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\u201cFrom public banking advocacy organizations, civil rights attorneys, environmental advocates, Democratic party activists, and others, many people had a hand in getting this historic bill over the finish line,\u201d Chiu stated. <\/p>\n\n\n\n
This unified front of working people, organizers and politicians is what has brought public banking to the forefront of the political discussion both in California and nationwide. <\/p>\n\n\n\n
\u201cIt doesn\u2019t make sense to line the pockets of Wall Street investors with public tax dollars when we could be investing that money back into our local communities,\u201d Chiu stated. \u201cAlso, many large financial institutions invest in industries\u2014fossil fuels, gun manufacturing, private prisons, immigration detention centers\u2014that most Californians are opposed to.\u201d<\/p>\n\n\n\n
That wave of public banking support is clearly bolstered by a ground swell of people, across party lines, who see California\u2019s investments in large conglomerate banks as not only immoral but unsustainable. <\/p>\n\n\n\n
District 1 Supervisor Sandra Fewer has also pushed the public banking movement forward in recent months with legislation introduced in November last year establishing a second municipal task force focusing on what the process would look like and possibly drafting a business plan. <\/p>\n\n\n\n
\u201cThis legislation [AB857] changes the game and allows a pathway for local or regional public banks to be formed and chartered by the state, an option that previously did not exist,\u201d Fewer told El Tecolote. \u201cWe have taken many steps towards a public bank during my three years on the Board of Supervisors, but the next step necessary to move this project forward is the development of a business plan.\u201d<\/p>\n\n\n\n
Both Chiu and Fewer also focused on how a public bank would help refocus the financials power of San Francisco from underwriting corporate profits to affordable housing and small business investment. <\/p>\n\n\n\n
These have been key focal points from Public Bank Coalition organizers throughout the entire process and was something some local organizers felt the first task force fell short on. <\/p>\n\n\n\n
On a local level the public bank movement has largely been driven by younger, distinctly progressive organizers who have worked tirelessly to bring this conversation to the forefront of the state politics discussion.<\/p>\n\n\n\n
Kurtis Wu, co-founder of the San Francisco Public Bank Coalition, is one such organizer.<\/p>\n\n\n\n
\u201cAB857 was a huge win for our coalition. We not only proved that we could pass tangible legislation but we proved to ourselves that we can take on one of the most powerful industries, Wall Street, and win. We know the fight isn\u2019t over and we need to take this momentum and energy to the local level,\u201d Wu said. <\/p>\n\n\n\n
Part 2 of this commentary will run in our following Feb. 13 issue. <\/em><\/p>\n\n\n\n But the previous iteration of a public banking task force, which released a finalized report in March 2019, fell short of what organizers expected.\u00a0<\/p>\n\n\n\n The task force included three models for establishing a public bank; none of the three provided an honest assessment of a public bank as an INVESTMENT rather than a COST and none of the three models provided analysis of how to phase in a public bank thus diminishing the initial costs.\u00a0<\/p>\n\n\n\n \u201cIt is important that the task force frame this as an investment, not simply a cost,\u201d Kurtis Wu, co-founder of the San Francisco Public Bank Coalition, said. \u201cI think the task force needs to have a more holistic approach to the idea of creating a public bank, factoring in return on investments, externalities with the current system, and lost opportunity costs that we are losing out by not currently having a public bank,\u201d\u00a0<\/p>\n\n\n\n This, in conjunction with a business plan, would help to alleviate public or institutional anxieties about a large overhaul of municipal funds like a switch to a public bank. A city as large and flush with capital as San Francisco would not be able to switch from private to public banking overnight, it would require a ramp up of the public bank and a phase out of the Wall Street investment and the first task force\u2019s report offered no such framing, only showing the huge upfront costs of an immediate shift from private to public municipal banking.\u00a0<\/p>\n\n\n\n \u201cThe previous task force report overstated start-up costs and the timeline to break even,\u201d Wu said. \u201cI think overall the previous task force could have done a better job at laying out a clearer blueprint to establish a public bank.\u201d \u00a0<\/p>\n\n\n\n Wu specified that the coalition would hope to see this task force made up of \u201cfinancial experts, including representatives from community banks and credit unions, and community members that have lived experience when it comes to affordable housing, renewable energy, student loans, small businesses, etc.\u201d\u00a0<\/p>\n\n\n\n Wu highlighted how a public bank and the process of taking municipal banking back into the hands of residents is only successful if the structure that creates said bank is, \u201ctruly represented by the people.