The Los Angeles City Council voted 11-3 on Wednesday, Oct. 21, to direct the city to find $460,000 for a feasibility study on creating a city-owned public bank.

It is the second time the council has approved funding for the same study. In June 2023, the council voted 12-0 to allocate $460,000 to the consulting firm HR&A Advisors for the work. That money was later swept back into city reserves amid budget pressures, and the study never started, as first reported by FOX 11 Los Angeles.

The vote drew sharp pushback from Councilmember Traci Park, who questioned spending on consultants while basic city services lag.

"Half a million dollars for another consultant when we have streetlights out across the city is ridiculous," Park said during the council meeting, according to FOX 11.

Park also questioned whether anyone would trust a bank run by the city, saying no one in their right mind would do their banking with a city-owned institution.

Supporters say a public bank would hold public revenues like taxes and fees rather than operate like a retail bank with checking accounts and ATMs. Councilmember Ysabel Jurado said the model could keep more money in Los Angeles instead of flowing to private financial institutions. Jurado said the city spends millions each year in fees to private banks and that a public bank would let the city keep that money local, according to FOX 11.

The Oct. 21 motion does not create a public bank or formally set aside money. It directs the city to identify funding sources, including the possible use of discretionary funds from individual council offices. Three council members, Eunisses Hernandez, Jurado and Hugo Soto-Martínez, each pledged $15,000 toward the effort at a May 30 news conference on the steps of City Hall, according to KNX News.

The push comes as Los Angeles faces significant budget pressure. FOX 11 reported a projected budget gap of nearly $100 million. KNX described the city as facing a roughly $1 billion deficit in its May 2025 reporting. The discrepancy between those figures has not been publicly reconciled. The Korea Daily reported the city has recorded consecutive budget deficits for two years, citing falling tax revenues, rising litigation settlements and departmental overspending.

Thomas Tarter, a banking expert from Andela Consulting Group Inc., warned that a public bank would carry real risks, including the use of taxpayer money, political influence and credit risk, according to FOX 11.

Nithya Raman, who championed the proposal as a council member in 2023 and is now running for mayor, had her office say the city had already committed to studying the idea and that the Oct. 21 vote would help advance the long-delayed work, FOX 11 reported.

Mayor Karen Bass does not vote on City Council motions. FOX 11 reported it reached out to her office for comment but had not received a response.