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San Francisco LAFCO votes to study creation of municipal bank
Summary
The San Francisco Local Agency Formation Commission voted to begin a study into establishing a municipal bank, directing staff to return with findings; commissioners and public commenters said a public bank could help fund affordable housing, small-business loans and reduce predatory check-cashing costs.
The San Francisco Local Agency Formation Commission voted to begin a formal study into the feasibility of creating a San Francisco municipal bank and directed Executive Officer Jason Fried to return with more information at the commission's next meeting.
Chair Hillary Ronan, who introduced the agenda item, said the idea — first raised by former Supervisor David "Supervisor" Avalos — could help the city address its housing crisis, expand financing for affordable-housing developers, provide microloans to small businesses and offer safe, low-cost accounts to people currently served by check-cashing businesses. "The creation of a San Francisco Municipal Bank could help us do three things that are extremely important to me and the future of our city," Ronan said during her remarks.
Commissioners framed LAFCO's role as a project manager that could coordinate multiple city agencies and stakeholders. Vice Chair Cynthia Pollock and Commissioner Sandra Lee Feuer both said LAFCO is well suited to study cross-agency projects and recommended clarifying what LAFCO would examine ("why," "what," and "how") rather than proposing immediate implementation.
Public commenters urged rapid study. Jed Holtzman, senior policy analyst with 350 Bay Area, called LAFCO's involvement "exciting" and said a municipal bank could reduce the city's exposure to environmental, social and governance risks tied to private banks. Eric Brooks of San Francisco Clean Energy Advocates said the commission should take the same coordinating role it played for Clean Power SF.
The motion to launch the study was moved and seconded by commissioners and passed without objection. Commissioners emphasized the motion was for study and did not commit the city to forming a bank or change existing Clean Power SF efforts. The study will address legal issues, financing options, potential staffing and a recommended timeline for further action.
What happens next: Executive Officer Fried is to return with a staff report on the scope and estimated costs for a study at the next LAFCO meeting.
