WITH MANY
REQUIREMENTS?
WE CRAFTED A BILL TO ENSURE THAT
PUBLIC BANK ASSETS ARE
SAFEGUARDED.
UNLIKE PRIVATE BANKS ARE BILL
REQUIRES A PUBLIC BANK TO ABIDE
BY A FIDUCIARY DUTY TO PROTECT
ITS ASSETS.
IT REQUIRES COMPLIANCE WITH ALL
REQUIREMENTS OF FINANCIAL
INSTITUTIONS Là AND BANKING LAW
WITH ALL REPORTING IN
TRANSPARENCY REQUIREMENTS.
AND IN ADDITION TO THE BILL'S
REQUIREMENT THAT PUBLIC BANKS
KEEP THE SAME COLLATERAL
REQUIREMENTS AS PRIVATE BANKS.
THE MINUTES WE ACCEPTED --
REQUIRE A PUBLIC BANK TO
MAINTAIN FDIC DEPOSIT INSURANCE.
IN ADDITION THE BILL'S
REQUIREMENTS OF AN INITIAL
BUSINESS PLAN WE ALSO ACCEPTED
AMENDMENTS TO REQUIRE A LOCAL
AGENCY THAT WANTS TO APPLY FOR
CHARTER TO ANALYZE ALL COSTS.
CAPITAL REQUIREMENTS FINANCIAL
PROJECTIONS AND THE LEGALITY OF
THE BANK.
WE ALSO CRAFTER BILL TO SUPPORT
LOCAL FINANCIAL INSTITUTIONS
THIS BILL SPECIFICALLY REQUIRES
PUBLIC BANKS WHENEVER POSSIBLE
TO PARTNER WITH LOCAL FINANCIAL
INSTITUTIONS TO CONDUCT RETAIL
SERVICES WITH THOSE LOCAL CREDIT
UNIONS AND COMMUNITY BANKS.
THIS IS MODELED AFTER THE PUBLIC
BANK OF NEW OF NORTH DAKOTA
WHICH FOUR HUNDRED YEARS THIS
YEAR HAS SUCCESSFULLY PARTNERED
WITH LOCAL BANKS AND CREDIT
UNIONS WITH PROPER ROLE RETURNS
TO THE PUBLIC.
THE LAST POINT I WANT TO MAKE IN
OUR OPEN MY OPENING.
IS TO RESPOND TO THE MAIN
ARGUMENT BY THE OPPOSITION THAT
SUPPORTERS OF PUBLIC BANKS
HAVEN'T SHOWN HOW THE CURRENT
BANKING INDUSTRY DOES NOT MEET
THE PUBLIC'S NEEDS.
I THINK OF U. S. PUBLIC THEY
WOULD HAVE AN ENTIRELY DIFFERENT
PERSPECTIVE IF YOU WOULD ASK
CUSTOMERS AND CONSUMERS WHO
EXPERIENCE PREDATORY LENDING.
WHO HAD MILLIONS OF FAKE BANK
ACCOUNTS OPEN IN THEIR NAMES
WHO'VE LOST FIVE HUNDRED BILLION
DOLLARS IN INTEREST PAYMENTS
AFTER THE GREAT RECESSION?
YOU COULD ASK HOMEOWNERS
VICTIMIZED BY MORTGAGE
FORECLOSURES STUDENTS VICTIMIZED
BY GREENLANDERS SMALL BUSINESSES
DENIED ACCESS TO CAPITAL.
YOU COULD ALSO PUBLIC WHOSE
MONIES ARE INVESTED EVERYDAY
AGAINST THEIR VALUES IN FOSSIL
FUEL INDUSTRIES GUN MANY FACTORS
AND PRIVATE PRISONS AND
COMPANIES WITH UNFAIR LABOR
PRACTICES.
ARE PUBLIC AND LOCAL
JURISDICTIONS ARE FORCED TO
INVEST OUR SAVINGS AND ASSETS IN
THE LARGEST WALL STREET BANKS
WALL STREET BANKS WHO HAVE
ENJOYED SOARING PROFITABILITY.
WALL STREET BANKS WHO FAILED US.
WITH OUR BILL LOCAL
JURISDICTIONS WILL HAVE THE
CHANCE TO KEEP TAXPAYER DOLLARS
IN LOCAL COMMUNITIES.
RATHER THAN CONTINUE TO SEND
RECORD PROFITS TO WALL STREET
INVESTORS TO CREATE LOCAL JOBS
THE LOCAL INFRASTRUCTURE AND
STABILIZE LOCAL COMMUNITIES.
THE PUBLIC'S MONEY SHOULD SERVE
A PUBLIC PURPOSE NOT SIMPLY
MAXIMIZE PROFITS.
THIS TIME I LIKE TO ASK MY JOINT
AUTHORED TO PROVIDE HIS
PERSPECTIVE THE TWO OF US
REPRESENT TWO OF TEN AREAS OF
THE STATE.
OF THAT HAVE A SIGNIFICANT
INTEREST IN ASKING FOR A PROCESS
TO CHARTER A LOCAL PUBLIC BANK.
AND MISTER SANTIAGO HAS BEEN A
TRUE PARTNER IN THIS BILL MR
SANTIAGO.
THANK YOU AND THANK YOU MADAM
CHAIR FOR HELPING US TO MAKE
THIS A BETTER BILL I ALSO WANT
TO THINK ONE OF THE CO AUTHORS --
WHO SENT UP THERE SO THANK YOU
VERY MUCH FOR HELPING US TO WORK
ON THIS LOOK THIS IS A SERIOUS
POLICY PROPOSAL?
AND IT'S A VERY SIMPLE PROPOSAL
ALL IT SAYS IS.
IS IF A LOCAL MUNICIPALITY ONCE
THE FED UP A BANK THAT THEY
SHOULD GO THROUGH A PROCESS THE
FED ABATEMENT.
THERE SHOULD BE A THEY SHOULD BE
A NEW WAY OF DOING STUFF I WON'T
ECHO WHAT MY COLLEAGUE SAID.
BUT I BUT YOU EVERYBODY IN THIS
ROOM KNOW SOMEBODY WHO'S HAD A
BAD EXPERIENCE OF THE BANK NO
SOMEBODY WHO'S HAD A MULTIPLE
ACCOUNTS OPEN NO SOMEBODY WHO
LOST THEIR HOMES RIGHT FROM
UNDERNEATH THEM.
AT THE TO EVERYONE IN THIS ROOM
WOULD THINK THAT THERE'S A
BETTER WAY OF DOING BANKING IN
THE STATE OF CALIFORNIA.
AND WHY NOT START HERE WITH A
PUBLIC BANK FOR THE PUBLIC GOOD
COULD YOU IMAGINE A BANK THAT
MAKES DECISIONS BASED ON THE
PUBLIC GOOD.
AS OPPOSED TO DECISIONS MADE
BASED ON THE BOTTOM LINE THIS IS
WHAT THIS IS ABOUT.
AT THE END THE DAY I'VE GOT TO
BELIEVE THAT THIS LEGISLATURE IS
GOING TO CONTINUE THIS
CONVERSATION BECAUSE WE NEED TO
DO THINGS FOR THE PUBLIC GOOD.
NOT MORE NOT SAY WE DON'T
SUPPORT A BUSINESS RUN THING WE
DON'T SUPPORT AN ECONOMY WITH
THE FIFTH LARGEST ECONOMY IN IN
THE WORLD RIGHT NOW THE FIFTH
LARGEST ECONOMY IN THE WORLD.
AND YET PEOPLE ARE NOT DOING AS
WELL AS THEY SHOULD BE WE NEED
ANOTHER OPTION IN CALIFORNIA FOR
A BANKING SYSTEM IN THIS IS
GOING TO PROVIDE THAT
ALTERNATIVE.
WHY NOT WE'VE GOT CORPORATE
BANKS?
WE'VE GOT COMMUNITY BANKS AND
WE'VE GOT CREDIT UNIONS WHY NOT
A PUBLIC BANK THAT'LL GIVE US AN
OPPORTUNITY TO INVEST OUR PUBLIC
DOLLARS FOR THE PUBLIC GOOD.
AND I RESPECTFULLY WOULD ASK FOR
AN AYE VOTE AND WE HAVE A COUPLE
WITNESSES MADAM CHAIR.
THANK YOU AND I WILL I LET.
THE WITNESSES IN SUPPORT AS I
WOULD LET THE WITNESSES IN
OPPOSITION NO THAT WILL HAVE
EIGHT MINUTES -- FOR SUPPORT IN
OPPOSITION.
COMMENTS.
THANK YOU MADAM CHAIRMAN AND
MEMBERS OF THE COMMITTEE.
MY NAME IS SUSHIL JACOB I'M WITH
THE CALIFORNIA PUBLIC BANKING
ALLIANCE AND LAWYERS COMMITTEE
FOR CIVIL RIGHTS OF THE SAN
FRANCISCO BAY AREA.
THE CALIFORNIA PUBLIC BANKING
ALLIANCE IS AN ALLIANCE OF
ADVOCATES FROM TEN CITIES AND
COUNTIES.
RANGING FROM SAN DIEGO UP TO
EUREKA.
IN THE PAST FEW WEEKS WE'VE HAD
TEN RESOLUTION SPECIFICALLY
ENDORSING AB -- EIGHT FIVE SEVEN
EITHER INTRODUCED OR PASSED
INCLUDING LOS ANGELES SAN
FRANCISCO OAKLAND BERKELEY SANTA
CRUZ COUNTY AND COMING UP WE
HAVE THE SAN JOSE AS WELL.
THIS LEGISLATION SPECIFICALLY
[inaudible]
REQUIRES.
AT A PUBLIC BANK [inaudible] TO
IDENTIFY.
IN ITS ARTICLES HOW IT COULD BE
IT'S EITHER.
PROMOTING A SOCIAL PURPOSE OR
SPECIFIC PUBLIC BENEFIT.
IT REQUIRES A PUBLIC BANK TO
OBTAIN AND MAINTAIN FDIC
INSURANCE.
IT INCORPORATES EXISTING
PROTECTIONS FOR PUBLIC DOLLARS
INCLUDING COLLATERALS ASIAN
REQUIREMENTS IT DOES NOT REQUIRE
INVESTMENT OR DEPOSITS OF ANY
SPECIFIC POOL OF FUNDS -- IT
REQUIRES A PUBLIC BANK TO COMPLY
WITH ALL REQUIREMENTS OF THE
FINANCIAL INSTITUTIONS LAW AND
THE BANKING LAW -- AND IT
REQUIRES A PUBLIC BANK WHEREVER
POSSIBLE TO CONDUCT RETAIL
SERVICES.
IN PARTNERSHIP WITH LOCAL
FINANCIAL INSTITUTIONS WHICH ARE
DEFINED AS COMMUNITY BANKS --
CDF EYES AND CREDIT UNIONS AND
WE ARE CURRENTLY IN DISCUSSION
WITH THE CREDIT UNION LEAGUE
MOVING FORWARDS TO COME.
TO AN AGREEMENT WITH THEM -- I'D
LIKE TO SAY THAT THIS THE
CALIFORNIA PUBLIC BANKING
ALLIANCES IN THIS BECAUSE WE SEE
THAT THE PUBLIC BANKING PROVIDES
A FRAMEWORK THAT WOULD ALLOW.
OUR CITIES COUNTIES AND REGIONS
TO BEGIN THE PROCESS OF DESCENT
TANGLING THEIR BANKING FROM.
OVER RELIANCE ON WALL STREET
MEGAMIX.
FOLLOWING THE MODEL OF THE BANK
OF NORTH DAKOTA OUR LOCAL
GOVERNMENTS WILL BE ABLE TO SAVE
MONEY.
WHILE FINANCING PROJECTS THROUGH
LOANS FROM PUBLIC BANKS -- IN IT
DITION SIMILAR TO THE BANK OF
NORTH DAKOTA -- WHO WHICH HAS A
ROLE AS A CENTRAL WHOLESALE BANK
FOR THAT STATE?
AB EIGHT FIVE SEVEN PUBLIC BANKS
WILL REVIVE THE LOCAL BANKING
SECTOR ON A REGIONAL BASIS BY
PARTNERING WITH THEM ON LARGE
LOANS AND PROVIDING OTHER
SUPPORT -- BY AN ACTING AB.
EIGHT FIVE SEVEN CALIFORNIA WILL
ENABLE THE CREATION OF LOCAL
PUBLIC BANK THAT WILL TRULY
SERVE THEIR REGIONAL ECONOMIES
LOCAL COMMUNITIES AND STRENGTH
AND LOCAL FINANCIAL INSTITUTIONS.
FOR THESE REASONS WE
RESPECTFULLY REQUEST YOUR IBOOK
THANK YOU.
GOOD AFTERNOON I'M JENNIFER
FINGER I AM EXECUTIVE VICE
PRESIDENT OF STRATEGY AND
DEVELOPMENT FOR BENEFICIAL STATE
BANCORP.
BENEFICIAL STATE BANK IS SO
BILLION DOLLARS SEE DFI
HEADQUARTERED IN OAKLAND AND WE
ARE IN SUPPORT OF THE PUBLIC
BANKING INITIATIVES --
BENEFICIAL STATE BANK IS A
MISSION ORIENTED BANK A SOCIAL
ENTERPRISE ORGANIZATION WE ARE
OUR MISSION IS TO PROVIDE FAIR
AND TRANSPARENT BANKING SERVICES.
TO THE UNDERSERVED -- WHICH ARE
PRIMARILY LOCATED IN LOW AND
MODERATE INCOME COMMUNITIES --
THE BANK SUPPORTS THE FORMATION
OF A PUBLIC BANK.
PARTICULARLY AT THE STATE OR
REGIONAL LEVEL WHERE IT WOULD
HAVE SUFFICIENT SCALE IN ORDER
TO BE SUCCESSFUL IN OUR VIEW A
PUBLIC BANK WILL MORE CLOSELY
ALIGN.
PUBLIC DEPOSITS WITH THE PUBLIC
BENEFIT.
THE END OF BENEFIT THE PUBLIC
GOOD.
OF WE ALSO FEEL THAT A PUBLIC
BANK SHOULD BE ALIGNING WITH CDF
BUYS AND OF CREDIT UNIONS IN
ORDER TO DO THINGS LIKE FINANCE
LARGE INFRASTRUCTURE PROJECTS
WHICH WOULD BE.
BEYOND THE CAPACITY OF MANY
LOCAL CDF BUYS AND CREDIT UNIONS
TO WORK ON WE ALSO FEEL THAT A
PUBLIC BANK CAN SUPPORT
RENEWABLE ENERGY INITIATIVES
THAT.
A COMMUNITY BANK ON ITS OWN MAY
NOT BE ABLE TO SUPPORT AS WELL
IT CAN ALSO SUPPORT LOW INCOME
HOUSING INITIATIVES AND
WORKFORCE HOUSING WHICH ARE SO
BADLY NEEDED.
AND WE ALSO FEEL THAT IT WILL
HELP US TAKE BACK MUNICIPAL
FINANCING FROM THE WALL STREET
BANKS.
AND SO -- BENEFICIAL STATE
FOUNDATION WHICH IS THE ULTIMATE
PARENT OF BENEFICIAL STATE BANK
SUPPORTS AB EIGHT FIFTY SEVEN
AND IS ALSO AN ACTIVE SUPPORTER
OF THE CALIFORNIA A BANKING
ALLIANCE.
THANK YOU OTHER WITNESSES IN
SUPPORT PLEASE COME TO THE
MICROPHONE STATE YOUR NAME AND
AFFILIATION.
I'M CHAIR MEMBERS MY NAME IS DAN
CALLED MEMBER OF THE OAKLAND
CITY COUNCIL WE URGE YOUR AYE
VOTE TEST SO OAKLAND ANOTHER
LOCAL JURISDICTIONS COULD
FURTHER EXPLORE THE OPTION OF
HAVING A PUBLIC BANK TO SERVE
OUR RESIDENTS IN OUR LOCAL
GOVERNMENT THANK YOU.
AT CHAIR MEMBERS MIKE MONICA
BEHALF OF MAYOR LONDON BREED AND
THE SITTING COUNTY OF SAN
FRANCISCO IN SUPPORT.
TAYLOR JACKSON WITH THE
CALIFORNIA NURSES ASSOCIATION
REPRESENTING OVER ONE HUNDRED
THOUSAND UNION NURSES STATEWIDE
IN STRONG SUPPORT.
KAREN JACK I'M HERE REPRESENTING
FIVE CLIMATE GROUPS FOSSEL FREE
CALIFORNIA THREE FIFTY SOUTH BAY
LA.
OF SOUTHERN CAL THREE FIFTY OF
THREE FIFTY RIVERSIDE AND THREE
FIFTY SILICON VALLEY ALL IN
STRONG SUPPORT.
MY NAME IS CITY WEBER I'M THE
LEGISLATIVE COMMITTEE CHAIR OF
PEACE FREEDOM PART OF CALIFORNIA
WE'VE BEEN ADVOCATING FOR STATE
BANK FOR YEARS AND WE THINK IT'S
ABOUT TIME WE HAVE.
A PUBLIC BANK THANK YOU WE
SUPPORT.
LARA GOLLY I REPRESENT MY
COMPANY QUANTITY POSTCARDS WHICH
IS A SMALL BUSINESSES AND
OAKLAND THANK YOU.
I'M LISA WERE YOU I REPRESENT
MYSELF I'M A RESIDENT SACRAMENTO
IN SUPPORT.
HI MY NAME'S TINA ROBINSON
REGISTERING SUPPORT ON BEHALF OF
THE LOCAL CLEAN ENERGY ALLIANCE.
HI DIAN OF US BECAUSE OF THE
CALIFORNIA TERMS JUST AS LONG AS
THE STRONG SUPPORT OF THE BILL.
HIRING EACH HAD ASIAN PACIFIC
ENVIRONMENTAL NETWORK STRONG
SUPPORT.
SYLVIA T. REGISTERING SUPPORT
FOR INDIVISIBLE EAST BAY.
MATTHEW RICH URAL -- REGISTERING
SUPPORT FOR THE PUBLIC BANKING
SPECS.
HI AYMERIC CURLING I'M A
REPRESENTATIVE OF THE UNITED
EDUCATORS OF SAN FRANCISCO WHICH
IS AN A. F. T. AND THE CTA
AFFILIATE AND WE FULLY ENDORSE.
THE THE LEGISLATION.
DEBBIE NOT CAN FROM STRICT AT
BAY AREA IN SUPPORT.
