Business
Coming Soon to California: A ‘Zero-Fee’ Public Banking Option
Proponents of public banking in California say Wall Street banks have failed low-income communities, particularly people of color. They also say the public banks will provide easier access to capital that will be critical to helping small businesses and neighborhoods rebound after the pandemic.
On October 4, Gov. Gavin Newsom signed legislation paving the way for a new public banking system in California.
AB 1177, known as the ‘California Public Banking Option Act,’ creates a zero-penalty, zero-fee, and zero-minimum-balance platform for basic financial services.
These services include direct deposit from employers and public benefits, automatic bill pay to registered payees, recurring payments and donations to account holders’ organizations or charities of choice, and an infrastructure to support account holders in building credit.
“AB 1177 will help Californians stay protected from overdraft fees and penalties and give them an opportunity to save money and build wealth while fighting the racial wealth gap,” said Assemblymember Miguel Santiago (D-Los Angeles), lead author of the bill.
“California is leading the nation’s public banking movement and we must keep working to provide no-fee banking services to all Californians,” he added.
Santiago wrote the bill with the intention to help close the financial services gap that leaves 1 in 4 Californians unbanked or underbanked. Modeled after the state’s public retirement program CalSavers, the bill forms a commission of representatives from the Treasurer’s office, the Department of Financial Protection and Innovation, financial access experts and community members to oversee market analysis on how the program should be implemented.
Proponents of public banking in California say Wall Street banks have failed low-income communities, particularly people of color. They also say the public banks will provide easier access to capital that will be critical to helping small businesses and neighborhoods rebound after the pandemic.
“Financial exclusion and scarcity have been a tool for oppression, discrimination and systemic inequity for too long. Public banking options such as BankCal, along with new technology that allows for free exchange over the internet, are urgently needed to decentralize power, privilege and financial control,” said Briana Marbury, executive director of the Interledger Foundation, a non-profit that advocates for standards and technologies that support an open and integrated global financial system.
Opponents of the bill believe that government-owned banks open the door for corruption and that the cost of any mismanagement of funds will come out of taxpayers’ pockets.
A 2015 article published by the Cato Institute critiques past public banking projects, highlighting shortcomings and failures.
Mark A. Calabria, who was chief economist to former Vice President Mike Pence and former director of the Federal Housing and Finance Agency authored the article.
He cites devastating losses Germany’s public banks suffered during the sub-prime mortgage crisis of 2008.
Calabria also points to public banking failures closer to home.
“The recent history of Fannie Mae and Freddie Mac, quasi‐ public banks at the federal level, illustrates that mismanagement and corruption are alive and well at the intersection of the public and private,” he wrote.
However, Trinity Tran, co-founder of the California Public Banking Alliance, argues instead that AB1177 does not create a new bank but “creates a statewide retail banking option through which every California worker can access zero-cost services.”
While California is known for its groundbreaking legislation, it will not be the first state with a banking system like this. North Dakota’s public banking system was founded back in 1919.
Marbury believes that the bill is only the first step toward a broader initiative that would revolutionize accessibility to financial growth and equality.
“This is an exciting development, but not far-reaching enough. Public banking initiatives should be introduced in other states across the U.S. to ensure equal access to financial services for the most vulnerable sectors of our population while elevating the economic health of society as a whole,” she said.
In addition, global financial inclusion should encompass both “brick and mortar” bank access for everyone and a more inclusive internet,” she added.
Activism
Post News Group to Host Second Town Hall on Racism, Hate Crimes
The mission of CRD is to protect the people of California from unlawful discrimination in employment, housing and public accommodations (businesses) and from hate violence and human trafficking in accordance with the Fair Employment and Housing Act (FEHA), Unruh Civil Rights Act, Disabled Persons Act, and Ralph Civil Rights Act. The employment anti-discrimination provisions of the FEHA apply to public and private employers, labor organizations and employment agencies. “Housing providers” includes public and private owners, real estate agents and brokers, banks, mortgage companies, and financial institutions.
By Oakland Post Staff
On Tuesday, Dec. 10, from 5-6:30 p.m. PT, Post News Group Global Features Journalist Carla Thomas will host a second Virtual Town Hall on Racism.
