The 2008 financial crisis spurred calls to create a financial system that is more responsive to social needs. Subsequently, scholarly and legislative efforts to develop a more democratic and accountable financial system have focused on public options: postal banking, bank accounts with the Federal Reserve, and a national investment authority. While efforts at the federal level have largely stalled, state and local governments have spearheaded the charge through public banking. Across the country, local governments are actively developing public banks to better serve the chartering city as well as its residents.

But legal scholarship has not adequately engaged in a sustained examination of municipal public banking or the efforts of state and local governments to create public banking infrastructure. This Note makes a significant scholarly contribution by exploring recent legal innovations in public banking and reorienting the narrative around financial reform to the local level. Conceptually, this Note seeks to elaborate on the unique public origins and public purpose of banking institutions and to highlight the important logic of decentralization and diffusion of banking powers in American law and political economy. On a practical level, it provides a novel analysis of the legal powers of local governments to establish, capitalize, and govern municipal public banks while also considering potential challenges to this new model of democratic finance.

* J.D., Stanford Law School, 2025. I owe my deepest gratitude to Richard Thompson Ford for inspiring my interest in local government law and supporting the development of this project from its inception. I would also like to thank Brian Highsmith, Mark Jia, Graham Steele, and Jeffery Zhang for their constructive comments and helpful suggestions on earlier drafts. I am grateful for the meticulous editing of the Stanford Law Review editorial team, especially Andrew Thompson, Colson Andrews, Andrew Baker, Emaan Hariri, Nathan Levit, Josie Pierce, and Jessica Wang. Finally, thank you to Tracey Zhang for her endless encouragement and support. All views and mistakes are my own.