GOOD AFTERNOON TRINITY TRAN WITH
THE CALIFORNIA PUBLIC BANKING
ALLIANCE REPRESENTING OVER
NINETY ORGANIZED ASIANS BROAD
REYES LABOR ENVIRONMENTAL
TENANTS RIGHTS ENVIRONMENTAL
RIGHTS WITH THE COLLECTIVE
MEMBERSHIP OF NEARLY ONE MILLION
AND AND STRONG SUPPORT THANK YOU.
HI MY NAME IS A JORDAN HAMMOND
I'M HERE FROM EIGHT TWENTY
PERSON START UP IN THE BAY AREA.
NOW STRONG SUPPORT.
BRAD GARRETT REPRESENTING
CALIFORNIA PROGRESSIVE ALLIANCE
STRONG SUPPORT THANK YOU.
HI DOUG NORRLAND WITH FRIENDS TO
GET US IN.
FULL SUPPORT [inaudible]
THANK YOU.
JIM LIMBURG ON BEHALF OF THE
FRIENDS COMMITTEE ON LEGISLATION
CALIFORNIA IN SUPPORT.
SUSAN HARMAN DOCTOR SUSAN HARMAN
FROM -- EAST BAY PUBLIC BANK AND
THREE FIFTY BAY AREA THANK YOU
IN SUPPORT.
ANY OTHER WITNESSES IN SUPPORT.
WITNESSES OPPOSITION PLEASE COME
TO THE TABLE
.
AND I'LL REMIND -- THE THREE
WITNESSES YOU HAVE A COMBINED
EIGHT MINUTES FOR YOUR
OPPOSITION.
GREAT THANK YOU MEMBER CHAIR AND
COMMITTEE MEMBERS -- HERE TODAY
TO OPPOSE THE MEASURE -- THAT
WILL ALLOW LOCAL GOVERNMENTS --
TO CREATE PUBLIC BANKS USING
TAXPAYER DOLLARS -- COMING FROM --
THE PART ME LET ME START BACK UP
MICHAEL'S EGGMAN MINUS YOU KNOW
BANK CONTRAST COVERING THE SANTA
BARBARA AND VENTURA COUNTIES --
WE HAVE THIRTEEN BRANCHES THERE
AND ARE ABOUT A BILLION AND A
HALF DOLLARS IN SIZE -- THE THE
AB EIGHT FIVE SEVEN ATTEMPTING
TO ACHIEVE THE PARTNERSHIP WITH
LOCAL AND FINANCIAL INSTITUTIONS --
IN REALITY THE MEASURE WILL
CREATE A TAXED ADVANTAGE ENTITY
THAT WILL DIRECTLY COMPETE WITH
COMMUNITY BANKS AND THE GREAT
WORK IN WHICH WE DO -- IN THE
LOCAL COMMUNITIES -- IN TWENTY
EIGHTEEN OUR FINANCIAL
INSTITUTION -- WAS ABLE TO
RETURN ONE POINT FOUR MILLION
DOLLARS IN TOTAL DONATIONS TO
NONPROFIT ENTITIES -- SERVE
FIFTY ONE HUNDRED TOTAL
VOLUNTEER HOURS -- WITH A
HUNDRED AND FORTY ONE OF OUR TWO
HUNDRED AND TWENTY FIVE
EMPLOYEES VOLUNTEERING FOR THOSE
NONPROFIT ORGANIZATIONS.
AND WORTHY WE ARE THE LARGEST
SMALL BUSINESS LENDER IN OUR
FOOTPRINT OUTPACING ALL OF THE
LARGE NAME BRAND BANKS THAT YOU
WERE TALKING ABOUT EARLIER -- IN
TO GIVE YOU A QUICK.
OVERVIEW OF SOME SOME GREAT
THINGS THAT WE'VE DONE AND
THINGS THAT WE WOULD NOT BE ABLE
TO DO WITHOUT THOSE -- DEPOSITS --
THAT WOULD BE GOING BACK TO
PUBLIC BANKS THIS LAST YEAR AND
TWENTY SEVENTEEN DURING THE
FLOOD IN DEBRIS FLOW -- WE WERE
ABLE TO SERVE THE COMMUNITY IN
VERY UNIQUE WAYS -- THAT WE
WOULD BE ABLE TO WITHOUT THE
LIQUIDITY FROM LOCAL DEPOSITS --
WE WERE ABLE -- TO CREATE AN
EMERGENCY -- SYSTEM WITHIN AN
HOUR -- BRANCHES WITH IN OUR
FOOT PRINT -- GOING UP AND DOWN
AND WE CREATED -- LOAN PROGRAMS
FOR THOSE -- IMPACTED CONSUMERS
AND SMALL BUSINESSES THAT WOULD
GIVE THEM A LONG WITHIN TWENTY
FOUR HOUR TURNAROUND TIME --
THAT WOULD NOT OTHERWISE BE
AVAILABLE TO THEM -- WE ALSO
WERE ABLE -- TO YOU CREATE
PAYMENT DEFERRALS ON ALREADY
EXISTING LOANS AND FREE SAFETY
DEPOSIT BOXES FOR THOSE THAT
WERE IMPACTED IN THOSE AREAS.
I THINK IT'S REALLY IMPORTANT TO
ALSO NOTES -- YOU KNOW WE WERE
DELIVERING YOU KNOW FIFTEEN
THOUSAND WATER BOTTLES TO OUR
LOCAL -- YOU COMMUNITY FIFTEENTH
OUT FIFTEEN HUNDRED RESPIRATORS
TO LOCAL RESIDENTS AND YOU KNOW
BEING ABLE TO WALK UP AND DOWN
THE STREETS AND BE ABLE TO LEND
THAT MONEY BACK OUT TO THE
COMMUNITY WAS VERY VERY
IMPORTANT TO US.
IN WITHOUT THE LOCAL DEPOSITS
THAT WOULD NOT BE POSSIBLE.
FROM MADAM CHAIR AND AND MEMBERS --
TRACHEA -- BE COUNTY TREASURER
TAX COLLECTOR HE REPRESENTING --
AGAIN CALIFORNIA ASSOCIATION OF
COUNTY TREASURER'S -- WE STARTED
THIS BILL ALLOWING PEOPLE TEND A
LOT OF THE MEETINGS AND SESSIONS.
A AND WE WE REALLY ARE POSED --
ONE THING WAS CITIES AND
COUNTIES NEED A VERY ROBUST
BANKING SYSTEM -- YOU KNOW WE
HAVE TO HAVE -- BILL REPORTING
RECONCILIATION ONLINE ONLINE
AVAILABILITY POSITIVE PAY --
PLATFORM THAT WILL SUPPORT WIRES
A C. H. E. IN IT HAS TO BE VERY
ROBUST IT CAN'T BE SOMETHING
SIMPLE.
AND THAT'S WHY A LOT OF TIMES
ONE OF THE LARGER COUNTIES WILL
WORK WITHOUT SOME OF THE LARGE
COMMERCIAL BANKS BECAUSE THEY
OFFER THOSE SERVICES -- SO TO
THINK THAT THE THIS THE STATE
CAN CREATE THAT ENVIRONMENT.
AND INVEST IN THAT AND IT WITH
THE CAPITAL COSTS WOULD BE
TREMENDOUS.
I KNOW THERE'S BEEN A NUMBER OF
STUDIES DONE ON THIS AFTER THE
TREASURER'S OFFICE AND OTHER --
CONSULTANTS AND I BELIEVE THE
YOU KNOW THE THE CAPITAL COSTS
WERE VERY SIGNIFICANT.
AND I THINK WAS ABOUT A THIRTY
YEAR PAY BACK.
OF FOR THE BANKS AFTER ACTUALLY
BECOME PROFITABLE -- SO AGAIN --
THE CHURCH OFFICE IN AND THE
COUNTY TREASURER'S SITUATION OR
A VERY MUCH OPPOSED TO THIS. ONE
THING THAT'S CRITICAL FOR US
ALSO IS IS IS SAFETY LIQUIDITY.
OF OUR FUNDS.
AND THEN -- ALSO INVEST RETURN
IS PRETTY CRITICAL -- WILL HAVE
VERY STRICT INVESTMENT
GUIDELINES AND POLICIES AND AND
WE NEED TO FALL THOSE SO -- WE
ARE VERY MUCH AGAINST THIS BILL.
WE FEEL THAT IT'S IT'S THERE'S
BEEN A LOT OF TIME SPENT ON THIS --
DEAD AND IT'S USUALLY DOESN'T
HAVE A LOT OF TRACTION.
SO [inaudible]
COMPLETE.
MADAM CHAIR NUMBER THE
COMMITTEES.
MY NAME IS JEREMIAH SMITH FROM
THE SENIOR EXECUTIVE VICE
PRESIDENT AND CHIEF OPERATING
OFFICER FOR FIRST NORTHERN BANK
TO COMMUNITY BANK FOUNDED IN.
NINETEEN TEN I'M ALSO THE
CURRENT CHAIR OF THE CALIFORNIA
BANKERS ASSOCIATION STATE
GOVERNMENT RELATIONS COMMITTEE.
AND RESPECTFULLY IN OPPOSITION.
A BEING FROM A COMMUNITY BANK
THAT SERVES THAT STRIVE TO SERVE
ALL IN OUR COMMUNITIES WHICH
INCLUDES EVERYONE ON THE SOCIO
ECONOMIC SPECTRUM.
I HAVE A SUBSTANDARD CONCERNS
THAT IF THIS BILL IS PASSED
BANKS LIKE FIRST NORTHERN.
WHICH ARE LOCATED UP AND DOWN
THE STATE WILL FIND IT MORE
DIFFICULT TO HELP OUR COMMUNITY
SUCCEED.
I AM SURE THAT YOU KNOW THIS BUT
WE USE MUNICIPAL DEPOSITS TO
FOCUS ON MANY DIFFERENT ASPECTS
OF THE COMMUNITY FROM CLEAN
ENERGY. TO NONPROFIT LENDING AND
OF COURSE TO SMALL BUSINESS
LENDING WHICH IS YOUR ALSO WHERE
IS THE HEART BEAT OF OUR RULE
TOWNS AND CITIES.
WITH THIS ACCESS TO CAPITAL IS
VITALLY IMPORTANT TO THE SUCCESS
OF THE COMMUNITIES ACROSS
CALIFORNIA.
WE WORK WITH A MOM AND POP
BUSINESSES THAT ARE LIKE MANY OF
THE BUSINESSES IN YOUR DISTRICTS.
TO HELP REVITALIZE COMMUNITIES
AND MANY OF THESE CASES WE
PARTNER WITH THE STATE OF
CALIFORNIA IN THE FORM OF
GUARANTEES THE THE CAL CAP
PROGRAM.
WHICH WE FEEL HAS BEEN A VERY
EFFICIENT WAY FOR THE STATE TO
COLLABORATE WITH THE INDUSTRY.
IN ADDITION THE INDUSTRY
PROVIDES MUCH REALLY NEEDED
FUNDING FOR LOCAL ECONOMIC
DEVELOPMENT PROJECTS LIKE LOW
INCOME HOUSING FOR SENIORS
FAMILIES AND VETERANS.
IF YOU LIKE I'M SURE THAT WE CAN
PROVIDE SOME MORE DETAILED
INFORMATION ON MANY OF THOSE
PROJECTS THAT ARE GOING ON
AROUND THE STATE.
ADDITIONALLY I'M CONCERNED ABOUT
THE UNNECESSARY RISK TO TAXPAYER
DOLLARS THAT THIS CREATES.
THERE ARE MULTIPLE STUDIES THAT
WERE COMMISSIONED BY DIFFERENT
MUNICIPALITIES AROUND THE STATE
INTO THE BEST OF MY KNOWLEDGE
EACH RECOMMENDED AGAINST A STATE
OR MUNICIPAL RUN BANK.
AND FORECASTED SUSTAINED LOSSES
ANYWHERE FROM TEN TO THIRTY
YEARS INTO THE FUTURE.
SO IN CONCLUSION I BELIEVE THAT
THE BANKING INDUSTRY IS DOING A
GREAT JOB OF MEETING THE NEEDS
OF THE PEOPLE OF CALIFORNIA.
WHICH IS INCLUSIVE OF THE
WONDERFUL DIVERSITY OF OUR STATE.
WE HELP SMALL BUSINESSES
NONPROFITS AND ALL MEMBERS OF
OUR COMMUNITIES REALIZE THEIR
POTENTIAL AND I WORRY THAT THIS
BILLS INTENT.
COULD MAKE THAT MORE CHALLENGING
ENHANCE FOR THE REASONS STATED
AND RESPECTIVELY RESPECTFULLY
OPPOSED ENERGY TO VOTE NOW THANK
YOU.
ANY OTHER WITNESSES IN
OPPOSITION PLEASE COME TO THE
MICROPHONE AND STATE YOUR NAME
AND AFFILIATION.
JASON LANE CALIFORNIA BANKERS
ASSOCIATION RESPECTFULLY OPPOSED.
MARGARET LATCHING ON HELP THE
CALIFORNIA COMMUNITY BANKING
NETWORK IN OPPOSITION.
KRISTIN MEMBERS ON BEHALF OF BAY
AREA COUNCIL IN OPPOSITION.
EMILY EIG NUMBER OF THE
CALIFORNIA CREDIT UNION LEAGUE
AND RESPECTFUL OPPOSITION WE
HAVE BEEN IN CONVERSATIONS WITH
PROPONENTS AND APPRECIATE THE
ONGOING DIALOGUE.
ELLERY NEAR FOR THE CALIFORNIA
CHAMBER OF COMMERCE WE ARE
OPPOSED IT IS ON A JOCULAR LIST.
ALL RIGHT I SEE NO ADDITIONAL
WITNESSES IN OPPOSITION MEMBERS
ANY QUESTIONS OR COMMENTS.
ASSEMBLY MEMBER ABOUT
BAUER-KAHAN.
THANK YOU MADAM CHAIR I AM WELL
FIRST I WANT TO THANK THE CHAIR
THE COMMITTEE AND THE AUTHORS
FOR WORKING TOGETHER ON WHAT I
THINK ARE REALLY IMPORTANT
AMENDMENTS I THINK.
THE MOST IMPORTANT THING WE CAN
DO AS A COMMITTEE AND IS ENSURE
THAT THE PUBLIC'S MONEY IS
SAFELY HELD IN THAT THE
AMENDMENTS.
DO THAT I THINK THAT THE D. V.
O. AND AFTER I SEE OVERSIGHT
FROM CHARTER THROUGH
CONTINUATION IS CRUCIAL TO THAT
I ALSO THINK.
THIS IS AN IMPORTANT MEASURE IN
LOCAL CONTROL AND IF THE LOCAL
ENTITIES CAN SHOW THAT THEY CAN
DO THIS I THINK IT MAKES SENSE
TO GIVE IT TO THEM -- I ALSO SEE
THE PUBLIC BENEFIT IN THIS I
ACTUALLY WISH SHE WOULD HAVE
ALSO ADDED EDUCATION LOANS
SOMETHING THAT HOPEFULLY WE CAN
WORK TOWARD LOWER INTEREST
EDUCATION ONCE IT'S SOMETHING
OUR STUDENTS DEEPLY NEED -- BUT
I DO HAVE A QUESTION I'M
CONCERNED WITH.
THE FISCAL IMPACT ON OUR GENERAL
FUND OF HAVING OUR MONEY MOVE
INTO PUBLICLY HELD BANKS THAT
ARE NOT TAXED.
SO WE'RE TAKING THE MONEY OUT OF
BANKS IN CALIFORNIA CURRENTLY
PAY STATE TAXES AND PUTTING THEM
INTO BANKS THAT WOULD NOT PAY
STATE TAXES NOT COULD
POTENTIALLY HIT THE GENERAL FUND
I UNDERSTAND THE RE THE BENEFITS
FINANCIAL BENEFITS BUT THAT
SEEMS LIKE A FINANCIAL RISK. TO
OUR STATE FUND OF DOING THIS YOU
HAVE ANY THOUGHTS ON THAT.
I THINK MY FIRST REACTION IS IF
YOU HAVE PUBLIC MONIES THE IDEA
OF TAKING PUBLIC MONIES THAT ARE
ALREADY TAXPAYER DOLLARS AND THE
TAXING THEM AGAIN MEANS YOU'RE
HITTING THAT MONEY TWICE.
I APPRECIATE YOUR PERSPECTIVE
BUT A BIT AGAIN.
THE IDEA OF SAYING THAT BILLIONS
OF DOLLARS OF TAXPAYER MONIES
OUGHT TO BE TAXED AGAIN THROUGH
THE BANKING SYSTEM.
YES ON THE ONE HAND IT WILL HAVE.
IT COULD HAVE AN IMPACT ON THE
GENERAL FUND DEPENDING ON WHAT
LEVEL OF FUNDING A LOCAL
JURISDICTION CHOOSES TO SPEND ON
IT BUT BUT I THINK A ALLOWING IN
A JURISDICTION TO HANG ON TO AS
MUCH OF THE TAXPAYER FUNDS THAT
ARE IN ITS BANK.
I THINK IT'S ALSO A BENEFIT THAT
WE SHOULD WE SHOULD BALANCE OUT.
NUMBER SAN DIEGO YEAH AND I
THINK I THINK THERE'S A BENEFIT
THE SAVING THE DOLLARS RATHER
THAN THAN -- THAN HAVING A
PRIVATE ENTITY INVEST THOSE
DOLLARS FOR THAT BENEFIT AS
OPPOSED.
TO A COMMUNITY BANK INVESTING
DOLLARS FORTY COMMUNITIES
BENEFITS I THINK THAT WOULD BE
OFFSET BUT LET ME ALSO SAY
SOMETHING.
THAT IS IMPORTANT ABOUT POOR
LOCAL CONTROL FUNNY WHAT BETTER
WAY FOR A LOCAL -- MISS A
PALETTE ENSURE THAT THEY'RE THAT
THEY'RE DOLLARS ARE YOU FOR THAT
ONE PARTICULAR PLACES AS OPPOSED
A STATEWIDE -- SERVICE I MEAN
CERTAINLY.
I MEAN IF IF I FIRED REPRESENT
AN AREA AND WORKING IN THE I
WOULD WANT EVERY SINGLE DOLLAR
WITHIN THAT AIR TO WORK FOR THAT
PARTICULAR AREA THAT'S WHAT WE
GET SENT UP HERE FOR BUT THAT'S
THE ONE MONTH ALSO TAKE A LOOK
AT IT.
