Learn about public banking law
Legal Issues
navigating legal questions
We can examine how legal experts view the central issues.
The path to creating a public bank for a city or state necessarily requires answering certain legal questions. While existing legislation varies by state, city, and county, it can be useful to examine recent legal memoranda that look deeply at the legal issues of consequence in establishing a public bank.
We’ve also included links to statutes that define the two existing U.S. public banks.
Legal memos & analysis
States – legal memoranda
National – legal analysis
| Year | Title |
| 2014 | “Are Public Banks Unconstitutional? No. Are Private Banks? Maybe.” By Ellen Brown – May 2014. Original article here. |
| 2011 | “Do State-Owned Banks Violate Constitutional Prohibitions Against Lending the State’s Credit? No.” By Ellen Brown in consultation with Tim Canova, Robert Bows – Nov 2011 |
public bank statutes
The following tables include links to existing statutes establishing a public bank and other useful related documents.
There are currently two public banks operating in the United States: the Bank of North Dakota, established in 1919, and the Territorial Bank of American Samoa, formed in 2018.
In 2019, California passed AB857, which established a common charter for the creation of city and regional public banks, indicating an approved way forward for the establishment of municipal banks.
North Dakota Statutes and FAQ
Territory of American Samoa Statutes
| Year | Title |
| 2018 | Territorial Bank of American Samoa – Statute, Chapter 2 |
California Statutes
| Year | Title |
| 2021 | PRO 01/20 Public Bank Regulations. California Department of Financial Protection and Innovation (DFPI) Approved Regulations. The Commissioner of Financial Protection and Innovation is adopting regulations to implement AB 857 (Stats. 2019, Ch. 442), which authorizes local agencies to apply for a certificate of authorization to transact business as a bank. – Approved Sept 14, 2021. Effective Jan 1, 2022. |
| 2019 | AB-857 (2019) Public Banks. It is the intent of the Legislature that this act authorize the lending of public credit to public banks and authorize public ownership of stock in public banks for the purpose of achieving cost savings, strengthening local economies, supporting community economic development, and addressing infrastructure and housing needs for localities. It is the intent of the Legislature that public banks shall partner with local financial institutions, such as credit unions and local community banks, and shall not compete with local financial institutions. |