\u201d<\/p>\n\n\n\n The criticism levied at the previous public banking task force centered around the miscategorization of an investment versus a cost regarding the initial stages of a public bank. Some of the high initial costs were not weighed against the cost of continuing the current banking path.\u00a0<\/p>\n\n\n\n The three models in the March 2019 report \u201cwere not satisfactory to our coalition,\u201d according to Wu. They hoped to phase in total public ownership of municipal banking, initially starting as a non-direct lending bank, then after building up enough capital, take on the sum of the San Francisco\u2019s roughly $11 billion annual in general funds.\u00a0<\/p>\n\n\n\n \u201cModel 1 is not even a bank and models 2 and 3 assume that the bank would be start immediately overnight, which explains the outrageous start-up costs and timeline to break even,\u201d Wu said.\u00a0<\/p>\n\n\n\n Sushil Jacob, a Senior Attorney with Lawyers\u2019 Committee for Civil Rights, explained why AB 857 was such a crucial first step.\u00a0<\/p>\n\n\n\n \u201cAB 857 provided a legal pathway for the City to apply for a bank license. AB 857 provides a new type of bank license for publicly-owned banks and provides certain privileges only available to those banks,\u201d Jacob said. \u201cThis task force is created with the specific mandate to create a business plan for the bank that will eventually be submitted to the state and federal regulators to obtain a bank license. The business plan will provide the roadmap for the bank including: directors and officers; business lines, governance plans\u2014allowing community input, while insulating bank management from political interference. This is the role of the independent board of directors,\u201d he said.\u00a0<\/p>\n\n\n\n Both Jacob and Wu brought up a Model 1.5, which is \u201ca more phased approach.\u201d This, as opposed to the approach proposed by the models in the first report, would alleviate large upfront costs and make the bank more sustainable long term.\u00a0<\/p>\n\n\n\n \u201cIt starts with a non-depository municipal finance corporation. After the municipal finance corporation builds a track record and lending expertise it then applies for a depository license as a public bank,\u201d Jacob said.\u00a0<\/p>\n\n\n\n The proposition by coalition members and advocates is designed to minimize up front costs while gathering the capital to sustain the bank long term.\u00a0<\/p>\n\n\n\n \u201cModel 1.5, which we are proposing, would start with investments and then break up the city\u2019s banking functions with Wall Street over a period of time. This would reduce risk and start-up costs,\u201d Wu said.\u00a0<\/p>\n\n\n\n Public banking represents a first revolutionary step for the populus in taking control of tax dollars and the subsequent distribution. In order to take meaningful steps towards economic justice, which is a grand encompassing project including healthcare and housing as a human right, we must take back our financial control.\u00a0<\/p>\n\n\n\n These are long term idyllic goals, but that doesn\u2019t mean they should be written off as unattainable or politically divisive. Talking to people about what senator supported what bill can be effective, but for the masses of disaffected Americans, it\u2019s just annoying and pandering. To connect and mobilize people effectively and consistently, we have to approach them along economic lines; class first politics are our way out of this hellscape of a world we seem stuck in. Taking banking in the hands of the public is a crucial first step.\u00a0<\/p>\n\n\n\n In the decade plus since the economic crash, politicians have signed back on to the financial ravagement and exploitation that led us there in the first place. They\u2019ve again relinquished any regulatory power to capital under the guise of \u201cthe logic of the market.\u201d The logic of the market seems to work well for those on Wall Street and continually fails the rest of us. If we are going to learn anything from our past mistakes, hopefully this lesson sticks. As trite and dramatic as it sounds, there is little time to waste. We have an option to get this long march towards equity and sustainability started and it comes in the form of a public municipal bank.\u00a0<\/p>\n\n\n\n \u201cThe last task force report was more focused on \u201cif.\u201d With climate change, affordable housing, and our inability for cities to truly leverage our tax dollars for public good, the conversation about \u2018if\u2019 in our mind is over,\u201d Wu said.\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":" It has been over a decade since the financial markets crashed in 2008, spurring foreclosure of homes, job loss for millions and economic destitution for many. The effects of this crisis are still being felt by working Americans, but for Wall Street these effects are spelled with a dollar sign. According to KQED, since PG&E\u2014California\u2019s […]<\/p>\n","protected":false},"author":35,"featured_media":42672,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"newspack_popups_has_disabled_popups":false,"newspack_featured_image_position":"","newspack_post_subtitle":"","newspack_article_summary_title":"Overview:","newspack_article_summary":"","newspack_hide_updated_date":false,"newspack_show_updated_date":false,"footnotes":""},"categories":[4],"tags":[17502],"coauthors":[18445],"class_list":["post-42670","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-voices","tag-sf-public-bank-coalition","entry"],"yoast_head":"\n