I'D LIKE TO CALL AYE THIS
HEARING TO ORDER --
TODAY'S AT FEBRUARY FOURTH.
AND I AM EXCITED TO ADD TO HAVE
A HEARING WITH ALL THE ASSEMBLY
LOCAL GOVERNMENT COMMITTEE AS
WELL AS THE ASSEMBLY BANKING AND
FINANCE COMMITTEE.
THE TOPIC FOR TODAY'S HEARING IS
PUBLIC BANKS AN EXAMINATION OF
PUBLIC BANKING AT THE LOCAL
LEVEL.
I WANT TO WELCOME MEMBERS FROM
BOTH AT COMMITTEES.
ADD TO OUR HEARING AND
ESPECIALLY THINK AT CHAIR WOMAN
I GEAR CURRY FOR AND HER TEAM
FOR WORKING AT TO ORGANIZE THIS
PARTICULAR HEARING.
I HOPE THAT TODAY'S HEARING ARE
WE CAN HAVE A ROBUST
CONVERSATION ABOUT PUBLIC
BANKING.
THAT HOPEFULLY WILL GUIDE ALSO
OUR RESPECTIVE COMMITTEES WORK
ON AND THINKING ABOUT
PERSPECTIVE BILLS THAT MAY COME
FORWARD IN THE FUTURE ADD THAT
FALL UNDER THIS PER VIEW.
PUBLIC BANKING IS NOT A NEW
CONCEPT AT A IT IS AN ISSUE THAT
THE LEGISLATURE HAS GRAPPLED
WITH SINCE.
TWO THOUSAND TWELVE AND RECENTLY
SEVERAL CITIES.
IN THE STATE OF CALIFORNIA HAVE
UNDERTAKEN STUDIES TASK FORCE.
TO BETTER UNDERSTAND THE
POTENTIAL BENEFITS OF PUBLIC
SPEAKING AT THE LOCAL LEVEL.
ACTION AT THE LOCAL LEVEL HAS
SPARKED INTEREST TO AND
QUESTIONS FROM FELLOW
LEGISLATORS AND SOME WHO ARE
HERE WITH US TO TODAY BUT SOME
WHO COULD NOT MAKE IT.
AND THAT ARE ALSO INTERESTED IN
THIS TOPIC AND IT BECAME CLEAR
TO ME.
THAT THE BROAD INTERESTS --
WAS REASON TO HAVE A HEARING ON
THIS PARTICULAR TOPIC I WANT TO
THANK IN ADVANCE TO ALL OF OUR
WITNESSES WHO ARE HERE WITH US
TODAY -- AND
ALSO ALLOW FOR A MOMENT FOR
CHAIR WOMEN AG YOUR CREE TO SAY
A FEW WORDS AND ANY OTHER --
MEMBERS AND WELCOME SOME NEW
FACES ADD TO BOTH COMMITTEES AS
WELL.
WELCOME.
I LIKE TO THINK --
THE BUSY SCHEDULE [inaudible]
HEARING.
DISCUSSIONS CONCERNING THE IDEA
PUBLICLY OWNED BANKS HAS GAINED
MOMENTUM IN RECENT YEARS WITH A
NUMBER OF STATES AND LOCAL
AGENCIES CONDUCTING STUDIES AND
WORKING GROUP'S TO DETERMINE THE
PROS AND CONS.
MY GOAL TODAY IS TO WALK AWAY
WITH A BETTER UNDERSTANDING OF
THE ISSUE OF ADVANTAGES AND
DISADVANTAGES OF PUBLIC BANKING
I'M ALSO INTERESTED TO HEAR HOW
PUBLIC BANKS HOWEVER PUBLIC BANK
WOULD WORK.
HOW WOULD FUNCTION?
AND WHAT AGENCIES WOULD
PARTICIPATE.
I'M LOOKING FORWARD TO THE
DISCUSSION FROM OUR PANELISTS TO
GAME BETTER UNDERSTANDING THANK
YOU TO ALL OF OUR SPEAKERS.
WHO WILL BE PARTICIPATING IN
PARTICIPATING TODAY?
AND I LOOK FORWARD TO THE THE
REST OF THIS A HEARING TODAY.
WITH ANY OF THE OTHER MEMBERS
LIKE TO SAY ANYTHING.
OKAY WELL SEEING THAT WHEN WE
GET STARTED HOUSE THAT'S THEM.
I WOULD LIKE TO INVITE THE FIRST
PANEL TO JOIN US --
THIS WILL BE AN OVERVIEW PUBLIC
BANKING --
AND THIS WILL BE.
WITH BEING THIRD BY OUR
HONORABLE FIONA MALL THE STATE
CALIFORNIA STATE TREASURER.
AND JAN LYNN OWN THE
COMMISSIONER FOR THE DEPARTMENT
OF BUSINESS OVERSIGHT AND IF YOU
COULD COME JOIN US.
WE MAY JUST NEED TO SWITCH YOUR
NAME TAG OUT OF AND WE ALSO HAVE --
THERE WE GO YEAH.
AND WE ALSO HAVE JOINING US TIM
SCHAFER FOR THE DEPUTY STATE
TREASURER.
FROM THE STATE TREASURER'S
OFFICE THANK YOU SO MUCH AND I
TRULY APPRECIATE YOU SPENDING
TIME WITH US TODAY ON YOUR BUSY
SCHEDULES.
AND WELCOME --
HONORABLE --
TREASURE PMR.
THANK YOU ALL --
IT IS MY PLEASURE TO BE HERE
WITH THE OF THE NUMBER OF THE
LIMON AND IS A MEMBER --
I CARE CARE CURRY.
AT TODAY'S THE BEGINNING OF WEEK
FOUR AS YOUR CALIFORNIA STATE
TREASURER THAT'S WHY HAVE TIM
SCHAFER HERE WITH ME.
AS MANY HERE IN THE ROOM NO IS A
MEMBER OF THE FIGURE OUT HOW TO
BANK THE CANNABIS INDUSTRY FOR
THE PAST. FOUR YEARS AND PUBLIC
BANKING HAS BEEN AN IDEA THAT
HAS GAINED MOMENTUM ESPECIALLY
AT THE LOCAL LEVEL.
I APPLAUD TREASURER FORMER
TREASURER JOHN CHIANG AND HIS
DEPUTY TIM SCHAFER FOR CONVENING
A SERIES OF PUBLIC STAKEHOLDER
MEETINGS IN TWO THOUSAND SIXTEEN
AND TWO THOUSAND SEVENTEEN THAT
BROUGHT TOGETHER DOZENS OF
EXPERTS AND SCORES A PUBLIC
SPEAKERS. TO WEIGH IN ON THE
PUBLIC SAFETY AND TAXATION
ISSUES THAT SURROUND THE
CANNABIS INDUSTRY.
MY ROLE TODAY'S TO GIVE AN
OVERVIEW OF PUBLIC BANKING BUT
I'M ALSO GOING TO TAKE THIS
OPPORTUNITY TO LET EVERYBODY
KNOW WHAT MY OFFICE DOES SO THAT
WE CAN NOT ONLY BE A RESOURCE.
BUT A WORKING PARTNER IN ALL
THINGS RELATED TO BANKING.
SO LET'S START WITH STATE BANKS.
THE BANK OF NORTH DAKOTA WAS
FORMED IN NINETEEN NINETEEN TO
PROMOTE AGRICULTURE COMMERCE AND
INDUSTRY IN NORTH DAKOTA.
IT WAS CAPITALIZE WITH THE
PROCEEDS OF A TWO MILLION DOLLAR
BOND ISSUED BY THE STATE.
UNDER NORTH DAKOTA STATE LAW ALL
STATE FUNDS MUST IT MUST BE THE
DEPOSITED.
UNDER NORTH DAKOTA STATE LAW ALL
STATE FUNDS MUST BE DEPOSITED
INTO THE BANK OF NORTH DAKOTA
WHICH DOES NOT HAVE DEPOSIT
INSURANCE.
BUT IS INSTEAD INSURED BY THE
FULL FAITH AND CREDIT OF THE
STATE OF NORTH DAKOTA.
TODAY THEY PROMISE PRIMARILY
PARTNER WITH LOCAL BANKS AND
CREDIT UNIONS TO FACILITATE
AGRICULTURAL COMMERCIAL REAL
ESTATE AND STUDENT LOANS.
SINCE NINETEEN NINETEEN WHEN THE
BANK OF NORTH DAKOTA WAS FORMED
THERE HAVE BEEN MANY FAILED
ATTEMPTS TO OPEN STATE PUBLIC
BANKS.
HOWEVER IT WASN'T UNTIL RECENTLY
THAT ANOTHER PUBLIC BANK OPENED
ITS DOORS.
THE TERRITORIAL BANK OF AMERICAN
SAMOA BANK TECHNICALLY OPENED
ITS DOORS IN OCTOBER TWENTY
SIXTEEN BUT WAS ONLY ABLE TO
OFFER NARAL MENU OF SERVICES
UNTIL.
TWENTY EIGHTEEN WHEN THE FEDERAL
RESERVE ALLOWED IT ACCESS TO THE
U. S. PAYMENT SYSTEM.
THEN THEY WERE ABLE TO OPEN UP A
CORRESPONDENT BANKING
RELATIONSHIP WITH THE US BANK SO
TODAY THE TERRITORIAL BANK OF
AMERICA SAMOA.
ISSUES DEBIT CARDS CHECKS ALLOWS
WHY PROVIDES COMMERCIAL LOANS
AND CREDITS TO SMALL BUSINESSES.
THIS BANK DID NOT OBTAIN DEPOSIT
INSURANCE BUS IS NOT SUBJECT TO
MANY OF THE SUPER OF HISTORIAL
ROLES OF THE FEDERAL DEPOSIT
INSURANCE CORP.
IN AMERICAN SAMOA MORE THAN HALF
OF THE HOUSEHOLDS ARE AT NEAR OR
BELOW THE FEDERAL POVERTY LEVEL.
AND THE TERRITORY HAS BEEN
ESSENTIALLY A CASH BASED ECONOMY
SINCE THE BANK OF HAWAII LEFT
THE MARKET IN THE TERRITORY IN.
TWENTY TWELVE SO WHAT DID WE
LEARN FROM 1-919-220-0018 CLOSE
TO A HUNDRED YEARS LATER.
IN GENERAL WE KNOW THAT IT IS
NOT EASY TO OPEN A STATE PUBLIC
BANK BUT IT IS NOT IMPOSSIBLE AS
SOME OF THE SPEAKERS I'M SURE
WE'LL TALK ABOUT TODAY.
WHAT I WOULD LIKE TO SAY IS THAT
I'M EXCITED TO BE YOUR STATE
TREASURER AND TO LET YOU KNOW
THAT I AM VERY DEDICATED AND
SAVVY PROFESSIONALS IN MY OFFICE
THAT HAVE BEEN DIRECTLY INVOLVED
IN MANY OF THE AREAS THAT PUBLIC
BANKING ADVOCATES ARE FOCUSED ON?
I'D LIKE TO JUST TAKE A FEW
MINUTES TO TALK ABOUT SOME OF
THE PROGRAMS UNDER MY OFFICE
THAT MANY.
UP OF THE PUBLIC MAY NOT BE
AWARE OF AS YOUR STATE BANKER
THE TREASURER'S OFFICE WAS
CREATED IN THE CALIFORNIA
CONSTITUTION IN.
EIGHTEEN FORTY NINE TODAY OVER
TWO TRILLION DOLLARS GOES
THROUGH THE STATE TREASURER'S
OFFICE EVERY YEAR.
MY OFFICE MANAGERS NINETY TWO
BILLION DOLLARS IN STATE AND
LOCAL FUNDS AND WE ARE
RESPONSIBLE FOR EIGHTY FIVE
BILLION DOLLARS IN OUTSTANDING
GENERAL OBLIGATION AND LEASE
REVENUE BONDS OF THE STATE.
CALIFORNIA PRESENTLY HAVE A
NUMBER OF INITIATIVES THAT
SUPPORT CAPITAL FORMATION FOR
SMALL BUSINESSES. ONE PROGRAM
CALLED THE STATE SMALL BUSINESS
CREDIT INITIATIVE WAS DESIGNED
TO ALLOW STATES TO BUILD ON
SUCCESSFUL MODELS FOR STATE
SMALL BUSINESS PROGRAMS
INCLUDING COLLATERAL SUPPORT
PROGRAMS.
CAPITAL AXES PROGRAMS AND LOAN
GUARANTEE PROGRAMS.
IN CALIFORNIA SOME OF THESE
PROGRAMS ARE MADE AVAILABLE
THROUGH THE CALIFORNIA CAPITAL
ACCESS PROGRAM OR CALLED CAL CAP.
WHICH IS ADMINISTRATE
ADMINISTERED BY THE CALIFORNIA
POLLUTION CONTROL FINANCING
AUTHORITY ONE OF THE BOARDS
COMMISSIONS AND IT'S ALREADY
UNDER THE STATE TREASURER'S
OFFICE AND WHICH I CHAIR.
CAL CAP WAS ESTABLISHED IN
NINETEEN NINETY FOUR TO ASSIST
SMALL BUSINESSES OBTAIN LOANS
THROUGH PARTICIPATING LENDERS.
MORE DIRECTLY THE STATE OF
CALIFORNIA USES THE NUMBER UP
FOR DEPOSITORY SERVICES IN ORDER
TO SUPPORT LOCAL ECONOMIES IN
OUR STATE.
THE LION SHARE OF THE STATE'S
SURPLUS FUNDS IS DEPOSITED INTO
THE POOL MONEY INVESTMENT
ACCOUNT.
WHICH ARE PROFESSIONALLY MANAGED
BY THE STAFF IN MY OFFICE.
A PRESENT ABOUT TWO THIRDS OF
THESE FUNDS ARE INVESTED IN
SHORT TERM LIQUID INVESTMENTS
WITH THE US TREASURY AND FEDERAL
FEDERAL AGENCY SECURITIES.
WITHIN THE POOL MONEY INVESTMENT
ACCOUNT WE OPERATE THE TIME
DEPOSIT PROGRAM CREATED IN
NINETEEN FORTY FIVE TO ALLOW THE
STATE TREASURE TO PLACE DEPOSITS
WITH ELIGIBLE CALIFORNIA
HEADQUARTERED FINANCIAL
INSTITUTIONS.
WHICH ARE FEDERALLY INSURED
COMMERCIAL BANKS SAVINGS BANKS
AND CREDIT UNIONS.
THESE PARTICIPATING FINANCIAL
INSTITUTIONS MUST MEET MINIMUM
CREDIT QUALITY STANDARDS AND
MEET COMMUNITY REINVESTMENT ACT
RATING OF NOT LESS THAN
SATISFACTORY.
THIS MEANS THAT THE RATING IS
BASED ON A REGULATORS OPINION
ABOUT HOW EFFECTIVELY THESE
INSTITUTIONS PROVIDE HOME
MORTGAGES SMALL BUSINESS LOANS
SMALL FARM LOANS.
AND SUPPORT ECONOMIC DEVELOPMENT
ACTIVITY.
THESE JUDGMENTS THESE JUDGMENTS
ALSO APPLY TO AFFORDABLE HOUSING
AND SUPPORT TO NOT FOR PROFIT
ORGANIZATIONS THAT MEET LOW TO
MODERATE INCOME HOUSING AND CAN
COMMUNITY DEVELOPMENT NEEDS.
THE CHARGES OFFICE ALSO OPERATES
A CALIFORNIA LOCAL AGENCY
INVESTMENT FUND WHICH WAS FORMED
IN. NINETEEN SEVENTY SEVEN TO
ENABLE LOCAL GOVERNMENTS TO HAVE
THERE FUNDS MANAGED BY
PROFESSIONAL MANAGERS IN MY
OFFICE.
THE NINETY TWO BILLION DOLLARS I
MENTIONED BEFORE INCLUDES ABOUT
TWENTY TWO BILLION IN LOCAL
GOVERNMENT FUNDS THAT WE MANAGE
ON BEHALF OF MORE THAN. TWENTY
THREE HUNDRED LOCAL GOVERNMENTS
IN CALIFORNIA.
AM I ALSO OFF ALSO OVERSEE THE
NINE AND 4% TAX EXEMPT BOND
FINANCING AND CREDIT PROGRAM
THAT HELPS BUILD NEEDED
AFFORDABLE HOUSING HERE IN
CALIFORNIA.
SO THE TERM PUBLIC BANK CAN MEAN
MANY DIFFERENT THINGS.
I BELIEVE THE KEY QUESTION WE
NEED TO HONE IN ON IS WHAT IS
THE PROBLEM WE ARE SEEKING TO
SOLVE AND WHAT ARE THE GOALS WE
WHICH TO ACHIEVE.
I LOOK FORWARD TO LISTENING TO
ALL OF THE EXPERTS BECAUSE HE I
IN MY OFFICE STAND READY. TO
FIND A PATH AND BE PART OF THE
SOLUTIONS TO MAKE BANKING
SERVICES MORE ACCESSIBLE AND
EQUITABLE TO ALL CALIFORNIANS SO
LONG AS THOSE ASS PROPERLY
PROTECT TAXPAYERS INTERESTS AND
BENEFIT THE ATTENDED AUDIENCES.
THANK YOU.
THANK YOU VERY MUCH TIM WOULD
YOU LIKE THE IS TO SPEAK AT THIS
POINT.
NO MA'AM THANK YOU I'LL LET
DEFERRED TO THE TREASURER AND
THE FOLKS FROM D. B. O. AND I'LL
BE HERE TO ANSWER QUESTIONS
THANK YOU VERY MEN IN THE
BUSINESS FIFTY YEAR I KNOW ANY
TECHNICAL QUESTIONS HE'S GONNA
ANSWER.
MANY THE WHEN HE WAS AT THE YEAH.
SO NEXUS JAVELIN OWNS
COMMISSIONER DEPARTMENT OF
BUSINESS OVERSIGHT WELCOME JAN
THANK YOU VERY MUCH FOR TAKING
THE TIME TO VISIT WITH US TODAY
THANK YOU CAN YOU GUYS HEAR ME.
OKAY --
THANK YOU MADAM CHAIRS ISN'T
THAT FUN MADAM CHAIR.
MEMBERS OF THE COMMITTEE AND
STAFF -- I
AM THREE I KNOW AND THE
COMMISSIONER FOR THE DEPARTMENT
OF BUSINESS OVERSIGHT AND THANK
YOU FOR THE OPPORTUNITY TO
PARTICIPATE TODAY IN THIS
HEARING.
THE DEPARTMENT OF BUSINESS
OVERSIGHT LICENSE AND REGULATE
OVER THREE HUNDRED AND SIXTY
FIVE THOUSAND LICENSEES.
EITHER ENTITIES OR INDIVIDUALS.
THESE LICENSEES PROVIDE
FINANCIAL SERVICES IN CALIFORNIA.
HOWEVER MORE PERTINENT TO THIS
DISCUSSION IS THE DIVISION OF
FINANCIAL INSTITUTION LICENSES
AND SUPERVISES STATE CHARTERED
FINANCIAL INSTITUTIONS.
INCLUDING A HUNDRED AND TWENTY
BAY OVER A HALF A TRILLION
DOLLARS IN ASSETS.
WE EXIST DO REGULATORY EXAMS ON
THESE BANKS EVERY TWELVE TO
EIGHTEEN MONTHS OR MORE OFTEN IF
THE NECESSARY. TO ENSURE THEY
RUN AND SAFE SOUND.
MANNER AS WELL AS LAWFULLY.
AS COMMISSIONER I'M ALSO THE
ADMINISTRATOR OF THE LOCAL.
AGENCY SECURITY PROGRAM.
THIS PROGRAM REVIEWS WEEKLY AND
QUARTERLY REPORTS FROM
APPROXIMATELY A HUNDRED AND
FIFTY A DEPOSITORY INSTITUTIONS.
HOLDING OVER SEVENTEEN BILLION
DOLLARS IN CALIFORNIA LOCAL
AGENCY DEPOSITS.
IT IS THE DEPARTMENT'S
RESPONSIBILITY. TO ENSURE THESE
DEPOSITS ARE ADEQUATELY
PROTECTED BY THE DEPOSITORY
INSTITUTIONS.
IN YOUR WRITTEN INVITATION TO
TESTIFY TODAY YOU ASKED US TO
PROVIDE INSIGHT AND EXPERTISE
RELATED TO THE MUNICIPAL BANKING
MODEL.
SPECIFICALLY REQUESTED
INFORMATION ON HOW THE
DEPARTMENT REVIEWS AND MAKES
APPROVAL DECISIONS ON NEW BANK
CHARTER APPLICATIONS.
