Q & A: Why Philly Needs a Public Bank

I. What Is A Public Bank?

A public bank is a bank that’s owned by a city or state and replaces privately owned banks like Wells Fargo as the place in which the government deposits its receipts from all sources.

II. What Does a Public Bank Do With Its Money?

Unlike a private bank, a public bank reinvests its resources in the community, according to the priorities set by the government that owns it. It also enables the government to borrow funds for capital purposes at no real cost, saving tens of millions of dollars that can be reinvested to support critically needed public services.

III.  Doesn’t Philadelphia Need to Spend All Its Money? How Can It Invest Or Lend it out?

Like all governments, the City has hundreds of millions of dollars in reserve accounts that it doesn’t tap except in cases of emergency. These funds often sit idly earning the City little in return while the Wall Street banks that hold the deposits plough them into super-profitable investments like predatory home loans, fossil-fuel extraction, risky derivatives, foreign currencies, and other financial “products” that provide absolutely no benefit to the people of our City.

IV. Do any public banks exist in the United States?

The only public bank in the continental U.S. is the bank of North Dakota that was established at the height of the populist movement in 1919. Although not a perfect model, it has been so well run and proven so critically important to the welfare of the people of the state that even Republican governments have been unwilling and uninterested in dismantling it.

V. Won’t Greedy Politicians Just Use A Public Bank to Fund Pet Projects and Line Their Pockets

Like in North Dakota, politicians will be barred from exerting any influence over individual lending decisions. Advocates will press to have investment priorities determined through an inclusive, participatory process that brings a wide range of stakeholders into the decision-making process.