Guests will include community builders Trevor Parham of Oakstop and Shawn Granberry of Hip Hop TV.
“There’s been an uptick of blatant racist acts going on in the community and it’s important for communities to have a forum, an outlet, and to be educated on the California Vs. Hate initiative that has resources available for victims and witnesses,” said Thomas. People like Trevor Parham and Shawn Granberry have found a multitude of ways to strengthen, heal, and protect the community through their entrepreneurial networks, special events, and mentoring.”
While community leaders step up, the state has added extra support with the CA vs. Hate, initiative, a non-emergency hate incident and hate crime reporting system to support individuals and communities targeted for hate.
“We are committed to making California a safer and inclusive place for all,” said James Williams, Jr. of the California Civil Rights Department.
In partnership with organizations across the state, the network is designed to support and protect diverse and underserved communities.
“Through CA vs. Hate, we support individuals and communities targeted for hate, identify options for next steps after an act of hate, and connect people with culturally competent resources and care coordination services,” said Williams.
“It’s important to report these incidents in order for us to use the data to enhance prevention and response services,” said Williams.
Funded by the California State Legislature, the California Civil Rights Department (CRD) received funding and authorization from the State Legislature to establish the non-emergency, CA vs. Hate Resource Line and Network to support individuals and communities targeted for hate.
The mission of CRD is to protect the people of California from unlawful discrimination in employment, housing and public accommodations (businesses) and from hate violence and human trafficking in accordance with the Fair Employment and Housing Act (FEHA), Unruh Civil Rights Act, Disabled Persons Act, and Ralph Civil Rights Act. The employment anti-discrimination provisions of the FEHA apply to public and private employers, labor organizations and employment agencies. “Housing providers” includes public and private owners, real estate agents and brokers, banks, mortgage companies, and financial institutions.
CRD began in 1959 with the creation of the Fair Employment Practices Commission to implement California’s first state-wide protections against discrimination in the workplace. In 1980, the 1959 Fair Employment Practices Act, and the 1963 Rumford Fair Housing Act were combined and rebranded FEHA. The Fair Employment Practices Commission became a department-level agency named the Department of Fair Employment and Housing (DFEH) to enforce that law.
In July 2022, DFEH’s name changed to CRD to more accurately reflect the Department’s powers and duties, which include enforcement of laws prohibiting hate violence, human trafficking, discrimination in business establishments, and discrimination in government-funded programs and activities, among others.
For more information visit the PostNewsGroup.com and CAvsHATE.ORG.
Business
Landlords Are Using AI to Raise Rents — And California Cities Are Leading the Pushback
Federal prosecutors say the practice amounts to “an unlawful information-sharing scheme” and some lawmakers throughout California are moving to curb it. San Diego’s City Council president is the latest to do so, proposing to prevent local apartment owners from using the pricing software, which he maintains is driving up housing costs.
By Wendy Fry, CalMatters
If you’ve hunted for apartments recently and felt like all the rents were equally high, you’re not crazy: Many landlords now use a single company’s software — which uses an algorithm based on proprietary lease information — to help set rent prices.
Federal prosecutors say the practice amounts to “an unlawful information-sharing scheme” and some lawmakers throughout California are moving to curb it. San Diego’s City Council president is the latest to do so, proposing to prevent local apartment owners from using the pricing software, which he maintains is driving up housing costs.
San Diego’s proposed ordinance, now being drafted by the city attorney, comes after San Francisco supervisors in July enacted a similar, first-in-the-nation ban on “the sale or use of algorithmic devices to set rents or manage occupancy levels” for residences. San Jose is considering a similar approach.
And California and seven other states have also joined the federal prosecutors’ antitrust suit, which targets the leading rent-pricing platform, Texas-based RealPage. The complaint alleges that “RealPage is an algorithmic intermediary that collects, combines, and exploits landlords’ competitively sensitive information. And in so doing, it enriches itself and compliant landlords at the expense of renters who pay inflated prices…”
But state lawmakers this year failed to advance legislation by Bakersfield Democratic Sen. Melissa Hurtado that would have banned the use of any pricing algorithms based on nonpublic data provided by competing companies. She said she plans to bring the bill back during the next legislative session because of what she described as ongoing harms from such algorithms.