HOW THE DEPARTMENT OVERSEAS
BANKS THAT ACCEPT DEPOSITS FROM
LOCAL AGENCIES REGULATORY
CONSIDERATIONS UNIQUE? TO A BANK
THAT IS OWNED AND CONTROLLED BY
A LOCAL GOVERNMENT AGENCY.
AND FINALLY THE DEPARTMENT'S
VIEWS ABOUT WHETHER A STATE
LEVEL DEPOSITORY INSTITUTION
SHOULD BE SUBJECT TO THE
DEPARTMENT'S SUPERVISION AND
OVERSIGHT.
I WOULD I WILL BE OFFERING THE
COMMITTEE THE DEPARTMENT'S
PERSPECTIVE ON THE APPROPRIATE
OVERSIGHT OF A DEPOSITORY
INSTITUTION.
OWNED BY THE STATE.
AS WELL AS THE CONCEPT OF
TRANSFORMING THE CALIFORNIA
INFRASTRUCTURE BANK INTO A
DEPOSITORY INSTITUTION.
BANK CHARTER APPLICATION
APPROVALS. ONE OF THE BANKS
REGULATE ONE OF THE BANK
REGULATORS MOST IMPORTANT JOBS
IS TO A VALUE WAY TO
APPLICATIONS TO ESTABLISH A NEW
BANK.
THESE ARE KNOWN AS THE NOVO
APPLICATIONS THE INTEGRITY OF
THE BANKING SYSTEM.
DEPENDS ON THIS WORK BEING DONE
WITH THE MOST DILIGENCE.
THE PROCESS INVOLVES A RIGOROUS
REVIEW OF THE PROPOSED BANK TO
DETERMINE WHETHER.
IT WILL HAVE THE CAPITAL.
ASSET QUALITY MANAGEMENT
EXPERTISE.
EARNINGS CAPABILITY AND RISK
MANAGEMENT PROFILES REQUIRED TO
SUCCEED.
BANKS SERVE THE CONSUMERS AND
BUSINESSES AND THEIR COMMUNITY.
AN APPLICATION TO ESTABLISH A
NEW BANK MAY BE APPROVED ONLY IF
THE FOLLOWING CRITERIA IS MET.
THE PUBLIC CONVENIENCE AN
ADVANTAGE WILL BE PROMOTED BY
THE ESTABLISHMENT OF THE
PROPOSED BANK.
THE PROPOSED BANK WILL HAVE A
REASONABLE PROMISE OF A
SUCCESSFUL OPERATION.
THE PROPOSED BANK IS BEING
FORMED FOR NO OTHER PURPOSE THAN
THE LEGITIMATE OBJECTIVES
CONTEMPLATED UNDER THE BANKING
LAW.
THE PROPOSED CAPITAL STRUCTURE
IS ADEQUATE.
THE PROPOSED FFICERS AND
DIRECTORS HAVE SUFFICIENT
BANKING EXPERIENCE ABILITY AND
STANDING TO AFFORD A REASONABLE
PROMISE OF A SUCCESSFUL
OPERATION.
THE NAME.
OF THE PROPOSED BANK.
DOES NOT RESEMBLE.
SO CLOSELY AS TO LIKELY CAUSE
CONFUSION WITH THE NAME OF
ANOTHER BANK IN CALIFORNIA.
AND FINALLY THE APPLICANT HAS
APPLIED WITH ALL APPLICABLE
PROVISIONS OF BANKING LAWS AND
RATES.
IN REACHING THE END OUR DECISION
THE DEPARTMENT CONSIDERS THE
FOLLOWING.
THE CHARACTER REPUTATION AND
FINANCIAL STANDING OF THE
ORGANIZERS AND THEIR MOTIVE.
IN SEEKING TO ORGANIZED A
PROPOSED BANK.
THE NEED FOR A NEW BANK GIVING
CONSIDERATION TO THE ADEQUACY OF
EXISTED EXISTING BANKING AND THE
NEED. FOR FURTHER BANK SO MANY
OF YOU HERE THE TERM IS THE
COMMUNITY OPEN BANK.
AND THAT'S WHAT THAT MEANS.
THE CHARACTER FINANCIAL
RESPONSIBILITY BANKING EXPERT
EXPERIENCE AND BUSINESS
QUALIFICATIONS OF THE PROPOSED
OFFICERS OF THE BANKS.
THE PROPOSED STOCKHOLDERS AND
DIRECTORS OF THE BANK.
THE ADEQUACY OF THE BANKING
FACILITIES TO OPERATE ITS. TO
SUPPORT ITS OPERATIONS SKEWS ME.
THE ADEQUACY OF CAPITALIZATION
TO SUPPORT THE PROJECTED VOLUME
AND TYPE OF BUSINESS.
THE LIKELIHOOD THE BANK WILL
ACHIEVE AND MAINTAIN
PROFITABILITY.
THE VIABILITY OF A BUSINESS PLAN
GIVEN THE ECONOMIC CONDITION
GROWTH POTENTIAL AND COMPETITION
OF THE PROPOSED MARKET AREA.
AND FINALLY WHETHER THE BANK IS
FREE.
FROM ABUSIVE INSIDER
TRANSACTIONS AND APPARENT
CONFLICTS OF INTEREST.
LET ME SPENT A COUPLE MEN'S ON
LOCAL GOVERNMENT AGENCY DEPOSIT
OUR DEPOSIT OVERSIGHT.
OUR EXAMINERS PLAY A KEY ROLE IN
THE SUPERVISORY PROCESS TO
ENSURE.
PUBLIC FUNDS ARE PROTECTED.
IN PARTICULAR OUR EXAMINERS
REVIEW THE FOLLOWING. TO ENSURE
LOCAL AGENCY DEPOSITS ARE
ADEQUATELY SECURED OR YOU'LL YOU
HEARD THE TERM COLLATERALIZED WE
VALIDATE THE EXISTENCE OF WAIVER
FARMS WHETHER OFFSET THE AMOUNT
OF SECURITIES NEEDED TO SECURE
THOSE DEPOSITS.
AND LOCAL AGENCY TREASURERS HAVE
THE DISCRETION TO WAIVE THE
COLLATERAL REQUIREMENT UP. TO
TWO HUNDRED AND FIFTY THOUSAND
DOLLARS AND WE VERIFIED THAT. TO
ENSURE THE ADEQUACY OF WEEKLY
AND QUARTERLY REPORTS SUBMITTED
TO DPO.
AND WE REVIEW THE BANKS LIST OF
DEPOSIT ACCOUNTS TO VALIDATE TH
DEPOSIT INFORMATION SUBMITTED
FROM THOSE INSTITUTIONS. TO
ENSURE THE ACCURACY OF THE
WEEKLY AND QUARTERLY REPORTS WE
REVIEW THE REPORTS FROM THE
HOLDERS OF THE DEPOSITORY
SECURED SECURITIES. TO VALIDATE
THE AMOUNT OF SECURITIES PLEDGE
TO THE LOCAL AGENCY DEPOSIT
[inaudible]
LOCAL GOVERNMENT.
AGENTS LOCAL GOVERNMENT AGENCY
STAY BANKING.
A BANK THAT IS OWNED AND
CONTROLLED BY LOCAL GOVERNMENT
AGENCY.
SHOULD BE TREATED NO DIFFERENTLY
THAN ANY OTHER STATE CHARTERED
BANK LICENSED OR SUPERVISED BY
THE DEPARTMENT.
SUCH AN INSTITUTION SHOULD BE
SUBJECT TO THE SAME STATE AND
FEDERAL LAWS AND EXAMINATION
SHOULD FOCUS ON THE BASIC
COMPONENTS.
CAPITAL ASSET QUALITY MANAGEMENT
[inaudible]
EARNINGS LIQUIDITY AND
SENSITIVITY TO MARKET RATE.
STATE OVERSIGHT OF A DEPOSITORY
INSTITUTION OWNED BY THE STATE.
WE BELIEVE THE DB O. WOULD BE
THE APPROPRIATE REGULATOR FOR
DEPOSITORY INSTITUTION OWNED BY
THE STATE.
THIS INCLUDES ANY CIRCUMSTANCE
IN WHICH THE CALIFORNIA
INFRASTRUCTURE BANK OR ANY
EXISTING LENDING PROGRAM.
IS EXTENDED FOR EXPANDED BY
STATUTE TO BECOME A STATE LEVEL
FDIC DEPOSITORY INSTITUTION.
SO PROVIDE SUPERVISION AND
OVERSIGHT BY THE DPO WHAT ARE
NOT ONLY BE APPROPRIATE BUT IT
WOULD BE NECESSARY.
AS WITH ALL OTHER DEPOSITORY
INSTITUTIONS IT WOULD BE SUBJECT
TO THE SAME STATE AND FEDERAL
LAWS.
IT WOULD LIKELY NEED TO OBTAIN
FDIC DEPOSIT INSURANCE.
AND A MASTER ACCOUNT FROM THE
FED. TO BE VIABLE.
OUR EXAMINATIONS WOULD COVER
AGAIN THE SAME COMPONENTS.
IN SUCH A SCENARIO.
IT WOULD BE VITALLY IMPORTANT TO
PROTECT THE DEPOSITS.
THE HARD EARNED MONEY OF THE
PEOPLE AND THE BUSINESSES OF
CALIFORNIA.
THE DEPARTMENT IS CURRENTLY THE
ONLY AGENCY WITH THE KNOWLEDGE
AND EXPERTISE TO DO THAT.
IN CLOSING THE DEPARTMENT AS
ALWAYS WILL OFFER ANY TECHNICAL
ASSISTANCE FOR ANY POLICY
CONSIDERATION THAT.
CONSIDER CONSIDERATION RELATED
TO PUBLIC BANKING.
AND WE LOOK FORWARD TO WORKING
WITH YOU AND I WOULD BE HAPPY TO
ANSWER ANY QUESTIONS.
THANK YOU VERY MUCH --
UP AT THIS POINT ANY OF THE
MEMBERS WOULD LIKE TO ASK ANY
QUESTIONS.
OF EITHER.
YOU HAVE A QUESTION.
THANK YOU --
I HAVE A COUPLE QUESTIONS FOR AT
VIEW --
COMMISSIONER --
AND BUT YOU JUST WALKED US
THROUGH THE ROLE OF THE DO AND
AND ONE OF THE THINGS YOU
MENTIONED WAS THE IMPORTANCE OF
OVERSIGHT AND THAT.
INCLUDING IN ENSURING ADEQUATE.
INVOLVEMENT OR OVERSIGHT OF ANY
ENTITY THAT TO AT THAT TAKES
MONEY.
HOW CAN YOU SPEAK SPECIFICALLY
ON HOW YOU?
COULD ENVISION THE OVERSIGHT
WOULD BE PARTICULARLY AROUND
CONFLICT OR INTEREST FOR ANY
ABUSE I KNOW THAT --
WHEN I THINK OF LOCAL
GOVERNMENTS MY GOSH AMAZING GOOD
INTENTION IS THERE BUT CERTAINLY
THROUGH TIME WE'VE SEEN EXAMPLES
OF PERHAPS ABUSE --
OF PUBLIC DOLLAR FINE OF CITIES
ARE AREAS CAN YOU HELP US THINK
THROUGH WHAT THAT COULD LOOK
LIKE AND DB O. R. WHAT KINDS OF
CONCERNS.
MORE SPECIFICALLY YOU MIGHT HAVE
THOUGHT THAT ARE CURRENTLY THE
BANKING LAW WASN'T DESIGNED TO
ADDRESS POSSIBLE POLITICAL
INFLUENCES.
ON AN EXECUTIVE MANAGEMENT TEAM
OR BOARD OF DIRECTORS WHICH IS
SOMETHING WE WOULD CONSIDER FOR
A PUBLIC ENTITY.
HOWEVER WE WOULD ATTEMPT TO
ENSURE THAT DURING THE
APPLICATION PROCESS THE
INSTITUTION IS STRUCTURED.
IN A WAY THAT PROHIBITS THOSE
TYPES OF INFLUENCES.
WE ALSO EXPECT THAT EVERYONE OF
OUR INSTITUTIONS NOW AND GOING
FORWARD HAS A CONFLICT OF
INTEREST POLICY.
AND WE WOULD EXAMINE AND
REGULATE TOWARDS BACK CONFLICT
OF INTERESTS POLICY.
AND WE WOULD ALSO WANT TO REVIEW
IT TO MAKE SURE THAT IT IS
APPROPRIATE.
WE WELL CHECK FOR COMPLIANCE
WITH ALL POLICIES AND REVIEW
TRANSACTIONS SUCH AS LOANS
INVESTMENTS.
AND CONTRACTS AGAIN.
THIRD PARTY CONTRACTS AGAIN
BEFORE I AND DO INFLUENCE.
IF I AM DO INFLUENCE IS
DISCOVERED THE DEPARTMENT MAY
TAKE AN ENFORCEMENT ACTION TO
CORRECT THAT SITUATION.
SO WE DO HAVE ENFORCEMENT
AUTHORITY.
BUT WHAT BUT WHAT I'M HEARING IS
ALSO THAT THERE WOULD HAVE TO BE
SOME CREATION OF REGULATIONS --
PROCESS --
TO ENSURE THAT WE DON'T HAVE AND
DO INFLUENCE --
IN ANY PARTICULAR WAY --
CAN YOU SHARE YOUR THOUGHTS ON
THE IDEA THAT A PUBLIC BANK
WOULD BE EXEMPT FROM FDA SEE
[inaudible]
I INSURANCE [inaudible]
I KIM.
S. FIRST --
FOR STATE CHARTERED COMMERCIAL
BANKS THERE CURRENTLY IS NO
REQUIREMENT IN CALIFORNIA LAW.
TO BE INSURED [inaudible]
HOWEVER.
THE DEPARTMENT'S REGULATIONS
PROVIDE THE STATE CHARTERED
COMMERCIAL BANKS CANNOT OPERATE.
UNLESS THEY ARE INSURED BANK.
AN INSURED BANK IS DEFINED AND
BACK INTO THE CODE THE FINANCIAL
CODE AS A BANK WHOSE DEPOSITS
ARE FDIC INSURED.
IN OTHER WORDS THE DEPARTMENTS
REGULATION REQUIRE STATE
CHARTERED COMMERCIAL BANKS TO BE
INSURED.
HOWEVER.
THERE THE FINANCIAL CALLED ALSO
ALLOWS THE COMMISSIONER TO WAIVE
THE DEPARTMENTS REGULATIONS.
THEREFORE IT IS POSSIBLE TO HAVE
A STATE CHARTERED COMMERCIAL
BANK WHICH COULD OPERATE.
UNINSURED ARE PRIVATELY INSURED
IF APPROVED BY THE COMMISSIONER.
LET ME GO A STEP FURTHER WE
WOULDN'T WANT TO SEE SOME TYPE
OF INSURANCE BUSINESS.
BECAUSE IT IS VITAL TO PROTECT
THE DEPOSITS OF THE PEOPLE AND
THE BUSINESSES A CALIFORNIA.
CURRENTLY THERE IS A PRIVATE
DEPOSIT INSURANCE MARKET BUT IT
IS TRULY ON DEVELOPED ALTHOUGH
SOME CREDIT UNIONS HAVE PRIVATE
CHAIR INSURANCE FROM A SINGLE
PRIVATE INSURER FOR THE COUNTRY.
IT HAS YET TO BE DEMONSTRATED
THE CALIFORNIA BANKS CAN
SUCCESSFULLY OBTAINED A PRIVATE
INSURANCE.
WE ALSO BELIEVE A PUBLIC BANK
WOULD BE UNLIKELY. TO OBTAIN A
MASTER ACCOUNT FROM THE FEDERAL
THE FEDERAL RESERVE IF IT DID
NOT HAVE FTA SEE INSURANCE.
OR A SUITABLE ALTERNATIVE THAT
COULD WITHSTAND SCRUTINY.
A MASTER ACCOUNT IS NEEDED TO
PERFORM MANY OF THE KEY
FUNCTIONS OF ANY BANK
[inaudible]
THANK YOU [inaudible]
I'M. FOR TREASURE Mà IT DOES
HAVE A COUPLE QUESTIONS AS WELL.
IN YOUR ROLE YOU'RE A MEMBER OF
THAT THE BOARD OF DIRECTORS FOR
THE AYE BANKS CAN YOU SHARE YOUR
THOUGHTS OUR REACTIONS.
TO THE I. BANK BECOMING A
DEPOSITORY INSTITUTION --
SINCE THIS IS MY FOURTH WEEK ON
THE JOB I'M I'M GOING
[inaudible]
TO YES. TO MISTER SCHAPER SINCE
I HAVEN'T SAT AT ONE OF THE AYE
BANK COMMITTEE MEET YET YET BUT
I I BETTER HAVE YOU.
SEC BECAUSE I MAY SAY IT WRONG.
THE FUN NOT SURE I WILL SAY IT
COMPLETELY RIGHT THAT I WILL DO
MY BEST TO HAVE THANK YOU FOR
THE QUESTION [inaudible]
THE THE AYE BANK WOULD.
HAVE TO CONFRONT SEVERAL
SIGNIFICANT CHALLENGES AND I'D
I'D.
PLEASE I DON'T WANT THE
COMMITTEE TO HEAR ME.
SAYING THESE ARE SHOW STOPPERS
JUST THINGS THAT AS POLICYMAKERS
YOU SHOULD CONSIDER AS THE AYE
BANK SHOT.
THE I. BANK HAS ONE LOCATION.
SO THAT WOULD THEN BEG THE
QUESTION.
HOW TO ACTUALLY REACH OUT AND
SERVICE THE INTENDED AUDIENCE?
BUT SINCE THE INTENDED AUDIENCE
IS STILL A MOVING TARGET IT
WOULD BE HARD FOR ME TO DROP
ANCHOR ON THAT.
AND SECONDLY --
THE I BANK OF FOR ALL OF THE
GOOD IT DOES AND IT DOES A
CONSIDERABLE AMOUNT OF GOOD IN
OUR STATE --
HAS SINCE ITS INCEPTION
GENERALLY BEEN FOCUSED ON EITHER
BECOMING A CONDUIT ISSUER OF
BONDS -- FOR
PROJECTS THAT ARE --
TYPICALLY AB AND ENDING --
FOR TO ADMINISTER --
BORROWING PROGRAMS FOR THAT THAT
THAT INCORPORATE OTHER --
BORROWING PROGRAMS WITHIN THE
STATE THE THE AYE SURF PROGRAM
BEING ONE OF THEM AND I DON'T
PROFESS TO BE AN EXPERT ON THE
AYE BANKS BUSINESS GOES.
UNDER THE PAST ADMINISTRATION I
WAS ONLY THE ALTERNATE DELEGATE
TO THE AYE BANK BOARDS SO I'M
SUFFERING FROM.
A FROM A THE A BIT OF IGNORANCE
ON THAT -- I
WOULD ALSO OBSERVE HOWEVER.
THAT AND THERE ARE --
AT LEAST A MEASURABLE NUMBER OF
THE AYE BANK STAFF.
ARE EXPERIENCED COMMERCIAL
BANKERS AS WAS THE RECENTLY
RETIRED EXECUTIVE DIRECTOR.
SO IT IS NOT AS THOUGH THE AYE
BANK IS WITHOUT THE MANAGEMENT
EXPERTISE --
AND SO PLEASE DON'T HEAR ME
SAYING THAT.
I DO BELIEVE HOWEVER THAT IT
WOULD MORE LIKELY THAN NOT
REQUIRE THE DEVELOPMENT OF SOME
OF THE KINDS OF PLANS THAT ARE
REQUIRED WHEN. EIGHT DID OVER
START AT BANK COME THIS AND SAYS.
WE WANT TO STAND UP A NEW BANK
THERE ARE A WHOLE SET OF PLANS.
THAT HAVE TO GO IN THAT
REVOLVING AROUND THE GOVERNANCE
OF THE INSTITUTION THE CREDIT
POLICIES THE INSTITUTION
CUSTOMER IDENTIFICATION PROGRAMS
AND SO FORTH.
AND MIKE MY EXPECTATION WOULD BE
THAT THE ALLIED BANK WOULD BE
REQUIRED TO UNDERTAKE THOSE AS
WELL AGAIN NOT A SHOW STOPPER
BUT CLEARLY --
WOULD PRODUCE SOME FRICTION TO
HAVING THE AYE BANK.
ACHIEVE THAT GOAL.
THANK YOU AND FINAL QUESTION AND
FOR THE TREASURES DEPARTMENT
WHOEVER WOULD LIKE TO ANSWER
THAT.
