Dear, Editor:

Prop. B, coming to this November’s ballot, asks voters to trust city hall to enter one of the most complicated and risk-sensitive businesses there is: banking.

Fraud, mismanagement, misrepresentation, corruption – San Francisco has seen it all. Scandals are proof we should never trust our hard-earned money to a pie-in-the-sky scheme like an open-ended “Municipal Finance Corporation” (MFC), in hopes it could someday lead to opening a “Public Bank” down the road. That’s the gist of Prop. B.

No City government should gamble our precious, essential public resources on running a risky “Public Bank.” Not now, not in the future, no matter how hard elected officials campaign promoting it.

The MFC and supporters’ hopeful Public Bank requires experts in credit, liquidity, compliance, cybersecurity and risk management – and lots of startup capital. That’s all very expensive, projected to reach into the hundreds of millions.

A City-run bank could expose taxpayers to loan losses through risky loans to un-creditworthy borrowers made under political pressure. Bad loans do not simply disappear, they may shift to San Francisco’s city budget which is, ultimately, taxpayers. That means less money available for our core City services such as housing, street repair, parks, emergency response and public health.

San Francisco already has multiple existing tools to support the same priorities a Public Bank claims it would target: affordable housing, small businesses and green/climate projects, often more quickly, transparently and with lower institutional risk. The Housing Trust Fund, affordable housing bonds, city-backed small business loans and grants, and 0% micro-loans – all exist today, with programs being expanded.

We do not need to create a new bank system to address what San Francisco already has.

And don’t be fooled, a “Public Bank” is not for neighborhood consumers to open a checking or savings account. 

We should protect taxpayer’s money and demand city hall focus on delivering essential services it already owes the public. Let’s not approve the next scandal.

From,

Richie Greenberg