Funded on June 1, 2023

Deep racial inequities in access to banking, loans, and financial services have long exacerbated disparities in health and well-being. In theory, by holding and managing money, banks provide a public service that is essential to people’s lives and a healthy economy. In practice, however, the current banking system has served to exacerbate inequities and perpetuate the racial wealth gap. Commercial financial institutions have engaged in longstanding patterns of racial discrimination and predatory practices that widen the racial wealth gap, such as blatant racial profiling of customers of color, steering communities of color to high-cost loans, denying loan services to immigrants, as well as overcharging people of color with predatory fees such as overdraft and other unnecessary or hidden charges.

This project will build on and contribute to a growing body of research into the impact of public banks – financial institutions created by governments and chartered to serve the public interest – and their potential to address interlocking health, housing, and climate crises and reduce the racial wealth gap.

In partnership with New Economy Project, the research team will work to answer: “What impact would the implementation of proposed public banking models have on community asset ownership and governance in communities of color?” The research team will conduct a comparative study of five public banking proposals across the U.S., including legislation passed in Philadelphia and California and proposed legislation in Massachusetts, New Jersey, and New York. In addition, they will analyze the federal Public Banking Act of 2020 (H.R. 8721), introduced in October of 2020, which would provide federal support for the formation, chartering, and capitalization of public banks at the state and local levels.

This research will provide a base of evidence to drive forward optimal policy, legislative, and administrative design for proposed public banks and grassroots public banking campaigns across the United States.