Public Banks

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 Business Oversight (DBO) 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 DBO 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 Business Oversight
Division of Financial Institutions
One Sansome Street, Suite 600
San Francisco, CA 94104-4428

  Phone: (415) 263-8500
  Fax: (415) 288-8830
  Email: licensing@dbo.ca.gov

Reviewed by Aaron Prosperi 12/2019

Last updated: Jan 15, 2020 @ 3:33 pm