For the past year, San Francisco has seriously considered if it could run its own bank, to better call the shots on how its $11-billion annual budget is invested.
A 16-member Municipal Bank Task Force has met monthly since February, going deep into the weeds of how finances are managed. They’ve weighed what a city-owned bank would look like, and examined the necessary components of such an institution, such as insurance, a government-granted bank charter, and access to the Federal Reserve, while evaluating what start-up costs might be to properly launch such an endeavor.
The push to open a public bank comes from its ability to invest taxpayer dollars in industries like clean energy (as opposed to, say, immigrant detention centers), set low-interest rates for small businesses or student loans, save millions on financial service fees paid to big banks, and be held accountable to voters. This would be a contrast to some of the policies of Bank of America, which manages much of the city’s finances.
But when the Treasurer’s Office released a draft executive summary at the Sept. Task Force meeting, the second-to-last before the investigation wraps up, attendees scratched their heads. They expected a full report detailing all the issues above, not a six-page document lacking a clear model for a full-fledged public bank.
“What they presented Thursday was this very vague executive summary that had none of the critical components of a public bank or what it would take to establish it,” says Jackie Fielder, a member of the activist-run SF Public Bank Coalition. “There’s no shared conclusions about what a public bank is, after all this time.”
The draft had a brief overview of four models for a city-run bank: a wholesale bank that doles out real estate, small business, and student loans; one that expands to direct small business loans and small-dollar consumer loans; one that doesn’t accept deposits but secures funds to become a commercial lender; and a hybrid option that transitions from a commercial lending program to a bank after six years.
Task force members like Sushil Jacobs, a senior economic justice attorney for the Lawyers’ Committee for Civil Rights of the San Francisco Bay Area, was surprised that the Treasurer’s Office did not release a full draft report, and pushed for one that dreamed as big as some of the discussions.
“I think that the four models reflected most of what we were talking about, but I don’t think they went far enough,” Jacobs says. “I still have faith that the task force will be valuable and have a report for the board to make a good decision.”
The Treasurer’s Office acknowledged the input in a follow-up email to task force members and committed to including a model that has the treasury take on management functions usually performed by Bank of America, and includes a timeline to create a full public bank, and calculates start-up costs. Though there’s no firm deadline on the full report, the updated executive summary will at least be completed by November’s meeting, according to Amanda Fried of the Treasurer’s Office.
The task force has one meeting left on Nov. 1, but the Treasurer’s Office would consider scheduling another to allow for a robust discussion before the Board of Supervisors takes up the issue. Jacobs feels there should at least be ample time to submit comments in writing before the final meeting.
“Our priority right now is making sure that we get it right,” Fried says. “We really want to make sure that everyone feels their voice is heard.”