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When a ballot measure that would’ve allowed Los Angeles to start its own public bank was rejected by the city’s voters last year, even proponents of the idea acknowledged that it was a little far out.
Get one of the nation’s largest cities to take the billions of dollars it deposits in big commercial banks and instead park that money in a financial institution that would invest it back into things like affordable housing? It sounded like a progressive pipe dream.
But, as supporters have said, the seed was planted. And now, amid rising anger at the state’s gaping economic inequality, the idea has gotten new momentum with an assembly bill that’s making its way through the State Legislature.
The bill, A.B. 857, would create a process for local governments to start their own public banks, if they choose to.
“Currently California cities turn over hundreds of billions of taxpayer dollars to our country’s largest Wall Street banks, who invest our money in industries antithetical to our state’s values and policies,” Assemblyman David Chiu, one of the bill’s authors, told me. “This is an idea driven by millions of consumers who in recent years have experienced predatory lending, foreclosures, student loan debt, lack of access to small business capital and having millions of fake bank accounts opened in their names.”
Mr. Chiu and others have pointed to the century-old Bank of North Dakota as a potential alternative model. The California Public Banking Alliance listed a roster of endorsements, including from some of the state’s biggest cities.
Still, experts and observers have cautioned that starting a new bank and figuring out the priorities of such an institution could be expensive, time-consuming — and yield questionable returns.
Even if public banks don’t invest in companies that, say, deal in fossil fuels, they still have to invest in things that will grow the city’s money over time. And affordable housing may not make as much money.
The Los Angeles Times’s editorial board slammed A.B. 857 as setting the stage for “a massive waste of time” and government resources.
The California Bankers Association called it “misguided,” according to CNBC.
And although San Francisco’s recent Municipal Bank Feasibility Task Force Report didn’t take a position on whether city leaders should press ahead with a city-owned bank, it said that starting one “has significant short-term costs,” as well as “significant, but uncertain, payout in the long term.”
David Jette, the legislative director for Public Bank L.A., said many of the predictions about high start-up costs were overblown in part because there isn’t currently a regulatory framework for municipal banks. Mr. Chiu’s bill would help solve that, he said.
In any case, he said, something has to change.
“We are the richest country in the history of mankind,” Mr. Jette said. “And we cannot solve the intractable problems of inequality and homelessness.”
Here’s what else we’re following
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• About a year after sexual abuse allegations against a longtime U.S.C. gynecologist plunged the campus into scandal, U.C.L.A. officials announced that a former gynecologist there had been arrested on charges that he sexually abused two patients. The announcement prompted scrutiny of U.C.L.A.’s handling of complaints against the doctor, James Mason Heaps. [The Los Angeles Times]
• Gov. Gavin Newsom and legislative leaders reached a deal for a budget that gives boosts to funding for health care — including for undocumented residents — and early childhood education. It does not include a proposed water tax. [Capital Public Radio]
• A quarter century after the brutal murders of his ex-wife and her friend, O.J. Simpson has entered what he calls a “no negative zone.” Mr. Simpson, 71, lives in Las Vegas and golfs nearly every day. [The Associated Press]
• Craig Matthew Tanber — an admitted white supremacist gang member accused of fatally stabbing a man of Iranian descent at a Laguna Niguel bar — could see the high-profile murder case against him dismissed following allegations that a sheriff’s deputy directed a drug-addicted informant to shoot Mr. Tanber up with heroin before he was taken into custody. [The Orange County Register]
• Kellen Winslow Jr., a former N.F.L. player, has been convicted of raping a 58-year-old homeless woman in Encinitas last year. [The Associated Press]
• Now that the government is finally listening, an array of businesses — including Oracle and a Harlem noodle shop — are speaking up about how big tech companies have hurt them. [The New York Times]
• If you missed it, here’s how a young man said YouTube’s recommendation system radicalized him. [The New York Times]
Warriors, cashews and a Twizzler-loving bear
• It was a nail-biter, and Kevin Durant reinjured himself after a long absence, but the Golden State Warriors managed to stay alive in the N.B.A. finals against the Toronto Raptors. On Thursday, the teams will face off in Oakland for Game 6. [The New York Times]
• Raphael Bob-Waksberg, who grew up in Palo Alto and created “BoJack Horseman,” has written a book that, like “BoJack,” is ultimately about overcoming “the relentless sadness of life.” One of the book’s 18 stories is written from the perspective of a can of cashews. [The New York Times]
• Tonight, the United States is scheduled to meet Thailand in their first game of the Women’s World Cup in France. The Americans are the defending champs — which adds some pressure. [The New York Times]
• “She’s eating Twizzlers. She is eating Twizzlers. I think we’ve been spotted.” Neighbors captured video of an extremely chill bear snacking on a sweet treat as it lounged on a wall outside a Claremont home. [ABC7]
And Finally …
Last week, we introduced our California Soundtrack, a new feature in which we’ll be building a playlist of your favorite songs that evoke the Golden State. This week’s selection comes from Ruth Murai, who is 22 and lives in Los Angeles. She picked Roy Orbison’s “California Blue.”
When I was 19, I worked with an Irish boy who was just in California for the summer. I fell in love with him as he fell in love with my home state. We listened to “California Blue” as he packed his bags in my bedroom late that August.
I cried as Roy Orbison wailed, “Every day I pray I’ll be on my way, Saving love for you, California blue.”
When I drove him to the airport he slipped a note in my hand. It said, “Check your Spotify, I made you a playlist. It’s California Blue. Just like me.”
Have a California song you love? Email no more than 100 words about it to CAToday@nytimes.com, along with your full name, age and where you live.
Click here to open the Spotify playlist.
California Today goes live at 6:30 a.m. Pacific time weekdays. Tell us what you want to see: CAtoday@nytimes.com. Were you forwarded this email? Sign up for California Today here.
Jill Cowan grew up in Orange County, went to school at U.C. Berkeley and has reported all over the state, including the Bay Area, Bakersfield and Los Angeles — but she always wants to see more. Follow along here or on Twitter, @jillcowan.
California Today is edited by Julie Bloom, who grew up in Los Angeles and graduated from U.C. Berkeley.