Bill Summary: Philadelphia Public Banking Bill

On January 28, 2021, Councilmember Green will be introducing legislation in City Council to establish a Philadelphia Public Bank! Here are summaries of what the legislation says. Check out our Social Media Toolkit to help build support for this important bill!

Short Summary

This bill creates a Philadelphia Public Banking Authority for a variety of stated purposes that include bringing financial equity to underserved communities, helping finance City projects, and promoting other justice-oriented goals. It will be governed by a Board of Directors containing four classes of members:

1. Six persons who have at least five years’ experience working on various issues of concern to underserved communities in the City;
2. Three persons who have experience in some kind of community-focused banking;
3. The Mayor, Council President and City Treasurer or their designees
4. The CEO of the Bank

The bank shall be fully empowered to hold City deposits, borrow and lend money, manage City investments, issue bonds, and engage in a  wide variety of other practices that will further the bank’s public purposes. It will be regularly audited, and all Board members and employees will be fully subject to the City’s Ethics Code.

Detailed Summary

This bill directs the City Solicitor to file Articles of Incorporation for the Philadelphia Public Banking Authority (PPBA) with the Pennsylvania Secretary of State. The bill also describes the purposes, structure, and powers of the bank, as described below:

1. Purpose. To take all practical measures within its powers to:
   1. provide financial resources at fair interest rates to credit-worthy Philadelphia residents and businesses that lack equitable access to existing sources of financing, particularly in communities that have suffered historical discrimination in credit markets;
   2. offer financing to the City of Philadelphia, other participating governmental entities, and their related agencies, including but not limited to the School District of Philadelphia, to service their infrastructure needs;
   3. to foster growth of:
      1. renewable energy and energy efficiency enterprises and projects;
      2. low-income housing availability;
      3. cooperative business development;
      4. enterprises paying family-sustaining wages;
      5. businesses creating new employment opportunities;
      6. transportation projects;
      7. other enterprises and activities filling needs of marginalized communities
2. Powers. The PPBA shall have the power to:
   1. hold deposits of funds belonging to the City of Philadelphia and other government entities as well as their related agencies, including but not limited to the School District of Philadelphia, and to invest such funds for the benefit of the City and such agencies, subject to the requirements of Chapter 19-200 of the Philadelphia Code and any other applicable federal and Commonwealth law or regulations;
   2. obtain from either or both governmental and private sources such collateral and insurance, as may be appropriate to protect deposits placed with it;
   3. accept contributions toward capital and operating costs from private nonprofit institutions;
   4. issue tax-exempt municipal bonds (pursuant to Act 102, Section 7);
   5. finance and refinance construction and rehabilitation infrastructure projects of the City, other governmental entities, and their related agencies;
   6. provide loans, letters of credit, guarantees, and other forms of credit enhancement, loan participation, and direct or indirect financial assistance, consistent with its purposes as set forth in this ordinance;
   7. to develop and implement programs that further its Purposes in collaboration with both for-profit and nonprofit financial institutions;
   8. enter into contracts with both private and governmental entities;
   9. purchase and sell securities;
   10. purchase and sell real property;
   11. seek and obtain such state and federal approvals as may be required for it to fulfill any or all of its Purposes.
3. Governance. The Bank will be governed by a Board of 13 Directors appointed to staggered terms of 6 years (may get cut to 5). Appointments shall be made as follows:
   1. Six members shall be picked by the mayor from a group of nine nominated by City Council. Council, in turn must comprise its list of recommendations from among persons with at least five years of experience working on one or more of the following concerns: environmental justice, racial justice, low-income housing, public education, public health, co-operative development, neighborhood-based small business development, gender justice, public transportation;
      1. All nominees sent to the Mayor must have been recommended to Council by organizations concerned with the issues listed above.
   2. Four members will serve ex officio: the Mayor, The Council President, the City Treasurer and the PPBA Chief Executive Officer
4. Audits and Ethics. The books of the PPBA will be audited annually by the City Controller and by a federal regulatory body. All bank employees, Board members and agents shall be bound by the City Ethics Code.