Austin City Council members voted to kickstart a feasibility study for the creation of a "public bank," which "is owned and operated by a public institution, such as a municipal government."
AUSTIN (KXAN) -- Austin City Council members voted to kickstart a feasibility study for the creation of a "public bank," which "is owned and operated by a public institution, such as a municipal government."
Council Member Mackenzie Kelly voted 'no' on the item and Council Members Paige Ellis and Alison Alter abstained from the vote.
Brought forward by Council Member Zohaib "Zo" Qadri -- and co-sponsored by members Ryan Alter, Vanessa Fuentes and José ''Chito'' Vela -- the resolution asks the city manager to look at any legal barriers and possible models for creating a public bank.
"I think creating a public bank to be able to reinvest in city revenues locally, to democratize banking and provide non-predatory banking services is only a positive," Qadri said.
The resolution asks the city manager to return with that feasibility study no later than November 1. That study will include legality of a public bank in Texas.
According to the Public Banking Institute (PBI) -- a nonprofit group that, in part, keeps track of legislative efforts tied to public banking -- North Dakota is the only state in the U.S. with an operating public bank. The territory of American Samoa has also created its own public bank because the private industry left the territory.
According to the Bank of North Dakota's website, a group of frustrated North Dakota farmers were behind the early 1900s effort to create that public bank. It's been in operation since.
States like New Mexico, Arizona, Virginia and Alaska have considered public banking through studies, the creation of a task force or introduction ballot measures, according to the PBI.
"Philadelphia, San Francisco and LA -- I think those are the communities really leading the pack right now. But we've got places like New Jersey, places like Ohio, Missouri, Florida, all of these are places where public banking has come up in conversation," said Geeta Minocha, executive director of the PBI.
While public banking is less prevalent in the United States, Minocha says roughly 40% of banks globally are public.
