This month, Governor Hochul signed legislation directing the state’s financial regulator to conduct a study of communities that lack fair banking access. Here in the Bronx – where check cashers and pawn shops outnumber bank branches at a higher rate than anywhere else in the state – we need more than a study, we need action.
That’s why we’re launching a community-owned credit union to provide affordable accounts, loans, international remittances, and other sorely-needed financial services in the Bronx. Along with Nos Quedamos, University Neighborhood Housing Program and WHEDco, we’re building an institution that will meet the needs of Black and brown New Yorkers whose neighborhoods have long been redlined by Wall Street.
Here’s something Albany should do to give community-based efforts like ours a big boost: pass the New York Public Banking Act. The bill establishes a safe and appropriate regulatory framework for public banks, created by local governments and chartered to serve the public interest. Public banks would partner with institutions like ours to expand financial services and drive investment in low-income neighborhoods.
Hundreds of groups statewide, led by the NYS Community Equity Agenda and Public Bank NYC coalitions, are calling on the Governor and Legislature to act before the legislative session ends in early June.
Our credit union effort is a perfect example of the kinds of community-led initiatives that a public bank would support. A public bank could provide secondary capital loans, for example, to help us grow our deposits and bring in new members. It also would serve as a lending partner to smaller institutions like ours, enabling us to make more and larger loans – for affordable housing, small businesses and other needs – than we could on our own.
In these and other ways, public banks are designed to support, rather than compete with, responsible lenders.
It’s a proven model. The century-old Bank of North Dakota is credited with expanding the lending capacity of local banks and credit unions. In fact, North Dakota has more banks and credit unions per capita than any other state.
Lawmakers should be working to bring that success here.
Study after study has shown that the big banks continue to discriminate against Black loan applicants, close branches in Black and brown neighborhoods, and drive low-income people out of the banking system with predatory overdraft fees. Check cashers, pawn shops and other high-cost financial services fill the void, leading to massive wealth extraction from our communities.
Public banks would give cities a powerful tool to expand fair lending and banking access, while helping to level the playing field for small credit unions and other responsible lenders that build – rather than extract – community wealth.
We don’t need another study to tell us what we already know. Albany lawmakers should advance concrete solutions that will help our communities thrive. Passing the New York Public Banking Act is a crucial place to start.
Gregory Jost is a Policy Advisor at Banana Kelly Community Improvement Association. Linda Levy is an Executive Consultant and the retired CEO of the Lower East Side People’s Federal Credit Union.