IF YOU'RE IN A PARTICULAR
JURISDICTION AND I JURISDICTION
THE SIZE THE TAKE ON A PUBLIC
BANK -- ALL THE DOLLARS THAT
WOULD'VE BEEN PAID STATEWIDE
WOULD ARE.
SPREAD ACROSS A WIDE YOU WOULD
WANT THOSE DOLLARS INVESTED THE
LOCAL LEVEL SO IT ACTUALLY MAKES
A LOT BETTER SENSE.
LOCAL CONTROL.
ASSEMBLY MEMBER WICKS AND I DO
WANT TO SAY IF ANYBODY FROM THE
SUPPORT SIDE OR OPPOSITION SIDE
OF ONE OF EACH ONE IS THAT JOIN
THE TABLE YOU'RE WELCOME TO IF
YOU WANT BUT AS A MEMBER WICKS
THANK YOU TERM.
I THINK -- THE AUTHORS AND AS A
CO AUTHOR THANK YOU FOR ALLOWING
ME TO BE ON THIS BILL I'M A BIG
SUPPORTER OBVIOUSLY BE VOTING
FOR THIS BILL TODAY -- YOU KNOWN
AS A MEMBER TO YOU MENTIONED
SOME OF THE ISSUES THAT -- HAVE
FACED OUR COMMUNITIES YOU KNOW
WE'VE GOT -- THE WELLS FARGO
SCANDALS WE'VE HAD PREDATORY
LENDING PRACTICES WE HAD THE
SUBPRIME MORTGAGE CRISIS ON MANY
ISSUES THIS COMMITTEE HAS
GRAPPLED WITH.
AN OVER THE YEARS AND YOU SEE
THE GUTTING OF THE CONSUMER
FINANCIAL PROTECTION BUREAU BY
THE CURRENT -- IT FEDERAL
MINISTRATION AND I THINK WHAT A
LOT OF THESE THINGS HAVE DONE
HAVE LED TO AN EROSION -- OF
TRUST IN OUR BANKING SYSTEM
UNDER OCEAN OF TRUST IN WHERE
AND HOW ARE WORKING CLASS
FAMILIES -- PUT THEIR MONEY AND
HOW THEY MANAGE THEIR MONEY --
AROSE IN TRUST AND OUR FINANCIAL
STABILITY AND FRANKLY INTER
OCEAN TRUST IN OUR SOCIAL
CONTRACT.
A AND I THINK THAT THIS BILL --
WILL AIM.
TO HOPEFULLY BE A VEHICLE TO TRY
TO BUILD BACK SOME OF THAT TRUST --
AND I THINK IT'S A COMING UPON
THIS BODY TO HAVE THOSE
THOUGHTFUL CONVERSATIONS AND
MOVE THIS BILL FORD SO I'M
HOPEFUL THAT WE WILL BE ABLE TO
DO THAT -- YOU KNOWI BELIEVE A
PROPOSED PUBLIC BANK CAN INVEST
IN THE NEEDS OF A LOCAL
COMMUNITY SOME OF THE IDEAS THAT
HAVE BEEN RAISED ARE YOU KNOW
AFFORDABLE HOUSING RENEWABLE
ENERGY SMALL BUSINESSES THAT
CENTRO WHICH I THINK IS ANOTHER
EXCITING ELEMENT ABOUT THIS BANK --
AND I KNOW THAT THIS BILL
REQUIRES A PUBLIC BANKS ARTICLES
IN A CORPORATION TO IDENTIFY A
SOCIAL PURPLISH PURPOSE.
OR A PUBLIC BENEFIT I WHICH IS
ALSO EXCITING MY QUESTION FOR
THE AUTHORS IN THE ADVOCATES OF
THE TABLES.
COULD YOU SHED A LITTLE LIGHT ON
HOW A PUBLIC BANK WILL BE
GOVERNED TO ENSURE THAT THOSE
LOCAL NEEDS BY COMMUNITIES ARE
BEING MAX I DO THINK THIS IS AN
EXCITING PART OF THIS BILL.
YES THANK YOU [inaudible]
SO THE THE ONE OF THE MOMENT SO
WE'VE ACCEPTED REQUIRES THAT THE
BANK ORGANIZER'S -- SUBMITTED
STUDY WHICH SHOW HOW THERE WOULD
BE A CLEAR.
SEPARATION OF THE ELECTED AND
BANK MANAGERS AND PREVENT ANY
CAUGHT CONFLICTS OF INTEREST SO
THAT'S SOMETHING THAT'S ALREADY
IN OUR LEGISLATION -- BEYOND
THAT WE LEAVE THAT UP TO THE
ORGANIZERS TO FIGURE OUT -- WHAT
IS THE RELATIONSHIP BETWEEN THE
BANK LET'S TRY THE LOCAL AGENCY
WHETHER TO CITY OR JOINT POWERS
AUTHORITY?
AND THE BANK SIDE HOW DO THEY
ACT AS SHAREHOLDERS IN.
CONTROLLING THE BOARD OF THE
BANK -- BUT I DO I YOU KNOW
THERE'S SPECIFIC PROTECTION FOR
THE IN LEGISLATION GREAT I'LL
ANSWER THE QUESTION IN A
DIFFERENT WAY AS IS IN YOUR
ANALYSIS.
A PUBLIC BANK WOULD BE REQUIRED
TO IDENTIFY IN ITS ARTICLES OF
INCORPORATION EITHER SOCIAL
PURPOSE OR SPECIFIC PUBLIC
BENEFITS.
I AND TO ENSURE THAT THERE'S
TRANSPARENCY REPORTING SO THAT
YOU'RE MEETING THOSE NEEDS THAT
IS NOT THE CASE FOR PRIVATE
BANKS WE KNOW THAT A PRIVATE
BANK.
DAY EXIST FOR SHAREHOLDER PROFIT
THEY EXIST TO MAXIMIZE.
THE RETURNS FOR THEIR FOR THEIR
INVESTORS -- I WILL ALSO MENTION
THAT UNLIKE PRIVATE BANKS ARE
BILL HAS ANOTHER REQUIREMENT --
THAT A PUBLIC BANK ABIDE BY A
FIDUCIARY DUTY TO PROTECT ITS
ASSETS AND AGAIN.
THE IMPERATIVE THE ECONOMIC
IMPERATIVE OF A PRIVATE BANK.
IS NOT THAT SIR ONE APPOINT
THOSE TWO OUT AS DIFFERENTIALS
BETWEEN WHAT A PUBLIC BACK IS
SUPPOSED TO DO AND WHAT PRIVATE
BAXTER.
THANK YOU [inaudible]
DECEMBER CHOI.
THANKS CHAIR AND NOW THANK YOU
AUTHORS OF FOR THE PRESENTATION --
I HAVE RECEIVED -- A LOT OF
QUESTIONS AND ON OR SO.
ATTENTION TO THIS BILL.
SO I DO HERE -- MANY BENEFITS --
THIS -- IDEA IS -- FOR THE UP
PUBLIC A GOOD.
THIS BILL IS THE ONLY.
ARE AUTHORIZING -- THE MINUTES
FOR GOVERNMENTS -- TO DECIDE --
TO IT ESTABLISH A PUBLIC BANG
SOMEONE KNOCKED ON OUR SIDE I DO
SEE SOME SOME -- BAND IF FISHER
ASPECTS UP BUT ON THE OTHER HAND --
I WOULD LIKE.
TO ASK A FEW QUESTIONS.
THAT THAT THE OF FAIRNESS ISSUE.
A THAT IS -- THIS ONE WOULD BE --
ULTIMATELY.
ARE.
I DON'T KNOW I'M NOT SURE OF
WHAT YOUR BILL EXACTLY SAYING IF --
A CITY -- CHOOSE IS SET TO
ESTABLISH A A BAND GOAL OF TONY
ESTABLISHES A BANKER.
IS THAT THE ULTIMATE THE
RESPONSIBLE BODY.
ARE IF AND WHEN THE BANK FAILS.
AND THEN THE TAX MONEY -- WOULD
BE IN JEOPARDY -- I'M I'M SURE --
YOU MAY HAVE A SOME MECHANISMS
AT THIS WATER.
ARE.
BUT TRACK THE ALLOWED WAY
INVESTMENTS OF PUBLIC.
DOLLARS SO INTO HATE US SO THAT
THE THE SENATE THE A DIFFERENT
ASPECT THAT THAT THE DIFFERENT
IN.
A PLAYING FIELD.
WHEN -- THIS PUBLIC BANKS
OPERATE THAT WITH THE BENEFITS.
ALREADY IS A TEAM THEY ARE ON
WHEN THEY COMPETE AGAINST A
COMMERCIAL BANKS.
SO -- A HOME.
TOWN FIRST QUESTION WOULD BE IF
AND WHEN IT FABIO SELF GONNA BE
RESPONSIBLE.
ARE AND IF THIS A MUNICIPAL
OWNED GOVERNMENT OWNED THE BANK
SO PUBLIC BACK THAT THAT'S WHAT
I UNDERSTAND.
WHETHER YOU HAVE A DIFFERENT.
IF I DON'T UNDERSTAND IT THE
LOCAL WILL THIS BE IS A SEPARATE
ENTITY LIKE A AND AS SHE IN A
NONPROFIT ORGANIZATION.
AND THAT THAT'LL BE MY FIRST AND
THE SECOND QUESTION -- RELATED
TO YEARS SELF ARE.
ON FAIR PLAYING FIELD.
WITH A BUILT IN BENEFITS SAID
THAT THE PUBLIC BANKS WILL HAVE
A SO THAT MEANS SO -- THE
EXISTING COMMERCIAL BANKS OUT
WOULD BE -- ARE PLACED IN UNFAIR --
PLAYING FIELD AND THE LOSING
ALTHOUGH THE PROCESS ALREADY ARE.
ACCORDING THE PUBLIC DOLLARS IN
THE ORDER MOVED AWAY.
INTO THIS FROM.
PUBLIC BANKS.
A SODA.
IF AND WHEN THERE IS -- UP AREAS
SO THAT THE COMMERCIAL AGAINST
AND NOT PERFORMING WE ARE FOR
THE COMMUNITY.
WE COULD ABA.
INITIATED A CHANGING THE
REGULATIONS AND RULES.
BUT RATHER THAN ESTABLISHING SO
THESE ARE TOOL OF FIRST THE
IMPORTANT QUESTIONS LOOK TO HEAR
FROM YOU.
LET ME START AND ANSWER WITH A
COUPLE THINGS FIRST -- WITH THE
COMMITTEES AMENDMENTS -- IN
ORDER FOR LOCAL JURISDICTION TO
EVEN CONSIDER STARTING A CHARTER
BANK YOU HAVE TO ANALYZE THE
COST YOU HAVE TO ANALYZE CAPITAL
YOU HAVE TO LOOK AT FINANCIAL
PROJECTIONS YOU NEED TO DO A
LEGAL ANALYSIS.
THERE ARE ALL SORTS OF STEPS YOU
HAVE TO CONSIDER BEFORE A LOCAL
JURISDICTION -- AND AND YOU AND
I BOTH SERVED IN LOCAL
GOVERNMENT BEFORE LOCAL ELECTED
OFFICIALS WOULD EVEN CONSIDER TO
TAKE THE STEP OF APPLY FOR
CHARTER.
ONCE A LOCAL JURISDICTION
DECIDES TO TAKE THAT STEP THEN
IT HAS TO MEET ALL OF THE
REQUIREMENTS THAT ARE SET UP BY
THE STATE AND WHAT THIS BILL
SAYS.
IS WE ARE NOT PROVIDING ARE
EXCEPTIONS FOR PUBLIC BANKS WITH
REGARDS TO HOW THEY NEED TO
CARRY OUT THEIR DUTIES THEY NEED
TO KEEP THE SAME COLLATERALS
NATION.
THEY HAVE TO KEEP FDIC.
INSURANCE THEY HAVE TO HAVE THE
SAME SAFE CARDS AND THAT'S JUST
TO GO THROUGH THE MULTI YEAR
PERIOD JUST TO GET CHARTER.
ONCE YOU'RE CHARTERED STATE
REGULATORS WILL CONTINUE TO MAKE
SURE ON A REGULAR BASIS THAT
YOU'RE DOING WHAT YOU NEED TO DO.
BUT I THINK ONE THING THAT I
WANT TO SUGGEST IF YOU THINK
ABOUT WHAT HAPPENS WHEN A BANK
FAILS.
LET'S TALK ABOUT WHAT HAPPENED
WHEN WALL STREET BANKS FAILED.
THEY DESTROYED COUNTLESS JOBS
WITH THE FINANCIAL CRISIS WITH
THE MORTGAGE FORECLOSURE CRISIS
PREDATORY LENDING NOT MONEY TO
SMALL BUSINESSES THE FAILURES OF
PRIVATE BANKS.
HAS HAD ENORMOUS AND IRREPARABLE
DAMAGE TO OUR COMMUNITIES AND
PART OF WHAT WE'RE SAYING IS LET
LOCAL COMMUNITIES CONTROL THEIR
OWN FATE.
LET LOCAL COMMUNITIES TAKE THEIR
HARD EARNED TAX DOLLARS AND
DETERMINE WHAT TO DO WITH THOSE
TAX DOLLARS INVESTED IN THEIR
COMMUNITIES ADDRESS THEIR ISSUES
AS OPPOSED TO SENDING.
THE MONEY TO WALL STREET AND
HAVING WALL STREET INVESTED IN
INDUSTRIES THAT HAVE NOTHING TO
DO WITH COMMUNITIES.
BUT INDUSTRIES THAT MANY
CALIFORNIA COMMUNITIES BELIEVER
JEOPARDIZING WHAT WE'RE TRYING
TO IN CALIFORNIA.
ANY OTHER.
ANSWERS.
AS I REMEMBER SHE DID YOU I'M
SORRY AS A MEMBER AT CHOI DID
YOU WANT. TO HEAR FROM ANYONE
ELSE SPECIFICALLY OR THE
OPPOSITION.
I JUST DON'T.
WANT TO HEAR ANY OF THE OPINIONS.
YEAH MY QUESTION IS YOUR YOUR
ADDRESS WHAT TYPE OF LEGAL
ENTITIES SO.
UNDER AB EIGHT FIVE SEVEN A
PUBLIC BANK IS A BANK
CORPORATION TO SEPARATE LEGAL
ENTITY FROM ITS OWNER WHICH
WOULD BE THE LOCAL AGENCY.
SAID THERE'S A M..
IN TERMS OF LIABILITY FOR THE
DEBTS OF THE BANK THOSE STAY
WITH THE BANK AND THE BANK
CORPORATION.
AND AS ASSEMBLY MEMBER CHIU.
WAS SAYING THESE.
BANKS HAVE THE SAME REQUIREMENTS
IN TERMS TERMS OF PROTECTING TAX
DOLLARS THAT CURRENTLY APPLIED
PRIVATE BANKS.
SO WHAT IS THE OUR RISK ANALYSIS
SO OF WHAT IS THE ABOLITION
GUEST OF NEW SYSTEM PUBLIC
BANKING SYSTEM.
OUR VERSUS -- THAT THE TRYING.
TO A CHANGE WHO ARE IMPROVE THE
SERVICE AREA SAID THAT CURRENTLY --
OF PUBLIC BANKS ARE NOT MADE I
MEAN THE COMMERCIAL BANKS ARE
NOT MEETING FOR THE CLIENTS.
IF I UNDERSTOOD YOUR QUESTION
CORRECTLY IT'S PRETTY SIMPLE --
YOU INVEST YOUR LOCAL DOLLARS IN
A PUBLIC BANKING YOU AND AND
IT'S FOR THE PUBLIC GOOD AS
OPPOSED TO INVESTING DOLLARS --
FOR A RAID RETURN THAT WE CALL
PROFIT.
AS YOU HEARD AWHILE AGO -- ALL.
THE BANG SAID THAT I HAVE.
WORKED WITH AYE HERE IS THAT THE
LOCAL BANKS -- THEY HAVE A
STRONG INTEREST IN THE A
COMMUNITY AND THAT THEY DO
RETURN.
THEIR BENEFITS -- AND THE
PARTICIPATING IN THE COMMUNITY
ACTIVITIES SO IN INTO IN THE
FORMS OF ON AND OFF GIVING MONEY
AND SPONSORING EVENTS ETCETERA
LACK OF FOUR HUNDRED THIRTY
MILLION DOLLARS -- THEY HALFWAY
INVESTED THE IN THE COMMUNITY --
ACTIVITIES -- SO ARE.
I MEAN THERE MAY BE SOME LACKING
AREAS -- COMMERCIAL BANKS ARE
NOT MEETING SO IF WE CAN REQUIRE -
THE MISSING PIECES SO FOR THEM
TO STRENGTH AND NOT BY.
OUR SO THAT RATHER THAN --
UNKNOWN CHARTER THAT THE WE ARE
TRYING -- TO ESTABLISH AN AND I
HEAR THAT NORTH DAKOTA EXAMPLE
HALLWAYS OUT HOW IT THE THAT THE
BANK IS UP.
A PERFORMING WHAT I HEAR ABOUT
IS THAT THAT THE SYSTEM WAS TO
SET UP A HUNDRED YEARS AGO AND A
NORTH DAKOTA -- ECONOMY IS SO
I'M NOT THE POPULATION.
VERY FRACTION OF A CALIFORNIA
LIKE A 2% SO IT IS A NOT A GOOD
REALLY GOOD A COMPARISON.
OF THE SYSTEM AND THE NORTH --
THE STATE SAYS SO FAR I KNOW
THAT SUCCESSFULLY THIS A PUBLIC
BANKING SYSTEM HAVE WAS
SUCCEEDED SO THE RISK RISK
FACTOR IS THE ABOLITION NEW.
NEW SYSTEM OFFERS SAYS -- TRYING --
TO THAT CHANGING IN THE
DEMANDING COMMERCIAL BANKS
CURRENT THE EXISTING -- TO
IMPROVE THE ERA LACKING AREAS.
OF THROUGH A WILL -- REGULATIONS --
ARE.
LEGISLATION SO WHETHER SOMEBODY
HAS DONE THAT KIND OF ANALYSIS
OF LOCKED IN.
I'LL ANSWER THE QUESTION AND A
COUPLE HUESO LET ME BE CLEAR
THAT OUR BILL IS REALLY.
FOCUSED ON THE FACT THAT THE
LARGEST AND I REFER TO THEM AS
WALL STREET BANKS INTERNATIONAL
BANKS HAVE HAVE FAILED.
OUR QUIBBLE IS NOT WITH CREDIT
UNIONS ARE QUIBBLE IS NOT WITH
COMMUNITY BANKS AND THIS IS WHY
WE SPECIFICALLY LEGISLATING OR
BILL.
