June 18, 2019

June 18, 2019

Subscribe to Latest Legal News and Analysis

June 17, 2019

Subscribe to Latest Legal News and Analysis

The IBank May Someday Be California's Bank

Yesterday, I wrote about legislation that would authorize local governments to form their own local or regional public banks.  Senator Ben Hueso has a somewhat different idea.  He has introduced a bill, SB 528, that would establish the California Infrastructure and Economic Development Bank (IBank) as a depository institution.  Established in 1994 pursuant to the Bergeson-Peace Infrastructure and Economic Development Bank Act, the IBank currently has statutory authority to issue tax-exempt and taxable revenue bonds, provide loans to state and local governments for public infrastructure and economic expansion projects and loan guarantees to help small businesses. 

Senator Hueso's bill would authorize the state, local agencies, as defined,  quasi-public nonprofit entities to establish a deposit accounts with the IBank. The bill would also require the IBank to become a member of the Federal Reserve System and the Federal Home Loan Bank System. 

Senator Hueso introduced his bill after a Joint Informational Hearing held in February by the Assembly's Banking and Finance Committee and Local Government Committee.  A background paper prepared for that hearing noted:

"The conversion of the IBank to a depository institution poses operational risks and implementation challenges that could negatively impact the effectiveness of existing IBank programs."

Based on the written testimony at this hearing, advocates see the establishment of the IBank as a "true" bank as a means to preclude investment of public money in investments that are "antithetical to California’s progressive values" such as fossil fuels, private prisons, arms manufacturers and predatory lending.

Reminder:  Lenders licensed under the California Financing Law must file their 2018 Annual Reports with the Department of Business Oversight by March 15, 2019.  The report must be filed online (instructions are available here).  The Department does not grant extensions.

© 2010-2019 Allen Matkins Leck Gamble Mallory & Natsis LLP

TRENDING LEGAL ANALYSIS


About this Author

Keith Paul Bishop, Corporate Transactions Lawyer, finance securities attorney, Allen Matkins Law Firm
Partner

Keith Paul Bishop is a partner in Allen Matkins' Corporate and Securities practice group, and works out of the Orange County office. He represents clients in a wide range of corporate transactions, including public and private securities offerings of debt and equity, mergers and acquisitions, proxy contests and tender offers, corporate governance matters and federal and state securities laws (including the Sarbanes-Oxley Act of 2002 and the Dodd-Frank Act), investment adviser, financial services regulation, and California administrative law. He regularly advises clients...

949-851-5428