SAN FRANCISCO (CBS SF) — A group of state legislators from the Bay Area and Southern California announced Thursday the introduction of a state bill that would create a state bank capable of giving loans to local governments and small businesses during the COVID-19 coronavirus pandemic.

Assemblymembers David Chiu, D-San Francisco; Ash Kalra, D-San Jose; Buffy Wicks, D-Oakland; and Miguel Santiago, D-Los Angeles, joined members of the California Public Banking Alliance to introduce Assembly Bill 310, the Bank on California Bill.

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The bill would convert the state’s Infrastructure and Economic Development Bank, commonly called the IBank, into a state-run bank. The conversion would expand the state’s capacity to lend money to local governments to protect crucial services like schools and public health.

The coalition of lawmakers and public banking advocates argued that establishing a state bank would reduce the reliance on large national banks and federal funding to rescue local governments.

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“You can’t count on the federal government to come and rescue us so the state must do its part to save our cities and save our small businesses,” Kalra said.

The bill would enable the state to invest about $9.9 billion of the state’s Pooled Money Investment Account in the IBank to fund the expansion of its lending and credit capabilities and act similar to a credit union for local governments and agencies.

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“We’re essentially filling a void where Wall Street banks and the federal government have failed,” CPBA co-founder Trinity Tran said. “We’re mobilizing state resources to provide direct recovery for the people because times of crises is when change happens and to fuel this recovery for California, we need a public bank designed to be able to stabilize the economy and reinvest back in our communities.”