Plans to create a publicly owned bank in San Francisco gained momentum on Tuesday after Supervisor Dean Preston proposed legislation to create a working group to develop a business plan.
According to Preston and the San Francisco Public Bank Coalition, the ordinance to create the working group would get the ball rolling to establish a public bank in the city to reinvest millions of public revenue to provide loans for small businesses, as well as investments in affordable housing, sustainable infrastructure, and economic recovery.
The working group will be made up of three financial experts, four community representatives, and one representative each from the City Controller’s Office and the Treasurer’s Office. In addition to a business plan, the group will also come up a timeline for the city to apply for a public banking license.
“It’s been a long road because this has never been done,” said SF Public Bank Coalition Co-Founder Jackie Fielder. The coalition, made up of several local community organizations, has been working since 2017 on developing the nation’s first municipal bank.
“Housing affordability, climate change and all the same challenges that we faced years ago, those problems still exist and are now exacerbated especially in this pandemic. We think that now is the perfect time to reinvest in the public good and continue the fight for a public bank,” she said.
“We’ve seen small businesses in our communities, particularly in communities of color, that have shuttered and others are barely surviving with ever growing rent debt. Communities of color have been hit the hardest both by the health impacts of the pandemic and the economic ramifications. And meanwhile, we know that this burden is not being shared across the county,” Preston said. “Millions of dollars in PPP (the federal Paycheck Protection Program) loans and grants that were intended for struggling businesses went to billionaires instead and to huge corporations.”
He added, “Unfortunately this is not a bug but a feature of capitalism in which disaster and hardship for some can serve as a windfall and profit opportunity for others. And our banking institutions play a key role in society in exacerbating these inequities and centering profit over the well-being of our communities.”
The ordinance to create the working group was enabled through 2019’s Assembly Bill 857, or the Public Banking Act, authored by Assembly members David Chiu, D-San Francisco, and Miguel Santiago, D-Los Angeles, which provided framework for municipalities to establish public banks.
According to Preston, the ordinance is set to be assigned and heard at a committee meeting within the next 30 days.