The “unbanked” are everywhere—even in a financial mecca like New York City.
To help low income New Yorkers without bank accounts enter the financial system, Andrew Yang wants New York City to found “The People’s Bank.” According to a new policy proposal outlined on the mayoral candidate’s website, the government-run bank would “ensure every New Yorker can access basic financial products and services,” while supporting “small business lending in underserved communities.” Yang says the People’s Bank could be launched without new legislation (presumably by executive order), with an initial $100 million loan from the city; it would later pay for operating costs via interest payments.
“By launching the People’s Bank early in his Mayoral Administration, Andrew Yang will build the case for a true public chartered bank that can ultimately offer a broader range of direct financial services both to the City of New York and to its people,” says the candidate’s campaign.
A People’s Bank will reduce reliance on predatory check cashers, get capital to entrepreneurs of color, increase resources for CDFIs, and expand access to financial services for the 12% of NYCers who don’t have a bank account. I am pumped! Learn more at https://t.co/aJH8sQFZOv. pic.twitter.com/krBF9t9GPc
— Andrew Yang🧢🗽🇺🇸 (@AndrewYang) February 17, 2021
The proposal points to government statistics indicating that 350,000 New York City households (roughly 12 percent of NYC’s households) lack access to banking, and are at greater risk of predatory lending. To better service these individuals, the People’s Bank would house an “Innovation Lab” to “bring the benefits of fintech products, like mobile-first banking, to more consumers.” Yang’s team points to the Bank of North Dakota, the only state-run bank in the United States, as a successful case study.
The People’s Bank would compliment Yang’s signature policy proposal: Universal Basic Income (UBI). Users could receive government-sent UBI payments via direct deposits.
“At virtually no cost, the City can intentionally use its role as a disburser of benefits to drive greater financial empowerment,” says the campaign.