I ONE OF THE ROLES THAT'S REALLY
IMPORTANT IS THAT YOU PLAY IS AT
IN ENSURING THAT TAXPAYER FUNDS
ARE PROTECTED --
IN SO CAN YOU SPEAK TO HOW.
AGAIN REACTIONS OUR THOUGHTS ON
KIND OF THESE AT THIS IDEA AND
HOW.
THE TREASURES DEPARTMENT WOULD.
ENSURE THAT TAXPAYERS FUNDS WERE
PROTECTED.
IF THIS WAS A MODEL THAT WAS
BEING CONSIDERED IF THERE WAS A
STRUGGLING BANK --
PUBLIC BANK --
HAVE RIGHT NOW --
SO LIKE ARE PULLED MONEY
INVESTMENT FUND IT'S ABOUT
NINETY TWO BILLION DOLLARS BUT
IT IS STATE MONEY AND LOCAL
MONEY THAT IS ESSENTIALLY.
SPOKEN FOR SO IT'S NOT MONEY
SITTING AROUND --
WE CANNOT RISK PUT IT UP AS
CAPITAL AND WHAT I BELIEVE IF WE
WANTED TO DO A LOCAL BANK IS
THAT IT HAS TO BE A SEPARATE
LINE ITEM ON THE BUDGET.
YOU CAN NOT ENCUMBER FUNDS THAT
ARE ALREADY BEING USED OR SET
ASIDE FOR DIFFERENT PURPOSES AND
MOST OF HE WALKING FROM LOCAL
GOVERNMENT SO YOU CAN UNDERSTAND
THAT WHEN.
YOU KNOW SOMEONE WANTS TO USE
THAT FUND TO CAPITALIZE IN
ANOTHER ONE THAT IS REALLY NOT.
YOU KNOW OUR MONEY TO DO IT THAT
IT IS YOU KNOW FOR SET ASIDE FOR
THE SCHOOLS ARE HEALTH AND HUMAN
SERVICES SO --
THAT IS OUR JOB IS TO MANAGE OF
THE STATE'S MONEY TAXPAYERS
MONEY OM AND THAT'S WHAT YOU
KNOW WE DO WE HAVE CHECKS AND
BALANCES YOU KNOW WE MAKE SURE
THAT -- WE
COMMUNICATE EFFECTIVELY WITH
LOCAL GOVERNMENTS IF WE ARE
MANAGING THEIR MONEY ABOUT.
TWENTY TWO BILLION DOLLARS OF
THAT AND THEY HAVE ACCESS TO IT
THROUGH KIND OF A PORTAL --
SYSTEM THAT THEY CAN DEPOSIT
EASIER AND ALSO WITHDRAW THE
FUNDS AS NEEDED SO THERE'S NO
PAPER TRANSACTIONS ANYMORE BUT
IT IS ALL.
DONE ELECTRONICALLY AND SO
THAT'S KIND OF SOME OF THE
GUIDELINES AND RESPONSIBILITIES
THAT WE HAVE MANAGING THE
STATE'S FUNDS AND TEMAS POINTING
HERE SO TEMAS AT SOMETHING.
IT THANK YOU FOR THAT --
I WOULD TRY TO GET VERY SPECIFIC
AND WALKING WITH YOU --
ADD TO THE CO CHAIRS AND SAY.
THAT BECAUSE ONE OF MY DUTIES IN
THE TREASURER'S OFFICE'S OVERSEE
THE INVESTMENT DIVISION WE
SIMPLY WILL NOT.
PUT TAX MAYOR MONEY AT IN A
LOCAL BANK AND WE HAVE ABOUT
SEVENTY TWO OR SEVENTY FOUR
LOCAL BANKS.
IN WHICH WE DEPOSIT STATE FUNDS
AND LAST [inaudible]
THE BANK.
CAN PROVE ITSELF TO BE CREDIT
WORTHY.
UNLESS THE BANK CAN DEMONSTRATE
THAT IT HAS A SATISFACTORY
RATING UNDER THE COMMUNITY
REINVESTMENT ACT.
AND MOST IMPORTANTLY THAT THE
BANK CAN SECURE THE DEPOSITS
WITH COLLATERAL SECURITIES AND
YOU HEARD THE COMMISSIONER TALK
ABOUT THAT EARLIER --
SO THIS IS THIS IS VERY SIMPLE
FOR TO A SIMPLE PERSON THAT DOES
THE INNARDS WORK OF THE
TREASURER'S OFFICE.
HERE'S THE STATE'S MONEY BELONGS
TO TAXPAYERS AND WE'RE GONNA
MAKE SURE THAT WE GET IT BACK
AND THE WAY WE ENSURE THAT WE'RE
GOING TO GET IT BACK IS.
YOU HAVE TO PLEDGE COLLATERAL TO
US -- SO
THAT IF YOU CAN'T PAY IT BACK WE
TAKE THE COLLATERAL AND SELL IT
AND WE CAN RESTORE THE TAXPAYER
TO THEIR TO THEIR ORIGINAL
CONDITION [inaudible]
THANK YOU [inaudible]
THE I HAVE ONE QUESTION FOR JAN --
OWES HIS MISSILE AND ALL RIGHT.
I'D YOU FOR SEEING CHALLENGES IN
REGULATING PUBLIC BANKS THAT ARE
NOT PRESENT REGULATING PRIVATE
BANKS.
SAY THAT AGAIN PLEASE DO YOU
FORESEE ANY CHALLENGES IN
REGULATING PUBLIC BANKS THAT ARE
NOT PRESENT WHEN REGULATING
PRIVATE BANKS.
THE TAXPAYER MONEY AND HOW TO
AND THE REPORTING.
BACK -- TO
THE EITHER THE LOCAL ENTITY OR
THE STATE --
THE INFLUENCE OF OTHEROF
POLITICAL INFLUENCES --
HOW TO MAKE SURE THAT BEING GAY
IS RAN IN A SAFE AND SOUND
MANNER --
KEEPING THE VISION CONSISTENT A
BUSINESS PLAN FOR A A NEW DID
NOBLE BANK.
THAT BUSINESS PLAN HAS TO BE
FROM THREE TO FIVE YEARS AND
THEY HAVE TO CONTINUE TO KEEP
WITH IT.
AND FIGURE OUT HOW THEY CAN MAKE
MONEY AT IT THAT BUSINESS
PLANNED FOR A PUBLIC BANK WOULD
HAVE TO STAY CONSISTENT AS WELL.
THROUGH A THREE TO FIVE YEAR.
TIME FRAME --
THE FOUR BANKS TAXATION IS AN
ISSUE.
SO HAVE A TAXATION WITH.
HELP ME JIMMY.
TAXATION HERE BUT IS AN ISSUE AS
WELL.
OKAY THAT'S EXACTLY WAS KIND OF
LOOKING.
FOR ARE THERE ANY OTHER
QUESTIONS FROM THE MEMBERS.
SEEING NONE --
THANK YOU VERY MUCH FOR YOUR
TIME HE'LL BE HERE TO ANSWER ANY
QUESTIONS.
OR IF YOU.
HAVE ANY QUESTIONS THANK YOU
VERY MUCH.
THANK YOU ADD TO TREASURER MA
AND COMMISSIONER.
OUR SECOND PANEL WE WERE HERE
FROM.
SOME OF THE MOVEMENT I HAVE MET
WITH GROUPS AND WHO REPRESENT
WHO ARE REPRESENTED ON THIS
PANEL AND I KNOW SEVERAL OF MY
COLLEAGUES IN THE LEGISLATURE
HAVE ALSO HEARD.
AND FROM SOME OF THESE FOLKS OUR
FIRST SPEAKER WILL BE AT SUSHIL
JAKE UP WHO HAS SERVED ON THE
TASK FORCE ORGANIZED BY
TREASURER CEASE NETTLES FROM SAN
FRANCISCO.
AS TWO CHILDREN ATTORNEY WHO IS
WORKING TO ESTABLISH A CHARTER
AND REGULATORY FRAMEWORK FOR
PUBLIC BANKS AT THE MUNICIPAL
LEVEL.
AND ASSIST US TO FEEL WILL BE
FOLLOWED BY OUR SECOND SPEAKER
DICK MAZES.
AYE DICK IS ASSOCIATED WITH THE
DEMOCRACY COLLABORATIVE AND IS
ADVOCATING FOR THE
TRANSFORMATION OF THE EXISTING
CALIFORNIA INFRASTRUCTURE BANK
INTO THE A DEPOSITORY
INSTITUTION THAT WOULD SERVE.
LOCAL OVERNMENT CUSTOMERS.
HIGH.
WE CAN HAVE YOU BOTH COME UP.
I WANT TO THANK YOU BOTH FOR
BEING HERE TODAY AND JOINING THE
DISCUSSION.
AND I WILL GO AHEAD AND HAVE YOU
AT START TO FEEL OKAY GREAT
THANK YOU.
MADAM CHAIR IS AND MEMBERS OF
THE COMMITTEE --
GOOD AFTERNOON MY NAME IS SO
SHE'LL JACOB I'M WITH THE
LAWYERS COMMITTEE FOR CIVIL
RIGHTS OF THE SAN FRANCISCO BAY
AREA.
AND I'M ALSO WITH THE CALIFORNIA
PUBLIC BANKING ALLIANCE.
ON AS CHAIR LIMóN SAID I WOULD
SUPPORT A WAS A PARTICIPANT IN
THE SAN FRANCISCO MUNICIPAL MAKE
FEASIBILITY TASK FORCE AND WE'LL
BE HEARING MORE FROM TREASURES
CISNEROS.
ON THAT --
I'D LIKE TO BEGIN BY FRAMING
WHERE WE'RE COMING FROM AS
ADVOCATES AND STATEWIDE
ADVOCATES.
WE BELIEVE THAT CALIFORNIA IS
FACING MULTIPLE CRISES.
THE POTENTIAL OF A RAT RECESSION
THAT WOULD REDUCE TAX REVENUES
AT THE STATE AND LOCAL LEVELS.
THE CRISIS OF AFFORDABILITY WITH
REGARD TO HOUSING THE LACK OF
AFFORDABLE HOUSING STOCK --
AND THE LACK OF DEVELOPMENT OF
AFFORDABLE HOUSING [inaudible]
I AM.
CLIMATE CHANGE BUT SPECIFICALLY
WILD FIRES IN NATURAL DISASTERS
BECOMING AN ANNUAL OCCURRENCE.
THAT ARE SEVERELY STRAINING THE
FINANCIAL RESOURCES OF LOCAL
GOVERNMENTS.
THE CONSOLIDATION OF THE BANKING
INDUSTRY CREATING --
A SITUATION WHERE LOCAL
GOVERNMENTS HAVE BECOME OVER
RELIANCE ON A FEW LARGE OUT OF
STATE BANKS FOR THEIR BANKING
SERVICES --
AND THE CONCURRENT LOSS OF OUR
LOCAL BANKING INDUSTRY IT IS OUR
UNDERSTANDING IS AN ALLIANCE IN
NINETEEN NINETY FOUR THERE WERE
FIVE HUNDRED BANKS HEADQUARTERED.
IN CALIFORNIA AS COMMISSIONER
ORINDA SAID THERE ARE NOW A
HUNDRED AND TWENTY STATE
CHARTERED BANKS.
WE KNOW THERE HAS BEEN A
DRAMATIC LOSS OF LOCAL AND
ESPECIALLY COMMUNITY BANKS.
WE KNOW THAT THE LOSS OF LOCAL
BANKS MEANS A LOSS OF LOCAL
RELATIONSHIPS WITH BANKERS.
WHO UNDERSTAND THE NEEDS OF
LOCAL GOVERNMENTS AND
COMMUNITIES IN WHICH THEY ARE
EMBEDDED?
OUR PROPOSAL TO YOU IS THAT BY
DECENTRALIZING AND
REINVIGORATING OUR BANKING
SYSTEM.
WE BELIEVE REGIONAL PUBLIC
BANKING CAN HELP US TO CREATE A
MORE RESILIENT FINANCIAL SYSTEM
AND SUPPORT OUR LOCAL
GOVERNMENTS.
FIRST PUBLIC BANKS WOULD ALLOW
CALIFORNIA CITIES AND COUNTIES
TO CREATE SOUND INVESTMENTS THAT
WILL SAVE THEM MONEY.
AND ALLOW THEM TO INVEST THEIR
PUBLIC DEPOSITS IN FISCALLY
SOCIALLY AND ENVIRONMENTALLY
RESPONSIBLE ACTIVITIES.
SECOND PUBLIC BANKS CAN SAVE
TAXPAYER FUNDS AND BRING THEIR
TREMENDOUS BANKING BUSINESS BACK
TO THE STATE.
THAT BUSINESS IS CURRENTLY
DOMINATED BY WALL STREET BANKS
INSTEAD WE CAN USE THOSE FUNDS.
IN THE LOCAL BANKING SECTOR.
IN PARTNERSHIP WITH LOCAL BANKS
AND CREDIT UNIONS PUBLIC BANKS
CAN PROVIDE AFFORDABLE LOANS AND
LINES OF CREDIT TO LOCAL SMALL
BUSINESSES AND NONPROFITS.
THAT CAN PROVIDE A CRITICAL BALL
WAR AGAINST DISPLACEMENT OF
COMMUNITY SERVING ANCHOR
INSTITUTIONS.
PUBLIC BANKS CAN INCREASE THE
LANDING CAPACITY OF THE LOCAL
BANKING SYSTEM TO PARTICIPATION
LOANS BY PROVIDING LIQUIDITY AND
SERVING AS REGIONAL BANKERS
BANKS.
THE CALIFORNIA PUBLIC BANKING
ALLIANCE BRINGS TOGETHER
ADVOCATES FROM ACROSS THE STATE
SAN DIEGO AND LOS ANGELES.
SAN FRANCISCO AND THE EAST BAY.
SILICON VALLEY GOING ALL THE WAY
UP TO EUREKA IN HUMBOLDT.
OUR VISION IS A NETWORK OF
PUBLIC BANKS THIRD ARE OWNED AT
THE REGIONAL COUNTY AND
MUNICIPAL LEVELS.
OUR PROPOSAL IS A CHARTER BASED
APPROACH. TO PUBLIC BANKING AND
BY THAT I MEAN WE ARE NOT
SEEKING TO LEGISLATE IN YOUR
BANK.
WE ARE SEEKING TO PROVIDE A
PATHWAY SO THAT LOCALITIES CAN
CREATE THEM.
THE ALLIANCE'S TWO THOUSAND
NINETEEN GOAL IS TO INTRODUCE
LEGISLATION THAT WOULD CREATE A
CLEAR PATHWAY. FOR THE
DEPARTMENT OF BUSINESS OVERSIGHT
TO LICENSE AND REGULATE LOCAL
PUBLIC BANKS.
THEY WOULD BE CLASSIFIED AS
SPECIAL PURPOSE COMMERCIAL BANKS.
THEY WOULD BE SEPARATE LEGAL
ENTITIES FROM THEIR PUBLIC
SHAREHOLDERS.
THESE BANKS WOULD HAVE SEPARATE
INDEPENDENT BOARD STAFF BY
BANKING PROFESSIONALS.
WE KNOW THIS BECAUSE
COMMISSIONER AN HAS JUST TOLD
US THE PROCESS BY WHICH YOU FORM
A BANK IN CALIFORNIA.
SHE TOLD US BY BUT THE EXTENSIVE
pORGANIZER'S A BANKS AND THEIR
BOARDS OF DIRECTORS WE'RE
PROPOSING TO USE THE SYSTEM THAT
WE ALREADY HAVE.
AND APPLY IT TO LOCAL PUBLIC
BANKS.
WE BELIEVE THE CHARTER APPROACH
TO PUBLIC BANKING ENABLES OUR
REGIONS TO BE.
THAT BECOME PATHWAYS PUBLIC
FINANCE.
NOT ONE IN WHICH LOCALITIES
DECIDE IF THEY WANT BANKS HOW
THEY WANT BANKS AND WENT TO
LAUNCH THEM.
BY DECENTRALIZING THE SUPPORT HE
TO CALIFORNIA'S REGIONS WE
BELIEVE WE ARE DIVERSIFYING THE
RISKS OF PUBLIC BANKING AS WELL
AS DIVERSIFYING ITS REWARDS.
IN OUR VISION PUBLIC BANKS WILL
BE CREATED TO MEET THE
PARTICULAR NEEDS OF LOCAL
ECONOMIES WHETHER IT IS
REBUILDING AFTER WILD FIRES
FINANCING AFFORDABLE HOUSING OR
PREVENTING DISPLACEMENT OF LOCAL
BUSINESSES AND NONPROFIT
AGENCIES.
IN ADDITION AFTER CONSULTING
WITH COUNTY TREASURER'S AND AND
BEING OPEN TO CONTINUE
ADDITIONAL CONSULTATIONS WE HAVE
TAKEN FEEDBACK AND I DON'T
BELIEVE THAT REMOVING COLLATERAL
IS ATION REQUIREMENTS --
FOR THESE BANKS --
SHOULD BE PART OF OUR
LEGISLATION AND IT'S NOT A IN IN
OUR PROPOSAL.
OUR VIEW IS --
BASED ON THE HIGHLY SUCCESSFUL
BACK IN NORTH DAKOTA WHICH YOU
HEARD ABOUT --
FROM TREASURE KIANA MAILLET AND
I WANTED TO POINT OUT A FEW
ADDITIONAL DETAILS ABOUT THIS
BANK WHICH I FIND SO FASCINATING.
THE BANK NORTH DAKOTA PARTNERS
WITH CREDIT UNIONS --
AND AS A RESULT OF THAT
RELATIONSHIP NORTH DAKOTA HAS
MORE BANKS AND CREDIT UNIONS PER
CAPITA.
THAN ANY OTHER STATE IN FACT IT
HAS NEARLY SIX TIMES AS MANY
LOCAL FINANCIAL INSTITUTIONS PER
PERSON AS A COUNTRY OVERALL.
IN WHAT THE COURT --
THE LOCAL FINANCIAL INSTITUTIONS
HAVE A REMARKABLE 83% OF THE
DEPOSIT MARKET.
IN THE REST OF THE COUNTRY LOCAL
BANKS AND CREDIT UNIONS ARE
ACCOUNT 429%.
OF THE DEPOSIT MARKET.
WE KNOW THAT'S THROUGH THE
RELATIONSHIP THAT THIS BANK HAS
PLAYED AS A CENTRAL BANK
PROVIDING LIQUIDITY.
EMERGENCY LOANS PARTICIPATION
LOANS AND STEPPING IN IN TIMES
LIKE THE TWO THOUSAND EIGHT
FINANCIAL CRISIS.
THE BANK COMPLETELY AVOIDED THE
SUBPRIME LENDING AND AND RISKY
FINANCIAL PRODUCTS OF WALL
STREET.
AND WAITING TO THE WALL STREET
JOURNAL A TWO THOUSAND EIGHT
NORTH DAKOTA'S CONNIE GROUP
SEVEN POINT 3% TWICE AS FAST AS
ANY OTHER STATE --
AND A KEY PRIORITY FOR THE BANK
UNIT IN NORTH DAKOTA IS TO
MAINTAIN A STRONG AND STABLE
BALANCE SHEET TO PROTECT
TAXPAYER MONEY.
THIS IS THE VISION FOR THE TYPES
OF PUBLIC BANKS WE WANT TO SEE
SPREAD THROUGH THE STATE OF
CALIFORNIA THANK YOU.
THANK YOU.
DICK MAZES.
OKAY MY NAME IS --
DICK MAYES THIS AND I KNOW
NOTHING ABOUT BANKING START OFF
WITH I'M A RETIRED PROFESSOR.
IN MEDICAL PHYSICS OF ALL THINGS
IS THE BALLOT FOR REMOVED FROM
BANKING AS ONE CAN GET.
AND AYE MOVED TO CALGARY TARGETS
CALIFORNIA FIFTEEN YEARS AGO.
AND VERY PLEASED TO BE HERE I
MUST SAY --
WHAT I?
WHEN A I THINK BROUGHT ME TO
THIS WAS LOOKING AT
INFRASTRUCTURE MORE THAN
ANYTHING?
AND LOOKING AT AT HOW
INFRASTRUCTURE FX DIFFERENT
SOCIETIES I LIVED IN HIGHLY AND
PERU FOR ABOUT TWO OR THREE
YEARS AND THEY HAD.
ESSENTIALLY NO INFRASTRUCTURE
AND NO SUPPORT PUBLIC
INFRASTRUCTURE AND A GREAT DEAL
OF INEQUALITY.
