Public Banking Act of 2023

The Public Banking Act of 2023 establishes a federal framework for public banks owned by state, tribal, or community entities. It creates a process for chartering public lending banks (which provide financial services to public entities) and public payment banks (which focus on payment services), while requiring democratic governance with community representation on boards. The bill sets specific lending preferences prioritizing environmental justice communities, quality job creation, and worker protections, while prohibiting loans to fossil fuel companies, private prisons, and tobacco industries. It also creates grant and incubator programs to help establish these banks and establishes public deposit insurance for them, fundamentally changing how public banking institutions operate in the United States.