CALIFORNIA: WILL THE BANKCAL PROGRAM BE CORRUPT BY DESIGN?
A Democrat Fraud Machine?
In a one-party state, the progressive socialist democrats plan to create another Democrat fraud machine, complete with cushy high-paying jobs for termed-out pols, temporary spots for pols that lost an election but want to run again, and various relatives and "special" friends. All funded with taxpayer funds. A place to co-mingle slush funds and illicit gains. And they will call it a “bank.” As if the state does not have enough banks.
Of course, the problem with real, regulated banks is they have to be prudently managed, fiscally sound, subject to audit under rigid standards, and are forbidden by law from making imprudent investments or granting loans to uncreditworthy individuals.
Want to see how California manages its business?
CA EDD admits paying as much as $31 billion in unemployment funds to criminals
As much as $31 billion in California unemployment funds have been paid out to scammers, California EDD admits. In an EDD conference call, Julie Su, secretary for the California Labor and Workforce Development Agency said, "Of the 114 billion dollars in unemployment paid by California since March, approximately 10% has been confirmed as fraudulent. An additional 17% of the paid claims have been identified as potentially fraudulent." That's $11.4 billion confirmed and as much as $20 billion more in fraud. "There is no sugar coating the reality, California did not have sufficient security measures in place to prevent this level of fraud," Su said. <Source>
California to spend $35 million on mail voting campaign run by firm with ‘Team Biden’ ties [OCS: Democrats doing business with other democrats]
A public affairs and consulting firm known for working with Democrats has been awarded a $35 million contract for a new California campaign to encouraging voting during the pandemic. SKD Knickerbocker, which has crafted successful campaigns for many Democrats and has championed issues like same-sex marriage and police reform, was awarded the contract on Aug. 13 after an expedited approval process, said Paula Valle, chief communications officer for California Secretary of State Alex Padilla’s office.
The process of awarding the contract did not follow a traditional schedule, Valle said. Normally, a bid process in California can take three to six months, but because of how close the election is and the urgency of the message, the process was expedited, she said. There was no lowest bidder for this contract, Valle said. Because the Legislature had already directed the office to spend $35 million on a voter outreach campaign, state officials instead focused on how each firm proposed spending the money. The administrative fee charged by each finalist was about the same, she added. <Source>
Now, the Democrats want a public bank to compete against 200 local and national banks that operate more than 6,500 branches in California.
Assembly Bill 1177 -- “This bill, the California Public Banking Option Act, would, among other things, establish in state government the Public Banking Option Board consisting of nine members, including the Treasurer or the Treasurer’s designee and would require the board to administer the BankCal Program, which the act would create for the purpose of protecting consumers who lack access to traditional banking services from predatory, discriminatory, and costly alternatives, by offering access to voluntary, zero-fee, zero-penalty, federally insured transaction account and debit card services at no cost to accountholders.” <Source>
(1) Assembly Bill 1177 should be known as the California Illegal Aliens Banking Act. Consumers who lack access to traditional banking services usually lack identification and the tax number needed to open up accounts at state- and federally-chartered depository institutions.
(2) Traditional banks are already prohibited by state and federal banking regulatory agencies from engaging in “predatory and discriminatory” practices.
(3) About those costly alternatives. It cost money to operate a bank, especially with its technology-based infrastructure. Investors are expected to see a return on their investment as that is the basis of capitalism. The costs do not magically disappear for zero-fee, zero-penalty account and debit card services offered at no cost to account-holders – the taxpayers assume them; the essence of a socialistic collective system. These costs can be paid for by indirect taxes on financial institutions, which would then be passed along to depositors in terms of lower interest rates and higher fees. Or a financial transactions fee.
(4) The state bank would decimate traditional financial businesses by placing them at a disadvantage from a state-subsidized bank. To deny any California resident access to these free banking services would be illegal and unconstitutional, so one might expect quite a few seniors and others would shift their accounts to a free bank. Companies that transfer a large portion of those billion dollars sent to Mexico by illegal aliens are also likely to see their business substantially reduced.
The Dodd-Frank Danger…
The 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act allows financial institutions to avoid collapsing by legally freezing and using their depositor's funds to maintain their solvency. Google “Dodd-Frank bail-in” and see what your representatives have done to the people they purport to represent. '
With a bailout, the government injects capital into the banks to enable them to continue to operate. With a bail-in, instead of relying on government funds (taxpayer money) to save itself from going bankrupt, a bank can simply dip into your deposit accounts to stabilize itself. With a bank bail-in, the bank uses the money of its unsecured creditors, including depositors and bondholders, to restructure their capital so it can stay afloat. In effect, the bank is allowed to convert its debt into equity for the purpose of increasing its capital requirements. A bank can undergo a bail-in quickly through a resolution proceeding, which provides immediate relief to the bank. The obvious risk to bank depositors is the possibility of losing a portion of their deposits. <Source>
When one considers California’s finances, including the offshore accounts and underfunded pension funds, California is either near insolvency or is technically insolvent. Perhaps relying on that old socialist trick to reduce their debts to zero using inflation. Of course, that would mean capitalism is gone and replaced with socialism, where everyone, except the politicians, the oligarchs, and the special interests, shares the misery. Hello Venezuela.
