San Francisco is a step closer to having the first city-owned public bank in the U.S. While private banks need to maximize shareholder profits, a public bank has a mission to serve the public interest.
If implemented, the city would deposit its money into the public bank, reinvesting any profits earned back into the community. Currently, the city's treasurer manages the banking relationships for San Francisco's more than 200 bank accounts.
The public bank would focus its initial lending on affordable housing development and homeownership, small businesses and climate change. In the future, the bank could expand its lending services to other areas, including student loans, according to the plan. The proposal calls for $50 million in initial funding, which could come from sources that include the city's general fund, local taxes and philanthropy, Jackie Fielder, co-founder of the San Francisco Public Bank Coalition, told Axios.If residents care about meeting the city's affordable housing goals, supporting small businesses and meeting climate goals, "then they should care about a public bank," Fielder said.
A challenge that exists, however, is getting residents to trust that a public bank can be "effective, accountable, transparent and better, frankly, than a private bank," Thomas Marois, a political economist,While a full-fledged public bank could take three to five years to achieve, it's "one of the best ways to ensure that our city dollars are used to reverse inequities, not perpetuate them," San Francisco Supervisor Dean Preston said in a press statement.
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