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Public Banks

Public banks are defined as corporations, organized as either a nonprofit mutual benefit corporation or a nonprofit public benefit corporation for the purpose of engaging in the commercial banking business or industrial banking business, that is wholly owned by a local agency, as specified, local agencies, or a joint powers authority.

Assembly Bill 857, which took effect on January 1, 2020, creates a process for a local agency to establish a public bank, subject to specific requirements. Among other things, the bill requires a public bank to obtain a certificate of authorization to transact business as a bank from the Department of Financial Protection and Innovation (DFPI) and to obtain Federal Deposit Insurance Corporation (FDIC) insurance.

A public bank may engage in banking activities, including infrastructure lending, wholesale lending, participation lending, and certain retail activities. A public bank may not compete with local financial institutions or engage in certain retail activities without partnering with a local financial institution.

The DFPI is prohibited by law from licensing more than two public banks per calendar year and more than ten public banks in total.

How to reach us:

Department of Financial Protection and Innovation
Division of Corporations and Financial Institutions
One Sansome Street, Suite 600
San Francisco, CA 94104-4428
Phone: (415) 263-8500
Fax: (415) 288-8830
Email: [email protected]