{"id":19189,"date":"2021-06-23T10:42:14","date_gmt":"2021-06-23T17:42:14","guid":{"rendered":"http:\/\/occupysf.net\/?p=19189"},"modified":"2021-06-23T10:42:16","modified_gmt":"2021-06-23T17:42:16","slug":"debate-reignites-over-san-franciscos-first-public-bank","status":"publish","type":"post","link":"http:\/\/occupysf.net\/index.php\/2021\/06\/23\/debate-reignites-over-san-franciscos-first-public-bank\/","title":{"rendered":"Debate reignites over San Francisco\u2019s first public bank"},"content":{"rendered":"\n
\"San(Kevin N. Hume\/The Examiner)<\/ins>“\/><\/figure>\n\n\n\n

San Francisco Public Bank Coalition advocates rallied as the Board of Supervisors considered supporting the creation of a public banking charter in 2019. (Kevin N. Hume\/The Examiner)<\/em><\/p>\n\n\n\n

Prior to the COVID-19 pandemic, momentum was building for San Francisco to create its own public bank where The City could be in charge of its own finances and free from Wall Street influence.<\/p>\n\n\n\n

Advocates argued that The City would be able to invest in key local areas like affordable housing and small businesses while being accountable to taxpayers as a public entity \u2014 something that became more desirable after the Great Recession banking scandals.<\/p>\n\n\n\n

The push to create a public bank, of course, became another point of competition with Los Angeles, with city officials jockeying for San Francisco to be the first to apply for a banking license<\/a> under a 2019 state law.<\/p>\n\n\n\n

All that stalled during the coronavirus crisis.<\/strong> But as The City and country enter recovery mode, San Francisco is working its way back to seriously pursuing a public bank. Under legislation unanimously approved by supervisors last week, a working group would develop a business plan to move the idea forward.<\/p>\n\n\n\n

\u201cI think it\u2019s pretty clear, particularly for working people in San Francisco, that recovering \u2014 and truly recovering \u2014 from this pandemic is going to be a multi-year effort,\u201d said Supervisor Dean Preston, who authored the legislation. \u201cA public bank needs to be part of that recovery. The ongoing public revelations around the flaws with the for-profit, private banking model have helped to build support.\u201d<\/p>\n\n\n\n

Plans would be crafted for what\u2019s called a Municipal Finance Corporation (MFC), an entity that doesn\u2019t take deposits but focuses on loans, <\/strong>to work alongside a public bank. The whole plan is being fine-tuned by the newly formed organization, known as the San Francisco Reinvestment Working Group, which would have members appointed by supervisors as well as representatives from the Treasurer and Controller\u2019s offices that would report to city officials in 2021.<\/p>\n\n\n\n

However, the working group must still be funded through The City\u2019s budget process with about $470,000 for a business consultant, community engagement and clerk staff. Depending on the direction and model, a full-fledged bank itself could cost up to $3.9 billion to break even over decades, the Treasurer\u2019s Office estimated in 2019<\/a>. The Budget and Legislative Analyst had a different approach in 2020<\/a>, one that recommended shifting $1 billion from The City\u2019s investment pool to start an MFC that would be immediately profitable.<\/p>\n\n\n\n

The California Bankers Association \u2014 one of the main opponents to Assembly Bill 857, which allows cities to apply for a public banking license \u2014 feels there is no need for such an institution pushed by \u201ca vocal minority\u201d who want to bring investment back to the local level.<\/p>\n\n\n\n

\u201cThat is a talking point that, in all honesty, is without merit,\u201d said Beth Mills, CBA spokesperson. \u201cWe think all communities and constituencies are served very well from their financial institutions. There doesn\u2019t seem to be a strong outcry from the general public for the government to set up public banks.\u201d<\/p>\n\n\n\n

But the payoff is both worth it and necessary to The City\u2019s long-term well-being, proponents say.<\/p>\n\n\n\n

Small businesses in North Dakota secured the most loans from the Paycheck Protection Program during the pandemic than any other state relative to their workforce thanks to the state\u2019s century-old public bank, according to the Washington Post<\/a>. Meanwhile, big banks were less likely to dole out PPP loans to lower-income neighborhoods or those with more Black and Hispanic residents, the San Francisco Chronicle reported<\/a>.<\/p>\n\n\n\n

\u201cWe need our own financial institutions to help us weather these storms,\u201d said Sushil Jacobs of the San Francisco Public Bank Coalition. \u201cThat fundamental issue of who is this city for and who can afford to live in it, there\u2019s no solution to that on the horizon.\u201d<\/p>\n\n\n\n

It\u2019s \u201cpotentially game-changing\u201d in the realm of affordable housing, said Fernando Marti, co-director of the Council of Community Housing Organizations, a nonprofit affordable housing collective. San Francisco has been stuck in a system of building affordable housing tax credits and private capital with a diminished role from the federal government in public housing, he said.<\/p>\n\n\n\n

\u201cIdeally, this is something that allows us to create new models of affordable housing,\u201d Marti said. \u201cThe public bank is a part of that discussion of something we can innovate that can get us beyond what we\u2019ve been doing for the last 30 years. It\u2019s going to be huge \u2014 creating a bank is not a little thing.\u201d<\/p>\n\n\n\n

The plan is more focused on beginning as a lending institution that doesn\u2019t function as a true bank. That would get the idea started in a less costly way.<\/p>\n\n\n\n

The Treasurer\u2019s Office, which led the Municipal Feasibility Task Force in 2018, determined that three models could achieve what a public bank set out to do, but without clear policy direction. Now, that policy seems to be in line with the first model, one focused on investment.<\/p>\n\n\n\n

\u201cWe saw quite a move in that during COVID,\u201d said Amanda Kahn Fried, spokesperson for the Treasurer\u2019s Office. \u201cThe landscape has changed quite a bit. The more details and clear the board gets with what they want this bank to do, the better. What funds are available certainly plays a role here.\u201d<\/p>\n\n\n\n

imojadad@sfexaminer.com<\/p>\n","protected":false},"excerpt":{"rendered":"

San Francisco Public Bank Coalition advocates rallied as the Board of Supervisors considered supporting the creation of a public banking charter in 2019. (Kevin N. Hume\/The Examiner) Prior to the COVID-19 pandemic, momentum was building for San Francisco to create its own public bank where The City could be in… Continue reading → <\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"_links":{"self":[{"href":"http:\/\/occupysf.net\/index.php\/wp-json\/wp\/v2\/posts\/19189"}],"collection":[{"href":"http:\/\/occupysf.net\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/occupysf.net\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/occupysf.net\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/occupysf.net\/index.php\/wp-json\/wp\/v2\/comments?post=19189"}],"version-history":[{"count":1,"href":"http:\/\/occupysf.net\/index.php\/wp-json\/wp\/v2\/posts\/19189\/revisions"}],"predecessor-version":[{"id":19190,"href":"http:\/\/occupysf.net\/index.php\/wp-json\/wp\/v2\/posts\/19189\/revisions\/19190"}],"wp:attachment":[{"href":"http:\/\/occupysf.net\/index.php\/wp-json\/wp\/v2\/media?parent=19189"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/occupysf.net\/index.php\/wp-json\/wp\/v2\/categories?post=19189"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/occupysf.net\/index.php\/wp-json\/wp\/v2\/tags?post=19189"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}