San Francisco could create the nation's first city-run public bank
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San Francisco voters will decide this November whether the city should take the first step toward creating what could become the first city-run public bank in the nation.
Why it matters: Supporters say a public bank could help finance affordable housing, small businesses and green infrastructure — projects that often struggle to get affordable loans from traditional banks.
Driving the news: The Board of Supervisors voted 9-2 this week to place the measure on the Nov. 3 ballot.
- Supervisors Alan Wong and Stephen Sherrill dissented.
How it works: The ballot measure would create a municipal finance corporation — essentially the governance framework for a future public bank, KQED reports.
- The bank would be run by professional bankers, but with public oversight. The city attorney, controller, treasurer-tax collector, mayor and supervisors would have appointment power.
- The proposal would prohibit lending to fossil fuel companies and weapons manufacturers.
Yes, but: The measure would not provide the money needed to launch the bank, which would require about $325 million in startup capital before it could begin issuing loans, Mission Local reports.
- Backers have floated a tax on large financial institutions, philanthropic dollars or other public funding sources as potential options.
What they're saying: District 9 Supervisor Jackie Fielder, a longtime public bank advocate, said at this week's meeting the proposal is about creating a financial institution "run by real bankers," while still keeping it accountable to "public policy priorities," per KQED.
The other side: Wong warned that running a financial institution requires discipline, transparency and banking expertise, adding the city is asking voters for trust "it has not yet earned."
- "Our city's track record shows that meeting those demands is harder than it sounds, even for institutions designed with the right intentions," he said.
Zoom out: Public banks are rare in the U.S.
- The Bank of North Dakota is the only existing one, though they're more common globally.
What we're watching: If voters approve the measure, the city would still need additional legislation and a funding plan before the bank could realistically open.
- And that must be done before California's law authorizing cities to create public banks expires in 2028.