Wells Fargo, headquartered in San Francisco, was recently fined $1 billion for charging mortage borrowers unfair fees and charging clients for car insurance they didn’t need. As The City explores the idea of establishing a public bank, some are focused on mitigating the harm large corporate banks are causing. (Aleah Fajardo/2016 Special to S.F. Examiner)
By Robyn Purchia on April 25, 2018 (SFExaminer.com)
Today, San Franciscans will take to the streets.
More than a year ago, a coalition of Native Americans, environmentalists and concerned San Franciscans testified before the Board of Supervisors. Many of them experienced brutalities at the Standing Rock Sioux Reservation in North Dakota as they protested the Dakota Access Pipeline’s impact on clean drinking water and Native Americans’ rights. They urged San Francisco to divest taxpayers’ money from banks financing the oil pipeline.
The supervisors listened. They directed Treasurer Jose Cisneros to establish a Municipal Bank Feasibility Task Force and to evaluate the creation of a public bank. A public bank could handle taxpayers’ money, provide loans to local businesses, fund affordable housing and ensure San Francisco isn’t complicit in preying upon the vulnerable and destroying the environment.
Last week, task force members began hashing out potential solutions for the bank’s high startup costs. Some believe the budding cannabis industry could give San Francisco the green it needs to break free from Wall Street banks and the harm they’ve caused.
But advocates remain concerned a public bank may still not move forward.
“A public bank in San Francisco is feasible,” Cisneros told me. “The more challenging question: Is it a good policy decision given the complexity, expense and risks?”
Other municipalities haven’t figured out ways to overcome these challenges. Last week, Santa Fe’s task force determined a public bank’s benefits are “at best marginal and at worst would carry risk of non-viability.” The Los Angeles chief legislative analyst called startup costs “exorbitant” in its report last February.
A public bank could require a minimum of $10 million in capital, approximately $1 million in startup costs and about $2 million for staff salaries, as well as additional funds for offices, branches, data processing, IT systems and security.
“I think the box we’ve been given is a public bank that will make, not cost, The City money,” said Steve Zuckerman, a San Francisco task force member and president of the Self-Help Federal Credit Union, during last week’s meeting. “All the problems we’re so passionate about need funding.”
Cannabis advocates rally in support of medical marijuana dispensaries outside City Hall in San Francisco on Nov. 28, 2017. (Mira Laing/2017 Special to S.F. Examiner)
Cannabis offers a cure. Federal law classifies marijuana as a “Schedule 1” drug, like heroin. Most banks are unwilling to face money-laundering charges for accepting drug proceeds. Their squeamishness has created a billion-dollar industry run primarily on cash.
If San Francisco’s public bank accepts deposits from dispensaries and other cannabis businesses, it could alleviate the industry’s cash problems and provide an initial revenue stream.
A few institutions in the United States provide limited deposit services. The Partner Colorado Credit Union, for example, averages $20 million in monthly deposits — about 80 percent of its monthly business — from the cannabis industry. Like other credit unions and community banks, it is willing to take on the risk and burden associated with the service, which includes in-depth investigations and documentation.
If San Francisco is also willing to take on the challenge, it could overcome the exorbitant cost of establishing a public bank and bring The City closer to divesting from institutions that fund fossil fuel corporations and abuse consumers.
Days ago, Wells Fargo was fined $1 billion for attaching unnecessarily high costs to its mortgage and auto loans. People lost their homes and cars as a result. The banking giant was also fined $185 million two years ago for secretly opening unauthorized deposit and credit card accounts.
“We have to get the banks to stop causing harm,” Kat Taylor, a San Francisco task force member and co-founder of Beneficial State Bank, told me. “We will never cleanup for the harm they’re causing. We have to stop it at the source.”
Although a public bank is not a promise San Francisco’s money will never cause harm, Taylor assured me it’s possible to accept money from cannabis businesses without compromising the bank’s values and vision.
But public bank advocates remain concerned. Figuring out how to get around federal requirements could complicate the process, slow it down or even stop it.
“The march is to demand city officials create a public bank now,” Kurtis Wu with the Public Bank San Francisco Coalition told me. “We’re facing urgent crises, and San Francisco has the unique opportunity to show the rest of the country how to break up with Wall Street.”
Members of the coalition and their allies will rally in front of the Bank of America building on Market Street at 4 p.m. today and march to City Hall. San Franciscans supportive of their cause can learn more on Facebook. Members of the public are also encouraged to attend the monthly Municipal Bank Feasibility Task Force meetings.
GREEN SPACE Q&A
“What’s the solution for things that are kind of paper and kind of foil, such as the inside wrapper of cream cheese?” — Elizabeth Bell
It’s hard when your trash sends you mixed messages. Foil and paper are each, individually, recyclable. But when they join forces, they’re considered foreign waste and should be tossed in the landfill, according to Recology spokesperson Robert Reed.
Terracycle does accept mixed materials, like Clif Bar wrappers. Check out the recycling business’s website for details. Cream cheese also comes in plastic tubs, which are easier to recycle.
Some bagel shops may be willing to sell cream cheese to customers in bulk. Try bringing a reusable container to Wise Sons or Noah’s Bagels and see if they’ll fill it for you.
I love spreading shmear and sorting info. Email questions to bluegreenorblack@gmail.com.
Robyn Purchia is an environmental attorney, environmental blogger and environmental activist who hikes, gardens and tree hugs in her spare time. Check her out at robynpurchia.com.