I ALSO LIVED IN ANOTHER PLACE
CALLED IT'S TAKEN CARE OF EVERY
BIT OF INFRASTRUCTURE IS TAKEN
CARE OF BY.
THE THE GOVERNMENT.
SO THEY HAVE NOT ONLY THE
EDUCATION HEALTH CARE ROADS.
ALL MODES OF TRANSPORTATION
UTILITIES EVERYTHING IS
SUPPORTED GOVERNMENTAL WAY AND
THIS CONSEQUENCE OF THAT THEY DO
HAVE INEQUALITY SOME PEOPLE ARE
DRIVING MASERATI SINCE SUMMER
DRIVING OLD VOLVOS --
BUT BASICALLY EVERYTHING IS
TAKEN CARE OF FOR THE GREAT
MAJORITY OF THE PEOPLE AND THAT
CREATES A GREAT SOLIDITY A
FEELING OF HAVING EVERYTHING
TAKEN CARE OF BY THE GOVERNMENT
BY THE INFRASTRUCTURE.
HOW DID THEY ACHIEVE THAT AND
BASICALLY THE GOVERNMENT
SUPPLIES FUNDS FOR DOING SO?
AND THE I THINK THAT COULD ALSO
BE DONE IN CALIFORNIA AND THAT'S
WHY I LOOK AT THIS --
WE LOOK AT CALIFORNIA
INFRASTRUCTURE THERE'S CURRENTLY
I THINK EIGHT HUNDRED BILLION IN
NEARLY BONDS THE STATE MAY HAVE
A HUNDRED BILL YEAH AND AND
LOCAL.
ENTITIES HAVE ABOUT SIX HUNDRED
BILLION THE STATE IS PAYING MATH
FIVE BILLION DOLLARS A YEAR OVER
THIRTY YEARS ON AVERAGE.
THE LOCAL ENTITIES ARE PAYING
ABOUT TWENTY TO TWENTY FIVE
BILLION A YEAR IN A AND INTEREST
COST.
OVER AN AVERAGE THIRTY YEAR NEW
KNEES --
FROM LOCAL OR FROM PROPERTY TAX
AND SALES TAX THEY ALL GO TO THE
TOP 2% OF THE POPULATION.
WHO ARE SEEKINGTO EVADE OR?
ELIMINATE --
PERSONAL INCOME TAX.
AND THE THERE IS NO PERSONAL
INCOME TAX ON THAT SO BASICALLY --
THE SAME GROUP IT PAYS 50% OF
THE PERSONAL INCOME TAX IS
GETTING A BREAK FROM THE
MUNICIPAL BOND.
ISSUANCE --
THE INTERESTING THING IS THAT
THE COURSE THE BONDS WELL FIRST
OF ALL INFRASTRUCTURE NEEDS WE
KNOW OVER THE NEXT TEN YEARS ARE
COMING TO A TRILLION DOLLARS AND
THAT'S BEEN IN THE GOVERNMENT
BUDGETS --
THE LEGISLATIVE BUDGET OFFICE
HAS -- SHOWN
THAT AND IT'S GOING TO BE
BASICALLY AT HIGHER COST.
THE A BONDS NEARLY BONTA USED TO
BE 3% ARE GOING TO GO 24% OR
MORE.
AND SO THE COST IN TERMS OF
INTEREST COST IS GOING TO GO UP
QUITE A BIT AND WE CAN EXPECT
MORTGAGE EVEN MORE DEBT --
PARTICULARLY FROM LOCAL ENTITIES
IN THE FUTURE.
AND I WAS VERY CONCERNED WITH
THIS BECAUSE I FELT THAT.
WE REALLY OR TO DO SOMETHING AND
HOW DO WE BEGIN TO ADDRESS IT
WELL STATE BANK OF COURSE COULD
ADDRESS IT --
PRETTY DRESS THE BASIC PROBLEM
THAT THERE'S GOING TO BE A LOT
OF TAXATION A LOT OF WHAT WE
MIGHT CALL REGRESSIVE TAXATION
INTERPRETED MUNICIPAL BONDS
VERSUS THE PROGRESSIVE TAXATION.
OF THE PERSONAL INCOME TAX.
UP.
BUT THE MORE IMPORTANT THING I
THINK IS THAT THE PUBLIC BANKS.
WHETHER STATE OR LOCAL OR AS I
PREFERRED THE INFRASTRUCTURE
BANK CALIFORNIA INFRASTRUCTURE
BANK -- IT
BASICALLY CUT THE MUNICIPAL BOND
INTEREST RATES GREAT DEAL.
AND COULD DO SO VERY EASILY --
BASICALLY AND I'LL JUST CUT TO
THE END AND I'VE GIVEN A LOT
INFORMATION HERE IN MY RIGHT UP.
THE KEY POINT IS THAT.
THE INTEREST COST WOULD
BASICALLY GO THAT MONEY THAT
THAT.
MUNICIPALITIES PAY IN TERMS OF
THEIR PROPERTY TAX AND SALES TAX
COULD BASICALLY GO. TO FINANCE
THE DIE THE PASTA COSTS BY THE
SAME PUBLIC ENTITIES.
AND I FEEL VERY STRONGLY THAT A
PUBLIC BANKS SHOULD ONLY
DIRECTLY DEAL WITH PUBLIC
ENTITIES WHETHER TO STATE BANK.
OR MUNICIPAL BANK --
FOR THE IN THE EXISTING.
CALIFORNIA INFRASTRUCTURE
DEVELOPMENT AND BANK ALL THE ALL
THE EFFORTS TO ACHIEVE ANYTHING
FOR SMALL BUSINESSES INDIVIDUALS --
HOMES SO --
AFFORDABLE HOUSING ETCETERA CAN
BE DONE THROUGH INTERMEDIARIES
RATHER THAN DIRECTLY IT CAN BE
DONE THROUGH AS THE HIGH BANK.
WITH THE INFRASTRUCTURE BANK
CURRENTLY DOES THROUGH LOAN
GUARANTEES TO SEE DFI BACK OVER
TO CREDIT UNIONS THEY DON'T LOAN
THE MONEY DIRECTLY AT ALL.
A PROVIDE LOAN GUARANTEES TO
THOSE WHO DO SO AND I THINK
THAT'S THE WAY A PUBLIC BANK
SHOULD OPERATE NOT DIRECTLY WITH
SMALL BUSINESSES NOT DIRECTLY
WITH INDIVIDUALS.
BUT THROUGH PUBLIC AGENCIES
PUBLIC INSTITUTIONS.
PUBLIC BANK FOR PUBLIC --
ENTITIES OR BASICALLY ANOTHER
TERM LIFE USES A CREDIT UNION
FOR MUNICIPALITIES AND THAT'S
PROBABLY THE UNDERLYING IDEA
THAT I'VE GOT FROM MY LIFE IN
WISCONSIN WHERE WE HAVE A LOT OF
CREDIT UNIONS.
HOW CAN DO SOME DO SO WELL
BASICALLY?
WE NEED --
DEPOSITS BIG CHALLENGE AND I PUT
THIS DOWN IN THIS RIGHT UP YOU
NEED TO POLITICS AND HOW DO YOU
GET ALL THAT THE POSITS WELL.
THE DAY.
THE THE PRIVATE BANKS I DON'T
CALL THEN COMMERCIAL BANKS
PRIVATE BANKS.
OR PROVIDING RELATIVELY.
LOW INTEREST PAYMENTS ON SHORT
TERM DEPOSITS AND I THINK MANY
PUBLIC ENTITIES ARE GETTING HALF
A PERCENT.
I KNOW SOME OF THE PUBLIC
PENSION FUNDS QUITE A BIT LOWER
ON SOME OF THEIR SHORT TERM
DEPOSITS THERE'S ABOUT TRILLION
DOLLARS IN PUBLIC.
PENSION FUNDS IN CALIFORNIA HALF
OF THAT IS IN CALPERS AND CAL
STARS WHICH RUN THEIR OWN MONEY
MANAGEMENT.
BUT THE OTHER FIVE HUNDRED
BILLION THAT'S OUT THERE.
AND 1% OF THAT IS THE SHORT TERM
MONEY THAT NEEDS MONEY
MANAGEMENT.
ARE NOT GETTING ANY INTEREST AT
ALL ON AND WAYNE MORRIS WRITTEN
A NICE ARTICLE ON THAT SHOWING
THAT THE HIGH BANK THE EXISTING
AYE BANK WOULD BE A GOOD VEHICLE
FOR MANAGING. FOR THOSE FUNDS --
THAT'S ALSO TRUE FOR MANY PUBLIC
ENTITIES.
I KNOW THAT PUBLIC ENTITIES PUT
THEIR MONEY AND WHATEVER BOUGHT
A PRIVATE BANK IS AVAILABLE
LOCALLY.
AND THEN.
EVERY DAY OR EVERY WEEK THEY'LL
TAKE THE EXCESS RESERVES THAT
THEY HAVE THE X. THAT'S DEPOSIT.
A SPIN IT OFF INTO A HIGHER
RETURN LIKE --
CAMPUS ONE OF THEM THE
CALIFORNIA ASSET MANAGEMENT
PROGRAM.
AND THEY'LL GET 2% OF TWO AND A
HALF PERCENT WITH THEIR EXCESS
DEPOSITS OR RESERVES.
THE REAL KEY IS TO GET ENOUGH
RESERVES FOR THE AYE BANK IN
EXISTING AYE BANK. TO MAKE LOANS
AND CAN DO THE SICKLY --
INSURING THAT YOU GET VERY GOOD --
RETURNS ON YOUR DEPOSIT.
AND THE RETURNS ON THINKING
ABOUT IFYOU HAVE A 3% LOAN TO A
PRIOR TO A MUNICIPALITY TO LOCAL
AND IT A GIFT 2% ACTED THE
MUNICIPALITY.
AND BASICALLY CHARGE 1% FOR A
LOAN INSTEAD OF 4%.
THE 1% IS THE COVER OPERATIONAL
COSTS OF THE BANK AND ALSO TO
PROVIDE A LITTLE BIT OF PROFIT
FOR RETAINED EARNINGS TO
INCREASE YOUR CAPITAL SHOULD BE
CAN DO MORE LINES YOU HAVE TO
HAVE SOME RETAINED EARNINGS. TO
DO TO DO LOANS --
INCREASE YOUR LOAN CAPACITY.
SO I THINK THAT COULD BE DONE.
WHY WOULD I CHOOSE THE AYE BANK
RATHER THAN A NEW BANK TO DO
THIS?
I THINK BECAUSE YOU HAVE AN
EXISTING AGENCY YOU HAVE
EXISTING STAFF --
YOU HAVE THERE ARE AS WE HEARD
FROM KEN STEVENS THEIR EXISTING
PEOPLE ARE EXPERIENCE PRIVATE
BANKERS --
WE CAN EXPAND ON THAT.
DAY HAVE A AN ABILITY THEY HAVE
TO CONTACT THE HAVE EXTENSIVE
PROGRAMS TO EAT A EVALUATE LOANS.
THEY HAVE A ALSO FOR DOING LOAN
GUARANTEES TO A VARIETY OF THE
EIGHTY ONE C. DFI BANKS IN
CALIFORNIA THE TO A VARIETY OF A
CREDIT UNIONS PROVIDED THERE
OVER IN EXISTENCE FOR OVER THREE
YEARS -- SO
THEY HAVE A NUMBER OF WAYS OF
DIRECTING FUNDS TO ACTUAL USE
FOR OTHER THAN THE MUNICIPALITY
ITSELF THROUGH THE LOAN
GUARANTEES.
THE OTHER THING ABOUT THIS IS
THAT BY EXPANDING THE AYE BANK
IT WOULD TAKE VERY LITTLE TIME
YOU DON'T HAVE TO DO A BIG TWO
YEAR STUDY.
AND DO ALL THE THINGS YOU HAVE
TO DO WITH THE NEW BANK
BASICALLY YOU HAVE ABOUT TWO OR
THREE YEAR PERIOD.
PROBABLY A TWO YEAR PERIOD TO
DEVELOP A PLAN FOR THE FEDERAL
RESERVE.
AND YOU WOULD BE ABLE TO HAVE A
FUNCTIONING PUBLIC BANK --
THAT WOULD WORK TO PROVIDE THESE
LOANS TO MUNICIPALITIES
ESSENTIALLY 1% --
IT WOULD BE CALM THE MONEY
MANAGER FOR THE SHORT TERM FUNDS
NOT NECESSARILY DIRECTLY AS MANY
BANKS DO THEY SPEND THE SOFTENED
ABOUT A QUARTER PERCENT TO MONEY
MANAGEMENT FIRMS THAT ACTUALLY
DO IT THAT EXPERIENCE THAT MONEY
MANAGEMENT.
BUT THE NAME ON THE ACCOUNT
WOULD BE THE AYE BANK ACCOUNT.
SO IT'S QUITE POSSIBLE TO DO
THIS THE AYE BANK TODAY HAS
REQUEST FOR OVER A BILLION
DOLLARS OF LOANS THEY ISSUE
ABOUT SIXTY MILLION.
OF LOANS THEY DON'T HAVE THE
FUNDS TO DO THE LOAN STATE THE
CONDUIT LOANS FOR A BILLION
DOLLARS A YEAR THROUGH MUNICIPAL
CHANNELS THEY COULD THEY COULD
FUND THOSE --
THOSE STATE AGENCY LOANS
THEMSELVES WERE THEY TO BECOME --
A A DEPOSITORY INSTITUTION SO I
THINK THE ANSWER IS THAT IN
CONTRAST TO ALL OTHER THINGS WE
HAVE AN EXISTING AGENCY.
FINANCIAL AUTHORITY RIGHT NOW
THAT COULD DO THE JOB.
IT WOULD BE A SLOW BUILD UP.
BUT YOU WOULD HAVE BASICALLY
THAT WOULD BE EXPANDING WHICH
SHOW YOU HOW.
A PUBLIC BANK COULD OPERATE AND
SHOW YOU ANY THE DIFFICULTIES
YOU HAVE WITH IT AND IT.
MAY NOT BECOME THE STATE PUBLIC
BANK LITTLE SURE PROVIDE
GUIDANCE FOR HEALTH BECOME
[inaudible]
ONE THANK YOU.
THANK YOU BOTH THAT TWO
DIFFERENT IDEAS AND MODELS.
OF OF WHAT WE COULD IT ENVISION
THE FUTURE MEMBERS ANY QUESTIONS
OR COMMENTS FOR THE PRESENTERS.
SURE.
I HAVE A FEW COMING FROM LOCAL
GOVERNMENT THIS MAKES ME NERVOUS
SO -- CAN
YOU EXPLAIN HOW PUBLIC AGENCY
BANK CAN BE COMPETITIVE WITH THE
LARGER COMMERCIAL BANKS THE
SPECIAL IN INVESTMENT RETURN
RATES.
WHO WHO IS THE?
ONE ON WHOEVER.
I'M I WILL I WILL SAY THAT THE
THE INVESTMENT RETURNS FROM --
IF YOU WILL FROM THE NEW NIECE
OR AREN'T YOU YOU'RE SPENDING A
LOT OF MONEY ONE UNIX NONE OF IT
COMES BACK TO THE NONE OF IT
COMES BACK TO THE ISSUE.
GROUP HSA AITCHISON EXPENDITURE.
WHEREAS IF YOU IF THE IF THE
MUNICIPALITIES ARE INVESTING IN
THE AYE BANK THE AYE BANK WILL
RETURN.
THEIR MONEY BACK THE INTEREST
MONEY BACK. TO THE TO THE ENTITY
SO IT'S IT'S VERY IT'S VERY
PROFITABLY SICKLY YOU GET
MUNICIPAL LOANS 41%.
VERSUS 4% THAT'S A HUGE SAVINGS
IN TERMS OF WHAT A PROPERTY TAX
AND SALES TAX.
THE THE FROM OUR PERSPECTIVE
IT'S ABOUT THE TREMENDOUS SOCIAL
BENEFIT THAT WOULD BE CREATED BY.
AT AM REGION'S HAVING BANKS THAT
ARE FINANCING THE SOCIAL
PURPOSES FOR LIKE AFFORDABLE
HOUSING SO THERE'S TAKING THE
DEPOSITS THAT WOULD OTHERWISE BE
AN OUT OF STATE BANKS PUTTING
THEM INTO A NEW INSTITUTION.
AND USING THAT AS A BASE FOR
THESE.
TYPES OF ACTIVITIES --
COUPLE --
CURSING OF MY CONCERNS WITH
LOCAL AGENCIES HAVING TO PROVIDE
A DEDICATED FULL TIME STAFF TO
CONDUCT SOME OF THESE TASKS THAT
WE MIGHT BE ASKING.
COMMERCIAL BANKS CHARGE FEES TO
PROVIDE BANKING SERVICES IN YOUR
OPINION OUR LOCAL AGENTS IS
GOING TO BE COMPETITIVE WITH
COMMERCIAL BANKS IN RELATION TO
THE COST OF THOSE SERVICES
[inaudible]
THE COMPETITION.
YOU'RE TALKING ABOUT I I WOULD
LIKE TO HEAR MORE ABOUT WHAT
WE'RE ENVISIONING IS THAT IF --
I COUNTY OR REGION OR CITY
FORMED ITS OWN BANK.
IT IS TAKING THE DEPOSITS OF
THAT BANK OF THAT AT LOCAL
AGENCY.
AND IT COULD BE CHARGING FEES
FOR THE SERVICES.
THAT IS PROVIDING THAT LOCAL
GOVERNMENT.
BUT IT.
THE IDEA OF COMPETITION IN TERMS
I'M NOT SURE.
AND ARE YOU SAYING COMPETITIVE
IN TERMS OF THE INVESTMENT
RETURN THAT THAT LOCAL AGENCY
WOULD BE GETTING.
BECAUSE WHAT WE'RE WHAT WE'RE
PROPOSING TO YOU IS THAT THE
PURPOSE OF THIS BANK ISN'T JUST
INVESTMENT RETURN THAT THE
GOVERNMENT'S GETTING IT'S ALL OF
THE BENEFICIAL USES OF THOSE
DEPOSITS.
IN THE COMMUNITY.
I I GET THE SO I UNDERSTAND HOW
WHERE YOU FOR SEE THIS MAY BE
HAPPY AND URBAN AREAS AND HAVING
REGIONALISATION FOR BANKS.
MY FEAR IS WE ARE VERY BIG STATE.
AND HOW THIS WOULD AFFECT OUR
RURAL COMMUNITIES WOULD THEY BE
ABLE TO PARTICIPATE WOULD THEY
BE ABLE TO HAVE THE STAFFING TO
DO THAT.
DO THEY HAVE THE EXPERTISE TO DO
THOSE KINDS OF THINGS SO I'M
SITTING OUT HERE LOOKING AT THE
ENTIRE STATE AND I HEAR.
A LOT ABOUT THE LARGEST
COMMUNITIES WILL BE ABLE TO PULL
THIS OFF --
BUT I DO THINK THAT WE HAVE TO
LOOK AT THIS IS A STATE WIDE
ISSUE.
SO -- THAT'S
WHAT I'M JUST KIND OF GOING
THROUGH --
TODAY JUST --
GIVE ART SO THE ALLIANCE
INCLUDES RURAL AREAS WE HAVE --
CHAPTERS GOING UP TO EUREKA
HUMBOLDT WE HAVE --
MEMBERS HERE WILL GIVE PUBLIC
TESTIMONY ABOUT THE WILD FIRES
IN THE FACT ON THEM FROM SANTA
ROSA AND OUR WE BELIEVE THAT.
A CHARTER BASED APPROACH TO THAT
PUBLIC BANKING IS A MODULAR
FLEXIBLE APPROACH BECAUSE IT
ALLOWS LOCAL GOVERNMENTS TO JOIN
FORCES AT A REGIONAL COUNTY OR
MULTI COUNTY LEVEL.
WHATEVER MAKES SENSE FINANCIALLY
TO AT WHAT SCALE IT MAKES SENSE
TO PROP UP A BANK.
IN SAN FRANCISCO MIGHT BE JUST
THE CITY AND COUNTY SAN
FRANCISCO BUT IT COULD BE AT A
DIFFERENT BANK SERVICE SEVERAL
COUNTIES OF NORTHERN CALIFORNIA.
CAN LOOK FOR THE OTHER TO
TESTIMONY.
ANY OTHER QUITE YES [inaudible]
CHAIR I I'M TRYING TO UNDERSTAND --
WHAT?
THE BENEFITS OF DHEA.
IDEA PUBLIC BANG SOME MORE
PUBLIC BANKS AT THAT WERE YOU.
EVENTUALLY SAVE CONSUMERS SO
FROM THE HI [inaudible]
COST ABA.
