The San Francisco Board of Supervisors voted 9-2 Tuesday to place a measure on the November ballot that would be a step towards creating the first city-run public bank in the country.
A public bank would let the city issue low-cost loans to affordable housing developers, small businesses, green infrastructure projects, and other entities that struggle to get loans from traditional banks.
“We can build a public bank that prioritizes reinvesting back into what we all need to sustain our local communities,” said Supervisor Chyanne Chen, who sponsored the measure. It will appear on the Nov. 3 ballot and requires more than 50 percent of the vote to pass.
Supervisors Stephen Sherrill and Alan Wong were the two dissenters.
“A public bank involves decisions about deposits, lending, credit regulation, and risk management. Those decisions carry real financial consequences. They demand institutional discipline, insulation from political pressure, transparency, and deep banking expertise,” Wong said.
“Our city’s track record shows that meeting those demands is harder than it sounds.”
It is unclear whether Mayor Daniel Lurie will support the measure.
Professional bankers would be hired to administer the bank. Though they are rare in the United States — the only one that currently exists is the Bank of North Dakota — they are common worldwide.
This November ballot measure is a first step. It would create the governance structure for a “municipal finance corporation,” an entity that would eventually turn into a public bank. For the bank to actually start functioning and dispersing loans, about $325 million in start-up money is needed.
After that, the bank would be self-sustaining.
On Feb. 3, Supervisor Jackie Fielder, a longtime proponent of the public bank, introduced a ballot measure that would have taxed certain financial institutions to fund the bank. That measure was withdrawn in March, and Fielder co-sponsored Tuesday’s measure.
It is possible that the bank could get funding through sources other than a local tax. The 2022 Inflation Reduction Act created grants for green finance institutions, for instance.
Supporters of the public bank are celebrating, calling it the product of years of advocacy. In 2019, California passed a state law allowing cities to create public banks. San Francisco then convened a Reinvestment Working Group, which in 2023 presented a plan for how the city could actually create such a bank.
“This is monumental,” said Misha Steier, spokesperson for the San Francisco Public Bank Coalition. “The S.F. Public Bank will put people over profits to invest in what we all need — affordable housing, infrastructure, local small business, and green energy.”
This bank will prioritize low(below market) interest loans to unqualified borrowers, and thus expect many of those borrowers will default. So which borrowers will take out “high interest” loans to cover the losses and pay the costs of running the bank? Answer: The bank won’t return as much investment income the City Treasurer currently receives from holding short term securities. The revenue reduction will put pressure to raise revenue from the public or reduce public services.
A public bank, simply put, is better with us than a bunch of suits that put money into morally reprehensible places with dubious loaning means and practices.
A private bank is completely unaccountable, and this ballot measure starts our path away from it.
All the better, and worth the try.
I asked a Treasurer this once …
“Why do we have to put our 15 billion in general fund and bond money into Wells Fargo who won’t use it to finance things like SF Land Bank purchases ?”
There was total silence in the Board chambers.
He finally answered:
“Because that’s the way we’ve always done it.”
Yeah, cause Warren Hellman was one hell of an influential financier.
Good enough to put on a giant Blue Grass Festival every year for free from the hereafter.
And, Fielder should talk to me about a plan to return the BART stations back into the Feinstein model.
go Niners !!
h.
These ding dongs can’t even manage a sidewalk, let alone a bank. We need less government programs, not more.
Given: https://www.data-z.org/state_data_and_comparisons/city/sanfrancisco
How can city government be trusted to maintain a public bank when it can’t manage its professional finances for its taxpayers?
The incompetent bos passed a loan fund for families making under 200k a year for down payment for home with possible forgiveness. Melgar sponsored this.At the Land Use committee there were only 3 people who could vote.Melgar,Peskin and another. (I forgot whom).Whether you like Peskin or not his reply was intelligent and realistic.Where was the $ coming from?What were the rules for forgiveness?The answer was the sponser did not know.This was to be figured out.Peskin also mentioned the bad financial situation with SF finances.Amember of the audience stated this sounds like a way to give their buddies a high paying job without any needed outcome.A dei princess muffled in and babbled about how wonderful this is.3 people could vote.Melgar got to vote yes on something she wrote.Peskin voted no.The 3rd person voted yes.This exactly means 1 vote can pass another wasteful program.Anyone who thinks sf can run a bank is delusional.
Genuine question, what does this achieve? You got on the ballot, let’s assume it passes. What’s next? Who benefits? Why use this over the plethora of banks available? Delusion that no existing bank serves people well?
You did not read the article Jack.
So one of the most corrupt city administrations in the country wants to start a bank, eh? I can’t imagine anything going wrong with this.
By what measure? San Francisco consistently ranks pretty low on measures of corruption relative to other metropolitan areas in the country. Not saying there isn’t corruption and we shouldn’t hold people to account, but we’re actually pretty good at it here.
Let’s face it.all Jackie Fielder’s interested in is getting a cushy seat on the bank’s board.
Alan Wong hits the nail on the head. Only thing to add is how the typical public bank around the world is not in the business of supporting bleeding-heart causes. She maintains underwriting standards and controls just like any other bank does.
Another slush fund. Just what we need.
The public bank is just a guise to fund their pet cronies with cheap loans paid by SF citizen’s. The last thing S.F. needs is a distraction from the pressing issues.
Ms. Fielder, now your back from ‘looking after yourself on the public dime’ for a few months PLEASE DO YOUR JOB and start addressing the biggest problems in your district: 16th & Mission, and 24th & Mission Bart plazas. This should be your #1 issue to resolve… or do you not want to address the real issues? Easier to ‘create a distraction’ than address the real problems…. Easier to spend other people money than to actually take risks to make it.