Friday, March 5, 2021
News + Politics SF moves a big step closer to a public bank

SF moves a big step closer to a public bank

At least six supes on board with visionary plan that has never been done in a city.

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Six San Francisco supervisors spoke today about their support for a public bank, guaranteeing that a measure just introduced by Sup. Dean Preston will be sent to Mayor London Breed.

The legislation would set up a task force composed of banking industry experts, community members, and a representative of the offices of the treasurer and controller that would have a year to craft a business and structural plan.

Sup. Dean Preston introduced legislation to begin the process of creating a public ban.

The proposal would have to go to state banking regulators for approval.

The details are, of course, not clear yet, but it the task force comes up with a workable plan, San Francisco could be the first city in the nation to have a municipal public bank.

The model is North Dakota, which has had a public state bank since 1919.

Speakers at a press conference made several points about the concept, including social responsible investing, community services, and affordable housing.

Jackie Fielder, who has been a leader in the public bank movement for several years, said at a press conference that “we can’t trust $13 billion to Wall Street.” That’s the amount of city money that now flows through private banks every year.

Preston said that the impacts of the COIVD crisis have not been felt evenly in society; while many small businesses have failed and people have lost jobs and face eviction, the billionaires have prospered.

“This is not a bug but a feature of capitalism,” he said. “Public banking is a visionary and essential step toward a more just and sustainable society.”

Board President Shamann Walton said that “now, more than ever, it’s important to look at the impacts of COVID on small businesses and individuals, and we need community institutions that don’t make money off tragedies.” He said a public bank could be a way to “eradicate the check-cashing places that take advantage of people.”

Sup. Hillary Ronen said that “we know banks invest in many places that have a direct impact on the environment. Saving this planet is our biggest overall need, and that can only happen if we control these dollars and where they go.”

She also said that a public bank could help the city buy out and municipalize PG&E to create more sustainable energy.

Sup. Myrna Melgar said that “the private market will not solve our affordable housing problems.” A public bank, she said, “will allow us to develop new models of shared ownership and social housing.”

Sup. Connie Chan said that she knew personally “how challenging it is for immigrants to negotiate the banking system. Our banking system has always been rooted in racism.”

Fielder said that there are many details to work out. The Bank of North Dakota is mainly a “bankers’ bank” that sends money to small community credit unions. The bank could also do direct consumer banking and finance everything from affordable housing to green energy.

It’s hard to overstate the potential importance of this idea, which could become a national standard. I can’t imagine how Mayor Breed could veto the bill, and I suspect there will be two more supes on board by the end, which would guarantee a veto-proof majority.

Tim Redmond
Tim Redmond has been a political and investigative reporter in San Francisco for more than 30 years. He spent much of that time as executive editor of the Bay Guardian. He is the founder of 48hills.

7 COMMENTS

  1. Please deliver us from the EDD contracts with private banks. Nothing a public bank might do could be any less professional than the disaster perpetrated by the private bank the state contracted with to handle the unemployment payments. Get this bank up and running and make sure it functions for the public good as intended, please.

  2. Really? San Francisco creating a city bank. NOPE! I would never trust my money to be handled or invested by such an institution if the city had anything to do with setting it up, managing or overseeing any aspect of the bank. Nearly everything managed and/or overseen by SF city agencies proves to be a major failure. That is why I came up with my own motto for San Francisco: San Francisco, the city that can’t. Every major project the City launches always turns into a massive mess. Projects are not properly planned. The Transbay Transit Hub project managers realized after what, 9 years of construction?, that no one ever figured out they were going to connect CalTrains to the hub. That was one of the main reasons it is was to be called a transit hub. Municipal projects, such as the unnecessary Central Subway, are millions over budget & years late. Project managers contract for materials only to discover when the materials arrive that they are shoddy or inadequate. The tracks received for the Central Subway turned out to not be heavy duty enough for long-lasting service but were used anyway. Often street & sidewalk “improvements”, once completed, end up having to be redone. Poor measurements taken for extending sidewalks & medians in front of the Glen Park BART station resulted in buses not being able to turn the corners. After months of construction & gridlock traffic the widened sidewalk corners & medians had to be torn up & redone immediately after they were finished.

  3. richmondman,

    Yes, there is no free lunch with a city-operated bank. It will either function like many existing credit unions and mutually-owned banks already do (and remember the “savings and loan” bank crisis from a few decades ago)?

    Or worse. If it is seen as a source of funds for every “worthy” bleeding heart cause that comes along then it will just become a huge slush fund of taxpayer money, but with less oversight. Which of course may be exactly what Preston has in mind.

  4. obo: “San Francisco Federal Credit Union?”

    The San Francisco Federal Credit Union was an instrument of Willie Brown that was linked with redevelopment and would guarantee Brown’s harebrained get rich quick schemes.

    The main challenge with a public bank is insulating the ability to do fractional reserve lending, creating debt money, from the Brown machine corruption swirling around City Hall.

    If City government appoints the directors of a bank, then how do we ensure that the Public Bank does not go the way of the SFMTA or other corrupt departments?

  5. Please excuse my ignorance, but what would be the difference between a public bank and the San Francisco Federal Credit Union?

Comments are closed.

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