LOANS CONSUMER LOANS SO MORE
BANGS SO WOULD BE BETTER IF MORE
PUBLIC BANDS WOULD BE BETTER.
THAT'S WHAT I'M GETTING IN MY
CORRECT [inaudible]
THE OKAY FINAL QUESTION THAT A
WHEN I'M TRYING TO GET AT THE IF
THIS OF CORRECT THE IDEA THAN.
THE UP PUBLICLY.
US SUBSIDIZED A GOVERNMENT
SUBSIDIZED PUBLIC BANKS.
IN ON MAY PROVIDE LOW INTEREST.
TO CONSUME LESS A WHOLE.
THEN THE WHAT ABOUT THE NEGATIVE
CAUGHT UP CONSEQUENCES TO THE
COMMERCIAL EXISTING COMMERCIAL
BANKS SO.
I COME FROM THE CITY OF OUR BY.
AS SO MANY BAGS SO EVEN ONE
SHOPPING CENTER THREE FOUR
DIFFERENT BANDS.
I OFTEN WONDER HOW THE SELF.
FIVE IN --
SO IF WE ADD THE MORE PUBLIC
VETTING SO WITH A MOLE.
TOUR SO FOR THEM TO COMPETE
AGAINST A COMMERCIAL BANDS OUT.
IT IS THIS IDEA TO KILL THE
EXISTING COMMERCIAL BATTLES.
SO THAT THE LET ME RESPOND TO
BOTH QUESTIONS THE FIRST ONE IS
WE THE PRIMARY CUSTOMERS OF THE
THANKS THAT WE'RE PROPOSING ARE
THE LOCAL GOVERNMENTS.
THEY WOULD BE THE PRIMARY
DEPOSITORS IN THESE BANKS.
AND THE BANK'S BUSINESS LINES
THEIR PRODUCTS --
OUR PROPOSAL.
IS THAT WHEREVER THEY'RE DOING
RETAIL BANKING.
IT IS TO BE DONE IN PARTNERSHIP
WITH LOCAL FINANCIAL
INSTITUTIONS THAT TO THE BANK OF
NORTH DAKOTA WORKS WITH REGARD
TO IN THE IN IN THE HANDOUT I
GAVE YOU IT IT IT SHOWS YOU.
THE LOAN PORTFOLIO THOSE LOANS
ARE DONE THROUGH LOCAL BANKS.
SO THE BANK NORTH DAKOTA --
DOES PARTICIPATION LOANS AND
PROVIDES.
THE A PARTICIPATION APPROACH SO
THE LOCAL BANK PUTS UP SOME
CAPITAL FOR THE LOAN AND THE
BACK AND WHAT THE COURT ALSO
PUTS IN CAPITAL AND YOU LOOK.
THERE'S A THERE'S A DIAGRAM ON
HOW THAT LOAN TRANSACTION WORKS
SO IT'S ACTUALLY QUITE THE
OPPOSITE OF TRYING TO KILL THE
LOCAL BANKING SECTOR WHAT WE'RE
TRYING TO DO IS BRING IT BACK.
WE'RE TRYING TO STRENGTHEN LOCAL
BANKING SECTOR BY BRINGING THESE.
BOMB.
THESE LOCAL PUBLIC BANKS THAT
WOULD WORK IN PARTNERSHIP WITH
THE WITH WHAT'S REMAINING OF OUR
LOCAL BANKING SECTOR.
SO WHAT I'M.
HEARING IS THAT THE DISTURBIA OR
LOCAL AND CITY OR MUNICIPAL
GOVERNMENTS --
LENDING OR BORROWING.
WOULD BE DONE IN CONJUNCTION
WITH THE PUBLIC BANG SAID THAT
WOULD WORK WITH THE EXISTING
COMMERCIAL BANKS --
AND THEN EVENTUALLY TRANSACTION
WILL TAKE COMMERCIAL BANKS YEAH.
THAT'S GOOD IN AND THERE'S THIS
FLOW CHART SHOWS YOU WHAT WE
ENVISIONED THAT'S HOW THE BANK
ACT IN NORTH DAKOTA WORKS WITH
LOCAL NOW I HAVEN'T HAD A CHANCE.
I JUST A YOU KNOW JUST LISTENING
TO YOU READ A LOT OF THIS I I
HAVE A LOT OF HOMEWORK TO DO
FEDERAL READING TO DO HERE BUT
THERE IS A I'M TRYING --
TO SO THAT ALL OF THE SOUL ARE
MORE PUBLIC BANKS.
THAT THE GOVERNMENT THE CENTURY
GOVERNMENT SUBSIDIZED RIGHT.
SO.
THEY ARE --
LOCALLY OWNED AT THEIR THEIR OWN
BY THE LOCAL.
GOVERNMENT AGENCY AND AGENCIES
SUCH AS A CITIES OKAY DEALING
COUNTIES OR JOINT POWERS
AUTHORITIES.
THIS WAS SO SO ARE THE TRY TO
EXPLAIN.
THAT TO ME AGAIN NOW FROM MY
UNDERSTANDING.
WITHOUT WITHOUT THOSE PUBLIC
BEARING SET THAT UP OWNED BY
MUNICIPAL GOVERNMENTS.
OF A COMMERCIAL BANG SO WE'RE
WE'RE WE HAVE TO CHARGE MORE.
SO THAT'S THE REASON PUBLIC BANG
SO PUBLICLY ON THE PUBLIC BANG
SO WOULD THE BAD A JOB.
THE WITHOUT THE PUBLIC BANKS
THESE EXISTING SMALL BANKS THE
LOCAL BANKS AND WILL BE HEARING
FROM SOME.
TODAY WOULD NOT HAVE NOTS ARE
THE ACCESS TO THE SAME BUSINESS
OPPORTUNITIES AS THEY COULD GET
IF THEY WERE.
IF THERE WAS A LOCAL PUBLIC
THANK WORKING WITH THEM TO DO A
TO PROVIDE THEM WITH ADDITIONAL
LIQUIDITY OR LINES OF CREDIT SO.
THE DEPOSITOR IN THE BANK AND
THE OWNER OF THE BANK IS THE
LOCAL GOVERNMENT.
BUT WHERE IT DOES ITS BUSINESS
IS IN THE LOCAL COMMUNITY
IMPARTED IN PARTICIPATION IN
PARTNERSHIP WITH.
THE LOCAL BANKING SECTOR OF THAT
COMMUNITY SOME MOST LIKELY OR
THE PUBLIC.
FUNDS OWNED BY HIS CITY OR
COUNTY A MUNICIPAL GOVERNMENT
THAT WILL YOU STAY IN THE PUBLIC
BANG ON A DRY UP BY.
THE FUNDS SAID THAT ARE
DEPOSITED.
WELL AT THIS TIME WITH THE
COMMERCIAL BANKS WILL PRIMARILY
THOSE DEPOSITS ARE GOING TO
LARGE OUT OF STATE BANKS WE
DON'T --
ENVISIONED THAT THE THE EXISTING
DEPOSITS IN LOCAL BANKS WOULD
STAY THERE THERE'S NO NEED FOR
THE LOCAL BUT FOR CITIES TO
WITHDRAW FROM THEIR LOCAL BANKS.
THIS WHAT WE'RE DOING IS
FACILITY FACILITATING A PATHWAY
FOR THEM TO BRING MONEY BACK
INTOTHE STATE THAT'S CURRENTLY
IN LARGEWALL STREET
INSTITUTIONS THAT DO WHERE ARE
CITIES AND COUNTIES DO THE
MAJORITY OF THEIR BANKING
BUSINESS RIGHT NOW.
GEN.
IN THE INTEREST OF TIME I JUST
WANT TO SEE IF WE GET A WE HAVE
A THIRD PANEL THAT IS GONNA
PROBABLY COME UP AS WELL --
BUT I THINK I I I'VE HEARD AT
THE SECOND PANEL REYES IS THAT
THERE'S TWO CLEARLY DID I MEAN
TWO MODELS THAT ARE DISCUSSED
HERE BUT MORE MODELS OUTSIDE.
OF THIS HEARING ROOM --
ONE MODEL IS TO ALLOW A
MUNICPALITY ESTABLISH A CHARTER --
AND AND THERE FOR COULD YOU GO
THROUGH THAT PROCESS THE OUT A
OTHER MODEL WE HEARD ABOUT WAS
EXPANDING THE AYE BANK FOR
PUBLIC INFRASTRUCTURE PROJECTS --
I EIGHTH I BELIEVE THAT WHAT WE
SO THAT.
AND I DON'T WANT TO PUT WORDS IN
YOUR MOUTH BUT THERE IS A
FEELING THAT THE TRADITIONAL
BANKS --
PRIVATE BANKS ARE NOT.
MEETING THE NEEDS OF THE PUBLIC
OR MUNICIPALITIES IS THAT WHAT
RE HEARING AS THE GENESIS --
FOR SOME OF THIS.
THERE ARE DISSED YES THERE THERE
ARE UNMET NEEDS CURRENTLY IT FOR
EXAMPLE ONE OF THEM IS PROVIDING
ALTERNATE SERVICES TO PAYDAY
LENDERS.
THAT TO AN UNMET NEED.
BRINGING PEOPLE WERE USING
PAYDAY LENDERS INTO.
THAT BANKING SYSTEM.
GOTCHA OKAY WELL I JUST SEE THE
I JUST SEE THE COST OF DOING --
EVERYTHING IS VERY HIGH FOR
INFRASTRUCTURE WE HAVE
TREMENDOUS NEEDS AND WERE
PLACING A LOT OF THE BURDEN ON
THIS. ONE TAXATION.
PRETTY TAX USE TAX SALES TAX.
IT'S GETTING VERY BURDENSOME I
THINK AND WE CAN DO MUCH MUCH
MORE AT MUCH LOWER COST IF WE
FINANCE IT DIRECTLY THROUGH THE
EXPANSION OF THE INFRASTRUCTURE
BACK WE CAN ALSO DO SOME OF THE
THINGS THAT WE WOULD LIKE TO DO
AT THE INDIVIDUAL LEVEL THROUGH
LOAN GUARANTEES.
THERE ARE THERE ARE AGENCIES AND
SEE THE F. BANKS EIGHTY ONE CITY
FLA BANKS AND CHRONICALLY
DEPRESSED AREAS THERE'S A LOT OF
AGENCIES WORKING.
THEY CAN PROVIDE LOANS THEY CAN
PROVIDE A LOT OF THE SERVICES
THAT WE WOULD LIKE TO SEE
INCLUDING CHECK CASHING.
OF FOR LOCAL AREAS --
BUT THEY CAN DO IT ONLY IF THEY
GET LOW LOAN GUARANTEES WOULD BE
AVAILABLE AND THERE ARE THEY ARE
AVAILABLE NOW BUT TO BE GREATLY
EXPANDED.
WITH THE EXPANSION OF THE AYE
BANK [inaudible]
THANK YOU.
AND WITH NO ADDITIONAL QUESTIONS
THEY THINK WILL TRANSITION TO
OUR THIRD --
PANEL THINK YOU BOTH.
FOR YOUR INSIGHT AND FEEDBACK.
ALRIGHT GOOD AFTERNOON THIS IS
THE THIRD POLICY CONSIDERATIONS
PUBLIC PLATE BANKING CA --
PANEL AGREE HAVE JASON LANE VICE
PRESIDENT GOVERNOR RELATIONS FOR
THE CALIFORNIA BANKERS
ASSOCIATION.
HONORABLE DâN MIRRORS UP FROM
THE TREASURER AND TAX COLLECTOR
FROM YUBA COUNTY.
HONORABLE JOSE CISNEROS
TREASURER CITY AND COUNTY OF SAN
FRANCISCO AND JAMES BECKWITH
PRESIDENT CEO OF FIVE STAR BANK.
WELCOME GENTLEMEN AND BUT I
THINK HAVE JASON LANES START
WITH THIS FOR TODAY
.
IF IS THE CLOSE TOGETHER YOU'RE
ALL ON TV AT ONE TIME.
THANK THE GENTLEMAN FOR
ATTENDING TODAY WE LOOK FORWARD.
TO LIVE THE CONVERSATION AS WELL --
BROKE.
GOOD AFTERNOON I'M DISTILLING
CALIFORNIA BANKERS ASSOCIATION
AND WE THANK YOU FOR GIVING ME
THIS OPPORTUNITY SPEAK ON
IMPORTANT ISSUE.
BANKING HAS BEEN DISCUSSED IN A
VARIETY OF FORMS THROUGHOUT THE
STATE FOR THE LAST SEVERAL YEARS
AND WHAT THE PROPONENTS OF
PUBLIC BANK HAVE DISCUSSED THE
VIRTUES THERE HASN'T BEEN A LOT
DISCUSSED ABOUT THE COSTS.
AND RISKS ASSOCIATED WITH PUBLIC
BANKING --
AND I THINK THAT THIS IS AN
IMPORTANT TIME TO DO THAT --
IT IN OUR BELIEF THE RISK AND
THE COST DO NOT OUTWEIGH THE
PERCEIVED BENEFIT OF A PUBLIC
BANK OR DOES OUTWEIGH THE PERCY
BENEFIT OF A PUBLIC BANK.
CONSIDERING THE WRIST TO THE
TAXPAYER DOLLARS LET'S --
TAKE FOR EXAMPLE THE COMPLY A
ABOUT A PUBLIC BANK BEING ABLE
TO PROVIDE BANKING SERVICES
CHEAPER THAN THE PRIVATE SECTOR.
BUT CONSIDER THAT THE BANKING.
SERVICES INDUSTRY SPENDS TWO
HUNDRED AND SEVENTY BILLION
DOLLARS A YEAR ON COMPLAINTS
COST.
TEAMS OF ATTORNEYS IN COMPLIANCE
OFFICERS.
ARE DEDICATED TO ENSURING
COMPLIANCE WITH FEDERAL AND
STATE REGULATIONS.
AND IT'S ESTIMATED THAT BY
TWENTY TWENTY TWO THOSE COSTS
WILL DOUBLE.
THE NOTION THAT A PUBLIC BANK
CAN PERFORM SERVICES CHEAPER IS
A MISINFORMED VIEWPOINT.
THE TECHNOLOGY ALONE IS A
SIGNIFICANT HURDLE.
BANKS INVEST MILLIONS OF DOLLARS
IN CYBER SECURITY SYSTEMS THE
EMPLOYEE ADVANCED ALGORITHMS TO
CATCH FRAUD AND PROTECT CUSTOMER
ACCOUNTS.
BANKS HAVE TEAMS OF SECURITY
EXPERTS DEDICATED TO STAYING ONE
STEP AHEAD OF FRAUD STIRS.
AND THESE ARE VERY SOPHISTICATED
SYSTEMS.
STATE LOCAL GOVERNMENTS DON'T
NECESSARILY HAVE THE BEST TRACK
RECORD IT DEPLOYING TECHNOLOGY
AND THE TYPE OF TECHNOLOGY
NEEDED TO SERVICE CALIFORNIA.
AS A STATE AND EVEN MUNICIPAL
GOVERNMENTS.
IS VERY SIGNIFICANT VERY COSTLY
AND VERY COMPLEX.
THE ADVOCATES BELIEVE THAT
PUBLIC BANKS PUBLIC BANKING
RESULTS IN MORE SOCIALLY
RESPONSIBLE LENDING --
THEY BELIEVE THAT THEY CAN
PROVIDE BANKING ALTERNATIVES
THAT PRIVATE COMMERCIAL BANKS
WILL NOT --
THEY BELIEVE THAT A PUBLIC BANK
WILL ADVANCE CALIFORNIA'S SOCIAL
GOALS MAKE LOANS TO INDIVIDUALS
WHO MIGHT NOT OTHERWISE HAVE
ACCESS TO BANKING SERVICES.
IT BANKS ARE ONE OF THE MOST
HEAVILY REGULATED INDUSTRIES IN
THE UNITED STATES THEY HAVE
RULES AND REGULATIONS GOVERNING
NEARLY EVERY ASPECT OF THEIR
ACTIVITIES.
A PUBLIC BANK WILL SIMILARLY
HAVE ALL THE REGULATIONS
GOVERNING THE SAFETY AND
SOUNDNESS OF THE INSTITUTION.
A PUBLIC BANK WITH REGULATORY
STRUCTURE DEPOSIT INSURANCE
ACCESS TO THE FEDERAL RESERVE
WILL HAVE REGULAR EXAMINATIONS.
LIKE A PRIVATE INSTITUTION A
PUBLIC BANK WILL HAVE REGULATORS
ON SITE SCRUTINIZING THE BANK'S
LENDING ACTIVITIES.
THE QUALITY OF ITS LOANS AND THE
RISK TO THE INSTITUTION.
THE BELIEF THAT A PUBLIC BANK
FUNDED BY TAXPAYER DOLLARS CAN
ENGAGE IN FINANCIAL ACTIVITIES
THAT A PRIVATE SECTOR BANK
COULDN'T OR WOULDN'T.
IS A FAIRLY UNSOPHISTICATED VIEW
OF BANKING.
PARTICULARLY IF A PUBLIC BANK
HAS A GOVERNANCE STRUCTURE
ENSURING THE SAFETY AND
SOUNDNESS OF THE INSTITUTION.
FROM A PUBLIC POLICY PERSPECTIVE
IN NETTLETON ONLY THE GOAL OF
THIS COMMITTEE IS TO UNDERSTAND
WHAT THOSE PERSPECTIVES ARE
LET'S BREAK IT DOWN INTO ITS
MOST BASIC TERMS.
YOU'RE TAKING REVENUE TAX PAYER
REVENUE WHICH INCLUDES PENSION
INVESTMENTS YOU'RE MAKING LOANS
THAT MAY OR MAY NOT BE BASED ON
POLITICAL PRIORITIES.
AT SOME POINT IN THE FUTURE
THERE WILL BE AN ECONOMIC
RECESSION.
PEOPLE WILL LOSE THEIR JOBS AND
THEY WILL DEFAULT ON THEIR LOANS.
SO THE QUESTION BEFORE THE
LEGISLATURE IS THE DOES THE
STATE WAR DOES THE LOCAL
GOVERNMENT WANT TO PUT ITSELF IN
THE ROLE OF DEBT COLLECTOR.
IF THE BANK LOSES MONEY AS IT
DID IN NORTH DAKOTA FOR TWELVE
YEARS BEFORE IT MADE MONEY.
WHO BACKSTOPS THAT?
IS IT THE LOCAL GOVERNMENT OR
STATE GOVERNMENT GENERAL FUND.
AND OF SOWHAT HAPPENS TO THE
LEGISLATURE'S OTHER PRIORITIES.
DOES THE STATE BANK BECOME A
FACELESS BUREAUCRACY OR IS IT.
ABLE TO SERVE ITS COMMUNITY AS
WELL AS A COMMUNITY BANK WHICH
IS ALREADY WILL INTO THE FABRIC
OF THE COMMUNITY.
I'D LIKE TO SPEND A MOMENT
TALKING ABOUT PUBLIC MAKE MODELS
THAT MUCH IS BEEN SAID ABOUT
NORTH NORTH DAKOTA AND IT WE
WOULD JUST SAY THAT NORTH DAKOTA
IS HALF THE SIZE OF PHOENIX IT
IS NOWHERE NEAR.
THE ECONOMY OF CALIFORNIA --
EAT EGGS IT CAME INTO EXISTENCE
BECAUSE THERE WERE NO OTHER
BANKS IN NORTH DAKOTA SERVING
YEAH COMMUNITY --
THEY RELIED ON OTHER STATE BANKS --
AND THEY WERE CHARGING VERY HIGH
INTEREST RATES.
BUT THE FACT IS MANY DOUBT THAT
THE BANK OF NORTH DAKOTA COULD
BE FORMED IN THE CURRENT
REGULATORY CLIMATE BECAUSE IN.
NINETEEN NINETEEN THE REGULATORY
UMBRELLA THE CURRENT BANKS
OPERATE UNDER DID NOT EXIST.
IN AGAIN IT LOST MONEY FOR
TWELVE YEARS.
IN SPAIN ALL OF THE PUBLIC BANKS
HAVE BEEN PRIVATIZED SINCE THE
200-072-0008 ECONOMIC CRISIS IN
GERMANY THE REGIONAL AND STATE
BANKS ARE.
FEW AND FAR BETWEEN AND THEY ARE --
VERY STATE OF ON PROFIT THE
BUILDING --
IN.
A THING WHICH IS BEEN MADE OF
THE REGIONAL MODEL IN GERMANY
BUT THE REALITY IS THERE NOW
CHARGING NEGATIVE INTEREST RATES
ON DEPOSIT ACCOUNTS AND CLOSING
BRANCHES.
