Williams has joined California’s “unbanked” — some 7% of Californians who don’t have checking or savings accounts at traditional banks.
CalAccounts would offer “a voluntary, zero-fee, zero-penalty, federally insured transaction account,” says the California Public Banking Option Act. People could access their accounts in person at post offices, rather than at bank branches. “Expenditures of taxpayer dollars should be approved by the legislature and open to public review,” he said. “If the bank’s loans were funded entirely with legislatively approved allocations of tax revenue, I would have no problem with it. But if they are funded by borrowing, this can mask the losses and procrastinate handing the ultimate bill to taxpayers.
Frequent overdrafters generate about half of banking companies’ checking account profits, according to a 2020by the global consulting firm Oliver Wyman. Overdraft-related fees generated $17 billion for banks in 2019, and among the 25 largest banks, about 9% of annual pre-tax profits. “That $12 is important,’ said Julia, who did not disclose her last name because she fears deportation as an undocumented immigrant. “For a poor person, every single dollar is important. We have to pay for lights, gas, trash service, and buy food. You have to work two or three jobs just to get by.”
So far that commission has held few meetings. It is just beginning the process of hiring a market analysis consultant.