LANGUAGE THAT SAYS WE SUPPORT
THOSE LOCAL FINANCIAL
INSTITUTION.
SO IF YOU READ THE BILL
SPECIFICALLY SAYS THAT A PUBLIC
BANK WILL PARTNER WITH LOCAL
INSTITUTIONS WILL CONDUCT RETAIL
SERVICES WITH THOSE
CONSTITUTIONS.
THAT IS THE MODEL OF THE PUBLIC
BANK OF NORTH DAKOTA AND WHILE
YOU'RE UPS TO CORRECT THE STATE
IN NORTH DAKOTA DOES HAVE A
SMALL POPULATION IN CALIFORNIA.
WE ARE NOT PROPOSING A STATE
BANK WITH THIS BILL WE'RE
PROPOSING THE POSSIBILITY OF
LOCAL JURISDICTIONS ESTABLISHING
LOCAL BANKS.
SO I WANTED TO MAKE MENTION THAT
AND THEN ONE OTHER THING I WANT
TO MENTION IS.
WITHOUT PUBLIC BANKS OVER THE
LAST. TWENTY FIVE YEARS.
THE LARGEST BANKS IN THE UNITED
STATES BECAUSE OF THEIR OF THEIR
MARKET COMPETITIVENESS HAVE
ESSENTIALLY KILLED 75% OF
CALIFORNIA LOCAL BANKS. NINETEEN
NINETY FOUR THEY WERE A LITTLE
UNDER FIVE HUNDRED BANKS.
IN THE STATE OF IN OUR STATE
TODAY THERE ARE A HUNDRED AND
TWENTY AND SO I AGREE WITH YOU
THAT IF WE COULD FIGURE OUT HOW
TO BOLSTER THAT COMMUNITY
BANKING WORLD.
THAT WOULD BE A GOOD THING FOR
US TO DO BUT UNFORTUNATELY THE
INDUSTRY HAS CANNIBALIZED ITSELF
AND SO WHAT WE'RE SAYING AS WE
WOULD LIKE TO BE ABLE TO CONTROL
OUR OWN ASSETS AND I'LL JUST USE
THE EXAMPLE.
OF THE CITY THAT TIME FROM -- WE
TYPICALLY BANK ABOUT TEN BILLION
DOLLARS A YEAR WITH THESE
LARGEST INSTITUTIONS IF WE COULD
USE THE INTEREST OFF THAT.
AYE AND INVESTED IN OUR IT IN IN
THE NEEDS THAT WE HAVE -- WE
WOULD GET MUCH MORE BANG FOR OUR
BUCK UP RATHER THAN SAYING IN IT
TOO NEW YORK INSTITUTIONS WHO
INVESTED IN THE INDUSTRIES THAT
THEY WANT THAT ARE NOT IN OUR
STATE.
AND GIVE US BACK VERY LOW
INTEREST RATES WE COULD KEEP
THAT MONEY IN OUR STATE KEEP
THAT MONEY IN OUR COMMUNITY AND
USE IT TO INVEST.
IN THOSE PARTS OF OUR
COMMUNITIES THAT HAVE NOT
RECEIVED AN INVESTMENT FROM
FINANCIAL INSTITUTIONS SO.
THE FACT IS YOU KNOW THAT THERE
ARE.
MANY MANY SMALL BUSINESS OWNERS
WHO WHO HAVE NOT BEEN ABLE TO
GET ACCESS TO CAPITAL THERE MANY
INDIVIDUALS HAVE NOT BEEN ABLE
TO GET MORTGAGES THERE MANY
CONSUMERS HAVE BEEN UNABLE TO
GET LOANS -- THERE MANY STUDENTS
WHO BEEN UNABLE TO GET UP FAIR
STUDENT LOANS AND I CAN GO ON
AND ON ABOUT THE LACK OF ACCESS
TO CAPITAL BUT IF THE LOCAL
COMMUNITY CHOSE TO MAKE THOSE
INVESTMENTS LOCALLY.
THAT WOULD BE VERY DIFFERENT%
PICTURE SO IT'S ALL ABOUT AGAIN
LOCAL CONTROL.
ALLOWING THE PUBLIC TO CONTROL
WHERE ITS MONEY IS USED WARTS
MONEY IS INVESTED BUT BUT WITH
THE AMENDMENTS THAT THE CHAIR
WOMAN HAD ASKED US.
FOR ENSURING THAT THE STANDARDS
THAT PUBLIC BANKS ARE REQUIRED
TO ENGAGE IN ARE THE SAME
STANDARDS THAT PRIVATE BANKS ARE
ENGAGEMENT.
THANK YOU FOR THAT EXPLANATION --
IT IT'S ALSO REALLY COOL --
THOUGHT THAT THE MONEY WOULD
BECOME MORE AVAILABLE LOCALLY
AND THE FOR THE PEOPLE WHO YOU
KNOW TRADITIONALLY DID NOT HAVE
A I WANT IRVINE'S MANY TO STAND
IRVINE YEAH.
IT IN ANY WE ARE NOT ONLY JUST --
LOCAL COULD BUT IT YEAH.
OUR BUT HERE LOOKING AT THE JUST
A AND NOT A QUESTION IS A QUITE
INTERESTING TO SUB -- TOLD OF
COMPARE SUPPORT GROUP UPPER OF
US IS -- OPPOSITION GROUPS -- A
SUPPORT GROUP -- TENDS TO BE
MORE PROFESSIONAL ORGANIZATIONS
OF SUCH AS A CALIFORNIA
ASSOCIATION OF WORK TELL ME
TREASURER SEND THE TAX
COLLECTORS.
CALIFORNIA BANKERS ASSOCIATION
AND THE CHAMBER OF COMMERCE OF
CREDIT UNIONS SO IN A TECH
SAPIEHA SOCIAL ASSISTANCE AT
CETERA -- WHERE IS -- SUPPORT
GROUP BUT TENDS TO BE MORE --
ENTITIES -- NOT IN IN IN THE IN
THAT IN INDUSTRY A SUCH AS SUCH
JUST A SUPPORT GROUP BANKING
ALLY AND SO -- NO REINVESTMENT
COMES SO -- WAS OF COURAGE
[inaudible]
CAMPAIGN -- OR IS THIS A FOSS
SEWER FREE CALIFORNIA NURSES
ASSOCIATION DEMOCRATIC PARTY
OFFICE AND SAN FERNANDO VALLEY --
RISING ALLIANCE WHATEVER THAT IS --
SOME FLYABLE SUNFLOWER LE IS
DECEMBER CHOI DOES IT HAVE A
QUESTIONS OR AND THE OPPOSITE ON
WHEN I SAID THAT THIS IS A NON
MY QUESTION.
I'M I'M TRYING TO SEE THAT.
AT THE SUPPORT GROUP VERSUS TO
OPPOSITION GROUPS OF EXPERTISE
SOMEONE MAY HAVE ANALYZED AT
THIS KIND OF IDEAS I'M HAPPY TO
ANSWER THAT VERY BRIEFLY -- AND
AND I AGAIN WITH REGARDS TO THE
CREDIT UNIONS THE COMMUNITY
BANKS I WANT TO PUT THEM ASIDE%
BECAUSE MY HOPE IS THROUGH THE
PROCESS OF THIS LEGISLATIVE
PROCESS WILL BE ABLE TO EXPLAIN
AND HOPEFULLY -- WORK OUT ISSUES
TWO TWO SO THAT TO THOSE WORLDS
CAN UNDERSTAND THAT WE ARE
LOOKING TO TO PARTNER WITH THEM --
BUT ON THE OPPOSITION LIST ARE
THOSE INDIVIDUALS WHO ARE
INVESTED IN THE STATUS QUO AND
I'M JUST SAYING THAT FACTUALLY
WE HAVE A CURRENT SYSTEM.
THAT HAS BEEN FAILING BUT THE
LARGEST BANKS WHO ARE
REPRESENTED BY THE CALIFORNIA
BANKERS ASSOCIATION.
THEY HAVE AN UNDERSTANDABLE
ECONOMIC INTEREST IN CONTINUING
THE STATUS QUO I THINK IT'S FAIR
TO SAY THAT THE VERY LENGTHY
LIST OF ORGANIZATIONS IN SUPPORT
OF OUR BILL.
REPRESENT THE TENS OF MILLIONS
OF CALIFORNIANS THE PUBLIC.
WHO HAVE BEEN WHO HAVE NOT FOUND
THE CURRENT BANKING SYSTEM TO
WORK FOR OUR PUBLIC THESE ARE
OUR CONSUMERS THESE ARE OUR
HOMEOWNERS THESE ARE OUR
STUDENTS?
THESE ARE OUR BUYER MENTALIST
WHO SEE THE MONIES THAT ARE
BEING INVESTED IN FOSSIL FUEL
INDUSTRIES THESE ARE
REPRESENTATIVES OF WORKING MEN
AND WOMEN WHO SEE EVERY DAY.
THAT THE CURRENT SYSTEM IS NOT
WORKING FOR THEM.
IS THE GENTLEMAN NOT IN A
POSITION -- CAN AT THE SOME OF
QUESTIONS SO.
WELL I LIKE TO ANSWER JUST A
COUPLE OF THE QUESTIONS IF I
COULD -- I THINK THE COMMENT WAS
MADE THAT STRUCTURALLY THE BILL
IS NOT COMPETING WITH COMMUNITY
BANKS AND I I THAT THAT'S
ABSOLUTELY NOT CORRECT -- YOU
HEARD FROM COMMUNITY BANKERS WHO
CBA ALSO REPRESENTS IN ADDITION
TO LARGER INSTITUTIONS -- STATE
THAT -- TAKING OF THOSE DEPOSITS
IMPAIRS THEIR ABILITY TO MAKE
LOANS INTO THEIR COMMUNITIES.
THIS BILL IS SUPPORTING THE IDEA
THAT WE ARE TAKING PUBLIC
DEPOSITS THAT CURRENTLY ARE USED
BY COMMUNITY BANKS AS A SOURCE
OF LIQUIDITY TO MAKE LOANS.
AND PUTTING THEM INTO A
GOVERNMENT ENTITY THAT HAS NO
RETAIL PRESENCE IN THEIR
COMMUNITY.
SO IF YOU'RE CONCERNED ABOUT
YOUR CONSTITUENTS HAVING ACCESS
TO CAPITAL THIS WILL ONLY MAKE
THAT WORSE.
THE SECOND ISSUE THAT WAS
BROUGHT UP WAS THE NOTION OF
TAXES AND WE VERY MUCH
APPRECIATE THE QUESTION BEING
ASKED.
IF THE BILL DOES WHAT IT SAYS IT
DOES IT PURPORTS TO CREATE A
SEPARATE CORPORATE STRUCTURED
INTO DE THERE IS ABSOLUTELY NO
REASON WHY THAT CORPORATION
CAN'T PAY CORPORATE INCOME TAXES.
IF THE GOAL HERE IS TO HAVE A
LEVEL PLAYING FIELD AND
COMPLEMENT COMMUNITY BANKING
CREDIT UNIONS.
THEN LET'S ALLOW THE PUBLIC BANK
TO ALSO PAY TAXES.
TAXES ARE GOOD ARE THEY NOT THEY
FIX OUR ROADS THEY HELP ARE
NEEDY THE HOMELESS PEOPLE WE
HAVE A GENUINE CONCERN AND NEED
TO HAVE GENERAL FUND REVENUES IN --
FOR THE NOTION THAT THAT WHAT IS
NOT -- YOU KNOW WHAT IS GOOD FOR
FOR CORPORATIONS -- IS NOT GOOD
FOR A PUBLIC ENTITY THAT THAT
SEEMS TO US TO BE A LITTLE
DISINGENUOUS.
AND FINALLY I APPRECIATE
ASSEMBLY MEMBER SHOES NEW FOUND
ADMIRATION FROM NORTH DAKOTA IT
IS OFTEN USED AS A MODEL FOR
PUBLIC BANKING -- UNFORTUNATELY
NORTH DAKOTA HAS A G. P. THAT IS
THE SIZE OF A OXEN ART IT IS
LITERALLY 2% OF CALIFORNIANS GDP
IT LOST MONEY.
IT'S PUBLIC BANK.
LOST MONEY FOR TWELVE YEARS
BEFORE IT BEGAN MAKING MONEY.
THAT'S TAX PAYER MONEY.
WE WILL HAVE YOU RESPOND I KNOW
THAT AS A MEMBER GABRIEL ALSO
HAS BEEN WAITING PATIENTLY TO
ASK QUESTIONS.
THANK YOU VERY MUCH MADAM CHAIR
AND I JUST WANT -- TO THANK YOU
VERY MUCH FOR THE AMENDMENTS
THAT YOU -- OFFERED AND I THINK
THE AUTHORS FOR ACCEPTING THOSE
MOMENTS I THINK THAT THEY WERE
REALLY REALLY IMPORTANT TO ADD
SOME REALLY STRONG PROTECTIONS
FOR TAXPAYER FUNDS -- AND JUST
WANTED TO SHARE SOME OF MY
THOUGHTS AND THEN.
A QUICK QUESTION FOR THE AUTHORS
YOU KNOW I WAS -- VERY INTRIGUED
BY THE IDEA PUBLIC BANKING WHEN
I FIRST HEARD ABOUT IT -- YOU
KNOW I THINK THERE'S BEEN A LOT
OF FRUSTRATION BROADLY WITH SOME
OF THE ACTORS IN THE PRIVATE
BANKING SYSTEM I THINK THE IDEA
OF INCREASING COMPETITION AND
LETTING.
PUBLIC BANKS COMPETE AGAINST
PRIVATE BANKS IS A GOOD IDEA I'M
IN FAVOR OF THAT TYPE OF
COMPETITION IN THE MARKET.
I WILL SAY WOULD GIVE ME SOME
PAUSE ON THE IDEA WAS THE JOINT
INFORMATIONAL HEARING THAT WE
HAD AND AND IT WAS PRETTY
PARTICULAR I'M I'M ABOUT 90%
SURE OF THIS BUT IT WAS THE CITY
TREASURER IN THE FROM SAN
FRANCISCO JOSE CISNEROS WHO CAME
IN.
AND REALLY -- OFFERED US A NOTE
OF CAUTION AND AND PRESENTED
HIMSELF AS SOMEONE WHO.
SHARES A LOT OF PROGRESSIVE EYES
THAT I THINK THAT THE AUTHORS
HAVE BUT SUGGESTED THAT THERE
ARE THINGS THAT WE OUGHTA
PROCEED WITH CAUTION WHEN IT
COMES TO PUBLIC BANKING -- IT
GIVE US SOME EXAMPLES OF THE
FACT THAT IN OTHER COUNTRIES
WHERE THEY HAVE PUBLIC BACON I
BELIEVE IT WAS GERMANY ACTUALLY
PAY NEGATIVE INTEREST RATES.
MUCH OF THE PAY TO KEEP THEIR
MONEY IN THE BANK SO THAT THEY
HAVEN'T -- THEY HAVEN'T ACTUALLY --
YOU KNOW SUCCEEDED IN THE WAY
THAT I THINK SUPPORTERS THERE
WOULD HAVE HOPED -- AND ALSO
REALLY URGE DISCUSSION THAT TO
THE EXTENT THAT THESE ENTITIES
FAIL AND THERE ARE PROTECTIONS
IT'S NOT JUST ABOUT TAXPAYER
MONEY IT'S THAT -- IS THE LOCAL
JURISDICTIONS THAN IN IT AND
INEVITABLY HAVE TO END UP CUT
WOULD END UP CUTTING SERVICES NO
SERVICES MAY BE.
SERVICES THAT BENEFIT THE POOR
THE MOST VULNERABLE AND AND
REALLY HURT COMMUNITIES AND AND
AND IN A WAY IN IN SOME WAYS
THERE COULD BE A LOT UNINTENDED
CONSEQUENCES FROM PUBLIC BANK SO.
I VERY VERY MUCH APPRECIATE.
YOUR WILLINGNESS TO ACCEPT THOSE
AMENDMENTS I WOULD JUST SAY THAT --
I HOPE THAT YOU'LL GO BEYOND OUR
CONSIDER GOING BEYOND THINKING
ABOUT WHAT IS THERE -- FOR
PROTECTIONS IN THE PRIVATE
SECTOR NOW BECAUSE THIS IS
TAXPAYER MONEY THIS IS THE
PEOPLE'S MONEY THIS IS THE MONEY
THAT IS USED TO FIND SOME OF THE
MOST ESSENTIAL SERVICES IN OUR
COMMUNITIES.
AND I THINK WE OWE IT TO THE
PUBLIC TO MAKE SURE THAT THAT
MONEY IS PROTECTED SO I'M GONNA
BE SUPPORTING YOUR BILL TODAY I
THINK IT'S SUPPORT FOR THIS
CONVERSATION TO CONTINUE.
BUT I DO YOU REALLY WANT TO MAKE
SURE THAT THIS BILL AS IT
PROGRESSES THAT WE HAVE THAT
CONVERSATION AND THAT WE ARE
PROTECTING TAXPAYER RESOURCES
BECAUSE WE MAY HAVE THE BEST OF
INTENTIONS BUT THEY ARE PLENTY
OF EXAMPLES OF OF GOOD
INTENTIONS GONE BAD OR WE COULD
END.
UP HARMING EXACTLY THOSE FOLKS
THAT WE ARE -- INTENDED HELPS I
DON'T KNOW IF -- ASSEMBLY MEMBER
CHIU SINCE HE IS FROM YOUR CITY
I TELL YOU WRITING IF YOU WANT
TO RESPOND TO SOME OF THE
COMMENTS THAT WE HAVE FROM THE
CITY TREASURE BUT THOSE REALLY
MADE ME THINK THAT IF WE'RE
GOING TO DO THIS WE NEED TO BE
IT.
DO IT THOUGHTFULLY DELIBERATELY
SLOWLY AND REALLY PROCEED WITH
CAUTION.
SO I CAN'T AGREE WITH YOU MORE
ABOUT THE WAY APPRECIATE YOUR
SUPPORT OF THIS BILL MOVING
THROUGH THIS COMMITTEE AND
SOMETHING THAT -- MISTER
SANTIAGO AND I HAVE TALKED ABOUT
AT GREAT LENGTH IS ARE VERY
PROFOUND HOPE AND DESIRE.
THAT THERE WILL NEVER BE A
PUBLIC BANK THAT IS CHARTER BY
THE STATE OF CALIFORNIA THAT
FAILS.