WE WOULD ALSO LIKE TO SAY THAT
THE CB A AND ITS MEMBERS REMAIN
DEDICATED TO CALIFORNIA.
AND WE WOULD LIKE TO PARTICIPATE
IN CONVERSATIONS TO DISCUSS GAPS
OR PERCEIVED MARKET FAILURES BUT
TO THE EXTENT THAT WE CAN --
WE WANNA FIND SOLUTIONS AND
WE'RE WILLING TO DO THAT.
THANK YOU.
VERY MUCH GREAT THANK YOU VERY
MUCH -- WE
WILL MOVE ON TO THIS IS MY NEXT
SPEAKER HERE --
WILL DâN MOUSA FROM A YUBA CITY
YUBA COUNTY WILL BE COMING THANK
YOU I AM --
PLEASED TO BE HERE SO THANK YOU
MADAM CHAIRS FOR THE OPPORTUNITY
SPEAK.
REGARDING PUBLIC BANK POLICY
CONSIDERATIONS I'M THE TREASURER
TAX COLLECTOR OF YUBA COUNTY
MUSCLE LEGISLATIVE CHAIR OF FOR
CALIFORNIA ASSOCIATION OF COUNTY
TREASURER AND TAX COLLECTOR'S.
CáC TECH AND I'M ALSO THE VICE
CHAIR OF THE BOARD DIRECTORS FOR
SEER CENTRAL CREDIT UNION --
WANT TO COME HERE TODAY
REPRESENTING BOTH THOSE ENTITIES
BUT MOST IMPORTANTLY TO TELL ON
TO WHAT WE'RE JUST DISCUSSING.
AS A FIDUCIARY A PUBLIC FUNDS MY
COLLEAGUES ARE INTERESTED
PROTECT THOSE FUND.
THE TWO MAIN DRIVERS FOR THE
CHARGE ASSOCIATION REGARDING
PUBLIC FUNDS ARE THE SAFETY AND
LIQUIDITY OF THOSE FUNDS.
THE RETURN OF THE PRINCIPAL IS
MORE IMPORTANT IN THE RETURN ON
THE PRINCIPLE.
SO THE FIRST TENANT THERE IS A
SAFETY IS ADDRESSED TO CLARA
BACKSTOPS HIGH CREDIT QUALITY.
LIMITED INVESTMENT CHOICES IN
VERY LIMITED MAXIMUM TERMS OF
REINVESTMENT FIXED INCOME
SECURITIES ARE BONDS INSIDE OF
FIVE YEARS OF THE MAJORITY OF
WHAT WE'RE ALLOWED TO REINVEST
IN.
THE SECOND TENANT IS LIQUIDITY
TO PUT THAT SIMPLY ITS
AVAILABILITY TO GET YOUR MONEY
BACK RATHER QUICKLY.
THE REASON WE HAVE BOTH THESE
TENANTS WITH THE BANKRUPTCY OF
ORANGE COUNTY IN.
NINETEEN NINETY FOUR AS A RESULT
OF THE INVESTMENT DECISIONS --
PERFECTLY LEGAL.
ALL COUNTIES AND THE STATE OF
CALIFORNIA HAVE CHANGED WHAT
THEIR GUIDELINES WERE THEREAFTER.
SENSE THEM ABOUT A DECADE AGO WE
EXPERIENCE THE FINANCIAL GREAT
RECESSION.
FORTUNATELY BECAUSE OF THE
BACKSTOPS PUT IN PLACE AT THE
TIME DUE TO ORANGE COUNTY THE
COUNTIES THE CITIES AND LOCAL
MISTER POWELL THESE WERE ABLE TO
WHETHER THOSE STORMS.
BECAUSE OUR INVESTMENTS HAVE THE
CREDIT QUALITY AND THE
COLLATERAL THAT WOULD SUPPORT
THEM THROUGHOUT THEIR USE.
THE INVESTMENTS THAT WE MAKE OUR
WITH THE TITLE FUNDS AS THEY ARE
DETERMINED THOSE AREN'T CONVERT
BUDGETED FUNDS FOR THE LOCAL.
MUNICIPALITIES THEIR SPECIAL
DISTRICTS THOSE SCHOOL DISTRICTS
AND THE OTHER ENTITIES THAT DO
DEPOSIT WITH THE COUNTY
TREASURER'S THOSE FUNDS ARE ON
DEMAND AS THEY ARE NEEDED. ONE
OF THE CONCERNS IT'S TREASURES
WE'VE SEEN ACROSS THE STATE.
IS THE GREAT PERFORMANCE
RECENTLY BUT HISTORICALLY IN
CALIFORNIA OF NATURAL DISASTERS
THAT PUTS ANOTHER STRAIN ON TO
THE AVAILABILITY OF THOSE FUNDS
WHEN FUNDS BECOME NECESSARY.
IN GREAT QUANTITIES ON PLANNED
EXPENDITURES DO OCCUR WE NEED TO
MAKE SURE THAT WE CAN HONOR
THOSE COMMITMENTS FOR THE
TAXPAYERS.
SO THAT WAS THE MAIN CONCERN
THAT WE HAD COMING IN I WANT TO
TURN OVER TO MY COLLEAGUE MR
CISNEROS THANK YOU THANK YOU
VERY MUCH FOR THE GOOD AFTERNOON
MR CISNEROS NICE TO SEE YOU.
PROJECT AND IT'S GREAT TO BE
HERE THANK YOU MADAM CHAIR IS
GOOD AFTERNOON --
I'M I'M JOSE CISNEROS THE
CHARTER FOR THE CITY AND COUNTY
OF SAN FRANCISCO AND I'M HAPPY
TO BE TALKING ABOUT PUBLIC
BANKING WITH YOU TODAY.
ACTUALLY FOR MORE THAN TWELVE
YEARS I'VE SPOKEN OUT ABOUT THE
HARMS THAT THINK BANKS OF COST
PARTICULARLY TO LOW INCOME
COMMUNITIES OF COLOR.
I'VE USED MY VOICE IS TREASURER
NOT ONLY TO CRITICIZE BAD
PRACTICES.
BUT ALSO TO CHANGE THE BANKING
LANCE.
I WAS FED UP WITHOUT BANKS
SYSTEMICALLY PREYED ON LOW
INCOME CONSUMERS WITH ABUSIVE
OVERDRAFT FEES AND EXCESSIVE UP
SELLING.
EVEN WORSE EACH OF OUR ON BANKS
RESIDENTS WERE SPENDING HUNDREDS
OF DOLLARS EACH YEAR ON
PREDATORY CHECK CATCHERS.
SO I LAUNCH THE BANK ON SAN
FRANCISCO PROGRAM TO MAKE SURE
EVERY SAN FRANCISCAN HAD ACCESS
TO A LOW COST AND APPROPRIATE
BANK ACCOUNT.
THE BANK I'M PROGRAM PRESSURES
BANKS TO CREATE AND MARKET SAFE
ACCOUNTS I'M THRILLED THAT A
DECADE LATER ANCON.
IS A NATION NATIONAL PROGRAM AND
THE NEW BANK ON NATIONAL ACCOUNT
STANDARDS HAVE SPURRED TWENTY
EIGHT BANKS AND CREDIT UNIONS
ACROSS THE COUNTRY TO OFFER LOW
COST.
LOW FEE AND NO OVERDRAFT
ACCOUNTS TO CONSUMERS.
AND WITH THE FOUR LARGEST BANKS
OFFERING BANK ON CERTIFIED
PRODUCTS TRULY SAFE FINANCIAL
ACCOUNTS ARE NOW AVAILABLE
NATIONWIDE.
BUT TRUST ME I KNOW ALL TOO WELL
THAT SAFE ACCOUNTS ALONE AREN'T
ENOUGH.
BIG BANKS SOMETIMES CONTINUE TO
DO DAMAGE.
THAT'S WHY IN TWENTY ELEVEN WE
INCLUDED SOCIALLY RESPONSIBLE
BANKING CRITERIA IN THE SAN
FRANCISCO R. F. P. FOR BANKING
SERVICES.
WE SPECIFICALLYEXCLUDED BANKS
WHO OFFERED PREDATORY CONSUMER
PRODUCTS LAKE PAYDAY LENDING
THROUGH BANK ATMS.
I BELIEVE THAT ARE SOCIALLY
RESPONSIBLE BANKING REQUIREMENTS
ARE A MAJOR REASON WHY WELLS
FARGO DECIDED TO WITHDRAW ITS
PROPOSAL TO HANDLE OUR CITIES
BANKING BUSINESS.
FAST FORWARD TO TWENTY SIXTEEN
WHEN I WAS THE FIRST ELECTED
OFFICIALS SPEAK OUT AGAINST
WELLS FARGO WHEN THEY WERE
CAUGHT RED HANDED RIPPING OFF
THEIR CUSTOMERS.
I IMMEDIATELY KICKED WELLS FARGO
OUT OF THE BANK ON SAN FRANCISCO
PROGRAM BECAUSE I NO LONGER HAVE
CONFIDENCE THAT MY CONSTITUENTS
COULD TRUST THEM WITH THEIR HARD
EARNED MONEY.
SO I DEEPLY UNDERSTAND AND AGREE
WITH MANY IN THIS ROOM WHO ARGUE
THAT AT TIMES WALL STREET BANKS
HAVE BEEN BAD FOR CITIES AND
COUNTIES.
BAD FOR STATES AND BAD FOR ALL
BUT THE WEALTHIEST AMERICANS.
YET LIKE YOU I AM BOUND BY THE
DUTIES AS AN ELECTED OFFICIAL
PER STATE LAW A COUNTY TREASURER
HAS ONE OVERRIDING PRIORITY. TO
ENSURE THAT THE PUBLIC FUNDS IN
MY CUSTODY REMAIN SECURE AND
PROTECTED.
THE WORST CASE SCENARIO FOR A
FUTURE PUBLIC BANK IS ANY LOSS
OF FUNDS WITH A NEED TO RUN THE
GOVERNMENT.
SO HOW CAN WE AVOID THIS.
AS YOU'VE ALREADY HEARD WE SPENT
MORE THAN A YEAR IN SAN
FRANCISCOCREATING DETAILED
OPERATING MODELS FOR MUNICIPAL
PUBLIC BANKS.
WELL THERE IS A WEALTH OF
EXISTING REPORTS THAT DETAIL THE
POTENTIAL BENEFITS OF A
MUNICIPAL BANK AND OUTLINED
REGULATORY HURDLES.
THERE ARE NONE THAT SHOW HOW
MUCH OF BANQUET COSTS TO START
AND RUN AND WHAT LINES OF
BUSINESS A BANK SHOULD UNDERTAKE.
LEVERAGING THE EXPERTISE OF OUR
TASK FORCE WHICH INCLUDED FOLKS
LIKETIM SCHAFER FROM THE STATE
TREASURER'S OFFICE WHO YOU HEARD
FROM EARLIER.
SUSHIL JAKE UP FROM THE LAWYERS
COMMITTEE FOR CIVIL RIGHTS WERE
YOU ALSO HEARD FROM.
CAT TAYLOR FROM THE BENEFICIAL
STATE BANK AND PAULINA GONZALEZ
FROM THE COMMUNITY REINVESTMENT
COALITION.
WE DOVE HEAD FIRST INTO THORNY
DISCUSSIONS ABOUT HOW TO BALANCE
FISCAL SUSTAINABILITY WITH
SOCIAL VALUES AND HOW TO CREATE
AN INSTITUTION THAT BUILDS UP.
RATHER THAN COMPETES WITH OUR
EXCELLENT NETWORKS OF CREDIT
UNIONS CDF ICE AND COMMUNITY
BANKS.
BY PARTNERING WITH EXACTLY THESE
ORGANIZATIONS A PUBLIC BANK
COULD PROVIDE COMMUNITY LOANS
ECONOMICALLY AND QUICKLY.
OUR SAN FRANCISCO REPORT WILL BE
RELEASED LATER THIS MONTH I
PROMISE YOU ALL GET A COPY.
AND IT FAIRLY REFLECTS THE
DIVERSITY OF OPINIONS OF WHAT A
PUBLIC BANK COULD DO WE HAVE
THREE PRIMARY MODELS.
FIRST.
A LENDING INSTITUTION THAT
INVESTS IN AFFORDABLE HOUSING
AND SMALL BUSINESS LOANS.
SECOND A COMMERCIAL BANK THE
TAKES OVER THE CORE BANKING
SERVICES FOR THE CITY AND COUNTY.
AND THIRD A HYBRID MODEL THAT
DOES BOTH OF THE FIRST.
TO I DON'T THINK IT WILL BE
SURPRISING THE CREATING A BANK
FROM SCRATCH THE CAN SUPPORT THE
BANKING NEEDS OF AN OVER TEN
BILLION DOLLARS CITY WHILE
PROVIDING MEANINGFUL COMMUNITY
LOANS.
IS EXPENSIVE.
WE'VE HURT WORKED HARD TO
ESTIMATE HOW LARGE A BANK WOULD
NEED TO BE TO BREAK EVEN AND NOT
LOSE MONEY.
AND HOW LONG IT MIGHT TAKE UNDER
DIFFERENT SCENARIOS TO REACH
SCALE.
THE MORE I DIVE INTO THIS WORK
THE MORE I'M CONVINCED THAT
THERE ARE NO EASY ANSWERS ABOUT
HOW TO FIND A PUBLIC BANK.
AND LIKE LL PUBLIC POLICY
CREATING A PUBLIC BANK
NECESSARILY MEANS MAKING TRADE
OFFS.
NO JURISDICTION WHETHER AT THE
LOCAL.
THE REGIONAL OR THE STATE LEVEL
WOULD BE ABLE TO CAPITALIZE
PUBLIC BANKS A PUBLIC BANK WITH
BILLIONS OF DOLLARS WITHOUT
TAKING MONEY AWAY FROM OTHER
PRIORITIES.
LIKE GOVERNMENT SERVICES OR
SOCIAL SERVICES.
I COMMEND ALL IN THIS ROOM WHO
ARE DILIGENTLY TRYING TO FIND
CREATIVE WAYS TO REALIZE THIS
VISIONARY GOAL.
AT THE SAME TIME LIKE MY
COLLEAGUES WHO SPOKE BEFORE ME I
REMAIN CONCERNED ABOUT ANY
CHANGES TO STATE LAWS.
THAT WOULD WEAKEN THE
PROTECTIONS IN PLACE FOR THE
PUBLIC MONEY WE SAFEGUARD.
CALIFORNIA LAWS THAT DETERMINE
HOW PUBLIC BANKS KEEP OUR MONEY
SAY.
PROTECT US ALL FROM THE RISKY
PRACTICES THE COULD RESULT IN
THE LOSS OF PUBLIC FUNDS.
OR AS DAN MENTIONED EVEN
DISASTERS LIKE THE ORANGE COUNTY
BANKRUPTCY.
I ALSO WANNA ASK THAT AS THESE
CONVERSATIONS CONTINUE YOU THINK
ABOUT GOVERNANCE STRUCTURES THAT
WILL ALLOW A PUBLIC THANK TO
OPERATE AS A SOUND BUSINESS.
INDEPENDENT FROM POLITICAL
PROCESS AND POLITICAL PRESSURES.
THEIR MOMS MOST CERTAINLY BE A
CONFLICT BETWEEN FISCAL
SUSTAINABILITY AND SOCIAL GOALS.
THAT'S WHY WE THAT'S WHY WE
SCENE SOME INTERNATIONALLY
POLITICAL PRESSURE HAS IMPAIRED
SOMETIMES THE OPERATION OF
PUBLIC BANKS.
ULTIMATELY BANK GOVERNANCE AND
LEADERSHIP MUST FULLY ACCEPT
THIS CONFLICT ENSURE THAT A
COMMITMENT TO BOTH SOCIAL GOOD
AND FISCAL SUSTAINABILITY IS
BAKED INTO THE STRUCTURE OF THE
BANK.
AND THAT ALL OF STAKEHOLDERS ARE
COMMITTED TO MAKING THE HARD
DECISIONS NECESSARY TO ENSURE
THE BANK'S ONGOING VIABILITY.
WE'RE AT THE BEGINNING OF THE
JOURNEY THAT SOMEDAY COULD
LAUNCH A PUBLIC BANK I'M EXCITED
TO BE INVOLVED AND I LOOK
FORWARD TO THE CONTINUE
CONVERSATION.
THANK YOU FOR LETTING ME TESTIFY.
THANK YOU VERY MUCH APPRECIATE
THE WE WILL NOW HAVE JAMES
BECKWITH PRESIDENT CEO OF FIVE
STAR BANK WELCOME MR BECKWITH.
THANK YOU IN THANK YOU MADAM
CHAIRS AND THANK YOU MEMBERS AND
THANK YOU STAFF FOR PROVIDING
THIS OPPORTUNITY TO SPEAK TO YOU
ABOUT.
WHICH ROLE CONSIDERING RIGHT NOW.
BOMB.
ON THE COMMUNITY BANKER BEEN
DOING THIS FOR MORE THAN TWENTY
FIVE YEARS AND I LOVE WHAT I DO
BECAUSE I'M ABLE TO GET BACK TO
THE COMMUNITIES IN WHICH I SERVE.
FIVE STAR BANK IS IN ITS
TWENTIETH YEAR.
WE ARE A UP A COMMUNITY BANK
THAT OPERATES WITH FOUR OFFICES
IN THE CAPITAL REGION. ONE
OFFICE AND UP THE CHICO AND ONE
OFFICE AND READING SO WE HAVE
BOTH URBAN AND RURAL.
OF FOCUS IN TERMS OF OUR
CUSTOMERS [inaudible]
BUT I'M.
DID YOU DID YOU TALK ABOUT THIS
PUBLIC BANK MATTER I WANTED TO
SHARE MY PERSPECTIVE AS A BANKER.
IN IN TERMS OF WORKING WITH THE
STATE.
IT'S AGENCIES AND ITS PROGRAMS
AND HOW BENEFICIAL THEY HAVE
BEEN.
TO WHAT WE DO IN TERMS OF
DELIVERING SERVICE TO OUR
COMMUNITIES --
THE A TREASURER MáS SPOKE ABOUT
THE STATE'S CD PROGRAM FOR
CALIFORNIA COMMUNITY BANKS.
THIS HAS A MAJOR IMPACT ON FOR
FIVE STAR BANK WE HAVE WELL OVER
FIFTY MILLION DOLLARS IN
DEPOSITS.
FROM THE STATE TREASURER'S
OFFICE WE'VE BEEN IN THE PROGRAM
FOR SEVERAL YEARS.
WE TURN AROUND AND TAKE THOSE
DOLLARS AND LINDA BACK IN OUR
LOCAL COMMUNITIES FOR
DEVELOPMENT PROJECTS LOW INCOME
HOUSING.
SMALL BUSINESS LOANS.
ON IT'S AN IMPORTANT PART OF OUR
FUNDING MIX.
IN FACT OF THE TREASURER'S
OFFICE OF I THINK IT WAS TWO
YEARS AGO PRODUCED A VIDEO ABOUT
THE PROGRAM.
WE WERE LUCKY ENOUGH TO BE ON
THAT VIDEO AND WE SPOKE ABOUT
THE LOCAL PROJECTS IN WHICH WE
FINANCE --
NAMELY.
THE A THE BUILD OUT OF THE IT
SACRAMENTO FOOD CO OP THE NEW
COOPER.
IT ALSO BE STREET THEATER --
WE THINK THAT THAT PROGRAM HAS A
LOT LEGS IT'S WELL ESTABLISHED --
IN.
I'M CONSTANTLY REMINDING MY
COLLEAGUES MY COUNTERPARTS UP
AND DOWN THE STATE ABOUT
UTILIZING THAT PROGRAM.
NOW THERE HAS TO BE
COLLATERALIZED.
IT'S DONE IT MARKET RATE SAID
THERE'S A THERE'S NO DISCOUNT
ANGER BENEFIT IF YOU WILL --
THE TREASURER'S OFFICE --
MAKE SURE THAT AND WE THINK IT'S
A FAIR PROGRAM FOR EVERYBODY
INVOLVED.
I ALSO WANT TO TALK ABOUT CAL
CAP ITS A VERY VIABLE LOAN
GUARANTEE PROGRAM THAT WE THINK
HAS.
BENEFITED A LOT OF SMALL
BUSINESSES WITHIN CALIFORNIA.
AND WE'RE VERY MUCH IN FAVOR
SUPPORTING THAT ALSO I BANK AYE
BANK IS A SIGNIFICANT PLAYER IN
TERMS OF INFRASTRUCTURE
DEVELOPMENT WITHIN CALIFORNIA.
