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LAFCO report urges transparency after uneven PPP distribution and outlines next steps for bank accountability
Summary
A LAFCO staff study of San Francisco banks’ COVID‑19 response found differences in PPP participation and customer relief access; the commission was asked to consider a resolution, a special study engaging communities of color and LEP groups, and public education about relief resources.
LAFCO staff presented a bank‑accountability assessment May 15 that looked at how San Francisco banks served small businesses and customers during the CARES Act response and urged the commission to consider several steps to improve local oversight.
Research associate Carrie Yee reported that of 45 banks in San Francisco, 38 were PPP‑eligible lenders and 35 participated in PPP lending; six banks accepted PPP applicants without requiring a preexisting banking relationship. Yee said the first PPP round skewed toward larger small businesses and that subsequent rule changes aimed to improve access for smaller firms. She noted a gap in publicly available data on which customers received loan modifications and other discretionary relief, saying that this lack of transparency complicates efforts to hold banks accountable for equitable crisis response.
Yee recommended the commission: issue a statement or resolution on bank accountability; undertake a special study engaging communities of color and limited‑English‑proficiency residents to document customer experiences; spotlight and expand public education about bank relief resources on the city’s COVID‑19 web pages; and conduct a preparedness assessment to strengthen nonprofit capacity for housing acquisitions should the market present acquisition opportunities.
Public commenters, including the San Francisco Public Bank Coalition and community housing advocates, urged the commission to pursue a clear blueprint for a public bank or alternative recovery finance tools to improve equitable capital access. Commissioners indicated support for pursuing the recommendations and for sharing the report with the Board of Supervisors.
Next steps: The commission asked staff to circulate the report to supervisors’ offices and to consider a LAFCO special study and potential resolution to increase transparency and document racial and LEP disparities in relief access.
