After taking months to come up with public bank models criticized for not living up to the full potential, the Treasurer’s Office has a new directive: think big.
Supervisor Malia Cohen urged the department at a hearing on Thursday to not let estimated cost get in the way of brainstorming paths to opening up a city-run bank that can serve the needs of San Francisco by investing in things like affordable housing instead of oil pipelines — and be accountable to taxpayers. Advocates say the banking models presented thus far have not matched what they have called for.
“I’m just not buying that we can’t do it because it’s too expensive,” Cohen said, referring to the city’s $11 billion annual budget, to claps and spirit hands in the chamber. “Good things happen to those who are patient but I just want to make sure that we’re not wasting time spinning wheels.”
Since February, the Treasurer’s Office has guided a 16-member Municipal Bank Task Force through the financial system of big banks that manage city funds and what it would take to establish a public bank, like a state-approved charter and insurance. But at the second-to-last scheduled meeting, it released a draft executive summary with four banking models criticized for not going far enough and delayed the final meeting to January.
The department instead presented three models at the Budget and Finance Committee hearing that would: divest the city’s banking services, hold the city’s short-term cash, and participate in business loans; expand loans to affordable housing and small business loans; or combine the two.
“There’s a healthy tension of thinking big and pushing this thing forward,” said Amanda Fried of the Treasurer’s Office to supervisors. “I think the challenging thing for us is nobody has created a bank from scratch that can immediately operate at a scale we would need it to.”
Despite referencing large start-up costs, the Treasurer’s Office felt it was premature to provide an estimate at the hearing, which Cohen took note of. The outgoing supervisor — who established the task force in 2017 and is heading to the State Board of Equilization— also encouraged the department to reach out to San Francisco’s state representatives like assemblymembers David Chiu, Phil Ting, and Sen. Scott Wiener.
Public commenters took to the mic to add in suggestions to invest in green energy, student loans, and even suggest looking into buying an existing bank. Through it all, the consensus was clear: it’s time to break from Wall Street banks who put money toward disagreeable projects like immigration detention centers and cannot be trusted, especially after the 2008 financial crisis.
Though the task force meetings are open to the public, Thursday’s hearing marks its arrival to a civic forum with a vested interest from city leaders. Supervisors Sandra Lee Fewer and Hillary Ronen have signaled that they will carry on the baton first started in 2011 by former Supervisor John Avalos.
“This is not only sensible, but it’s right,” said Jackie Fielder, a member of activist-run SF Public Bank Coalition, who was pleased with hearing. “We’re very excited to work with supervisors Ronen and Fewer to broaden this discussion.”
Fewer called for a working group that brings together statewide efforts seen in Oakland, Santa Rosa, and Los Angeles. She also expects another hearing once the final report is released in January, and for a fight from big banks to heat up. Jim Lazarus from the Chamber of Commerce sits on the task force and has expressed the most local skepticism thus far.
“There is no social justice without economic power and they know that,” Fewer said. “I think it’s time for a public bank in San Francisco.”