LOCALLY WE UTILIZE THE PROGRAM
FOR ITS --
IT'S CON TO IT --
BOND FINANCING AND ALSO IT'S
GUARANTEE PROGRAM --
IF YOU'RE DRIVING OUT TO THE
AIRPORT YOU CAN LOOK AT THAT
POWER SCIENCE CENTER.
THAT'S AN AYE BANK DEAL.
SO IT HAS BEEN A FULL IMPACT.
OUR TO OUR LOCAL COMMUNITIES.
AT FIVE STAR ANNA A COLLECTION
OF LOCAL COMMUNITY BANKS.
SAW THE STATE CD PROGRAM AND
THOUGHT GEEZ WOULDN'T IT BE
INTERESTING IF WE TRY TO EMULATE
THAT.
WITH THE COVER A COUPLE OTHER
PROGRAMMATIC REQUIREMENTS HERE
LOCALLY.
SO WE DEVELOPED A PROGRAM CALLED
RISE RESPONSIBLE INVESTMENTS FOR
A STRONG ECONOMY.
AND HERE'S HOW THE PROGRAM WORKS
WE TAKE MONIES FROM MINUTES
APOLOGIES.
IF WE'RE LUCKY ENOUGH COUNTIES.
SPECIAL DISTRICTS AND WE TURN
AROUND AND WE GUARANTEE THAT
WILL LEND IT LEAST 50% OF THOSE
MONEYS BACK INTO THE LOCAL
MARKET.
IT'S PRETTY NEW PROGRAM.
PRINCIPALLY IN THE CAPITAL
REGION WE HAVE FOUR CITIES AND
ONE SPECIAL DISTRICT
PARTICIPATING IN A RIGHT NOW.
IN AGGREGATE WE'VE.
WE HAVE ABOUT A HUNDRED MILLION
OF DEPOSITS THAT HAVE BEEN
PLACED WITH LOCAL INSTITUTIONS.
THEN WE PLANT OUT PRETTY CLOSE
TWO HUNDRED BILLION DOLLARS BACK
IN THOSE JURISDICTIONS.
WE HAVE A REPORTING SCHEME.
ARMS SO THERE'S A LOT OF HIS
ABILITY ON THE PROGRAM.
IN IT WAS SUPPORTED BY THE
ELECTED.
MAYOR STEINBERG AND ALL THE
OTHER BEARS FOR THE
MUNICIPALITIES THAT THE
PARTICIPATED WHICH ARE ELK GROVE.
A RANCHO CORDOVA --
CITY SACRAMENTO IN SMART.
SO WE HOPE THAT.
THESE ARE SOME EXAMPLES ABOUT
WHAT CAN BE DONE.
WITH PUBLIC FUNDS THROUGH
COMMUNITY BANKS AND THE POSITIVE
IMPACT THAT IS HAPPENING.
ON JUST ONE EXAMPLE.
I KNOW THAT MY COUNTERPARTS UP
AND DOWN THE STATE ARE DOING
SAME OR SIMILAR THINGS.
SO WHEN WE'RE DISCUSSING A
PUBLIC BANK PLEASE DO UNDERSTAND
WE ARE LEVERAGING THROUGH
COMMUNITY BANKS PUBLIC FUNDS FOR
THE BENEFIT IN THE COMMUNITIES
IN WHICH WE SERVE.
THANK YOU.
THANK YOU VERY MUCH BACK WITH
ARE THERE ANY QUESTIONS OF THE
COMMITTEE.
THIS.
RESEARCH BY --
CLEARLY ODD THIS PANEL ALL IS OF
VERY CONCERNED ABOUT THE PUBLIC
BATHS.
AND NOW WAS THE OP WITHOUT
KNOWING.
OUR ACTUAL TANKERS UPON A FEW.
MY CONCERN WHY LOCAL MAN I MADE
COMMENTS --
WHY CAN WE?
ENCOURAGE --
UP PROVIDE.
SUGGESTIONS EXISTING COMMERCIAL
BANKS.
OUR FOR THE AREAS --
THAT THEY THEY ARE STE ARE
LACKING.
RATHER THAN CREATING --
COMPETITION SO WITH THE PUBLIC
FUNDS.
AND THE JEOPARDIZING --
COMMITTEE BANKS IN THE
COMMERCIAL BANKS ARE CURRENTLY
WE HAVE.
SOLO.
FROM WHAT I HEAR RIGHT NOW
CLEARLY.
YOU HAVE A DEEPER SIR.
IS CRIED DRESS THAT [inaudible]
BOB.
I SIT ON THE BOARD OF THE
CALIFORNIA BANKERS ASSOCIATION --
EXECUTIVE COMMITTEE AND ALSO ON
THE BOARD OF DIRECTORS OF THE
CALIFORNIA COMMUNITY BANK
NETWORK IN.
WE'RE HERE TO ENGAGE WITH THE
MEMBERS IN THE COMMITTEES THAT
ARE HAVE OVERSIGHT WITH RESPECT
TO THIS ISSUE WE WANT TO KNOW.
HOW WE CAN IMPROVE WHAT WE DO IN
OUR LOCAL COMMUNITIES WE WANT TO
BE ABLE TO FULFILL OUR
COMMITMENTS --
UNDER C. R. A BUT NOT JUST THE
FILL THEM BUT KILL GO BEYOND.
IN TERMS OF HELPING OUR
COMMUNITIES GROW TOOK THERE'S A
PROGRAMMATIC IDEA THAT BUBBLES
UP OUT OF ALL THE PUBLIC
TESTIMONY.
ON WE WANT TO KNOW ABOUT IT.
I GAVE THE EXAMPLE OF RICE THAT
SAID INNOVATION THAT WE KIND OF
CAME UP WITH THAT HELPS OUR
OTHER THINGS THAT COME UP.
OTHER OTHER POLICY MATTERS WE
CAN IMPLEMENT.
AND INTO IT UP AND DOWN THE
STATE.
IN THE URBAN IN IN THE RURAL
AREAS.
BEFORE YOU JUMP IN NOW CAN I
JUST THE AD THE ONE MORE AND ONE
ONE OF THE HANDLES IS TO SET THE
STATE BACKED THE FINANCIAL
INSTITUTION.
AS A PUBLIC BEN'S SERVING THE
CANNABIS INDUSTRY IS THAT THE
ULTIMATE COLDER WE ARE TALKING
ABOUT THE PUBLIC GOT BANKS
[inaudible]
HELLO [inaudible]
NO.
THE MENU HERE I HAVE WHAT
DOCUMENTS.
AND WE WILL HAVE THE OPPORTUNITY
FOR PUBLIC TESTIMONY UPON --
HEARING THIS THIRD UP PANEL BUT
A THINK THE TWO MODELS WE HEARD
IN THE SECOND PANEL NEITHER ONE
OF THEM DISCUSSED.
CANNABIS PER SE AS THE IMPETUS
FOR THIS IDEA SO THE REST OF THE
MONTH THE HIDDEN GORE.
OKAY LET ME HEAR FROM THE
GENTLEMAN I INTERRUPTED YOU.
OKAY THEM MISTER.
MOST WHAT IS THAT THANK YOU AT
FROM THE TREASURES PERSPECTIVE
AGAIN AS A FIDUCIARY I DIDN'T
WANT TO BELABOR --
THE ORANGE COUNTY THE BANKRUPTCY
IN THE BECAUSE IS THERE AS MUCH
AS I'D LIKE TO DISCUSS THAT IN
THE INTEREST OF THE TIME OF THIS
COMMITTEE --
BUT I'D BE HAPPY TALK ABOUT IT
LEVERAGE IS A MAJOR CONCERN AN
ISSUE OF WHICH OUR GOVERNMENT
CODE NOW.
536-00 AND FIFTY THREE SIX A ONE
LOOKS TO ADDRESS AND THAT'S A
CONCERN THAT I WOULD HAVE.
WHEN TALKING ABOUT --
PUBLIC BANKS IN LEVERAGING OF
THOSE DOLLARS THE MULTIPLIER
EFFECT IS ONE OF THE BENEFITS.
OF THAT IS MENTIONEDTO CREATE
GOOD FOR PUBLIC USING PUBLIC TAX
DOLLARS.
AND THAT CANNOT BE DISCOUNTED IT
SOUNDS LIKE THERE ARE COMMUNITY
PROGRAMS OUT FROM COMMUNITY
BANKS REGIONAL BANKS --
AS WELL BUT HOW MANY TIMES CAN
THOSE DOLLARS BE LEVERED BEFORE
I NEED TO GET MY DOLLAR.
BACK WHAT HAPPENS IF I NEED TO
UNWIND THAT EARLIER THE UNWIND
ITSELF OF THOSE INVESTMENT
DOLLARS ULTIMATELY PUBLIC FUNDS
IS WHAT LED.
TO THE BANKRUPTCY IN ORANGE
COUNTY HAD THEY WAITED THIRTY
FOUR MORE DAYS WE'RE NOT TALKING
ABOUT A BANKRUPTCY ANY LONGER.
SO THE TIMING IS VERY VERY
CRITICAL TO THOSE DOLLARS THE IN
MATURITY.
THEY USE ITSELF IS WHAT WERE
JUDGING THE SAFETY ON BUT THE
ABILITY TO GET THAT BACK IS
SOMETHING THAT IS EQUALLY
CRITICAL TO THE TREASURES
[inaudible]
THANK.
MISLED SOME REALLY MONTH THANK
YOU.
IN THINKING ABOUT SOME OF AT THE
THE IDEAS THAT HAVE COME FORWARD.
EIGHT I MEAN WHERE.
WHERE DO DO THE BANKS?
SEE THEIR ROLE IN CHANGING SOME
OF THIS BECAUSE THIS IS NOT IS
COMING FROM THE PUBLIC SO
CLEARLY THERE IS SOMETHING THAT
HAS NOT WORKED FOR THE PEOPLE OF
CALIFORNIA --
WITHIN THE MODELS AND PROGRAMS
WE HAVE NOW WE'VE CERTAINLY
HEARD ABOUT CONCERNS RELATE
RELATED TO PREDATORY --
IT YOU KNOW.
ASPECTS OF IT --
TO BUT SOMETHING HAS GONE INTO
THIS POINT SO CAN WE IT.
AS OPPOSED TO ONLY LOOKING AT
THE RISK IS THERE ANY SELF
REFLECTION AS TO WHY THIS
SERVICES AND PRODUCT YOU OFFER
AREN'T MEETING THE NEEDS OF
CALIFORNIANS [inaudible]
SELECT YOUR IT IT'S A GOOD
QUESTION IT'S A FAIR QUESTION I
I DON'T KNOW NECESSARILY THAT IN
THIS.
COMMITTEE HEARING TODAY I'VE
HEARD A LOT ABOUT WHAT THOSE
MARKET PLACE FAILURES ARE BUT WE
STAND COMMITTED TO WORKING WITH
THE SUPPORTERS OF A PUBLIC BANK
TO UNDERSTAND WHERE THE GAPS ARE.
TO HAVE A CONVERSATION TO BE
SOLUTIONS ORIENTED WE WANT TO
HAVE THAT CONVERSATION AND IF IT
MAKES SENSE FROM A REGULATORY
PERSPECTIVE --
YOU KNOW CERTAINLY THAT WHAT IS
THE UNITY TO ME TO ALTER OR
AMEND PRACTICES.
WE WANT TO KNOW ABOUT WE REMAIN
COMMITTED TO FIXING IT --
AND I THINK YOU KNOW WE WE HAVE
TO HAVE THOSE CONVERSATIONS.
JUST TO ADD ON TO THAT --
FROM.
YOU KNOW WE'RE VERY OPEN OF
TRYING TO UNDERSTAND HOW WE CAN
IMPROVE.
A WE DON'T THINK.
OF THAT WE HAVE EXIST HAVE IT.
EXACTLY RIDER EVER EVEN CLOSE TO
THAT GIVEN THIS.
WHERE WE ARE RIGHT NOW A INTERN
TO HAVING THESE DISCUSSIONS
ABOUT A PUBLIC BANK?
BUT I CAN TELL YOU THERE'S A LOT
OF WILLINGNESS TO YOU KNOW TO
CHANGE AND TO IMPROVE.
AND I THINK THAT TERM.
AS A COMMUNITY BANKER WE LIVE
AND BREATHE.
THE SUCCESS OF OUR OF OUR FELLOW
MEMBERS IN THE COMMUNITY EYES
WEEK AS THEY GO WE GO.
SO IT'S A IT'S A DIFFERENT
PERSPECTIVE THAT ZERO IN TERMS
OF THE HEALTH OF OUR COMMUNITIES.
AND WE WANT TO DO EVERYTHING
THAT'S POSSIBLE WE'VE BEEN UP TO
THE LAST TWO WEEKS I'VE BEEN UP
THE READING TO TALK ABOUT.
THE THE CAR FIRE IN THE
RESOLUTION THAT THAT WE'RE
TRYING. TO TO IMPROVE THOSE
COMMUNITIES AND BUILD HOUSING
BEEN UP TO CHICO A TO TALK ABOUT
THE CAMPFIRE AND ALL OF ITS
DEVASTATION THAT'S OCCURRED OVER
THERE.
WAS OVER IN SANTA ROSA.
LAST -- LAST
WEEKEND AND DROVE AROUND IN AND
WAS PLEASED TO SEE ALL THE
BUILDING THAT WAS HAPPENING OVER
IN SANTA ROSA.
AND A LOT OF THAT'S BEING DRIVEN
BY COMMUNITY BANKS AND THEIR
EFFORT AND THEIR CAPITAL AND
THEIR THEIR THEIR FUNDING --
IN WITHOUT COMMUNITY BANKS ON
THEN ARGUE THAT YOU KNOW THAT
REBUILD CERTAINLY OF WHAT I'VE
SEEN SO FAR IN IN SANTA ROSA AND
AND WHAT'S HAPPENING UP IN
REDDING IN CHICO WOULD BE A VERY
VERY DIFFICULT TASK.
THANK YOU I DO ACKNOWLEDGE THAT
I MEAN THERE AS YOU'VE
HIGHLIGHTED THERE'S DEFINITELY --
NOT ALL BANKS ARE THE SAME WE
KNOW THAT AND AND THE CONNECTION
WITH THE COMMUNITIES DIFFERENT --
ENDS AND SO I DO WANT TO
ACKNOWLEDGE THAT I I THINK THAT
ONE OF THE FUNDAMENTAL QUESTIONS
THAT I HAVE IS.
YOU KNOW KIND OF THINKING ABOUT
WHAT.
SOMETHING WENT WRONG WHEN THE
PEOPLE OF THE STATE OF
CALIFORNIA ARE ASKING US TO
RETHINK OF A MODEL --
AND SO I WANT TO REFLECT ON THAT.
AND IT'S ALSO PARTICULARLY
IMPORTANT FOR ME.
TO UNDERSTAND OBJECTIVES OF WHAT
IS WHAT THE END GOAL WOULD BE OF
ONE OF THE MANY --
PUBLIC BANK MODELS THAT HAS BEEN
DISCUSSED AND CERTAINLY THERE'S
OTHERS THAT HAVE NOT BEEN
DISCUSSED HERE TODAY OTHER
MODELS THAT HAVE NOT BEEN
DISCUSSED --
AND HAVING A REAL ANALYSIS ON
WHETHER THERE ARE ANY REFORMS OR
ANY WORK THAT NEEDS TO HAPPEN
WITHIN OUR CURRENT STRUCTURE
THAT WOULD MEET THE OUTCOMES
THAT PEOPLE ARE LOOKING FOR OR
IF.
A WHOLE NEW BOTTLE IS IS THAT
THE DIRECTION THAT WE NEED TO GO
THROUGH --
AND I THINK THAT THIS ENTIRE
CONVERSATION AT GIVES US MORE TO
THINK ABOUT AT LEAST FOR ME IN
TERMS OF THAT TYPE OF THE
DISCUSSION.
SO ANY OTHER QUESTIONS FROM
MEMBERS.
SO WITH NO FURTHER QUESTIONS
FROM MEMBERS WE ARE GOING TO
ALLOW FOR PUBLIC COMMENTS WE HAD
WE ARE GOING TO HAVE A
MICROPHONE THE MICROPHONE
ALREADY IS UP.
AND AND WE WILL ALLOW --
WHEN?
WE WILL ALLOW FOR ANY MEMBER OF
THE PUBLIC WHO WOULD LIKE TO
COMMENT TO PLEASE COME UP TO THE
MICROPHONE STATE YOUR NAME.
AND AFFILIATION AND YOU'LL HAVE.
A MINUTE. TO PROVIDE ANY
FEEDBACK OR THOUGHTS. ONE MINUTE
YES MA'AM REALLY YOU CAN.
WE BELIEVE IN YOU WE CAN DO IT.
SHELLEY BROWNING FRIENDS A
PUBLIC BANKING CENTER IS ALSO
WITH THE CALIFORNIA PUBLIC
BANKING ALLIANCE.
SANTA ROSA FOR THE FACT PAST
FIFTEEN YEARS BANK THAT WELLS
FARGO LAST YEAR THEY PUT OUT AN
RFP FOR NEW BANK TO THE CRA.
RATING BEING DOWNGRADED TO NEEDS
IMPROVEMENT IN A THREE HUNDRED
THOUSAND DOLLAR FEE ANNUALLY FOR
THE SERVICES.
THEY INVEST THREE AND FIFTY
EIGHT MILLION DOLLARS. TWENTY
THEIR WITHIN PART OF THOSE IN
TWENTY BANKS NATIONALLY AND
INTERNATIONALLY FIFTEEN OF THOSE
ARE AMONG THE TOP TOP FINANCIERS
OF THE FOSSIL FUEL INDUSTRY.
THE CITY IS --
THEY ARE DOWN FIFTEEN MILLION IN
THEIR BUDGET FOR THE EIGHTEEN
NINETEEN FISCAL YEAR LARGELY IN
PART BECAUSE OF THE FIRES BUT
ALSO BECAUSE OF THE UNFUNDED
PENSION LIABILITIES ARE MUCH
GREATER.
THREAT TO THIS CITY THEN BACK TO
THE FIRE WHICH IS OUR STATE OF
BY OUR CFO --
CURRENTLY THERE ARE FIFTY JOBS
OPEN IN CITY DEPARTMENTS SEVEN
FIREFIGHTERS WHICH ARE NOT GOING
TO BE FILLED BECAUSE THE CITY IS
NOT HAVE THE MONEY TO PAY THEM.
NOR DO THEY HAVE THE MONEY TO
PAY THEIR PENSIONS WHEN THEY
RETIRE STATED BY OUR CFO --
OUR FIRE PARTY OR RECENTLY
STATED THAT IF BUYERS NOW OCCUR
IN OTHER CITIES THROUGHOUT THE
STATE SANTA ROSA WILL NOT BE
ABLE TO SEND FIREFIGHTERS TO
ASSIST BECAUSE THEY DON'T HAVE
THE MONEY. TO DO IT.
WITH REGARD TO THE REDEVELOPMENT
AFTER THE FIRES FIVE THOUSAND
HOMES PER DOWN A HUNDRED FIFTY
HAVE BEEN REBUILT THUS FAR.
IN ESSENCE WHAT WE AS THE
CALIFORNIA PUTTING HIM LINES ARE
ASKING THAT YOU GUYS THAT THE
OFFICE OF BUSINESS OVERSIGHT
BEGINS ISSUE THIS LICENSE SO
THAT CITIES CAN COME FORWARD.
AND CLAIM CONTROL OF THEIR OWN
FINANCIAL SYSTEMS WE HAVE A ONE
POINT TWO FIVE BILLION INVESTED
IN LOCAL BANKS AND CREDIT UNIONS
OF OUR THREE HUNDRED FIFTY EIGHT
MILLION DOLLAR INVESTMENT
PORTFOLIO.
AND THAT IS BECAUSE OF THE FDIC
INSURANCE REQUIREMENTS AND THIS
IS SOMETHING.
THAT COULD BE WAY TOO WITHIN THE
NEW LICENSURE BECAUSE THE BANK
OF NORTH DAKOTA IS NOT FDIC
INSURED THANK YOU --
GOOD AFTERNOON MADAM CHAIRS --
TREE KID --
BICU COUNTY TREASURER TAX
COLLECTOR --
I'VE REACHED NEW TO THE PUBLIC
SECTOR ACTUALLY I WORKED IN
BANKING FOR TWENTY SIX YEARS --
ONE THING I WANT TO MENTION IS --
IN BICU COUNTY OFFICE YOU WERE
DEALING WITH THE DISASTER
RECOVERY.
