Sacramento, CA – Today, the California State Assembly approved landmark legislation that would guarantee all Californians access to basic banking services without fees or penalties. The California Public Banking Option Act, AB 1177 (BankCal), addresses the inequities in financial services acutely felt by communities that have been hardest hit by pandemic and recession: discrimination, predatory lending, and vicious spirals of debt. AB 1177 is endorsed by SEIU California, California Reinvestment Coalition, California Public Banking Alliance, and 200 racial and economic justice groups, faith-based and climate justice organizations, businesses, and labor unions.
“Struggling families are hit by fee after fee at every corner, and BankCal will help them keep their hard-earned dollars for food and rent,” said Assemblymember Miguel Santiago, lead author of AB 1177. “Providing a public banking option for essential financial services will help close the racial wealth gap. AB 1177 is a key tool to social and economic mobility, and I’m excited to continue pushing to pass this bill in the Senate.”
“We applaud the Assembly for supporting this bill and ensuring access to financial services for all Californians regardless of how much money they make, their zip code, or the color of their skin,” said Bob Schoonover, SEIU California President and SEIU 721 Executive Director. “Limited access to basic banking services like check cashing are a problem that disproportionately impacts low-income communities and communities of color. BankCal is a concrete step in making sure that everyone has the opportunity to recover and come back stronger from the devastation caused by the pandemic.”
Seventy-eight percent of unbanked households make less than $30,000 annually and 42% make less than $15,000 annually. Nearly half of all Black-identifying households and Hispanic-identifying households in California are unbanked or underbanked.
“Today’s vote advancing BankCal, moves the state closer to being on the right side of history,” said Paulina Gonzalez-Brito, Executive Director of the California Reinvestment Coalition. “AB1177 carries with it the potential to finally build an alternative to the extractive and exclusive Wall Street banking system that has failed historically low-income communities and Black, Indigenous, People of Color. A banking system that centers people instead of profits is a start toward addressing long-standing racial and economic inequities in the state.”
“Today’s Assembly vote in support of BankCal affirms that banking services are essential in allowing full participation in our economy–it is a necessity, not a luxury,” said Trinity Tran, lead organizer of the California Public Banking Alliance. “The Assembly’s passage of AB 1177 comes at a critical moment for struggling Californians and advances the movement toward a more equitable banking system.”
AB 1177 is modeled from the success of CalSavers and CalKids, similar programs aimed at creating greater financial stability for working families. To study the most effective and efficient way to operate the BankCal program, AB 1177 requires a market analysis. Upon completion of the market analysis and approval by the Legislature, AB 1177 establishes the BankCal program.
The BankCal program would allow Californians to create a BankCal account, use a BankCal debit card, deposit funds, automate bill pay, and set up direct deposit without fees or penalties.
Contact: Mike Roth, 916.813.1554
Maria Elena Jauregui, Spanish-language, 818.355.5291