San Francisco can now create a public bank after measure declares victory

San Francisco voters have approved the city’s first-ever public-bank measure, Proposition B, with 52.3% of the vote as of 4 p.m. on Sunday. 

With only 6,200 votes in total left to be counted, the campaign for the measure declared victory Monday morning. 

“Together we made history, and in 100 years, San Franciscans will assume the Public Bank has always been here to provide for us, like our airport, our roads, like the very water from the Hetch Hetchy,” wrote Misha Steier, spokesperson for the San Francisco Public Bank Coalition, an organization created in 2017 that has been spearheading the issue, in a statement. 

The organization was co-founded by Supervisor Jackie Fielder, a progressive who has been one of the most vocal champions of Prop. B. 

“As working San Franciscans struggle with the rising cost of living and the growing threat of climate crisis, we need public institutions that aspire to reimagine how we can invest in our communities and in solutions that address climate change,” Fielder wrote in a statement. 

The measure marks the first step to establishing a municipal public bank in San Francisco, a city-owned and independently operated financial institution that could give out loans to issues of public interest, such as housing, environmental protection and various forms of community infrastructure. 

Prop. B would help create a “municipal finance corporation” and start out with the help of banking professionals and a board of directors and commissions to oversee it. 

The measure does not fund that body, however. Potential funding sources for the corporation would include federal funding, state grants and philanthropic giving. 

To become a full-fledged public bank, the corporation would need to have a record of success in its first three years.

Then it can transition into a public bank once it successfully applies for a state banking charter, obtains approval and licensing from the California Department of Financial Protection and Innovation along with Federal Deposit Insurance Corporation (FDIC) deposit insurance.

City progressives, including the Democratic Socialists of America, have long floated the idea of a public bank, which would reinvest public money back into the community.

Critics of Prop. B said that creating a public bank would be costly for the city, and that running such a complicated financial institution poses too many risks. Mayor Daniel Lurie was opposed to the measure but did not actively campaign against it; the group GrowSF and the think tank SPUR were behind a modicum of opposition spending.

Supervisor Chyanne Chen, who led the legislative effort to put the measure on the ballot, sees hope, especially after the “blue tsunami” on election night in which Democrats took back majority control of both House and Senate in Congress.

“I’m especially excited because with Democrats in control of the House and Senate, there may be new avenues available to fund the bank, so that we can get work financing the things we need,” Chen wrote in a statement.

On election night, the measure was trailing behind at 49.8% to 50.2% with a thin margin of 630 votes. It gained ground as more results came in and reversed course two days later on Nov. 5. With later ballot returns leaning progressive, Prop. B continued to pick up steam. 

“This victory shows that nothing is beyond grassroots power,” Steier said. “On we march.”