FROM THE CAMPFIRE --
SO LIQUIDITY IS CRITICAL --
A WORLD THE COUNTY'S KERR
EXPENSE FROM FEMA AND CAL --
YES.
ALL RIGHT SO HAVING THAT
LIQUIDITY --
FOR OVERNIGHT FUNDS IS CRITICAL.
NOT ONLY THAT BUT ALSO GETTING A
RATE OF RETURN ON THOSE FUNDS --
SAFETY IS CRITICAL --
THE ONE THING I WANT TO BRING UP
THAT THE WASN'T TALKED A LOT IN
THESE SESSIONS WAS COLLATERAL.
THE COSTA COLLATERAL HAS BEEN --
ASTRONOMICAL AND THAT'S REALLY
WHAT IT'S PUSHED A LOT OF BANKS.
OUT OF THE PUBLIC SECTOR BANKING
BECAUSE OF THE COSTS OF
COLLATERAL.
SO THAT'S KIND OF A PIECE OF
THAT.
THAT WE CAN ONLY TOUCH ON TODAY --
AND THAT'S TRULY --
BEEN CHALLENGING FOR A LOT OF
THE MEDIUM TO SMALL SIZE BANKS
IS COMPETING IN THE PUBLIC
SECTOR BECAUSE OF ACOSTA
COLLATERAL --
YOUR THING I WOULD MENTION IS
THAT WE TALK ABOUT COMMERCIAL
BANKING YOU'RE TALKING ABOUT
WIRE TRANSFERS.
A CH INFORMATION REPORTING LOCK
BOX ON A ONLINE PLATFORM YOU'RE
TALKING ABOUT A GREAT DEAL OF
CAPITAL NEEDS TO SUPPORT THAT --
THE GERMAN FROM THE OTHER
COMPANY MAKES CESSATION
MENTIONED YOU KNOW JUST THE COST.
TO OFFER FRAUD PROTECTION IN
ONLINE MAKING ALL THAT SORT OF
THING IS.
IT'S I WOULD COMPARE IT TO TRY
TO COMPETE AGAINST DISNEYLAND AS
A THEME PARK CREATING A THEME
PARK.
IN TRYING TO COMPETE AGAINST
DISNEYLAND YOU YOU BETTER HAVE A
LOT OF CAPITAL IN SOME DEEP
POCKETS --
GIVING I WOULD SAY IS --
WE EITHER HAVE SOME OTHER STATE
AGENCIES SUCH AS DIEM V..
AND D. W. ARE AND AND WE WE KIND
OF WHAT THE HELL'S AGENCIES
OPERATE.
SO THANK YOU.
HELLO MADAM CHAIR IS MY NAME IS
DOUG NORRLAND I'M THE POLICY
DIRECTOR OF THE ECONOMIC POLICY
PROGRAM.
AT FRIENDS OF THE EARTH UNITED
STATES.
OF FRIENDS HERE IT IS IN SEVENTY
FIVE COUNTRIES AROUND THE WORLD
WE HAVE ONE POINT SEVEN MILLION
MEMBERS HERE IN THE US.
AND WE VERY MUCH SUPPORT THE
CONCEPT OF PUBLIC BANKING FOR
THE REASONS STATED BY OUR
COLLEAGUES.
OF THE SOCIAL REASONS THAN YOU
KNOW PAYDAY LENDERS THAT NEED
FOR AFFORDABLE HOUSING.
THERE'S ALSO A BIG CLIMATE
CHANGE CONNECTION AS SUSHIL
JACOB HAS MENTIONED I MEAN WERE
NO.
STRANGERS HERE TO THAT
DEVASTATING IMPACTS.
OF CLIMATE CHANGE --
WE SEE IT EVERY YEAR IT'S
GETTING WORSE AND OUR STATE --
THE STATE OF CALIFORNIA AS WELL
AS CITIES ARE TRYING TO DO
SOMETHING ABOUT IT. ONE EXAMPLE
IS CITIES HAVE BEEN JOINING.
A NATIONAL ASSOCIATIONS TO TRY
TO PRESSURE THE FEDERAL
GOVERNMENT TO DO MORE ABOUT
CLIMATE CHANGE MAYOR SO STATIONS
OF MAYORS ARE ARE PRESSURING.
THE ADMINISTRATION TO DO MORE
AND THEY'RE TRYING TO DO MORE
THEMSELVES WITHIN THEIR OWN
CITIES.
AND YET THEY'RE VERY FUNDS THEIR
DEPOSITS IN THE ARE FUNDING THE
VERY THING CAUSING THE CLIMATE
CHANGE.
MASSIVE EXPANSION OF FOSSIL FUEL
PROJECTS AROUND THE WORLD WHICH
IS INCREASING GREENHOUSE GAS
CONCENTRATION.
CAUSING THE VERY PROBLEMS WERE
SAYING SO ON THE ONE HAND WHERE
WERE YOU KNOW SOCK IT TO THE
FEDERAL GOVERNMENT FOR THEIR
INACTION AND AT THE SAME TIME.
WERE SECOND TO OURSELVES BY
FINANCING THE VERY THING.
THAT'S CAUSING THE PROBLEM AND
SO WE SEE PUBLIC BANKING AS A
SOLUTION TO THAT AS A WAY.
TO EXPAND THE DIVESTITURE
MOVEMENT AWAY FROM.
WALL STREET BANKS AND REINVESTED
IN LOCAL COMMUNITIES AND LOCAL
COMMUNITY BANKS WHICH ARE NEEDED
TO HELP REBUILD AFTER THE
DEVASTATION.
CAUSED BY WILDFIRES AND OTHER
FORMS OF CLIMATE CHANGE.
THANK YOU VERY MUCH.
DEBBIE NOT CAN WITH THE
CALIFORNIA PUBLIC BANKING
ALLIANCE I JUST WANT.
TO AFTER THANKING THE GENTLEMAN
FROM THE CALIFORNIA BANKING
ASSOCIATION FOR HIS REMARKS.
SAY THAT I MISSED THREE CRUCIAL
WORDS. ONE IS PROFITS. ONE THE
SHAREHOLDERS AND ONE IS FINE.
IF THE CALIFORNIA IF THE BANKING
REGULATION IS AS GOOD AS IT IS
WHY HAS WELL FARGO HAD TO PAY
THOSE MILLIONS OF DOLLARS.
IN FINES FOR ITS ACTIVELY FRAUD
YOU DOESN'T THAT MONEY COME BACK
TO US.
THANK YOU.
CLIFFORD JOHNSON JUST A MYSELF.
I JUST WANT TO PUT ONE
HISTORICAL.
PERSPECTIVE ON THIS IS ALWAYS
BEEN THE TENSION BETWEEN PUBLIC
MONEY AND PRIVATE MONEY.
KNEE GOES BACK.
TO HAVE A A BIG CONFRONTATION
ABRAHAM LINCOLN INTRODUCED HIS
ORIGINAL GREEN BACK DOLLARS THE
BANKERS SAID YOU COME DO IT IT
WON'T WORK.
BUT HE DID IT HE VETOED A BANK
BILL IT SAID NGUYEN STOP
PUBLISHING OUR OWN MONEY.
AND NOT VETO RESULT HITTING
WINNING THE CIVIL WILL THE IS OF
WILL IS GOING ON BETWEEN PUBLIC
AND PRIVATE AND LET'S HOPE WE
CAN WORK TOGETHER.
AND HAVE BOTH [inaudible]
THANK YOU.
SEE NO A DIVISIONAL THERE'S ONE
MORE.
SORRY.
THE CLIFFORD UNDERSTATED HE'S
WITH THE PUBLIC BANKING
INSTITUTE A NATIONAL
ORGANIZATION.
PROMOTING PUBLIC BANKS.
I'M WITH US THE EAST BAY PUBLIC
BANK WHICH IS A MEMBER OF THE
CALIFORNIA PUBLIC BANKING
ALLIANCE.
OF MY NAME IS SUSAN HARMAN --
I THINK DOUG MENTIONED
DIVESTMENT WHICH IS A MAJOR
REASON --
FOR CITIES AND COUNTIES TO
ENGAGE IN PUBLIC BANKING.
OF AT THE PHRASE CURRENTLY IS TO
DISRUPT THE CURRENT BANKING
SYSTEM AND IF WE ALL THINK THAT
THAT'S A VERY GOOD IDEA --
MR CHOI OF SEEMS TO THINK THAT
LOCAL GOVERNMENTS WAS WILL
SUBSIDIZE THESE BANKS THAT IS
NOT THE CASE IN FACT IT'S THE
OPPOSITE.
WE EXPECT THESE BANKS TO MAKE A
PROFIT THAT WILL GO BACK INTO
THE GENERAL FUNDS OF THE
LOCALITIES --
THEY WILL NOT BE RUN BY
GOVERNMENTS THEY WILL NOT BE
UNDER POLITICAL INFLUENCE THEY
WILL HAVE INDEPENDENT BOARDS.
OF PRIMARILY COMMUNITY MEMBERS
AND CITIZENS AND BANKERS.
AND WE'RE AWARE THAT THERE'S A
TENSION.
BETWEEN FIFTH FISCAL
SUSTAINABILITY AND SOCIAL GOOD
AND THAT WILL THAT IS PART OF
ALL OF THE BANKS THAT WE'RE
ENGAGED WITH ALL OF OUR MISSIONS --
RECOGNIZE THAT TENSION AND WE'LL
DEAL WITH IT IT WILL BE A
PROBLEM IT WILL BE DIFFICULT BUT
MANAGEABLE.
A PROFIT IS NOT OUR ONLY GOAL IT
IS NOT OUR BOTTOM LINE --
AND MR BECKWITH TALKED ABOUT A
PROGRAM CALLED RISE WHICH I'M
NOT FAMILIAR WITH BUT WHICH
SOUNDS LIKE A MINI EXAMPLE OF
THE KINDS OF COLLABORATION AND
MUTUAL HELP THAT.
PUBLIC BANKS WILL BE ABLE --
TO INSTITUTE WITH COMMUNITY
BANKS SO IT IT'S AN EXAMPLE THAT
WE NEED TO FIND MORE OUT MORE
ABOUT.
AND FINALLY I JUST WANT TO THANK
YOU FOR THIS.
IS HEARING THIS WAS WONDERFUL
THANK YOU.
GOOD AFTERNOON AND THANK YOU FOR
THE HEARING ALLOWING ME TO SPEAK
MY NAME IS MARGIE LEWIS AND I TO
A MEMBER OF THE CALIFORNIA
BANKING ALLIANCE.
AND I JUST WANTED TO OF TO
LITTLE BIT ON WHAT SUSAN SAID IS
THAT HAVING A MUNICIPAL BANK AS
AN ENTITY.
WILL BE AVAILABLE TO PROVIDE THE
CAPITAL FOR THE COMMUNITY BANKS
THAT THEY WOULDN'T HAVE ON THEIR
OWN THAT WOULD ALLOW THEM TO
GIVE.
MAY BE A LOAN THAT THEY DIDN'T
HAVE THE MONEY FOR OR THAT'S A
LITTLE MORE RISKY AND THE REASON
WE BE ABLE TO DO IT.
IS BECAUSE WE WILL NOT
SHAREHOLDERS BECAUSE WE ARE THE
SHAREHOLDERS WE WILL NOT BE
PROVIDING FOR THE MULTI MILLION
DOLLAR BONUSES AND GOLDEN
PARACHUTES.
OF THE CEOS HERE WILL HAVE A CDL
BUT THEY WILL NOT BE MAKING
THREE HUNDRED TIMES WHAT.
THE AVERAGE BANK WORKER WELL SO
THAT IS A CLEAR DIFFERENCE THAT
TYPE OF PROFIT MOTIVE THE PROFIT
MOTIVE IS TO MAKE PROFIT TO GIVE
BACK TO THE COMMUNITY.
NOT TO GO INTO THE GOLDEN OF
LAID POOLS OF THE CEOS AND THE
LAST THING I WANT TO SAY IS.
THE PUBLIC BANKS IN GERMANY HAVE
BEEN AROUND FOR OVER TWO HUNDRED
YEARS THEY ARE INCREDIBLY
SUCCESSFUL I AM SORRY HIS
COMMENT WAS NOT CORRECT THEY'VE
BEEN LOSING MONEY AND THEY HAVE
BEEN FUNDING.
THE GREEN ECONOMY THAT IS
INCREDIBLY SUCCESSFUL IN GERMANY
TODAY THANK YOU AND I THIS IS A
WONDERFUL HEARING I APPRECIATE
IT THANK YOU.
HI -- I'M
SOVIET SHE ALSO FROM THE
CALIFORNIA PUBLIC BANKING
ALLIANCE AND PUBLIC BANK EAST
BAY -- AND I
WANT TO ALSO THANK YOU FOR THIS
HEARING --
AND FOLLOW UP WITH WHAT MY
COLLEAGUE SAID --
OF THE WORK THAT MR BECKWITH WAS
DESCRIBING --
THAT IS THOSE ARE THE TYPES OF
PROJECTS THAT WE WANT TO
INCREASE THAT WE WANT TO DO MORE
OF AND USE PUBLIC BANKS AS A
MULTIPLIER TO INCREASE THAT
LEVERAGE SO THAT WE INVEST MORE
IN OUR COMMUNITIES AND THAT'S
WHAT THE BANK OF NORTH DAKOTA
DOES RIGHT NOW --
MISTER LANE FROM THE CALIFORNIA
BANKERS ASSOCIATION SAID THAT HE
WAS OPEN TO DIALOGUE ABOUT THE
PERCEIVED MARKET FAILURES AND
UNMET NEEDS IN THE BANKING.
SYSTEM SECTOR.
AND WE WOULD LIKE TO TAKE HIM UP
ON THAT OFFER IN A PUBLIC FORUM --
ONE UNMET NEED THAT WAS
MENTIONED WAS THE DIVESTMENT
MEAT AND MANY CITIES AND
COUNTIES IN CALIFORNIA HAVE
PASSED RESOLUTIONS.
STATING THAT THEY YOU KNOW WANT
TO DIVEST FROM FOSSIL FUELS OR
FROM SPECIFIC PROJECTS LIKE THE
DAKOTA ACCESS PIPELINE.
WHICH MILEY INDIGENOUS
SOVEREIGNTY.
AND THE BANKS THAT ARE PROVIDING
THEM THEIR BANKING SERVICES HAVE
NOT PROVIDED.
THE SERVICE THEY WANT WHICH IS A
IN TERMS OF DIVESTING FROM THOSE
PROJECTS --
AND IN FACT OR IT ACTIVELY
EXACERBATING CLIMATE CHANGE
CHAOS BY LEVERAGING PUBLIC MONEY
TO DO SO --
SO.
YES SO THE FOSSIL FUELS AND WITH
A THIRD IN THE BANKS THAT
FINANCE THEM HAVE NOT BEEN
RESPONSIVE TO CALIFORNIANS OR
THEIR PUBLIC DEPOSITORS.
SO WE THINK THAT'S ANOTHER
REASON THAT PUBLIC BANKS SHOULD
BE CONSIDERED THANKS.
I THINK WE ARE DONE WITH PUBLIC
COMMENTS AND I'M GONNA BRING IT
BACK TO THE MEMBERS I KNOW
SOMEONE MEMBERS CERVANTES WOULD
LIKE TO MAKE SOME COMMENTS.
THANK YOU MADAM CHAIR I FIRST
OFF I JUST WANT TO THANK
EVERYONE FOR PARTICIPATING IN
TODAY'S INFORMATIONAL HEARING.
ACCESS TO CAPITAL IS EXTREMELY
IMPORTANT AS WE KNOW AND SO AS
WE EXAMINE THE CREATION OF A
STATE BANK I HAVE SEVERAL
QUESTIONS --
FOR BOTH SIDES THAT I WILL LOOK
FORWARD TO ENGAGING AS WE MOVE.
CORD AND CONTINUE DISCUSSING
THIS TOPIC THIS THAT IS OF
INTEREST I TO MANY OF US --
BUT FIRST OFF I JUST WANT TO
THANK YOU FOR PARTICIPATING AND
AND BEING ACTIVE --
IT JUST BEING ENGAGED IN AT THIS
POINT IN TIME [inaudible]
THANK YOU --
ON JUST QUICKLY TO US THANK YOU
ALL FOR ATTENDING TODAY I THINK
IT WAS A LIFE GOOD DISCUSSION --
MY INTEREST IS WOULD BE IS
COULDN'T CONTINUE THE
COLLABORATION CONTINUE THE OPEN
DIALOGUE --
THERE'S SO MANY QUESTIONS HERE
IS GOING TO HAPPEN OVERNIGHT.
NOW.
LET'S BE HONEST WITH EACH OTHER
BUT THERE'S WITHIN THE ROOM HERE
THAT HAVE COMMITTED TO MOVING
AND LOOKING INTO THIS.
INTO PUBLIC BANKS AND I THINK WE
CAN DO IT --
NO MATTER WHAT SIDE A LOT OF THE
WHAT I'LL YEAR ON I THINK YOU
WORK ON THIS SO I CONTINUE
WORKING TOGETHER TO MAKE SURE
THAT WE GET ENGAGED.
OUT AND WE'RE MORE THAN HAPPY TO
SEE WHAT WE CAN DO ALL AS A TEAM
SO THANK YOU VERY MUCH FOR ALL
ATTENDING TODAY.
AND I WANT TO AND I THINK ALL OF
OUR PANELISTS ALL OF THE
PRESENTERS AT AS WELL AS WELL AS
THAT BANKING AND FINANCE TEAM
AND THE LOCAL GOVERNMENT TEAMS --
FOR FOR GATHERING ALL THE
INFORMATION AND THE SPEAKERS I
THINK WE'VE HEARD --
A START OF A CONVERSATION THAT'S
BEEN HAD VERY PUBLICLY --
BUT WE HAVEN'T HAD A RECENT
CONVERSATION --
A IN A FORMAL SPACE IN THE IN
SACRAMENTO THE CAPITAL SAY THINK
IT WAS IMPORTANT TO BRING.
A LOT OF US ARE HEARING OUT IN
THE COMMUNITY --
TO SACRAMENTO TO THE CAPITAL TO
HOPEFULLY THINK OF HOW WE MOVE
FORWARD AND WHAT THAT LOOKS LIKE --
SOME OF MY TAKE AWAYS FROM
TODAY'S HERE FRONT MODELS OUT
THERE AND THAT WERE NOT --
COALESCING AROUND ONE MODEL PER
SE -- AND
CERTAINLY THEY'RE STILL I THINK
A LOT OF PIECES --
THAT HAVE TO DO WITH THE RISKS
TO THE PUBLIC AND WHAT THAT
LOOKS LIKE AS WELL AS REALLY
EVALUATING --
AND HAVING A PUBLIC SAY ON
WHETHER THAT RISK IS A MATTER
YOU KNOW WORTHY AND IT WHETHER
IT MERITS CONSIDERATION GIVEN
ALL OTHER RISKS THAT WE TAKE --
WITH ANY TYPE OF PRIVATE OR
COMMERCIAL SO I HOPE THAT --
WE CAN CONTINUE THOSE
DISCUSSIONS OUT ONE OF THE
PIECES THAT IS IS CHAIR OF THE
COMMITTEE THAT I FIND MOST
FASCINATING AND AND DIFFICULT.
IS NOT ANSWERING THE EASY
QUESTIONS BUT ANSWERING THE HARD
QUESTIONS THE HARD QUESTIONS
THAT PUT US ALL TO THINK ABOUT
WHAT DO WE DO --
WHAT IS IN THE BEST INTEREST OF
THE PUBLIC EVERYTHING THAT WE
DISCUSSED TODAY?
HAS A TRADE OFF OF SORTS AND SO
DISCUSSING WHAT THOSE TRADE OFFS
WOULD LOOK LIKE TO THE PUBLIC --
IS IMPORTANT IT DOESN'T MEAN WE
DO OR WE DON'T DO THINGS --
IT JUST MEANS THAT WE HAVE TO BE
PREPARED TO HAVE SOME OF THE
CONVERSATIONS ON THAT ARE NEEDED --
IN ORDER TO CONSIDER WHAT NEXT
AND I LOOK FORWARD TO THOSE
DISCUSSIONS AND CERTAINLY I KNOW
THAT TO AT THE WILL CONTINUE.
SO AGAIN I WANT TO THANK
EVERYONE FOR PARTICIPATING AND
FOR BEING PART OF THIS
DISCUSSION FOR TAKING THE TIME
TO BE HERE AND WITH THAT I WILL
CLOSE THE HEARING [inaudible]
SORRY