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Los Angeles’ left-leaning City Council wants to explore launching a government-run bank despite the city facing a projected $100 million budget gap — drawing a blistering rebuke from one councilmember who questioned whether City Hall can handle its own finances.
The council voted 11-3 Wednesday to spend $460,000 for a feasibility study on creating a city-owned bank, reviving a proposal whose funding was previously swept back into city reserves amid budget pressures.
The idea has been championed by socialist-backed councilmembers Eunisses Hernandez, Ysabel Jurado, and Hugo Soto-Martinez, who last year introduced a motion to begin funding the feasibility study.
The plan, which also gained support from councilmember and mayoral candidate Nithya Raman, was shredded by Westside Councilmember Traci Park.
“We can’t even manage our own damn finances,” she said during a council meeting Wednesday.
“Who in their right mind would do their financial businesses and banking with the Bank of the City of LA? Absolutely no one,” she added.
The plan’s progressive backers argue a public bank could direct financing toward affordable housing, small businesses and infrastructure while keeping more money in Los Angeles.
Critics, however, question the financial risks of launching a municipal banking operation and whether residents and businesses would trust the city with their money.
Jurado defended the proposal as a way to put public money toward community needs rather than private profit.
“A public bank has the potential to finance affordable housing, supporting small businesses, and invest in infrastructure that serves instead of private profit,” she said.
Wednesday’s decision directed officials to identify funding for the feasibility study, potentially including discretionary money controlled by individual council offices.
The proposal has been kicking around City Hall for years. Councilmembers unanimously approved studying a city-owned bank in October 2021, then voted 12-0 in 2023 to approve $460,000 for HR&A Advisors to conduct the feasibility study.
That funding was later swept into city reserves, stalling the effort.
Raman previously argued that a public bank could address gaps left by the city’s reliance on commercial lenders.
Her office said she supported Wednesday’s action to move the study forward.
Raman’s district also allocated $15,000 in discretionary funds to the effort last year.