The proposed legislation, appropriately labeled as a “bill” to taxpayers…
CALIFORNIA LEGISLATURE— 2021–2022 REGULAR SESSION
Introduced by Assembly Members Santiago, Carrillo, Chiu, Eduardo Garcia, Gipson, Lorena Gonzalez, Kalra, Lee, Ting, and Wicks
An act to amend Section 1947.3 of the Civil Code, to add Title 21.1 (commencing with Section 100100) to the Government Code, to add Section 90.4 to the Labor Code, and to amend Section 12302.2 of the Welfare and Institutions Code, relating to financial institutions.
LEGISLATIVE COUNSEL'S DIGEST
AB 1177, as amended, Santiago. California Public Banking Option Act.
(1) Existing law, the CalSavers Retirement Savings Trust Act, creates in state government the CalSavers Retirement Savings Board and requires the board to, among other things, design and implement the CalSavers Retirement Savings Program.
This bill, the California Public Banking Option Act, would, among other things, establish in state government the Public Banking Option Board consisting of nine members, including the Treasurer or the Treasurer’s designee and would require the board to administer the BankCal Program, which the act would create for the purpose of protecting consumers who lack access to traditional banking services from predatory, discriminatory, and costly alternatives, by offering access to voluntary, zero-fee, zero-penalty, federally insured transaction account and debit card services at no cost to accountholders.
The act would require the board to design and implement the BankCal Program by, among other things, selecting a program administrator, which may consist of one or more contractors or program staff or a combination thereof, and establishing the duties and functions of the program administrator, as prescribed, including a duty to administer the program as a fiduciary for accountholders.
[OCS: Money for contractors and consultant -- whoopee – something to replace the fees generated by California’s suspended faux high-speed rail program that goes nowhere and will never pay for itself.]
The act would also establish the BankCal Fund in the State Treasury. The act would make moneys in the fund available upon appropriation by the Legislature for the purposes of the act.
The act would authorize the board to seek and accept voluntary contributions, in cash or in kind, from private donors solely for the purpose of paying for the costs of implementing the program under this title and would require those voluntary contributions to be deposited into the fund.
[OCS: This is known as shakedown funding, where contributions are solicited from individuals or entities having business before the state. Pretty much how those governor’s fund programs work to supply perks and privileges to the governor. Sort of like charitable donations to a designated charity in a politician’s name before an election. Can you say, lobbyists?]
The act would require employers and hiring entities to have and maintain a payroll direct deposit arrangement that enables voluntary worker participation in the BankCal program.
[OCS: Voluntary workers is a euphemism for representatives of special interests.]
The act would define “employer” to mean a person, including a state or local government or agency, engaged in a business, industry, profession, trade, or other enterprise in the state, whether or not for profit, excluding the federal government, that has at least five employees. By imposing the mandate to maintain a payroll direct deposit arrangement on a local government or agency, this bill would impose a state-mandated local program.
The act would require the board to enforce the provisions of the act with respect to employers and hiring entities in coordination with the Labor Commissioner, as specified, and would make an employer or hiring entity that, without good cause, fails to allow its workers to participate in the BankCal Program liable for a civil penalty, as prescribed.
[OCS: Employers cannot refuse to direct-deposit employee’s money into the BankCal program under penalty.]
(2) Existing law authorizes a landlord or a landlord’s agent to demand or require cash as the exclusive form of payment of rent or deposit of security if the tenant has previously attempted to pay the landlord or landlord’s agent with a check drawn on insufficient funds or the tenant has instructed the drawee to stop payment on a check, draft, or order for the payment of money, as specified.
The act would, as an exception to that authorization, require a landlord or landlord’s agent to allow a tenant to pay rent and deposit of security by an electronic funds transfer from a BankCal account.
[OCS: Adding additional costs to small landlords, many of whom hold rental real estate for their own retirement accounts.]
(3) The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.
How political and corrupt by design?
(a) The Public Banking Option Board is hereby established in state government.
(b) The board shall consist of nine members pursuant to the following:
(1) The Treasurer or the Treasurer’s designee.
[OCS: Given the dodgy accounting in California with its reported numerous slush funds, hidden accounts, insider deals, and propensity to steal from designated-use funds for undesignated purposes, this is a bad idea and also represents a conflict of interest.]
(2) The Commissioner of the Department of Financial Protection and Innovation or that person’s designee.
[This is a state licensing and regulatory agency whose coziness with those they regulate is of concern.]
(3) An individual with banking expertise, particularly expertise in transaction accounts and debit cards, appointed by the Senate Committee on Rules.
