Los Angeles voters on Tuesday considered a ballot measure that would eliminate a key barrier to forming a municipal bank, paving the way for the plan to move forward at City Hall.
The ballot measure seeks to alter the City Charter so that the city can legally create a "purely commercial" enterprise.
The measure trailed in early returns.
If Charter Amendment B passes, Los Angeles will become the first jurisdiction in the U.S. where voters have signed off on the idea, bringing fresh momentum to the public banking movement. Backers of the plan argue that a public bank could save the city money on fees, steer clear of predatory practices, and generate profit that could be invested in local communities.
Critics deride the ballot measure as a gateway to financial risk, questioning how effectively the city would run a bank and whether it would be protected from political meddling. They complain that the city has yet to spell out how much forming a municipal bank would cost and how it would operate.
City Council President Herb Wesson has countered that the ballot measure is a way to gauge public interest before spending more time and money on that analysis.
"If people say, 'We don't want you to do this,' then we don't move forward with it," Wesson said last month.
Wesson first floated the idea of a public bank more than a year ago, suggesting that it could bolster affordable housing. At the time, Wesson also said it could give the cannabis industry a safe place to park its cash, but experts have warned that could prove complicated because marijuana is still illegal under federal law.
The modest campaign for the measure focused instead on arguments about Wall Street greed and socially responsible investments. As of last week, backers of the ballot measure had reported raising more than $44,000, including donations from actress Rosario Dawson and Public Banking Institute founder Ellen Brown. No opponents had reported any fundraising.
The ballot measure does not address other possible barriers to forming a municipal bank: City analysts have warned that ensuring public funds go into such a bank could also necessitate other changes to the City Charter and state law.
Los Angeles voters also took up proposals to shift city and school board election dates to match up with state and national contests in March 2020.
Angelenos had overwhelmingly voted three years ago to shift elections to June and November of the same year as upcoming state and national races, but the state then switched its 2020 primary to March, leaving the city out of sync.
Measure E and Measure EE were leading in early returns.