Episode 3: Co-ops
PRESS RELEASE
Philadelphia Public Banking Coalition
April 27, 2021
Councilmember Green discusses the Philadelphia Public Banking Authority
This public conversation addresses issues about establishment of a Philadelphia Public Bank.
PHILADELPHIA—On Tuesday, April 27, 2021, from 4:30 to 5:00, the third program in the “Financing Philadelphia’s Future with Councilmember Derek Green” series was presented by the Philadelphia Public Banking Coalition. The general public is invited to participate in this program, moderated by Vanessa Lowe, on Zoom https://us02web.zoom.us/j/85835928783 and livestreamed on the Facebook and Instagram accounts of Councilmember Green and Philadelphia Neighborhood Networks.
Emily Wyner, spokesperson for PACA, the Philadelphia Area Cooperative Alliance, was our guest. Wyner is the Co-op Development Administrator at PACA, supporting groups interested in cooperatives as well as its member co-ops in building and sustaining cooperative enterprises across sectors. Wyner leads communications, resource mobilization, and policy efforts at PACA.
Outside of her role at PACA, Wyner is an assistant adjunct professor at Temple, where she teaches courses in nonprofit management and community development. Wyner is also a member leader of Resource Generation, where she organizes her peers from class privileged backgrounds to redistribute wealth, including through alternative and non-extractive investments.
Prior to joining PACA, Wyner led a successful $1.29 million capital campaign for the recently-opened South Philly Food Co-op, where she also served as a board member and co-chair of the food justice and equity committee. She believes in building economies rooted in solidarity and care, and she is excited to share what a public bank could do for Philly’s existing, emergent, and future cooperatives.
Green reported, “We are close to concluding a contract with a law firm to provide legal advice regarding establishment of a Philadelphia Public Bank. This resource will assist the finance Committee in moving forward with legislative action.” Councilmember Green introduced Bill #210005 on January 28, 2021 to authorize organization of the Philadelphia Public Banking Authority. This Bill is currently before the City Council Finance Committee.
Green noted, “As a result of the American Rescue Plan, Philadelphia will be receiving $1.4 billion. This money will eliminate the $450 million deficit the City had been facing for this year. The City will also be receiving $70 million in two tranches, half in the spring of 2021 and the other half in the spring of 2022. As a result, the City has capacity to pursue initiatives such as creation of the Philadelphia Public Bank.”
Green urged all citizens to participate in the City’s budget hearings. “The budget hearings begin on Monday, May 3rd. I encourage you to attend and give your comments about the priorities our City should be pursuing, including establishment of the Philadelphia Public Bank.”
Green, a former banker, asked, “How do we help those types of entity that are hard to lend to? I think cooperatives are interesting in that regard. I have been a member of Weavers Way for a number of years, and I support the co-ops throughout our City. The challenges for co-ops and to helping them get started and to grow are different; but they are also similar to some of the issues we have talked about in the past regarding small businesses, especially those owned by people of color who have not had access to credit or credit enhancement. With a cooperative, you don’t have one true owner. You have a group of people who are owners. Having a public bank that can provide credit enhancement will make it easier for banks to lend to cooperatives. That will help existing co-ops to grow and flourish. And, it will also help people who want to establish co-ops in their own neighborhoods.”
Wyner described how cooperatives combine the interests of people and enterprises. Such combination can take many forms: In worker cooperatives, employees are owners. Consumer cooperatives seek to meet member demands for goods and services. Electricity and other utility cooperatives provide community services. Businesses form cooperatives to achieve economies of scale. Producers such as farmers use cooperatives to engage in marketing together. Housing cooperatives bring residents together in common ownership. All of these types of cooperatives are guided by seven, international, democratic principles.
Wyner expanded on the issues described by Green. “Co-ops do face very particular financing challenges. Consider the various systemic barriers that black and brown and working-class and immigrant communities face in accessing capital to launch businesses. Take all of those challenges and also compound them when you’re talking about a group of people coming together. Maybe there is no one person who has collateral to front, so that the group can get a loan. And, the bank needs to run credit checks on maybe twenty different people. There are few and far between lenders who are equipped to do it and do it well.”
At the same time, Wyner asserted, “The power of the co-op is in the association of people.” As an example, she reported, “The South Philly Co-op had over 1,400 households who were member and had bough into the business at the time it had opened. And still, the task of finding institutional financing was enormous. The households contributed more than half of the $1.3 million capital campaign; yet some lenders were finding it difficult even to conceptualize how to lend to a group like this.” The market is telling us this is what the community wants; the business is destined for success. But, the cooperative model doesn’t fit the bank’s formula. We need the Philadelphia Public Bank to close this gap. All Financing Philadelphia’s Future programs can be viewed on the Philadelphia Public Banking Coalition website.