“We’ve got to make sure the economy is fair and … that every individual who wants a shot at creating a business has a shot without being destroyed along the way, and that we’re also protecting consumers because it is hurting the pocketbooks of everybody in one way or another,” said Hurtado.
RealPage has been a major impetus for all of the actions. The company counts as its customers landlords with thousands of apartment units across California. Some officials accuse the company of thwarting competition that would otherwise drive rents down, exacerbating the state’s housing shortage and driving up rents in the process.
“Every day, millions of Californians worry about keeping a roof over their head and RealPage has directly made it more difficult to do so,” said California Attorney General Rob Bonta in a written statement.
A RealPage spokesperson, Jennifer Bowcock, told CalMatters that a lack of housing supply, not the company’s technology, is the real problem — and that its technology benefits residents, property managers, and others associated with the rental market. The spokesperson later wrote that a “misplaced focus on nonpublic information is a distraction… that will only make San Francisco and San Diego’s historical problems worse.”
As for the federal lawsuit, the company called the claims in it “devoid of merit” and said it plans to “vigorously defend ourselves against these accusations.”
“We are disappointed that, after multiple years of education and cooperation on the antitrust matters concerning RealPage, the (Justice Department) has chosen this moment to pursue a lawsuit that seeks to scapegoat pro-competitive technology that has been used responsibly for years,” the company’s statement read in part. “RealPage’s revenue management software is purposely built to be legally compliant, and we have a long history of working constructively with the (department) to show that.””
The company’s challenges will only grow if pricing software becomes another instance in which California lawmakers lead the nation. Following San Francisco’s ban, the Philadelphia City Council passed a ban on algorithmic rental price-fixing with a veto-proof vote last month. New Jersey has been considering its own ban.
Is It Price-fixing — or Coaching Landlords?
According to federal prosecutors, RealPage controls 80% of the market for commercial revenue management software. Its product is called YieldStar, and its successor is AI Revenue Management, which uses much of the same codebase as YieldStar, but has more precise forecasting. RealPage told CalMatters it serves only 10% of the rental markets in both San Francisco and San Diego, across its three revenue management software products.
Here’s how it works:
In order to use YieldStar and AIRM, landlords have historically provided RealPage with their own private data from their rental applications, rent prices, executed new leases, renewal offers and acceptances, and estimates of future occupancy, although a recent change allows landlords to choose to share only public data.
This information from all participating landlords in an area is then pooled and run through mathematical forecasting to generate pricing recommendations for the landlords and for their competitors.
San Diego City Council President Sean Elo-Rivera, explained it like this:
“In the simplest terms, what this platform is doing is providing what we think of as that dark, smoky room for big companies to get together and set prices,” he said. “The technology is being used as a way of keeping an arm’s length from one big company to the other. But that’s an illusion.”
In the company’s own words, from company documents included in the lawsuit, RealPage “ensures that (landlords) are driving every possible opportunity to increase price even in the most downward trending or unexpected conditions.” The company also said in the documents that it “helps curb (landlords’) instincts to respond to down-market conditions by either dramatically lowering price or by holding price.”
Providing rent guidance isn’t the only service RealPage has offered landlords. In 2020, a Markup and New York Times investigation found that RealPage, alongside other companies, used faulty computer algorithms to do automated background checks on tenants. As a result, tenants were associated with criminal charges they never faced, and denied homes.
Impact on Tenants
The attorneys general of eight states, including California, joined the Justice Department’s antitrust suit, filed in U.S. District Court for the Middle District of North Carolina.
The California Justice Department contends RealPage artificially inflated prices to keep them above a certain minimum level, said department spokesperson Elissa Perez. This was particularly harmful given the high cost of housing in the state, she added. “The illegally maintained profits that result from these price alignment schemes come out of the pockets of the people that can least afford it.”
Renters make up a larger share of households in California than in the rest of the country — 44% here compared to 35% nationwide. The Golden State also has a higher percentage of renters than any state other than New York, according to the latest U.S. Census data.
