AB 2243 California Assembly · 2025-2026 Regular Session

State Bank Act.

Summary

The Bergeson-Peace Infrastructure and Economic Development Bank Act creates within the Governor's Office of Business and Economic Development the Infrastructure and Economic Development Bank and requires it to administer the act, which, among other things, provides for the financing of certain economic development projects. This bill, the State Bank Act, would create in state government the State Bank Commission and provide for its membership, as prescribed. This bill would require, on or before June 1, 2028, the commission to develop a state bank plan that addresses various items with respect to creating a state bank, including a state guarantee of public deposits, including those held by public banks. The bill would require, on or before January 1, 2028, the commission to hold at least 2 public hearings to solicit input on the state bank plan from members of the public and, by July 1, 2028, vote whether to adopt the state bank plan. The bill would require, if the commission adopts by a majority vote the state bank plan, the commission to publish the state bank plan and the fact of its adoption on its internet website.

Bill status in committee 1 of 4 stages cleared

Introduction

Feb 2026

Committee Review

Floor Vote

Governor

Introduced Feb 19, 2026 Last action May 14, 2026

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What changed between versions

03/19/26 - Amended Assembly → 04/20/26 - Amended Assembly · 5 edits · Apr 20, 2026

MODERATE

The April 20 amendment to AB 2243 removes the 7-year sunset provision that would have prohibited new public bank licenses, adds a short title ('State Bank Act'), deletes the aspirational legislative intent section, and adds a clarifying clause stating that an adopted state bank plan has no legal effect without subsequent implementing legislation. These changes make the bill more permanent in its allowance of public bank licensing while making the state bank planning process explicitly non-binding until the Legislature acts separately.

Scope change

The bill's scope expanded slightly by removing the 7-year cap on public bank licensing, allowing indefinite issuance of new licenses. At the same time, the state bank planning process was narrowed in practical effect by explicitly stating that an adopted plan has no force without separate implementing legislation, and by removing the broader legislative intent language that had signaled a wider policy direction.

SCOPE

Removed Section 57607(d), which prohibited the Commissioner of Financial Protection and Innovation from issuing any public bank license after 7 years from when regulations were first promulgated. Without this sunset, public bank licenses can be issued indefinitely.

Removed an entire legislative intent section (former Section 1) that expressed the Legislature's intent to enact future legislation on public banking, state-owned depository banks, expanded IBank roles, transparency, governance evaluation, financing priorities, and technical assistance for local public banks. This was aspirational language with no direct legal effect.

DEFINITION

Added a new section designating the act's short title as the 'State Bank Act.'

REQUIREMENT

Added Section 62706(e)(2), which clarifies that a state bank plan adopted by the commission 'shall not have any effect other than through the enactment of subsequent, implementing legislation.' This makes explicit that the plan is purely advisory and cannot create obligations or establish a state bank on its own.

TECHNICAL

Added Assembly Members Elhawary and Lee as coauthors of the bill.

02/19/26 - Introduced → 03/19/26 - Amended Assembly · 6 edits · Mar 19, 2026

MODERATE

The amendment transforms AB 2243 from a purely declaratory intent statement into operative law with binding requirements. It now amends existing public banking law to cap licenses at 10 total, requires a study after the 10th license is issued, and creates a State Bank Commission with specific membership, deadlines for developing a state bank plan by June 2028, public hearings by January 2028, and a vote on adoption by July 2028. The bill also defines what the state bank plan must address, including capitalization, deposit guarantees, backstop mechanisms, a five-year business plan with specific financing priorities, and governance structure.

SCOPE

New Section 1 amends Government Code Section 57607 to cap public bank licenses at 2 per calendar year, limit total public banks to 10, require a study within 2 years of the 10th license, and prohibit new licenses after 7 years from initial regulation promulgation.

The original Section 1 (legislative intent statement) is renumbered to Section 3, shifting the bill from a purely aspirational declaration to one with enforceable legal obligations and a new regulatory body.

REQUIREMENT

New Section 2 creates Title 6.6 (State Bank) in the Government Code, establishing a State Bank Commission composed of the Governor, Treasurer, Controller, and six appointed members with specified expertise areas including affordable housing finance, community lending, public finance, climate/infrastructure finance, small business lending, and banking operations.

The state bank plan must address capitalization options, state guarantee of public deposits, backstop mechanisms including a multistate pooled backstop fund, a five-year business plan prioritizing climate, housing, small business, and local government financing, centralization with existing state agencies, ESG investment screens, holding state property insurance program deposits, alternatives to security requirements, conversion vs. new entity evaluation, and governance structure ensuring democratic accountability.

TIMELINE

The commission must contract with independent entities by July 1, 2027; develop a state bank plan by June 1, 2028; hold at least two public hearings by January 1, 2028; and vote on adoption by July 1, 2028.

DEFINITION

New definitions added for IBank, Commission, local agency, local financial institution, public bank, public development facilities, public purpose financing, social housing, and state bank plan (a plan to create a state-owned depository bank that holds general fund moneys, conducts public-purpose financing, and centralizes state financial programs).

Floor votes

How they voted

No floor votes recorded yet.

Full legislative history

Actions timeline

Total actions

Key actions

Committee

Amendments

May 14, 2026

Lower · Passed

In committee: Held under submission.

lower

May 6, 2026

Committee

In committee: Set, first hearing. Referred to APPR. suspense file.

lower

Apr 23, 2026

Lower · Passed

From committee: Do pass and re-refer to Com. on APPR. (Ayes 7. Noes 2.) (April 23). Re-referred to Com. on APPR.

lower

Apr 21, 2026

Committee

Re-referred to Com. on B. & F.

lower

Apr 20, 2026

Introduced

From committee chair, with author's amendments: Amend, and re-refer to Com. on B. & F. Read second time and amended.

lower

Apr 14, 2026

Lower · Passed

From committee: Do pass and re-refer to Com. on B. & F. (Ayes 5. Noes 2.) (April 14). Re-referred to Com. on B. & F.

lower

Mar 23, 2026

Committee

Re-referred to Com. on E.D., G., & H.I.

lower

Mar 19, 2026

Introduced

From committee chair, with author's amendments: Amend, and re-refer to Com. on E.D., G., & H.I. Read second time and amended.

lower

Mar 19, 2026

Committee

Referred to Coms. on E.D., G., & H.I. and B. & F.

lower

Feb 20, 2026

Lower · Passed

From printer. May be heard in committee March 22.

lower

1 primary · 3 co-sponsors