How We Finance Our Future
We envision a world in which our financial systems put people over profits.
Financial systems in our current economy are based on extracting value from land and people in order to concentrate wealth in the hands of the few — fueling economic, political and ecological crises globally. Finance can be understood as how money is managed, controlled, invested, and spent. In the United States, this extraction has looked like a long history of exploitation, which generated the wealth currently being managed in our financial systems. Financial systems, like markets and investments, were intentionally created to justify and profit off of this violence.
Transforming finance is crucial to transforming our economy. These current financial systems reinforce dominant economic activity and prevent people and movements from shifting the flow of capital to a system that is equitable, socially just, and environmentally sustainable. We must create a system in which capital can fuel a regenerative economy and invest in visionary institutions that meet the needs of communities and the planet.
Through tighter regulation of private banks and Wall Street, divestment from extractive and predatory industries, and an expansion of public banking and community-controlled capital, we can scale financial systems that are equitable, socially just, and environmentally sustainable — reinvesting in communities most impacted by extraction, and preserving our planet for generations to come.
Federal, state, and local governments must embrace the following public policies that create equitable access to capital and ensure democratic governance and accountability over our financial systems.
Limit the size and power of banks
- Break up the biggest banks so they are smaller, simpler, and safer; and strengthen regulations including the Dodd-Frank Act to clarify and enforce rules that will better protect the public and keep Wall Street in check.
- Reinstate Glass-Steagall or policy to prohibit proprietary trading and to separate the commercial and investment banking arms of banks, so that banks cannot engage in risky activity that is detrimental to communities.
- Reform the Community Reinvestment Act by enforcing real penalties for illegal activity and by explicitly including race-based and environmental criteria for bank community development lending.
- Mandate financial institution reporting on the social and environmental impacts of their lending and investments, and across all activities of their operations.
Divest banks from extractive industries and invest in community based and community wealth building initiatives.
- Divest banks from extractive or predatory industries, including but not limited to fossil fuels, prison industrial complex, and payday loans.
- Invest in community-wealth building efforts with funding for state and local CWB Offices, funding programs, and research
- Redirect economic development incentive programs away from big business and towards fostering local businesses
Protect people who interact with the financial marketplace
- Support a strong, fair, and independent Consumer Finance Protection Bureau (CFPB) that protects consumer and holds backs accountable by enacting real penalties for abusive and/or illegal practices.
- Create state-level Consumer Financial Protection Bureaus.
Create and strengthen banks, community capital vehicles, and financial institutions that prioritize the communities they serve
- Create and expand opportunities for easily accessible banking services, including municipal and state public banks and postal banking
- Convert banks to public ownership after a financial crisis
- Strengthen Community Development Financial Institutions.
- Create new exemptions, like Regulation Crowdfunding, for small, community investment funds from the 1940 Act, allowing them to file with state but not federal regulators.
- Expand concept of crowdfunding operator to allow them to take deals other than Regulation Crowdfunding offerings, such as Direct Public Offerings.
California Public Bank Charter
Scale of policy change (local, state, national): State
WHO – California Public Banking Alliance, a coalition of public banking activists working towards creating socially and environmentally responsible municipal and regional banks.
WHAT – AB 857, creating a state-level public bank charter for which local jurisdictions (e.g. cities, counties) in California may apply. A public bank is a bank that is owned, operated, and governed by a city or county in a given place.
WHERE – Across the state of California
WHEN – AB 857 was signed into law on Wednesday, October 2, 2019. It went into effect January 2020. Members of the California Public Banking Alliance have been organizing for the last few years in their various locales and came together for the first time in 2018 to work towards the state law.
WHY –To generate more resources and opportunities for public investment; to provide accessible and fair banking services (including access to capital) via a public option, which, ideally, meet the needs of communities where other financial institutions fall short. Public banks provide local governments an alternative place to hold public funds, like taxpayer money, outside of private Wall Street banks that do not serve public interests. Public banks end the extraction of public money (via fees) to Wall Street, and align public funds with the public’s values.
Boston Ujima Project
Scale of policy change (local, state, national): Local
WHO – Boston Ujima Project and the working class communities of color in Boston proper.
WHAT – A community-run, democratic, participatory loan fund and community planning project.
WHERE – Boston, MA
WHEN – Boston Ujima Project was officially founded in 2017, launched in 2018, and made its first loan (to CERO coop) in December 2019.
WHY – To create a model for community planning and shared decision-making in communities of color and for said communities to impact and initiate development through collective investment in their neighborhoods.