There’s a growing movement pushing for every Californian, particularly Black and Brown people, to be guaranteed a no-fee, no-penalty bank account.
Advocates said the move will provide greater financial services access to unbanked and underbanked Californians.
The plan is called the California Public Banking Option Act (AB 1177), also known as BankCal. It was discussed during a recent Zoom news conference.
“BankCal removes the roadblocks in the communities of color,” said Assemblymember Mike Gipson, (D-64).
BankCal would offer residents a no-fee, no-penalty bank account with a debit card, automatic bill pay, direct deposit and the ability to improve their credit scores.
Supporters of the movement said people who are struggling with bank account access, currently pay up to 10 percent of their take home pay to check cashing operations.
“That impacts their ability to improve their overall quality of life,” said Trinity Tran, co-founder and lead organizer of California Public Banking Alliance.
“This is a big deal, most people don’t realize one in four Californians don’t have a bank account,” said Congressman Ro Khanna, (D -17), from the San Francisco Bay area.
Households without bank accounts tend to rely on high-cost financial services, such as non-bank check cashers, payday lenders, prepaid debit cards and pawn shops – services that lack basic consumer protections, advocates said.
AB 1177 is also being hailed as a way to address inequality of inadequate access to basic financial services in communities of color, especially those hit hardest by the pandemic. If successful, advocates explained, AB 1177 would narrow the widening racial wealth gap in California.
BankCal is also an alternative to high-interest payday loans, said Joseph Bryant, president of SEIU 1021 and executive board member of SEIU California.
Bryant said this is ultimately about fair banking for Blacks, Latinos and other communities of color in California.
Meanwhile, advocates explained that Californian households earning less than $30,000 per year, or just under $15 per hour for a full-time worker, make up 80.7 percent of the unbanked in the state.