A new California state law allows local governments to form their own banks to handle taxpayer money. Gov. Gavin Newsom (D) announced on Wednesday, Oct. 2 that he signed the law co-authored by Assemblymen Miguel Santiago and David Chiu.
The concept behind the law is that public banks do not need to worry about shareholder profits and can invest in things like affordable housing and infrastructure, as well as other subjects that commercial banks are reluctant to invest in.
The law is to go into effect on Jan. 1, 2020. The application process is anticipated to be rigorous, and local governments will need a business plan as well as state-approved insurance. The law also allows for only 10 public banks across the state, and no more than two bank licenses will be issued each year. You can learn more information on the new law here: https://www.usnews.com/news/best-states/california/articles/2019-10-02/new-california-law-allows-local-government-to-form-banks