The campaign for a public bank in San Francisco moved a big step forward this week when the Board of Supes Rules Committee voted unanimously to advance a City Charter amendment by Sup. Cheyanne Chen to create a Municipal Finance Corporation and after three years, a public bank.
The move comes just as Sup. Jackie Fielder, who made this a signature campaign issue, is returning from a medical leave.
The support of all of the committee members, including Stephen Sherrill, one of the most conservative supes, means it’s likely the full board will put the measure on the fall ballot.
The only speaker in opposition was Griffin Lee, representing Connected SF, a right-wing group funded by Big Tech and real estate interests. He said that “more money will not solve the affordable housing crisis.” I don’t know many people anywhere on the local political spectrum who would agree with that statement.
Under the proposal, the city would move into public banking slowly, starting off with a Municipal Finance Corporation, a nonprofit that would use very limited start-up capital—$27 million—and begin making low-interest loans for affordable housing.
After three years, if the MFC demonstrated that its revenue was greater than its costs, the city would transition the entity to a public bank, that over time could start taking deposits and making loans for small businesses and public-interest projects.
Sherrill asked a lot of pointed questions, and Khalid Sumaree, executive officer of the Local Area Formation Commission, which is heading up the project, had clear answers. The public bank would not offer any products that the private sector is already making available. It would not be an agency of the city, so in the worst case, if it failed, no city money would be at risk.
Sumaree noted that experience banking consultants had worked on the plan. Sup. Shamann Walton, a co-sponsor, said that “this has been in the works for many years.”
It’s a potentially groundbreaking idea. A public bank could transform finance in San Francisco, and create a model for other cities. At this point, the only public bank in the country, the Bank of North Dakota, has been around since 1915 and is widely considered a tremendous success.
Mayor Daniel Lurie has not made a formal statement on the proposal, and other than the folks at Connected SF, there’s not a lot of formal opposition—so far.
We shall see if Big Tech and Real Estate try to derail this after it makes the ballot.