AND I THINK WHAT THIS COMMITTEE
HAS DONE IS PUT SAFEGUARDS TO
ENSURE TO MAXIMIZE THE CHANCE
THAT THAT HAPPENS AND YOU TALKED
ABOUT THE THE THE POSSIBILITY OF
A CITY.
OF A PUBLIC BANK DOES FAIL
HAVING TO CUT SERVICES WHEN I
WOULD ASK PEOPLE TO THINK ABOUT
IS THE BILLIONS OF DOLLARS THAT
THE STATE OF CALIFORNIA HAS HAD
TO SPEND.
BECAUSE OF THE FAILURE OF WALL
STREET BANKS.
WHEN IT COMES TO THE MORTGAGE
FORECLOSURE CRISIS WHEN IT COMES
TO PERPETRATE LANDING I COULD GO
ON AND ON WITH THE LIST?
BUT BOB WE KNOW A SYSTEM THAT
HAS FAILED AND WHAT WE ARE
SAYING IS IS THERE ANOTHER
OPTION -- NOW I'VE HAD A NUMBER
OF CONVERSATIONS WITH MY CITIES
GREAT TREASURE JOSE CISNEROS.
AND THEY'RE REALLY TWO THINGS
THAT I WOULD JUST NOTE ABOUT HIS
PERSPECTIVE.
FIRST HE DOES BELIEVE THAT THERE
ARE VERY HIGH COST ESTIMATES OF
WHAT IS GOING TO TO TO STATE
STARTUP THESE BANKS -- AND
USUALLY THOSE OUT WHAT I WOULD
SAY TO THIS COMMITTEE IS EVEN IF
THOSE COST ESTIMATES ARE HIGH
THAT'S NOT A REASON TO SAY THAT
A LOCAL JURISDICTION SHOULDN'T
HAVE THE CHANCE. TO TRY THAT
THERE SHOULD BE AN OPPORTUNITY
FOR A LOCAL COMMUNITY TO PUT A
BUSINESS PLAN TOGETHER THAT MAY
ACTUALLY BE ABLE TO START A BANK
WITH PROFITABILITY AND LESSEN
SAY THE TWELVE YEARS THAT WAS
ALLUDED TO BY THE BANK OF NORTH
DAKOTA AND BY THE WAY.
THE BANK NORTH DAKOTA'S BEEN
AROUND SINCE NINETEEN NINETEEN
IT DID TAKE A DOZEN YEARS FOR TO
GET UP TO PROFITABILITY BUT IN
RECENT YEARS WE HAVE SEEN
SIGNIFICANT.
PROFITABILITY THAT'S THE KIND OF
PROFITABILITY THAT WE'D LIKE TO
BRING BACK TO CALIFORNIA AND AND
AND IF I CAN JUST TO CLOSE.
EVEN IF IT IS DIFFICULT TO START
A PUBLIC BANK IF FOR SETTING THE
GROUND RULES CORRECTLY.
AND THE LOCAL JURISDICTION IS
ABLE TO FIGURE THIS OUT WHY
WOULD WE NOT WANT TO ALLOW THAT
TO HAPPEN WHY WOULD WE NOT ALLOW
THAT AS AN OPTION TO THE STATUS
QUO THE STATUS QUO HAS FAILED US.
MEMBERS ANY OTHER QUESTIONS OR
THOUGHTS.
I WILL ADD THAT A THINK THAT THE
WHEN WE STARTED THAT THE
LEGISLATIVE YEAR WE STARTED WITH
A HEARING AND IT WAS A HEARING
RELATED. TO TO REALLY DIFFERENT
MODELS ACTUALLY OF WHAT PUBLIC
BANKING COULD LOOK LIKE -- AT
THAT POINT THERE WAS A
CONVERSATION ABOUT A STATE BANK
AS WELL AND AND I THINK AS THE
CONVERSATION PROGRESSED AND AND
AS THINGS PROGRESS IN OUR
LEGISLATURE THEY OFTEN DO SO
BECAUSE OF A BILL -- IF THERE'S
A BILL THERE IS A CONVERSATION --
ABOUT THIS I REALLY TIED TO
THINK ABOUT THIS BILL -- FROM
THE LANDS OF THE BANKING
PERSPECTIVE AND I KNOW IN
TODAY'S CONVERSATION AND AND THE
DIALOGUE BACK AND FORTH THERE
CERTAINLY HAS BEEN A A LOT OF
ELEMENTS AND ELEMENTS RELATED TO
LOCAL GOVERNMENT -- AND I YOU
KNOW SHOULD THIS COULD BILL GET
OUT OF COMMITTEE TODAY IT MOVES
OVER TO LOCAL GOVERNMENT AND I
KNOW THAT THE LOCAL GOVERNMENT
COMMITTEE -- WILL HAVE THAT
LANDS ON TO THINK ABOUT WHETHER
LOCAL JURISDICTIONS -- ARE THE
RIGHT SPACE AND WHAT KINDS OF A
RISK -- AND OPPORTUNITIES --
SOMETHING LIKE THIS COULD
PRESENT BUT FROM A BANKING
PERSPECTIVE -- AS I HEARD TODAY
AND I'VE HEARD THROUGHOUT THIS
ENTIRE CONVERSATION THERE HAS
BEEN AN INTEREST TO HAVE A EQUAL.
UP PLAYING FIELD -- BEFORE AN
ENTITY AND DOING SO THE ALSO
MEANS NOT JUST CREATING AN
OPPORTUNITY BUT ALSO THE
SAFEGUARDS.
UP FROM MY PERSPECTIVE AS CHAIR
OF THIS COMMITTEE.
IT'S BEEN IMPORTANT FOR ME TO
UNDERSTAND HOW WE ACHIEVE THAT --
AND DO SO AGAIN FROM A BANKING
FLAT LANDS IN A RESPONSIBLE WAY
AND I THINK IT THAT BY ALLOWING
THEM.
THE REGULATORY BARRIERS BARRIERS.
FOR TO BE THE SAME REALLY FOR
BOTH PUBLIC AND COMMERCIAL BANKS --
WAS SOMETHING THAT.
WE DON'T I THOUGHT LONG AND HARD
ABOUT AND I THINK THAT THE BILL
WITH THE AMENDMENTS THAT.
IS BEING TAKEN DOES THAT WE HAVE
NOW CREATED -- THAT SIMILAR
REGULATORY BARRIERS BARRIERS FOR
COMMERCIAL AND PUBLIC BANKS TO
ENGAGE IN A CONVERSATION.
AS HAS BEEN SAID THIS BILL
DOESN'T CREATE A PUBLIC BANK
THIS BILL ALLOWS FOR A PROCESS
AT TO BE CREATED OF FOR A PUBLIC
BANK.
I I THINK THAT -- TO IT WILL
ALSO BE IMPORTANT THAT.
TO WE UNDERSTAND THAT.
WHETHER WE LIKE SOMETHING OR NOT
NO ONE GETS A FREE PASS ON THIS
STILL HAS TO GO.
THROUGH -- THE DB OWE THE
DEPARTMENT OF BUSINESS OVERSIGHT
CHARTER APPLICATION PROCESS AND
TO IT HAS FTA SEE.
OVERSIGHT THE FDA SEAT PORTION
OF IT -- WHICH IS IMPORTANT NOT
JUST TO SECURE THE PUBLIC'S --
FUNDING BUT ALSO THE FTA SEE
WORKS TO M. HE IN SUCH A WAY
LIKE OF A CHRIS A CRISIS
MANAGEMENT TEAM IF SOMETHING
GOES WRONG WHAT IS THE OUTSIDE
ENTITY THAT WOULD COME IN TO
HELP -- OF FINANCIAL INSTITUTION
AND SO THAT ALLEN IS INCLUDED
HERE AND I THINK THAT THAT WAS
REALLY IMPORTANT.
I DO THINK THAT LOCAL
GOVERNMENTS AND WE'VE TALKED
ABOUT CITIES AND COUNTIES BUT I
WANT TO BE CLEAR THAT THE
LANGUAGE HERE IS ANY KIND OF
LOCAL GOVERNMENT INCLUDING
SPECIAL DISTRICTS COMMUNITY
COLLEGE DISTRICTS.
BOARDS OF EDUCATION AND THAT
REALLY IS WHAT THE BILL ALLOWS
IT'S NOT JUST CITIES OR COUNTIES
AND CLEARLY THERE ARE CAPACITIES.
THAT ARE DIFFERENT FROM ALL OF
THOSE ENTITIES SO I KNOW THAT AS
THIS BILL MOVES FORWARD TO LOCAL
GOVERNMENT THEY WILL THINK ABOUT
THAT -- TOO IT'S ONE THING TO
THINK ABOUT WHAT A COUNTY OR
CITY COULD DO I'M VERSES WHAT A
SCHOOL YOU KNOW BOARD COULD DO
AND AND THEY WOULD ALL BE
ALLOWED TO GO THROUGH AGAIN THIS
PROCESS I THINK THE PROCESS IS
RIGOROUS -- AT THE FOUNDATION
THOUGH OF THIS.
AND I SAID THIS IN THE IN THE IN
THE HEARING.
THERE HAS TO BE SOME REFLECTION
ON WHY.
THE PEOPLE OF CALIFORNIA WANT.
AN ALTERNATIVE PRODUCT TO WHAT'S
ALREADY THERE.
I WILL BE THE FIRST TO SAY THAT
OUR COMMUNITY BANKS AND I KNOW
MONEY SEE TO BANK AND TRUST IS
HERE HAVE BEEN INCREDIBLE AND
HELPING OUR COMMUNITY THAT THE
DISTRICT I REPRESENT OF THE
THOMAS FIRE.
I'M IN THE DEBRIS FLOW -- IN A
GREAT TIME OF NEED -- WE HAD NOT
EXPERIENCED THAT LEVEL OF
DISASTER AND NOT ONLY WERE THEY
THERE AT AS FINANCIAL
INSTITUTIONS TO HELP.
OUR COMMUNITY MOVE THROUGH THREE
EMERGENCY LOANS AT THROUGH LONG
TERM LOANS BUT ALSO AS
VOLUNTEERS AND JUST HUMANS THAT
WERE TAKING CARE OF OUR
COMMUNITY WHEN IT WAS REALLY
REALLY DIFFICULT.
I DON'T WANT THAT TO BE LOST IN
THIS CONVERSATION AND THAT NOT
ALL ENTITIES DO BUSINESS IN THE
SAME WAY -- BUT I THINK THAT WE
DO HAVE TO REFLECT ON WHY THE
PEOPLE OF CALIFORNIA ARE ASKING
FOR AN ALTERNATIVE.
PRODUCT.
THE LEGISLATURE THOSE REASONS --
THE LEGISLATURE IS TRYING TO
HANDLE AND ASSESS AND ADDRESS
HOW TO RESPOND TO SOME OF THE
REASONS THAT THE PEOPLE OF
CALIFORNIA ARE ASKING FOR AN
ALTERNATIVE PRODUCT -- I THINK
THAT THE CONVERSATION IS
CERTAINLY NOT LIMITED TO THIS
HEARING ROOM OR TO THE
LEGISLATURE I THINK THOSE
CONVERSATIONS ARE HAPPENING IN A
PUBLIC WAY.
I DO KNOW THAT.
THERE ARE BANKS WHO ARE
RESPONDING TO THE NEEDS -- OF
THE PUBLIC AND HEARING WHAT SOME
OF THE CONCERNS ARE -- INCLUDING
AB.
I MEAN THERE WAS ONE THAT.
DIVESTED FROM THE PA -- THE
PRIVATE PRISON A SYSTEM -- IN
RECENT MONTHS AND IF IT IT IT
AND I WANT AS TO RECOGNIZE THAT.
THIS CONVERSATION IS. ONE ASKED
FOR BY THE PEOPLE OF CALIFORNIA
BUT TO ALSO AT NEEDED IN A WAY
SO THAT WE CAN ADDRESS WHAT
CONSUMERS ARE ASKING FOR I I
THINK THE LEGISLATURE'S REALLY
THE VEHICLE BUT THE ASK IS FROM
THE PUBLIC.
AND THE PUBLIC IS LOOKING FOR
PRODUCTS THAT BETTER MEET THEIR
NEED -- AND THEY'VE IDENTIFIED
THAT THE PUBLIC BANK COULD BE --
ONE OF THOSE AB PRODUCTS IT'S
NOT LIKE A PRODUCT PER SE BUT A
SYSTEM -- THAT COULD DO THAT.
SO I SHARE THOSE COMMENTS IT'S
NOT NECESSARILY QUESTIONS I
APPRECIATE THAT THE AUTHORS --
ENGAGEMENT IN THIS WE'VE HAD A
LOT OF CONVERSATION SINCE DAY --
ONE ABOUT THIS I DON'T THINK
THAT ANY PART OF THIS IS
NECESSARILY PERFECT BUT I DO
THINK THAT -- THE KID THE LENS
OF THIS COMMITTEE HAS REALLY
BEEN FROM A BANKING PERSPECTIVE
FROM A FINANCIAL INSTITUTIONS
WHAT ARE THE BARRIERS HOW DO WE
ASSESS THIS -- AND THOSE COULD
BE DIFFERENT AS IT MOVES TO A
LOCAL GOVERNMENT -- SO JUST SOME
THOUGHTS TO THINK ABOUT I DO
APPRECIATE ALSO -- ALLOF THOSE
THAT HAVE BEEN IN INVOLVED IN
THE CONVERSATION -- FOLKS FROM
THROUGHOUT THE STATE THAT HAVE
BEEN IN OUR OFFICE HAVE BEEN --
INVOLVED WITH THE AUTHORS OFFICE ---BUT ALSO A THINK THERE HAVE BEEN
CONVERSATIONS I'M FROM FINANCIAL
INSTITUTIONS THAT ARE REALLY
DOING.
THINKING ABOUT WELL WHAT IS IT
THAT IF YOU KNOW HOW DO WE
DELIVER THE OUTCOME THAT THE
PEOPLE OF CALIFORNIA WANT US TO
DELIVER AND WHAT WOULD THAT LOOK
LIKE -- SO EIGHT EIGHT AGAIN I
THINK YOU TO THAT TO EVERYONE
INVOLVED IN THOSE CONVERSATIONS --
THE BILL DOES HAVE A DO PASS.
TWO LOCAL GOVERNMENTS
RECOMMENDATION.
AND SO WITH THAT.
WE HAVE A MOTION AND WE HAVE A
SECOND.
WITH THE MEMBERS LIKE TO CLOSE.
I WANT TO THANK THE COMMITTEE
FOR YOUR REAL DELIBERATION ON
THIS I KNOW THIS IS NOT AN EASY
QUESTION AND I PARTICULARLY
AGAIN WANT TO THANK THE CHAIR
AND YOUR STAFF WHO HAVE SPENT
MANY HOURS THINKING THIS THROUGH
THIS IS NOT AN EASY QUESTION.
ONE JUST -- ADDRESS ONE THING
AND THEN CLOSE WITH ONE POINT
WHICH HAS -- AGAIN OUR INTENT TO
WITH OUR BILL IS TO PARTNER WITH
CREDIT UNIONS AND COMMUNITY
BANKS BECAUSE WE HAVE FEW THOSE
FINANCE AND INSTITUTIONS.
AS HAVING THE THE THE THE MIND
OF THE PUBLIC -- AT HEART -- AND
I ALSO MENTION CREDIT UNIONS
ALSO DO NOT PAY TAXES BUT THAT'S
ANOTHER CONVERSATION -- BUT ONE
THING I WILL ALSO STATE JUST TO
CLOSE HIS I KNOW THIS IS A NEW
CONCEPT FOR SOME -- BUT THAT WAS
TRUE FOR MANY AREAS OF
GOVERNMENT.
THAT WE TAKE FOR GRANTED TODAY
THERE WAS A TIME IN AMERICA WHEN
WE DIDN'T HAVE A PUBLIC HEALTH
SYSTEM.
AND THEN THE PRIVATE HEALTH
SYSTEM FAILED AND WE NOW HAVE A
PUBLIC HEALTH SYSTEM.
THERE WAS A TIME IN AMERICAN WE
DIDN'T HAVE A PUBLIC TRANSIT
SYSTEM BUT THE PRIVATE TRANSIT
SYSTEM FAILED AND SO THAT SYSTEM
CAME ABOUT THE SAME COULD BE
SAID ABOUT PUBLIC EDUCATION THE
SAME COULD BE SAID ABOUT PUBLIC
HOUSING.
WHAT WE'RE SAYING IN THIS AREA?
IS AT THE PRIVATE BANKING
INDUSTRY UNFORTUNATELY HAS
FAILED AND WE'RE ASKING FOR THE
OPPORTUNITY. TO MOVE FORWARD
WITH CREATING A NEW TYPE OF
INSTITUTION THAT COULD HOPEFULLY
ENSURE THAT THE PUBLIC'S.
INTERESTS ARE IN MIND TO ENSURE
THAT PUBLIC DOLLARS ARE BEING
INVESTED FOR COMMUNITIES AND CAN
ENSURE THAT WE HAVE THE KIND OF
COMMUNITIES AT ONE ELEVEN
WITHOUT A RESPECTFULLY ASK YOUR
SUPPORT.
THANK YOU MA'AM TURNOUT WANNA --
THANK YOU PARTICULAR FOR LAST
COMMENTS THAT YOU MAY BE THINK
IT'S IMPORTANT UNDERSTAND THAT.
THAT WE'RE NOT GOING AFTER A
PARTICULAR INDUSTRY THERE THERE
IS A WILLINGNESS TO WORK WITH
COMMUNITY BANKS AND CREDIT
UNIONS -- TO MAKE SURE I AND ALL
STAKEHOLDERS TO MAKE SURE THIS
BILL IS IS IS A GOOD BILL THAT
CAN ACTUALLY GET EMPLOYMENT SO I
I REALLY DO APPRECIATE YOUR
THOUGHTFUL APPROACH.
AND THAT THE ECHO MY COLLEAGUES
COMMENTS THOMAS LIKE IF YOU'VE
WRITTEN MY TALKING POINTS BUT
BUT BUT NO LOOK NEW IDEAS ARE
TOUGH AND THEY'RE CHALLENGING
BUT YOU GOT TO GIVE THEM YOU
GOTTA GIVEN THE OPPORTUNITY --
AT THE END OF THE DAY I TRUE
BLUE TRULY BELIEVE THAT THE TIME
FOR CALIFORNIA TO IMPLEMENT A
PUBLIC BANKS IS COME.
