Few crises in American history have exacerbated inequality to the extreme that the Covid-19 pandemic has. That is especially true in New York City, where the wealth of billionaires has increased at the very time when over 1 million residents are out of work and thousands of small businesses have been forced to close.

The scale of this crisis demands bold action—and a break from the financial practices that for decades have marginalized low-income neighborhoods and communities of color.

This is the ideal moment for New York City to create a public bank.

On any given day, New York City government has billions on deposit at commercial banks—money that is too often used by these institutions in ways that are contrary to our values and interests. This is the public’s money, but Wall Street banks are using it to finance fossil fuel extraction, private prisons, weapons manufacturers, and other harmful industries.

Bad behavior in banking is nothing new. From redlining, to the foreclosure crisis to high-interest payday loans, mainstream financial institutions have long exacerbated racial inequality. And in this current crisis, large banks were responsible for steering most Payroll Protection Program (PPP) loans to their established customers, leaving small businesses in communities of color with far less than their fair share of this desperately needed funding.

Public banking offers a better way. A bank created and controlled by our city government would be driven not by profit motive but by the public interest. It would provide an alternative depository option for some of the City’s own cash holdings—funds that could be used to support the kinds of public interest projects that are too often shut out of loans by mainstream banks. A public lender could support affordable housing developers, MWBEs, worker cooperatives, renewable energy projects, community land trusts, and other equitable economic development initiatives.

A public bank could be a huge boon to New York City’s existing community development financial institutions, by providing them with intermediate funding to expand their lending to small businesses, first-time homeowners, and families who are unbanked. Our city is home to several community development credit unions that would be strengthened and expanded by this kind of support, including Neighborhood Trust FCU, Brooklyn Cooperative FCU, and Lower East Side People’s FCU. In the mid-1990s, City Council member Levine helped found Neighborhood Trust FCU because he knew it could fill the void that left many working-class people and local businesses in Washington Heights and Inwood without access to loans and credit. The organization has continued to do what big financial institutions refuse to do—invest in communities of color.

The idea of a public bank is nothing new in America. For over a century the Bank of North Dakota (BNK), owned by the state government, has been a source of financing for critical infrastructure and underserved businesses. During the Covid-19 crisis, BNK has been credited with helping secure more PPP funds, relative to the size of the state’s workforce, than its competitors in any other state. Though the Bank of North Dakota was originally founded by grassroots populists, today it enjoys committed support across the political spectrum.

It’s no surprise, then, that the public banking movement is gaining momentum nationally. Enabling legislation has been introduced in over two dozen states and municipalities. California enacted a landmark law this past January giving local governments in the state to power to charter such institutions.

Here in New York City a large, growing coalition has brought together grassroots groups, labor unions, and civil rights organizations to work toward creating a municipally owned bank. Enabling legislation has already been introduced in both houses of the state legislature. Levine recently introduced bills in the City Council that would require the City to disclose details of its current banking relationships, in order to gauge the scale of deposits available for a public institution.

We must seize this moment and act boldly to tackle the profound inequality exacerbated by this pandemic. A return to the status quo is not an option. The time is now to create a banking institution that will do what Wall Street hasn’t and won’t: invest the public’s money to advance economic, racial, and environmental justice in New York City.