The recent ranks of California legislators, however, have included few renters: As of 2019, CalMatters could find only one state lawmaker who did not own a home — and found that more than a quarter of legislators at the time were landlords.
The State Has Invested in RealPage
Private equity giant Thoma Bravo acquired RealPage in January 2021 through two funds that have hundreds of millions of dollars in investments from California public pension funds, including the California Public Employees’ Retirement System, the California State Teachers’ Retirement System, the Regents of the University of California and the Los Angeles police and fire pension funds, according to Private Equity Stakeholder Project.
“They’re invested in things that are directly hurting their pensioners,” said K Agbebiyi, a senior housing campaign coordinator with the Private Equity Stakeholder Project, a nonprofit private equity watchdog that produced a report about corporate landlords’ impact on rental hikes in San Diego.
RealPage argues that landlords are free to reject the price recommendations generated by its software.
RealPage argues that landlords are free to reject the price recommendations generated by its software. But the U.S. Justice Department alleges that trying to do so requires a series of steps, including a conversation with a RealPage pricing adviser. The advisers try to “stop property managers from acting on emotions,” according to the department’s lawsuit.
If a property manager disagrees with the price the algorithm suggests and wants to decrease rent rather than increase it, a pricing advisor will “escalate the dispute to the manager’s superior,” prosecutors allege in the suit.
Activism
Self-eSTEM Empowers BIPOC Women, Girls in Science, Math
In January 2025, Self-eSTEM will launch digital and generative AI programming, which provides digital literacy and AI literacy training through an entrepreneurial project-based activity. This programming will be a hybrid (i.e. in-person and online). Additionally, thanks to a grant from Comcast, in spring 2025, the organization will have a co-ed series for middle and high school students.
By Y’Anad Burrell
Special to The Post
In a world where technology plays an increasingly central role in all aspects of life, the importance of Science, Technology, Engineering, and Math (STEM) education cannot be overstated. Recognizing the significance of STEM for the future, focusing on young women and girls is a critical step in achieving gender equality and empowering the next generation.
Self-eSTEM, an Oakland-based non-profit organization, was founded by Adamaka Ajaelo, an Oakland native who had a successful corporate career with several Bay Area technology and non-tech companies. Ajaelo boldly decided to step away from these companies to give 100% of her time and talent to the non-profit organization she started in 2014 in the belief that she can change the game in innovation and future STEM leaders.
Over the course of a decade, Ajaelo has provided futurist tech programming to more than 2,000 BIPOC women and girls. The organization has an Early STEM Immersion Program for ages 7-17, Emerging Leaders Workshops for ages 18-25 and volunteer network opportunities for ages 25 and up.
In January 2025, Self-eSTEM will launch digital and generative AI programming, which provides digital literacy and AI literacy training through an entrepreneurial project-based activity. This programming will be a hybrid (i.e. in-person and online). Additionally, thanks to a grant from Comcast, in spring 2025, the organization will have a co-ed series for middle and high school students.
While the organization’s programs center on innovation and technology, participants also gain other valuable skills critical for self-development as they prepare for a workforce future. “Self-eSTEM encourages young women to expand on teamwork, communication, creativity, and problem-solving skills. The organization allows young women to enter STEM careers and pathways,” said Trinity Taylor, a seventh-year innovator.
“Our journey over the last decade is a testament to the power of community and opportunity, and I couldn’t be more excited for what the future holds as we continue to break barriers and spark dreams,” said Ajaelo.
“By encouraging girls to explore STEM fields from a young age, we foster their intellectual growth and equip them with the tools needed to thrive in a competitive global economy,” Ajaelo says.
Empowering young girls through STEM education is also a key driver of innovation and progress. When young women and girls are encouraged to pursue careers in STEM, they bring unique perspectives and problem-solving approaches to the table, leading to more diverse and inclusive solutions. This diversity is crucial for driving creativity and pushing boundaries in scientific and technological advancements.
Self-eSTEM has fundraising opportunities year-round, but year-end giving is one of the most critical times to support the program. Visit www.selfestem.org to donate to the organization, as your generosity and support will propel programming support for today’s innovators.
You will also find more details about Self-eSTEM’s programs on their website and social channels @selfestemorg
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