Progress Continues On Establishing A Philly Public Bank
A public bank in Philadelphia is on the horizon. This financial innovation promises to be particularly energizing for area co-ops, and may provide unique opportunities for Weavers Way.
A public bank is owned by the people rather than by private investors; it therefore seeks benefit for the community instead of maximum profit for shareholders. A public bank provides financing for local economic development instead of speculation throughout the world.
The last year has seen a number of developments that have moved the city closer to establishing a public bank, in spite of the COVID-19 pandemic. Councilman Derek Green announced in a January opinion piece in the Philadelphia Inquirer that the establishment of a public bank is his top legislative priority. On September 1, the Philadelphia Public Banking Coalition held a virtual town hall, and later that month, the real estate and economic development firm HR&A Advisors released its report of a public bank feasibility study for the city. In early October, City Council’s finance committee convened a hearing about a prospective public bank. Enabling legislation is expected soon.
Co-ops have occupied a prominent place in the public bank discussion. Jamila Medley, executive director of the Philadelphia Area Cooperative Alliance, spoke at the town hall, and Margaret Lenzi, a former Weavers Way board president and PACA board member, testified at the finance committee hearing. They emphasized the potential for co-ops to lift up people who have been systematically marginalized and excluded from access to non-exploitive financing and, therefore, do not hold the generational wealth and credit scores required for access to traditional banks. A public bank could level the playing field for access to financing, which would help eliminate de facto redlining practices.
In addition to the challenges associated with starting any business, co-ops face additional obstacles. Similar problems complicate conversion of an existing business to cooperative ownership. Traditional banks tend to not be sympathetic to these issues; a public bank will be. Programs for co-ops designed and backed by the public bank may stimulate commercial banks to be more responsive to the financing needs of co-ops.
In partnership with a public bank, Weavers Way could stimulate the development of part of its supply chain. Perhaps, products bearing the Co-op’s brand will become widely distributed within our region. The possibilities are limited only by our imaginations.