Despite the momentousness of the occasion — CNBC characterized it as serving Wells Fargo its “walking papers” — it was a surprisingly quiet vote, with little fanfare or any more than the usual audience, according to Bass. “We did not get our advocacy community rallied up for this particular vote,” she says. They’re saving that moment for when the city pulls all of its deposits out of Wells Fargo.
“This work will continue,” adds Bass.
Part of that work includes exploring the possibility of setting up a public bank for the city of Philadelphia, which could take over payroll functions and city deposits permanently, among other functions. At-large Council Member Derek Green initiated that exploration by passing a resolution in January 2016 authorizing the council’s Committee on Commerce and Economic Development to hold hearings regarding public banking. The first hearing took place in February 2016.
The universe seems to have conspired to put the right person at the right time in the right elected office. Green spent several years in banking in Philadelphia and then, while working for former City Council Member Marian Tasco, drafted one of the first municipal anti-predatory lending laws in the U.S. With deep experience in both banking and government, Green was mulling over a public bank even before he was sworn in last January alongside new Mayor Jim Kenney. The public banking resolution was his first solo act as a legislator.
“When they took direct lending out of branches,” Green said last year to open up the first public banking hearing, “that’s one of the reasons why I left banking, because at that point, I no longer could be the banker that I wanted to be … .”
Green hopes that a public bank can restore banking to be the community-driven, character-based lending that he was able to do successfully in his early days, particularly when it comes to small business lending. Most banks these days don’t have branch-based loan officers, as Green pointed out. That makes it pretty much impossible to maintain the relationships that are especially essential for small business lending.
A public bank can change the local or regional economics of banking. The Bank of North Dakota is the last remaining public bank in the country. The state legislature established it in 1919. It opened its doors on July 28 of that year, with $2 million in capital ($28 million in today’s dollars accounting for inflation). With $7.2 billion in assets today, it functions largely as a “banker’s bank,” mostly making low-interest loans alongside or directly to community banks and credit unions around the state. With such a reliable, affordable and local source of capital, North Dakota community banking is stronger than in other parts of the country. It’s a big reason why North Dakota has more banks and credit unions per capita than any other state.