Philadelphia may become first U.S. city to run its own municipal bank

The Philadelphia City Council is set to vote March 2 on whether to create a Philadelphia Public Financial Authority and become the first U.S. city to charter a public bank. 

The goal of establishing the PPFA would be to address racial and economic disparities and aid small businesses, BillyPenn reported. The PPFA would be managed by a board of directors made up of nine mayoral appointees. In turn, the directors would appoint a policy board to manage the day-to-day activities. 

Supporters of the endeavor believe it will increase investment in underprivileged areas of the city and aid businesses, especially those owned by people of color. Additionally, the PPFA could provide services to the 10 to 22 percent of Philadelphia households that currently have limited access to banking services. 

​BillyPenn reported that at least five members of the PPFA policy board would need five years of experience dedicated to issues such as environmental justice, racial justice, and small business development. Critics also expressed concerns about the cost of implementation, and the fact the bank could still be subject to political influence.

The movement to establish Philadelphia’s own municipal bank was spearheaded by the Philadelphia Public Banking Coalition, which is led by multiple Penn alumni. 

“There are so many things a public bank can do,”  Peter Winslow (C '66, WG '68), who is a member of PPBC, told the DP last March. “But we can start by taking job creation in the inner city community in conjunction with environmental issues.”

Action Center on Race and the Economy Research Director Brittany Alston also supports the bank's creation.   

“[This could] fundamentally reshape how we think about financial systems,” Alston told Billy Penn, “and introduce a level of democracy that does not exist in any traditional banking systems.”