CA AB857

Authorizes creation of public banks organized as nonprofit corporations wholly owned by local agencies or joint powers authorities, with power to engage in commercial or industrial banking business.

Requires public banks to obtain certificate of authorization from Commissioner of Business Oversight and FDIC insurance; limits commissioner to issuing maximum 2 licenses per calendar year and 10 total authorized public banks.

Allows counties to lend available funds to public banks and permits local agencies to deposit funds and invest in public bank securities; requires public banks to conduct retail activities in partnership with local financial institutions and prohibits competing with them.

Exempts public banks from corporate franchise and income taxes, and from state and local taxes and licenses with limited exceptions.

Requires local agencies to conduct viability study before applying for public bank charter; mandates voter approval (except charter cities) and prohibits public bank information disclosures regarding loans, investments, customer accounts, and regulatory communications.