AND THIS TOOK ME ABOUT ABOUT A
YEAR OF LOOKING INTO IT AN AND
CHEWING ON INDIAN.
AND HAVING DIFFERENT
CONVERSATIONS BUT WHEN YOU
REALLY GET DOWN TO THE NUTS AND
BOLTS OF IT -- I THINK THERE'S A
RULE BOOK PUBLIC A BENEFIT TO
THIS AND THERE'S A RULE PUBLIC
GOOD ABOUT.
AN ABOUT CHALLENGING THE WAY WE
INVEST OUR DOLLARS WHERE WE
INVEST OUR DOLLARS AND AND WHAT
OUR TAXPAYER DOLLARS SHOULD
REALLY ULTIMATELY BE DOING
[inaudible]
AND AND YOU KNOW I WOULD SAY
IT'S IT'S UNIQUE BECAUSE I THINK
THE FRAMING OF FROM THE
OPPOSITION RESPECTFULLY.
ARM IS ALMOST IS ALMOST VIEW
LIKE AS AN ATTACK ON THE
INDUSTRY IN SOME CASES IT'S
REALLY NOT I MEAN THERE'SNOTHING IN THIS BILL THAT LOOKS
TOWARDS REFORMING TOWARDS
CHANGING TOWARDS MODIFYING PORTS
TOUCHING.
ON THE INDUSTRY.
MAYBE WE SHOULD NOT TO THE FROM
BILL AND MAYBE THAT CONVERSATION
WILL SPARK UP IF.
IF THOSE VOICES GET LOUDER --
BUT THAT'S NOT THE CONVERSATION
THAT IS HAPPENING RIGHT NOW THE
CONVERSATION OF THIS HAPPEN
RIGHT NOW IS JUST JUST LET AN
ALTERNATIVE OF FORMER BANKING
EXIST -- I DON'T I DON'T RECALL
TOO MANY TIMES I'VE BEEN IN THE
LEGISLATURE WERE FOR EXAMPLE
THERE IS A AND I'LL PICK A
COUPLE IN NAMES OF AUTO DEALERS
THERE IS A TOYOTA THERE IS A
CHEVRON -- CYBER SEVEN CHEVY
OTHERS A GM WHO'S ARGUING ODD TO
NOT HAVE A DIFFERENT SORT OF
VEHICLE ON THE MARKET.
ALL IN THE WAY THAT I LOOKED AT
THIS AT THIS YOU'RE JUST GIVING
ANOTHER ALTERNATIVE FOR FOLKS TO
BANK.
AND WHAT WE CALL THE PUBLIC BANK.
WHICH I BELIEVE IN OTHERS THAT
WOULD SERVE THE PUBLIC GOOD
THAT'S PLAIN AND SIMPLE ABOUT
WHAT THIS BILL DOES.
AND IT WILL ALLOW LOCAL
MUNICIPALITIES TO GO THREE VERY
RIGOROUS PROCESS TO BE ABLE TO
SET UP A BANK.
I AND IT WOULD BE INSURED AND
THEN IT'S A NEW DAY AND IT'S A
NEW WAY OF THINKING ABOUT
BANKING.
THANK YOU MADAM CHAIR THE
COMMITTEE MEMBERS FOR HAVING AND
VERY THOUGHTFUL IN DEPTH
CONVERSATION AND FOR MY
COLLEAGUE MISTER CHIU IN ALL THE
CITIES IN CO AUTHORS WHO WERE
PRACTICING.
AND AND ALSO A BIG THANK YOU TO
ALL THE ALL THE PEOPLE UP AND
DOWN THE STATE ALL THE
ORGANIZATIONS TO INVEST IN THE
TIME IT IS BECAUSE THE STATE'S
COME.
THAT'S GONNA HAPPEN [inaudible]
THANKS.
WITH THAT WE WILL CALL THE ROLL.
MOTION IS TO PASS REFER TO
COMMITTEE ON LOCAL GOVERNMENT
LIMON I LIMóN I CHAN.
CHAN NO.
BAUER-KAHAN.
THERE CAN I BURKE [inaudible]
CERVANTES.
CHOI.
CHOI NO GABRIEL.
CABLE I GRAYSON [inaudible]
MELENDEZ [inaudible]
STONE.
STONE I WEBER.
WICKS FIVE WEEKS HI.
THE BILL HAS FOR US FIVE VOTES
NOW NEEDS TO MORE VOTES TO MOVE
FORWARD.
WE WILL LEAVE THE ROLE OPEN FOR
AT ABSENT MEMBERS THANK YOU
THANK YOU COLLEAGUES.
ASSEMBLYMEMBER SOUND WILL HAVE
YOU GO NEXT [inaudible]
BUT THE THAT WAS.
THANK YOU MADAM CHAIR THANK YOU
SEVEN MEMBER STONE.
SO.
LET'S SWITCH TO STUDENT LOANS.
WE HAVE A MOTION TO MOVE AB
THREE SEVEN SIX THANK YOU AB
THREE SEVENTY SIX IS ABOUT
STUDENT DEBT.
ADD IN THE STATE OF CALIFORNIA
JUST IN THE STATE OF CALIFORNIA.
WE HAVE HUNDRED I'M JUST GOING
TO ASK IF FOLKS CAN JUST QUIETLY
MOVE OUT SO WE CAN HEAR THE
TESTIMONY THANK YOU SOME MEMBERS
DOWN WE HAVE A HUNDRED AND
THIRTY FOUR BILLION DOLLARS.
IN OUTSTANDING STUDENT LOAN DEBT
WITH. THREE POINT SEVEN EIGHT
MILLION BORROWERS IN CALIFORNIA.
WE ALSO KNOW THAT THIS LEVEL
THIS LEVEL OF DEBT IS SECOND
ONLY TO HOME MORTGAGES.
AND IT IS.
ESSENTIALLY ENTIRELY ON
REGULATED HOME MORTGAGES ARE
REGULATED CREDIT CARD INDUSTRY
REGULATED THERE'S SO MANY OTHER
ASPECTS OF IT WERE CONSUMERS
HAVE PROTECTIONS BUT NOT IN
STUDENT LOAN DEBT AND THIS IS
REACHED A REALLY CRISIS LEVELS.
ACROSS THE COUNTRY NOW THE
FEDERAL GOVERNMENT WAS SET UP.
TO TRY AND START TO REGULATE
THIS IN FACT THE STUDENT LOAN
SERVICING BILL WHICH WAS PASSED
A COUPLE OF YEARS AGO.
WE HAD INTENDED TO TAILOR THAT
TO FEDERAL REGULATIONS BUT THEN
FEDERAL REGULATIONS.
WENT AWAY SO THE FEDERAL
GOVERNMENT IS PROVIDING NO
ASSISTANCE WHATSOEVER TO
CONSUMERS AND THIS IS NOW BEING
LEFT MORE AND MORE TO STATES. TO
THE STATE OF CALIFORNIA HAS THE
MOST COMPREHENSIVE STUDENT LOAN
LICENSING PROGRAM THAT IS BEING
IMPLEMENTED THROUGH DEPARTMENT
OF BUSINESS OVERSIGHT.
BUT THERE STILL IS A LARGE GAP
THE CONSUMER FINANCIAL
PROTECTION BUREAU HAS BEEN DE
FUNDED TO A POINT WHERE IT IS
ESSENTIALLY DOES NOT EXIST AND
THE STATE OF CALIFORNIA DOES IN
FACT -- NO WE'RE INTERESTED IN
THIS NEED A CONSUMER FACING
REGULATORY ORGANIZATION.
IN ORDER TO COMPLETE WHAT'S
NECESSARY TO PROTECT CONSUMERS
AND REALLY HELP MANAGE THE THAT.
CONSUMERS THAT THE THE FINANCIAL
SITUATIONS THAT THEY HAVE OUT
THERE SO THAT THAT.
ORGANIZATIONS ARE NOT TAKING
UNDUE ADVANTAGE OF CONSUMERS SO
WHAT IS AB THREE SEVENTY SIXTY
WITH RESPECT TO STUDENT LOANS
FORCING WE'RE NOT TALKING AT
THIS POINT ABOUT DECREASING
STUDENT THAT.
BY PUTTING MONEY INTO THE SYSTEM
OR FINDING WAYS WHICH WE DO NEED
TO DO TO ENSURE THAT.
STUDENTS ARE NOT BEING BURDENED
BY SIGNIFICANT THAT.
BUT WE NEED TO BE PRO PUTTING IN
PLACE PROTECTIONS FOR
CALIFORNIANS THAT HAVE BEEN LOST
TO THE ROLL BACK TO THE FEDERAL
LEVEL WE NEED TO DEFINE
PROTECTIONS FOR THE BAR WAS SO
THAT THEY KNOW WHAT THEIR RIGHTS
ARE AND THE PROTECTIONS THAT ARE
AVAILABLE TO THEM BECAUSE TOO
OFTEN.
THE SERVICERS ARE NOT GIVING
CORRECT INFORMATION TO THE TO
ESSENTIALLY THEIR CLIENTS WHO
THEY FEEL ABSOLUTELY NO
RESPONSIBILITY TOWARDS.
ABOUT HOW TO MANAGE THEIR DEBT
AND WHEN THE STUDENT BORROWERS
GO TO THEIR SERVICES TO TRY AND
UNDERSTAND WHAT THEIR RIGHTS ARE
WHAT THE RULES ARE HOW THAT THEY
CAN MANAGE THE DEBT.
THEY ARE OFTEN GIVEN INFORMATION
THAT LEADS TO HIGHER INTEREST
RATES TO LEAD TO PROLONG THE
DEBT AND WAYS THAT ARE NOT
HELPING THEM COME OUT OF THAT.
THIS BILL IS ABOUT TRANSPARENCY
THIS BILL WOULD CREATE A STUDENT
BORROWER ADVOCATE IN OUR STATE
REALLY START TO LOOK AT HOW WE
CAN BETTER PROTECT.
THIS LEVEL OF CONSUMERS IN OUR
STATE.
GET OUR HANDS AROUND THIS AMOUNT
OF DEBT AS WE THEN WORK TO TRY
TO LOWER IT AND FIND BETTER WAYS
TO ENSURE THAT.
PEOPLE CAN GET THROUGH SCHOOL
WITHOUT CARING THAT THAT AND
THEN THOSE WHO ARE CARRYING THE
DEBT ARE TREATED FAIRLY KNOW
WHAT THEIR RIGHTS ARE AND KNOW
HOW TO MANAGE.
THEIR RESPONSIBILITIES AND WITH
THAT I ASKED FOR AND I ABOUT.
MADAM CHAIRMAN MEMBERS OF THE
COMMITTEE MY NAME IS SET FROGMAN
AND IT IT IS AN HONOR TO BE
TESTIFYING BEFORE THIS COMMITTEE
ONCE MORE.
AS IT DEMONSTRATES HOW
CALIFORNIA IS A NATIONAL LEADER
IN PROTECTING STUDENT LOAN
BORROWERS.
AS THE FORMER TOP FEDERAL
REGULATOR FOR THE STUDENT LOAN
MARKET I AM HERE TO TELL YOU
THAT WE ARE AT A CROSSROADS.
DOWN ONE PATH OUR LEADERS CHOOSE
TO STAND UP FOR THE MILLIONS OF
AMERICANS STRUGGLING UNDER
HISTORIC DEBT.
DOWN THE OTHER THE STUDENT LOAN
INDUSTRY HAS FREE REIGN TO RUN
ROUGHSHOD OVER A GENERATION OF
STUDENT LOAN BORROWERS.
IT IS NEVER BEEN MORE IMPORTANT
THAT STATES CHOOSE THE RIGHT
PATH.
MILLIONS OF FAMILIES DEPEND UPON
IT.
TODAY THREE POINT SEVEN MILLION
CALIFORNIANS COLLECTIVELY --
MORE THAN ONE HUNDRED AND FORTY
BILLION DOLLARS IN STUDENT LOAN
DEBT.
MORE THAN HALF A MILLION OF
THESE BORROWERS ARE AT LEAST TWO
STUDENT LOAN PAYMENTS BEHIND.
PEOPLE ACROSS CALIFORNIA ARE
HURTING.
AND THEY NEED YOUR HELP.
FEDERAL AND STATE LAW
ENFORCEMENT OFFICIALS IN
COURTHOUSES ACROSS THE COUNTRY
HAVE DOCUMENTED HOW THE STUDENT
LOAN INDUSTRY HAS FAILED EVERY
TYPE OF BORROWER WITH EVERY TYPE
OF LOAN.
FROM HER FIRST BILL UNTIL HER
LAST PAYMENT.
WE SEE STUDENT LOAN SERVICERS
RIPOFF SERVICE MEMBERS AND
VETERANS LIGHT A PUBLIC SERVICE
WORKERS TRICK OLDER AMERICANS IN
TWO YEARS OF UNEXPECTED DEBT.
AND UNFORTUNATELY I COULD GO ON
AND ON I CAME TO SACRAMENTO
TODAY TO MAKE ONE SIMPLE POINT.
THE FEDERAL GOVERNMENT IS NOT
GOING TO RIDE TO THE RESCUE
THERE IS NO CAVALRY ON THE
HORIZON.
I'VE SEEN FIRST HAND HOW FAR
BETSY DEVICE IN THE ENTIRE TRUMP
ADMINISTRATION WILL GO.
UTILIZING THE FULL POWER OF THE
FEDERAL GOVERNMENT TO THE
DETRIMENT OF FORTY FOUR MILLION
AMERICANS INCLUDING THREE
MILLION RIGHT HERE IN THIS STATE.
BUT FORTUNATELY THESE BORROWERS
THE STATE OF CALIFORNIA HAS THE
POWER TO STAND UP FOR ITS
CITIZENS ASSEMBLY MEMBER STONE'S
LEGISLATION DOES EXACTLY THIS.
SO I JUST LIKE TO CLOSE WITH
THIS.
YOU WILL HEAR FROM INDUSTRY THAT
CALIFORNIA CANNOT ACT THAT BETSY
DEVICE HAS IT UNDER CONTROL.
THAT THERE IS ALREADY A ROBUST
SET OF PROTECTIONS IN PLACE BUT
INDUSTRY IS WRONG DECEPTIVELY
AND DANGEROUSLY WRONG.
YOU WILL HEAR THAT STATES LIKE
CALIFORNIA SHOULD STEP ASIDE AND
LET THE FEDERAL GOVERNMENT
HANDLE QUOTE A FEDERAL ASSET.
BUT CALIFORNIA STUDENT LOAN
BORROWERS ARE A CALIFORNIA ASSET
ITS GREATEST ASSET.
CALIFORNIA HAS THE POWER TO ACT
CALIFORNIANS ARE DEPENDING ON IT
THANK YOU.
CHAIR AND MEMBERS WHO SAN MARTIN
DE WITH CONSUMER REPORTS AS WELL
AS THE CALIFORNIA'S FOR ECONOMIC
JUSTICE COALITION AWARE IN
STRONG SUPPORT OF THE BILL AND
AS MR FROM ELUDED.
TO YOU WE'RE NOT GOING TO SEE A
CALORIE COMING TO THE DOOR I CAN
TELL YOU AS AN ADVOCATE WHO
HEARS FROM BARS EVERY DAY AS
WELL AS ONE OF THOSE THREE POINT
SEVEN MILLION.
I HAVE MY OWN LOANS -- THE
PROBLEMS THAT PEOPLE FACE
DEALING WITH LOAN SERVICERS ARE
DEPRESSINGLY COMMON.
AND THEY CRIED OUT FOR
LEGISLATIVE FIX I CAN GIVE YOU
TWO EXAMPLES I GOT IN THE LAST
WEEK A WOMAN WHO EMAILED ME HER
NAME IS STEPHANIE SHE IS A
VETERAN WITH A DISABILITY.
JUST FEDERAL AND PRIVATE LOANS.
AND SHE WORKS FOR THE FEDERAL
GOVERNMENT ON A FEDERAL LOANS
AND FORBEARANCE THIS WOMAN WHO
CLEARLY COULD QUALIFY FOR PUBLIC
SERVICE LOAN FORGIVENESS BUT HER
SERVICES OF NEVER GIVING HER THE
PAPERWORK.
SHE TRIED TO FIGURE OUT ON HER
OWN SHE SENT SOMETHING IN WHICH
IS NOT SURE OF THE DEPARTMENT OF
EDUCATION GOD AND SHE'S BEEN
WAITING FOR MONTHS WELL HER
FEDERAL LOANS ARE ACCRUING
INTEREST AS WE SPEAK.
AND HE'S CLEARLY SHOULD BE ON
THE PATH FOR PUBLIC SERVICE LOAN
FORGIVENESS OF BETTER OR WITH A
DISABILITY WHO MIGHT EVEN IF HER
DISABILITY IS DIM SEVERE QUALIFY
FOR A LOAN JUST CHARGE ON THOSE
FEDERAL LAWS FOR HER LOANS ARE
GROWING BIGGER EVERY DAY.
SECOND EXAMPLE MAN IN A MANUAL
HE WENT TO A FOR PROFIT COLLEGE
OF THE FOR PROFIT COLLEGE
ULTIMATELY WAS SO BADLY
MISMANAGED OF THE DEPARTMENT OF
EDUCATION I BELIEVE UNDER BETSY
TO BOSS.
YANK THEIR FUND ARE THEY NO
LONGER QUALIFY FOR TITLE FOR
FINANCIAL AID THIS PERSON
PROBABLY QUALIFIES FOR LOAN DOES
CHARGE AT LEAST ON THEIR FEDERAL
LOANS.
ON THE BASIS OF THE BAR DEFENSE
BECAUSE THEY WERE MISLED I DID
NOT GET THE EDUCATION THEY WERE
PROMISED HOWEVER HIS LOANS ARE
ALL IN FORBEARANCE HE'S NOT
MAKING ANY PAYMENTS ON HIS DEBT
IS GROWING TO THIS DAY.
THE FINAL TO SAY VERY BRIEFLY I
HAVE BEEN IN REPAYMENT ON MY
LOANS FOR ALMOST A DECADE.
I AM IN REPAYMENT AND MANAGING
TO KEEP UP WITH IT BUT ALMOST
EVERY YEAR I HAVE A PAPERWORK
PROBLEM.
TO WHERE I HAVE DELAYS ARE THE
SERVICES LOSE MY PAPERWORK THEY
PUT MY LOANS INTO FORBEARANCE
WITHOUT EVEN ASKING ME AND AS A
RESULT I MORE NOW THAN WHEN I
GRADUATED TEN YEARS AGO -- SO IF
IT CAN HAPPEN TO ME AND I WORK
ON THIS FOR A LIVING.