[OCS: One might think that the fundamental requirement of ALL Board Members would be extensive banking and business experience. ]
(4) An individual with expertise in economic and racial justice and cultural competence appointed by the Speaker of the Assembly.
[OCS: In other words, a professional racist who is prepared to discriminate against one class of people (especially white males) to benefit another class of people. This is unconstitutional and a violation of equality under the law.]
(5) An employee representative appointed by the Governor.
[OCS: Most likely a union-chosen employee representative that introduces another layer of potential corruption into the system on behalf of their union masters.]
(6) A small business representative appointed by the Governor.
[OCS: Essentially a patronage position up for grabs.]
(7) An advocate for, or representative of, a mission-aligned banking institution, a community development financial institution, or a community development credit union appointed by the Governor.
[OCS: This is a conflict of interest that would violate financial fiduciary duties to both entities.]
(8) A public banking advocate appointed by the Senate Committee on Rules.
[OCS: Why would one appoint a self-serving advocate that advocates against the private sector on behalf of the government? This is the government working against the people.]
(9) A consumer representative or advocate with expertise in banking access and financial empowerment appointed by the Speaker of the Assembly.
[OCS: Financial empowerment – one of those amorphous concepts that are likely to mean banking access for illegal aliens.]
(c) Members of the board appointed by the Governor, the Senate Committee on Rules, and the Speaker of the Assembly shall serve at the pleasure of the appointing authority.
[OCS: There is no independence here. Political control removes all doubt as to who the board members serve. One would think that a board would have a fiduciary responsibility to the entity they serve and not a split allegiance to politicians – in this case, a single political party known for its corruption.]
(d) The board shall elect a chairperson on an annual basis.
(e) In making appointments to the board, the appointing authorities shall take into consideration the cultural, ethnic, and geographical diversity of the state so that the board’s composition reflects the communities of California.
[OCS: Color, Ethnicity, Sexual Orientation over banking competence]
(f) (1) Except as provided in paragraph (2), members of the board shall serve without compensation. (2) Members of the board shall be reimbursed for necessary travel expenses incurred in connection with their board duties.
[OCS: Serving without compensation usually means rich members of the prevailing political party or employees of existing companies who pay their salaries while they are on “leave” for voluntary activities. You see this with numerous charities and social entities.]
(g) A board member, staff of the board, or publicly employed program staff, while serving in those positions, shall not be employed by a consultant to, a member of the board of directors of, affiliated with, or otherwise a representative of a private bank or financial services institution unless that position is an unpaid volunteer position.
[OCS: A loophole big enough to swallow a truck. Nothing is said about big technology companies involved with payment processing, but are not financial institutions,]
(h) The board and program administrator shall have the responsibility and duty to meet the requirements of this title and all applicable state and federal laws and regulations, to serve the interests of program accountholders and those seeking to access financial services and debt management tools through the program, to serve the public interest and pursue partnerships with credit unions and other local financial institutions and public banks, and to ensure the operational well-being and fiscal solvency of the program.
[OCS: Play along or risk losing state deposits or government business. The big hammer. As for fiscal solvency, this is an illusion. How many state-associated accounts have been drained of their funds and now hold interest-bearing IOUs that are technically worthless without a specific state allocation of funds? Think corrupt and underfunded off-the-books state accounts or pension funds as a model of solvency.]
Some banking analysts see this as a scam, not to create a public bank, but to create a statewide retail banking network where the state would pay the normal and customary bank fees associated with a zero-cost program, provided certain regulatory requirements, such as strict identification, are waived.
Either way, this appears to be another rip-off by progressive socialist democrats who rule, not govern, the State of California.
We are so screwed.
“Nullius in verba.”-- take nobody's word for it!
“Beware of false knowledge; it is more dangerous than ignorance.”-- George Bernard Shaw
“Progressive, liberal, Socialist, Marxist, Democratic Socialist -- they are all COMMUNISTS.”
“The key to fighting the craziness of the progressives is to hold them responsible for their actions, not their intentions.” – OCS "The object in life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane." -- Marcus Aurelius “A people that elect corrupt politicians, imposters, thieves, and traitors are not victims... but accomplices” -- George Orwell “Fere libenter homines id quod volunt credunt." (The people gladly believe what they wish to.) ~Julius Caesar “Describing the problem is quite different from knowing the solution. Except in politics." ~ OCS
“The key to fighting the craziness of the progressives is to hold them responsible for their actions, not their intentions.” – OCS
"The object in life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane." -- Marcus Aurelius
“A people that elect corrupt politicians, imposters, thieves, and traitors are not victims... but accomplices” -- George Orwell
“Fere libenter homines id quod volunt credunt." (The people gladly believe what they wish to.) ~Julius Caesar
“Describing the problem is quite different from knowing the solution. Except in politics." ~ OCS