How Seattle and Other U.S. Cities Can Create Better, More Inclusive Banking Systems

Our latest study for the City of Seattle shows how Seattle and other U.S. cities can divest from Wells Fargo and pursue public banking as part of a larger effort to align their banking activities with progressive values, expand banking services for residents, and increase investment in pressing public needs like affordable housing and infrastructure.


The study comes amid a growing movement for Seattle’s divestment from Wells Fargo and growing interest in the creation of public banks in cities across the country. From New York City to Los Angeles and beyond, more cities are ending banking contracts with Wells Fargo and considering creating what would be the first municipal public banks as an alternative.


Seattle’s municipal government hired HR&A to examine the feasibility of establishing a city-owned public bank.


Read the Study


Seattle’s goals for a city-owned public bank include replacing Wells Fargo and providing better banking services to residents and consumers, including those who have been historically underserved by the banking industry. Additionally, Seattle would like to provide capital for public priorities like affordable housing and infrastructure and extend banking services to the cannabis industry.


The study shows that it is feasible for Seattle to establish a public bank, albeit through a long-term process. The need for approval from state and federal agencies and a commitment of capital present political and financial obstacles to overcome. Existing legal and regulatory frameworks create additional barriers for a city-owned bank in Seattle. For example, the acceptance of retail deposits and issuance of loans to the public or cannabis-related businesses require changes in state or federal law that are possible, but unlikely in the short-term.


Although Seattle can achieve its key goals through a city-owned bank over the long term, alternative approaches for public banking can offer greater certainty, lower public cost, and faster results, according to the HR&A study. It’s the first study to show that a city-owned bank is not the only option for cities divesting from Wells Fargo and interested in public banking.


For Seattle, we recommend several strategies that can allow Seattle to meet its goals of divestment from Wells Fargo and greater investment in public priorities like infrastructure and affordable housing, while laying the groundwork for the eventual creation of its own bank:


Strategies to build more inclusive banking systems

  1. Refresh the City’s treasury services RFP content and process to make it easier for socially responsible banking partners to participate and compete with Wells Fargo.
  2. Develop non-bank investment vehicles and partnerships to support social priorities.
  3. Collaborate with existing public banking efforts, such as the plan for a state-owned bank that has been proposed in Washington’s state legislature. Seattle could pursue participation in such a State bank or request that the State ease public depository and charter requirements to enable its own bank.
  4. Engage with other cities to pursue public banking within or across state lines.


While the study is focused on Seattle, the policy implications are national. Seattle and other cities are offered a road map for how they can achieve independence from Wells Fargo, and implement models of public banking that can be tailored to different needs and goals.


“Our study shows there are multiple paths forward for public banking in Seattle and other cities. There is no one-size-fits-all approach. When cities divest from Wells Fargo, they can take a variety of steps to ensure their new banking practices serve all residents, businesses, and consumers. Cities can make their own choices about how they want to empower communities through public banking. They do not have to remain beholden to Wells Fargo or the banking industry,” said Andrea Batista Schlesinger, a Partner at HR&A Advisors, who oversees the firm’s Inclusive Cities practice, and growing portfolio on public banking in cities.


HR&A’s Inclusive Cities practice empowers city governments and advocates, activists, and philanthropic organizations across the United States to implement equitable and inclusive growth strategies.  The study on public banking comes as HR&A is offering its expertise to more cities looking to maintain their financial independence, invest in public priorities like infrastructure, and pursue more equitable and inclusive banking. When properly implemented, public banking can help cities of the future grow, develop, and thrive.