IT CAN HAPPEN TO LITERALLY
ANYBODY AND THAT IS WHY IT IS
HIGH TIME THE CALIFORNIA STEPPED
UP AS IT IS WELL POISED TO DO
WITH MR STONE A LEADING THIS
CHARGE AND SO WE ARE STRONG IN
SUPPORT OF THE BILL AND REALLY
APPRECIATE HIS LEADERSHIP
REQUEST AN AYE VOTE.
IF YOU HAVE A MOTION AND A
SECOND NOW THANK YOU ANY
ADDITIONAL WITNESSES AND SUPPORT
PLEASE COME TO THE MICROPHONE
STATE YOUR NAME AND AFFILIATION.
HI JERRY FOR MEN FROM DISABILITY
RIGHTS CALIFORNIA AND WE'RE IN
SUPPORT.
HI A PARTIAL SEVEN WITH THE UC
STUDENT ASSOCIATION WERE IN
SUPPORT.
GETTING ME MADAM CHAIR AND
MEMBERS JENNIFER FEARING ON
BEHALF OF THE CALIFORNIA
ASSOCIATION OF NONPROFIT AND ARE --
TEN THOUSAND POLICY ORGANIZATION
NUMBERS WE IN STRONG SUPPORT
THANK YOU MISTER DOWN.
TED MERMAN FIVE FROM CALIFORNIA
LOW INCOME CONSUMER COALITION ON
BEHALF ARE LEGALLY MEMBERS IN
SUPPORT.
GOOD AFTERNOON KRISTIN MCGUIRE
YOUNG INVINCIBLE STRONG SUPPORT.
CAN REALLY ROSENBERGER WITH F.
YEAH YOU CALIFORNIA OUR MEMBERS
HAVE EVERY FORM OF UPDATE FROM
THE GRANDPARENTS TAKING ON FOR
THEIR CHILDREN TO PRIVATE
UNIVERSITIES FOR IN HOME SUPPORT
SERVICE WORKERS THANK YOU.
VENTURE MEMBERS MIKE MON AGAIN A
BEHALF OF MAYOR LONDON BRAID AND
THE SITTING COUNTY IN SAN
FRANCISCO AND SUPPORT.
JIM LIMBURG ON BEHALF OF THE
FRIENDS COMMITTEE ON LEGISLATION
CALIFORNIA IN SUPPORT.
SAMANTHA THING THE NEXT IN
CALIFORNIA PROUD CO SPONSOR THE
BILL IN STRONG SUPPORT.
CHRIS FOR SIGNS OF THE TRAILER
AND STRONG SUPPORT.
SEND YOU MERGE ON BEHALF OF THE
NATIONAL STUDENT LEGAL DEFENSE
NETWORK REGISTER IN STRONG
SUPPORT.
THE THAI ABRAMS ON BEHALF OF
STUDENT THAT CRISIS REGISTERING
STRONG STRONG SUPPORT.
CODY ABANDON ON BEHALF OF
STUDENT DEBT CRISIS AND NEARLY
ONE MILLION SUPPORTERS STRONG
SUPPORT.
ALEXIS COATING ON BEHALF OF
AMERICANS FOR FINANCIAL REFORM
WHICH IS A COALITION OF TWO
HUNDRED CONSUMER CIVIL RIGHTS
AND LABOR ORGANIZATIONS
REGISTERING STRONG SUPPORT.
ANY.
IS ANYONE IS IN OPPOSITION.
SEEN NO WITNESSES IN OPPOSITION
I MEMBERS ANY QUESTIONS OR
COMMENTS [inaudible]
ASSEMBLYMEMBER CHOI.
THANK YOU CHAIR -- ESTIMATES
STONE I SEE YOUR INTENT OF YOU
ARE A BILL IS -- TO PROTECT THE
CONSUMERS SO.
BUT THE LITERALLY THE YOUR BILL
IS -- TELLING PAPER -- TO SUE
FOR THEIR FABIO'S.
THAT'S VERY INTERESTING.
AUTHORIZING CONSUMERS TO TO
THROUGH THE SERVICERS.
I MEAN SERVICERS ARE JOB IS -- A
PROVIDING THE GUIDELINES AND
HELPING THE CONSUMERS SO WHEN --
THEY NEED -- EXTERNAL HELP --
FOR BUT THE WHEN THE PERSON IS --
IN THE POSITION WHO -- MAY HAVE
A SOME DIFFICULTY THAT AND I
THINK THAT THEY ME OUT FOR ON
THIS KIND OF A B. R. AND IT.
ALLOWS ME TO SCHOOL MY SERVICE
PROVIDER AND THAT'S JUST
ENCOURAGING.
NO LAWSUIT SO.
I DON'T KNOW.
THE WHOLE WHOLE.
TREATING YOU THIS PMR IS
ENCOURAGING OR OTHERWISE IF THE
US AT ANY.
MISCONDUCT -- WITHOUT TELLING
THEM TO SUIT THEY WILL OBVIOUSLY
SO.
THAT'S AN ASTONISHING QUESTION
AND I THINK THE ONLY ANSWER I
CAN GIVE YOU IS HERE IS A DIRECT
QUOTE.
FROM THE LARGEST STUDENT LOAN
SERVICER IN THE COUNTRY THIS IS
A DIRECT QUOTE.
THERE IS NO EXPECTATION THAT THE
SERVICER WILL ACT IN THE
INTEREST OF THE CONSUMER.
THAT IS A DIRECT QUOTE.
THE SERVICERS FEEL ABSOLUTELY NO
OBLIGATION TO ACT IN THE
INTEREST OF THE CONSUMER SO IF
WE ARE PROVIDING TOOLS FOR THAT
CONSUMER.
THE TAKE ACTION FOR THEMSELVES
WAR.
UNDER THIS BILL ESPECIALLY TOOLS
FOR LOCAL PROSECUTORS DA'S
OTHERS TO TAKE ACTION ON BEHALF
OF CONSUMERS THEN I THINK THAT'S
A VERY GOOD THING.
SO HOW DOES A JUDGE SAY BRIEFLY
SO -- WHILE I WORKED AT THE
CONSUMER FINANCIAL PROTECTION
BUREAU WE RECEIVED. SIXTY
THOUSAND COMPLAINTS FROM STUDENT
LOAN BORROWERS OVER THE COURSE
OF LITTLE MORE THAN SEVEN YEARS.
AND WHAT THOSE COMPLAINTS REALLY
SHOWED WAS THAT THESE WERE
BORROWERS DESPERATELY TRYING TO
PAY BACK THEIR BILLS THESE WERE
BORROWERS WHO ARE REACHING OUT.
FOR HELP -- AFTER THEIR LOAN GOT
LOST IN THE SERVICING TRANSFER
WHO KNEW THAT THE WORK IN PUBLIC
SERVICE AND WE'RE ENTITLED -- TO
HAVE A LITTLE BIT OF THEIR LOAN
FORGIVEN BECAUSE PROMISES MADE
BY THE FEDERAL GOVERNMENT.
THE EXAMPLE THAT I HAD NEARLY
UNANIMOUSLY WERE BORROWERS
ACTUALLY TRYING TO DO THE RIGHT
THING ACTUALLY TRYING TO MAKE
GOOD ON THEIR DEATH -- AND WHEN
THEY REACHED OUT -- TO THEIR
STUDENT LOAN COMPANY THEY GOT.
NO INFORMATION CONFLICTING
INFORMATION OR DOWNRIGHT WRONG
INFORMATION.
AND I THINK WHAT ASSEMBLY MEMBER
STONE'S BILL DOES IS ENSURE THAT
THESE BORROWERS.
HAVE AN AVENUE FOR RECOURSE FOR
MISTAKES THAT COULD COST THEM
LITERALLY HUNDRED THOUSAND
DOLLARS -- NOT BECAUSE THEY DID
ANYTHING WRONG THEY TOOK ON THE
DEBT WE ASK THEM TO THEY ENTERED
FIELDS THAT WE ENCOURAGE THEM --
TO AND WHEN THEY WERE TRYING TO
SIMPLY GET THE RELIEF IN THE
PROTECTIONS THAT THEY WERE
PROMISED.
A VERY LARGE OUT OF STATE
COMPANY BECAUSE IT WAS IN THEIR
FINANCIAL INTEREST TO DO SO.
GAVE THEM BAD INFORMATION.
AND I BELIEVE I THINK WHAT THIS
BILL DOES IS CREATE A PATH BY
WHICH PEOPLE WHO'VE HAD THEIR
FINANCIAL LIVES RUINED HAVE SOME
RECOURSE TO TRY TO GET SOME
JUSTICE.
I'M MY QUESTION IS ARE.
OBVIOUS -- ALONE SERVICE OF
PROVIDERS.
ARE LICENSED RIGHT.
SO WHEN WE ARE GOING TO THE
PROCESS RIGHT NOW IN THE STATE
OF CALIFORNIA OF TRYING TO GET
THEM LICENSED SO THAT WE HAVE
SOME STANDARDS TO BE ABLE TO TRY
TO HOLD THEM ACCOUNTABLE.
EVEN IF WE CAN DO THAT
[inaudible]
THERE.
NOT EXHIBITING THE KIND OF
BEHAVIOR WITH RESPECT TO THE THE
BORROWERS WHO YOU WOULD THINK
WOULD BE THEIR CUSTOMERS. TO
HELP THEM MANAGE TO GET OUT OF
DEBT THE DECISIONS THAT THEY ARE
FACILITATING WITH THEIR
BORROWERS KEEP THE BAR WITH AND
THAT LONGER THAN THEY NEED TO BE.
PUT THEM INTO FORBEARANCE
INSTEAD OF SOLUTIONS FOR GETTING
OUT OF THAT THAT JUST KEEP THE
INTEREST TAKING UP AND UP AND UP
AND UP.
SO THERE ARE OPERATING IN THEIR
OWN BEST INTEREST NOT IN THE
INTEREST OF THE BORROWERS.
SO WE'RE TRYING TO PUT TO FLESH
OUT THE LICENSING SYSTEM AND SO
FAR MANY OF THESE.
STUDENT LOAN SERVICERS ARE NOT
COOPERATING WITH THE STATE
DEPARTMENT OF BUSINESS OVERSIGHT.
AS THE LAW THAT WAS PASSED IS
REQUIRES THEM TO DO.
AND THEY'RE SORT OF THEIR
ESSENTIALLY THUMBING THEIR NOSE
SO YES WE ARE TRYING TO GIVE THE
BORROW SOME CELLS AND D. A.'S.
ATTORNEY GENERAL AND OTHERS THE
ABILITY TO TO FIND OUT ABOUT THE
MALFEASANCE THE INCOMPETENCE THE
INCORRECT TREATMENT OF THE
STUDENT LOAN BORROWERS.
AND GIVE THEM AND THE BAR WAS
THEMSELVES THE TOOLS TO REDRESS
SOME PRETTY EGREGIOUS WRONGS.
OKAY WHY UNDERSTAND THAT THE
RIGHT NOW WITH THE SERVICE
PROVIDERS ARE NOT -- OPERATING.
OUT WITH THE CALIFORNIA AS A
REQUIREMENT TO BE LICENSED A WE
DON'T HAVE A LICENSE FOR THEM TO
OPERATE.
THAT IS BEING THAT IS CURRENTLY
BEING ATTEMPTED TO BE
IMPLEMENTED INCLUDING COLLECTING
DATA FROM HIS SERVICERS BUT NOT
ALL OF THEM RIGHT NOW WE'RE
COOPERATING SHOULDN'T BE THE
FIRST STEP US SO THAT WE CAN --
A DE REGULATE THE IF THE VIOLATE --
WE JUST OF VIOLATIONS SO THEN
THEY CAN BE DE LICENSED.
NO WE ARE TRYING TO PUT SOME
POWER TRYING TO LICENSE THEM
WHICH IS APPROPRIATE AND ONCE
CALIFORNIA PUT THAT LICENSING
PROGRAM A PLACE WITH AT LEAST
THE DEVON DOESN'T STATES NOW
THAT ARE FOLLOWING SUIT.
AND ALL OF THOSE STATES AND MORE
ARE WATCHING CALIFORNIA RIGHT
NOW TO SEE ASKING US TO LEAD THE
WAY ON RECREATING SOME CONSUMER
PROTECTIONS MOST OF WHAT WE BASS
FOR HERE WOULD HAVE BEEN
CONSUMER PROTECTIONS.
AT THE FEDERAL LEVEL BUT ALL OF
THOSE HAVE NOW GONE AWAY.
THEY ARE THE FEDERAL GOVERNMENT
IS NOT PROVIDING ANY OF THESE
PROTECTIONS SO WE NEED TO STEP
IT SO LICENSING.
THAT'S WHAT WE HAD TALKED ABOUT
ABOUT THE THE SORT OF THE TWO
FACES OF PROTECTIONS FOR
CONSUMERS AND ONE IS HAVING A
LICENSING SCHEME.
THAT FACES THE SERVICERS THE
REGULATED INDUSTRY AND WORKS
WITH THEM TO MAKE SURE THAT
THEY'RE DOING THEIR BEST JOB THE
OTHER THAN WOULD BE CONSUMER
FACING THAT'S THIS PIECE.
THAT LOOKS TO GIVE TOOLS TO
CONSUMERS TO PROTECT THEM AND
GIVE THEM THE ABILITY TO REDRESS
THE WRONGS THAT ARE HAPPENING SO
WE HAVE A LICENSING STRUCTURE
WHICH IS A REGULATORY STRUCTURE
TO TRY AND HOLD THE SERVICES
ACCOUNTABLE.
AND THE THEN WE GIVE SPECIFIC
RIGHTS.
TO THE STUDENT LOAN BORROWERS
THEMSELVES TO BE ABLE TO ADDRESS
THE GRIEVANCES THAT THEY HAVE
WHEN THE LICENSEES IN THIS CASE
OR THE STUDENT LOAN BORROWERS TO
THE EXTENT THAT THEY GET LICENSE
IN THAT PROGRAM CAN BECOME
SUCCESSFUL.
THAT THAT STUDENT LOAN SERVICERS
THAT ARE HELD ACCOUNTABLE FOR
THE SENT TO THE THE WHAT WHAT
THEY ARE SUPPOSED TO DO.
UNDER OUR LAWS AND UNDER THE
SORT OF FADING FEDERAL STRUCTURE.
THIS AMENDMENT STONE ARE YOU OF
TEARING THAT BE A LICENSING THAT
THAT IS ONE STATE THAT'S
CURRENTLY THE LAW IN THE STATE
OF CALIFORNIA.
YES I I DID CARE THAT BILL
COUPLE YEARS AGO.
OKAY WAS THE STATUS.
IT IS BEING IMPLEMENTED
CURRENTLY BY THE DEPARTMENT OF
BUSINESS OVERSIGHT.
IT HAS GONE INTO EFFECT YET.
IT HAS GONE INTO EFFECT OKAY IF
THAT'S THE CASE -- THEN -- WHEN
THEY VIOLATE THE?
LICENSING BODY WE HAVE -- THAT
WAS MY FEARS OBVIOUSLY -- CAN
NOT JUST TO TAKE AWAY THEIR
LICENSE SAID.
RATHER THAN TELLING.
ALL IT THIS IS OUR LIKE --
ENCOURAGING PREVIOUS LAWSUITS --
NOT FRIVOLOUS LAWSUITS BY ANY
STRETCH OF IMAGINATION THIS IS
HIM POWERING STUDENT LOAN
BORROWERS WHO HAVE BEEN WRONGED.
TO BE ABLE.
TO TAKE GET REDRESS FOR HOW THEY
HAVE BEEN WRONG.
THE WITHOUT THE DISPUTE PEOPLE
CAN ALSO WITH THEM NOW I THOUGHT
THAT THEY CAN SUE FOR ANY REASON.
IF THIS OBVIOUS MISTAKE
COMMISSION SAID THEY WOULD SUE --
POTENTIALLY BUT THAT'S THAT'S A
BIT NEBULOUS WHAT WE'RE DOING BY
THIS BILL IS CREATING THE
FRAMEWORK OF RIGHTS AND
RESPONSIBILITY AND CREATING A
STUDENT LOAN ADVOCATE IN THE
STATE OF CALIFORNIA TO MAKE SURE
THAT WE HAVE.
A BROAD LOOK AT A A POINT. FOR
STUDENT BORROWERS TO COME TO THE
STATE OF CALIFORNIA ASK
QUESTIONS GET CORRECT
INFORMATION AND BE INFORMED OF
WHAT THEIR RIGHTS ARE.
THANK YOU SIR.
THANK YOU MEMBERS ANY OTHER
QUESTIONS OR COMMENTS.
THANK YOU A AND RIVER SAM.
FOR BAUER-KAHAN YEAH I JUST WANT
TO SAY THAT YOU KNOW.
LIAM IT'S GOING TO SOUND OLD
WHEN I SAY THIS BUT IT IS
ASTONISHING THE AMOUNT OF DEBT
STUDENTS ARE GRADUATING WITH
TODAY.
IT'S SO MUCH MORE THAN WHEN I
GRADUATED.
AND THESE SERVICE PROVIDERS.
IN A LOT OF CASES ARE MAKING
MONEY OFF THE BACKS OF
CALIFORNIA STUDENTS.
AND THE LEAST WE CAN DO FOR
CALIFORNIA STUDENTS IS PROVIDE
THEM WITH THE RIGHTS AND
GUARANTEES THAT THEY WILL BE
TREATED FAIRLY AND THEY WILL BE
ABLE TO PAY BACK THEIR LOANS
WHEN THEY WANT TO AND SO I WANT
TO THANK THE MEMBER STONE FOR
BRINGING THIS BILL.
I WANT TO MAKE A ASSEMBLYMEMBER
STONE AS WELL BECAUSE I THINK --
OFTENTIMES WE DON'T SPEND TIME
OF EDUCATING PEOPLE ABOUT THEIR
RIGHTS.
AND THEY THINK THEY'RE
VULNERABLE AND THEY ARE
VULNERABLE TO ANYBODY WHO COMES
ALONG AND AND THEY FEEL LIKE
THIS IS WHAT THEY GET THIS IS
WHAT THEY GET.
AND OFTENTIMES IS A HIGH LEVEL
OF FRUSTRATION AMONG PEOPLE THAT
THEY CAN ACTUALLY ADVOCATE FOR
THEMSELVES GET SOME FAIRNESS AND
SOME JUSTICE IN THIS WHOLE
PROCESS AND SO.
I THINK IT'S VERY IMPORTANT
STUDENT LOAN DEBT HAS BECOME BIG
BUSINESS WE KNOW THERE.
ARE MUCH MORE THAN WHEN I WENT
TO SCHOOL AS I SAID I GOT
EVERYTHING FOR TWELVE HUNDRED
FIFTY DOLLARS YOU KNOW I
ACTUALLY WROTE HIM A CHECK AND
THANK THEM -- BUT YOU KNOW NEXT.
OF WITH THREE DEGREES YOU CAN'T
DO ANYTHING BETTER THAN THAT
FROM UNIVERSAL CALIFORNIA.
BUT THAT WAS IN AN ERA WHEN
PEOPLE BELIEVED IN AND STUDENTS
AND BELIEVE THAT -- WE SHOULD
ONLY.
HAVE AS MUCH DEBT OR OF GRANTS
AND LOANS THAT WAS REQUIRED AND
AND WHEN OUR FEES WERE
REASONABLE BECAUSE WE BELIEVE
THAT EDUCATING KIDS IN
CALIFORNIA WAS RESPONSIBILITY OF
CALIFORNIA.
AND WE BENEFIT FROM THOSE FOLKS
WHO WENT TO SCHOOL AND GOT THESE
DEGREES MY FEET AND MY CONCERN
IS THAT AS I LISTEN TO YOUNG
PEOPLE OR THAT WHEN I WAS AT THE
UNIVERSITY OF JUST.
YOUNG PEOPLE IN THE STREETS
THEY'RE BEGINNING TO CALCULATE
AND DECIDE TO GOING TO COLLEGE
IS NOT WORTH IT BECAUSE IF THEY
END UP WITH THE DEBT THAT'S
ENORMOUS.
THEN THEY CAN'T PAY IT OFF AND
SO IT BECOMES A DOWNWARD SPIRAL
AND THEY LOOK THEIR COLLEAGUES
WHO GOING TO COLLEGE WITH THIS
DEBT NOW THEY SAY OH LOOK HE'S
PAYING ALL THIS DEBT I'M WORKING
A JOB DOING WHATEVER I'M DOING.
AND I'M DOING BETTER AND SO I
THINK THE THE OPTICS OF OF
HAVING OUR STUDENTS SO DEEPLY IN
DEBT AS A RESULT OF GETTING A
COLLEGE DEGREE.
IS SOMETHING THAT CALIFORNIA
COULD NOT AFFORD TO HAVE.
A AND THAT'S IN AND AND THIS IS
FROM FROM LOOKING AT AT MY AGE
LOOKING AT WHAT COLLEGE DEGREES
MEANT TO MY GENERATION AND AND
MANY OF YOUR PARENTS GENERATION.
THAT WAS REALLY THE THE GOLDEN
TICKET TO A TO A TO A BETTER
LIFE THAN THOSE WHO DIDN'T GO.
AND AND SO AS A RESULT BUT NOW I
LISTEN TO YOUNG PEOPLE AND
THEY'RE ACTUALLY CALCULATING
BECAUSE THEY HAVE FRIENDS WHEN
DEBT FOR A HUNDRED THOUSAND OR
WHATEVER IT IS AND IT KEEPS
ESCALATING IT ESCALATING.
AND IT DOESN'T SEEM TO BE A WAY
OUT OF IT OTHER THAN TO GO INTO
DEFAULT AND IN THAT ROLE IN JULY
FOR A SIGNIFICANT PERIOD OF TIME.
AND SO WE KIDS ARE SMART NOW
BEGINNING TO REALIZE THAT MAYBE
DOESN'T DOESN'T FACTOR OUT WHICH
IS UNFORTUNATE BECAUSE IF YOU'RE
POOR KID YOU NEED SOMETHING TO
GIVE YOU A LEG UP.
YOU KNOW YOU NEED THAT DEGREE TO
BASICALLY DEFINED AND GIVE YOU
SOME PARAMETERS OF YOUR FUTURE
AND SO I'M CONCERNED AND I THINK
THIS IS GREAT -- THAT WE'RE
DOING WE'RE NOT TELLING PEOPLE
THAT THEY DON'T HAVE TO PAY THE
DEBT AND SO FORTH BUT WE THERE
ARE SOME RIGHTS THAT THEY HAVE.
AND AND AND THEY SHOULD NEED TO
BE MUCH MORE CONSCIOUS IN TERMS
OF THOSE WHO GIVING LOANS AS TO
WHO YOU'RE GIVING IT TO AND AND
WHETHER NATURAL OVER.
GIVING LOANS TO YOUNG PEOPLE AND
AND ALL THOSE KINDS OF THINGS
BUT I THINK IT'S EXTREMELY
IMPORTANT AND IT'S NOT JUST
BECAUSE IT'S A FAIR ISSUE SO
FORTH AND SO ON BUT I LOOK AT IT
IN THE LARGEST SENSE OF WHAT
MESSAGE DO WE SEND CALIFORNIA TO
YOUNG PEOPLE.
GO TO COLLEGE.
IS IT REALLY WORTH IT AND
THEY'RE BEGINNING TO TELL ME
THAT IT'S NOT THAT THE COST OF
IT IS TOO GREAT AND THEIR
FRIENDS WHO WENT TO COLLEGE HAVE
THIS TREMENDOUS DEBT THAT THEY
DON'T HAVE.
AND ON AND ON AND ON SO I THINK
WE WANT TO SEND THE RIGHT
MESSAGE CALIFORNIAN
TRADITIONALLY HAS DONE THAT IN
TERMS OF MAKING OUR COMMUNITY
COLLEGES ARE SEE ISSUES THAT I
UC'S AFFORDABLE.
AND SAYING WE HAVE COLLEGE FOR
EVERYONE AND THAT COLLEGE REALLY
DRIVE CALIFORNIA AND THE
INNOVATION AND EVERYTHING WE
HAVE HERE SO WE CANNOT AFFORD TO
ALLOW OURSELVES TO CONTINUE DOWN
THIS PATH.
THAT THAT SAYS THAT THE IT'S NOT
WORTH IT AND THAT OUR YOUNG
PEOPLE ARE BECOMING VULNERABLE
SO THANK YOU FOR TAKING THE LEAD
ON THIS I APPRECIATE.
AND I LOOK FORWARD TO THIS
GETTING TO THE FLOOR IN PASSING
THANK YOU.
THANK YOU -- AND I AGAIN I WANT
TO ECHO THE THANKS THAT TO YOU
AS A MEMBER STONE FOR BRINGING
THIS FORWARD WE HAVE MORE THAN
THREE POINT SEVEN MILLION BARS
IN THE STATE.
THAT TOTALS MORE THAN A HUNDRED
AND THIRTY FOUR BILLION DOLLARS
OF DEBT.
I THINK WHAT YOU'RE BRINGING
FORWARD IS IT WHAT CALIFORNIA
BARS NEED THEY NEED TO KNOW THAT
THEY HAVE SOME RIGHTS AND THAT
THOSE RIGHTS IN Q. INCLUDE
ACCURATE INFORMATION INCLUDE AN
ENTITY.
THAT THEY CAN GO TO TO ASK
QUESTIONS I THINK BACK TO WHEN I
HAD STUDENT LOANS AND READING
THE FORMS AND CALLING THAT YOU
KNOW EIGHT HUNDRED NUMBERS
TRYING TO GET AN ANSWER THAT IS
REALLY HARD TO DO.
AND I AM SORRY THAT THAT THAT
THE YOU KNOW THAT THAT THAT SOME
OF THE CONVERSATION INCLUDED
JUST ONE ASPECT OF WHAT THIS
BILL DOES THIS BILL DOES SO MUCH
MORE THAN GIVE SOMEONE THE
ABILITY TO SUE.
THIS BILL GIVE SOMEONE A RIGHT --
THAT IS BIGGER -- AND I THINK
THAT THAT'S VERY IMPORTANT I AND
I ALSO FEEL LIKE THIS IS A BILL
THAT IMPACTS MANY A MILLIONS OF
HOUSEHOLDS.
IN THE STATE -- WITH DIVERSE
BACKGROUNDS WHO ARE GRAPPLING
WITH LOAN AND DEBT A STUDENT
LOAN DEBT IS NOW THE SECOND
HIGHEST TYPE OF DEBT IN THIS.
STATE.
YOU KNOW FOLLOWD BY MORTGAGES
AND I THINK THAT -- TO IT'S
REALLY IMPORTANT -- I'M GLAD
YOU'RE BRINGING THIS FORWARD I
THINK AB.
IT'S NEEDED -- AT THIS TIME --
IN OUR STATE AND I AM GLAD THAT
CALIFORNIA'S TAKING THE LEAD --
I A ABSOLUTELY SUPPORT THE BILL
AND I THINK -- IF YOU'RE OKAY
WITH AT AN APPROPRIATE TIME
WOULD LOVE TO BE CONSIDERED AS A
CO AUTHOR OF THE BILL.
ABSOLUTELY THANK YOU.
AND WITH THAT -- TO I WILL ALLOW
YOU TO CLOSE AND WE WILL CALL
THE ROLL THANK YOU AND I
APPRECIATE.
YOUR STAFF HAS BEEN FABULOUS TO
WORK WITH OF THE LAST COUPLE
YEARS IS WE'VE DONE A LICENSING
AND THAT ON THIS PROGRAM.
I THANK YOU VERY MUCH IN THE
MALEVOLENCE OF THIS IS.
THAT THE STUDENT LOAN BORROWERS
GO TO THEIR STUDENTS SERVICER TO
TRY AND GET INFORMATION AND GET
LED ASTRAY.
THEY END UP AT IN MORE PAYING
MORE THAT IS FUNDAMENTALLY
UNFAIR ON THE OTHER ASPECT WHICH
IS UNDERLYING THIS IS WE HAVE
GOT TO DEAL WITH THE AMOUNT OF
THAT DEBT.
AND THE CONTINUATION OF OF
BRINGING KIDS INTO DEBT BUT IN
THE MEANTIME.
THIS IS REAL WE CAN DO SOMETHING
REAL NOW THAT BENEFITS THOSE WHO
ARE CARRYING ALL THIS THAT AND
GIVE THEM SOME HOPE OF BEING
ABLE TO CLIMB OUT FROM
UNDERNEATH THAT DEBT.
IN A RATIONAL WAY AND THANK YOU
I RESPECTFULLY ASK YOUR ABBOTT
THANK YOU WITH THAT WE WILL CALL
THE ROLL.
THE MOST IS THE PASTOR FOR TO
COMEDIAN PREPARATIONS LEE MON.
HI LIMON I CHEN.
CHEN NOT VOTING.
BEAR CAN I CAN I BURKE.
BURKE I CERVANTES.
TORONTO I CHOI.
CHOI NOT VOTING.
GABLE.
GABLE I GRAYSON [inaudible]
MELENDEZ.
WHEN DOES NOT VOTING?
STONE BY STONE I WEBER.
WEBER I WICKS FIVE WICKS HI.
THE BILL IS OUT WITH EIGHT VOTES
WE WILL LEAVE IT OPEN FOR ABSENT
MEMBERS.
AND NOW WE HAVE OUR FINAL BILL --
BY ASSEMBLY WOMAN BURKE AB
[inaudible]
ELEVEN FIFTY SEVEN THE BILL.
WE HAVE A MOTION AND A SECOND.
THEN I WILL BE VERY QUICK
ASSEMBLY BILL ELEVEN FIFTY THAT
REQUIRES THE TREASURER'S OFFICE
DEVELOP AN ISSUE IN A REPORT ON
THE COMMUNITY REINVESTMENT AS
SMALL DIAL ANY ACTIVITIES.
A SMALL BUSINESS AND MEDIUM SIZE
FINANCIAL INSTITUTIONS WITHOUT A
RESPECTFULLY REQUEST AND I THANK
YOU AND AS FOLKS ARE.
EXITING OUT WE COULD JUST --
MIND THE NOISE BECAUSE WE DO
HAVE A MEMBER PRESENTING THANK
YOU.
DIGITAL HAS MONEY FOR A RIGHT TO
AN ANY.
YEAH ANY TESTIMONY IN OPPOSITION.
YES JASON LANE CALIFORNIA
BANKERS ASSOCIATION WERE.
OPPOSED UNLESS AMENDED THE
THERE'S A THE BILL REQUIRES THAT
THE TREASURE PRODUCE A REPORT OF
ON ELIGIBLE BANKS.
IN THEIR PARTICIPATION IN SMALL
DOLLAR LENDING -- NOT CLEAR AS
TO WHY IT DOESN'T INCLUDE ALL
INSTITUTIONS IN THE TIME DEPOSIT
PROGRAM IN IN OTHER WORDS.
IT SHOULD BE A REPORT THAT NOT
ONLY SHOWS WHAT -- ELIGIBLE
BANKS ARE DOING IN TERMS MAUL
OUR LUNCH BUT ALSO CREDIT UNIONS
AND THAT'S NOT CURRENTLY IN THE
BILL.
I'M SORRY.
AND WE'RE PREPARED TO ADDRESS
THAT ISSUE MOVING FORWARD
ALRIGHT THANK YOU.
MEMBERS ANY QUESTIONS COMMENTS
WE HAVE A MOTION AND A SECOND.
ALRIGHT WITH THAT.
WOULD YOU LIKE TO CLOSE BY THERE
BECAUSE THEY HAVE A THANK YOU.
AND THIS MY THE BILL DOES HAVE A
DO YOU PASS TO APPROPRIATIONS.
LEóN HI LIMON I CHEN.
CHEN HI BEAR CAN I CAN I BURKE
BY BURKE I CERVANTES.
CERVANTES I CHOI.
CHOI AYE GABRIEL.
CABLE I GRAYSON [inaudible]
MELENDEZ.
MELENDEZ AYE STONE.
STONE I WEBER.
WHENEVER I WICKS I WICKS I I
WRITE THE BILL I'D DOES HAVE A
LEVIN -- SUPPORT IT DOES MOVE
OUT AND WE WILL LEAVE IT.
THE ROLE OPEN FOR ABSENT MEMBERS.
AND NOW WE WILL GO THROUGH ALL
THE ROLE SAID DO ADD ONS AND
WILL START FROM THE TOP. SEVEN
OPEN THE ROLE FOR AB
[inaudible]
THREE SEVEN SIX GRAYSON.
SB SIX EIGHTY NINE TO PASS.
BURKE.
BURKE I CHOI I'M SORRY.
JOINT.
CABLE I GRAYSON [inaudible]
MELENDEZ [inaudible]
MELENDEZ NO.
STONE.
STONE I WEBER [inaudible]
WEBER I THE BELL THE BILL IT HAS
A VOTE OF NINE TO ONE IT DOES
MOVE OUT AND WE'LL LEAVE IT OPEN
FOR ABSENT MEMBERS.
AB.
EIGHT FIFTY SEVEN DO PASSED
COMMITTEE ON LOCAL GOVERNMENT.
BURKE [inaudible]
I CERVANTES.
NOT VOTING [inaudible]
SEVEN TO SEVENTY GRAYSON
[inaudible]
MELENDEZ.
THE LENDERS KNOW [inaudible]
WEBER [inaudible]
WEBER I AB EIGHT FIFTY SEVEN
MOVES AT A COMMITTEE WITH SEVEN
VOTES IN FAVOR.
THREE OPPOSED IN ONE NOT VOTING.
AND WE WILL LEAVE THAT OPEN FOR
ABSENT MEMBERS. EIGHTY NINE
FORTY FIVE TO PASS BURKE.
I WEAR DIE.
GABLE.
GABLE I GRAYSON [inaudible]
GRAYSON HIGH [inaudible]
STONE [inaudible]
STONE I WEBER [inaudible]
WEBER AYE.
ALL RIGHT THE BILL I MOVED OUT
TO A A AB NINE FOUR FIVE WITH.
TWELVE AB ELEVEN FIFTY SEVEN
GRAYSON [inaudible]
GRAYSON HIGH.
AB ELEVEN FIFTY SEVEN MOVES AT A
COMMITTEE WITH TWELVE OF A WHAT
DO THE CONSENT CALENDAR NOW
[inaudible]
BURKE.
BURKE I GABRIEL.
CABLE I GRAYSON.
GRAYSON HIGH MELENDEZ
[inaudible]
MELENDEZ I STONE.
STONE I WEBER.
WEBER I AND JUST AS A REMINDER
THE CONSENT CALENDAR WAS
THIRTEEN OH FIVE THIRTY AB
THIRTEEN OH FIVE IN AB FOURTEEN
TWENTY AND THAT MOVES OUT WITH
TWELVE A VOTES.
AB FIFTEEN TWENTY FIVE TO PASSED
COMMITTEE ON BUSINESS
APPROPRIATIONS [inaudible]
BURKE [inaudible]
BURKE I CERVANTES.
CERVANTES I GRAYSON.
GRAYSON NOT VOTING [inaudible]
MELENDEZ [inaudible]
MELENDEZ NO [inaudible]
WEBER [inaudible]
CORRECT.
HI WEBER HIGH.
THE BILL MOVES OUT AT AB FIFTEEN
TWENTY FIVE MOVE THAT WITH EIGHT
VOTES SAM.
WHEN ASCENSION AND ONE A NO?
AND WE'RE NOT YEAH.
WHEN NOT VOTING SORRY?
ALRIGHT SO THAT THOSE ARE ALL
OUR BILLS.
AND WE WILL START FROM THE TOP
AND YEAH.
AB THREE SEVENTY SIXTY PASTOR
REFERRED COMING OUT
APPROPRIATIONS [inaudible]
GRAYSON.
THANK YOU VOTED FOR THEM.
ALL RIGHT AB THREE SEVENTY SIX A
AS MOVES OUT WITH AND NINE OVER
[inaudible]
OKAY.
AB SIX EIGHTY NINE DO PASS
[inaudible]
GRAYSON [inaudible]
GRAYSON HI.
I AB IS SIX EIGHTY NINE MOVES
OUT WITH -- TEN VOTE. TEN ONE
VOTE SORRY.
AB EIGHT FIVE SEVEN TO PASS
REFERRED COMMITTEE ON LOCAL
GOVERNMENT.
GRAYSON.
GRAYSON NOT VOTING.
ASSEMBLY MEMBER OF ASSEMBLY BILL
EIGHT FIVE SEVEN MOVES OUT OF
COMMITTEE WITH THE S. SEVEN IN
SUPPORT -- THREE KNOWS AND TO
HAVE A NOT VOTING.
AND WITH THAT -- WE'VE NOW GONE
THROUGH ALL OF OUR BILLS AND WE
WILL CLOSE HEARING