San Francisco voters will decide in November whether to authorize a city-owned financial institution that could eventually become a public bank, potentially giving the city a new way to finance affordable housing, small businesses and environmental projects.
Proposition B — titled Establishing a Municipal Finance Corporation and a Public Bank — would not immediately create a bank, raise taxes or provide money to start one. Instead, the Charter amendment would authorize the city to create a nonprofit lending institution called a municipal finance corporation. Funding would have to be secured separately, potentially through city appropriations, grants, foundations or contributions from banks.
Proposition B would spell out what the institution may or may not do with its money. It would prioritize goals such as affordable housing, economic opportunity and environmental sustainability, while avoiding investments in industries the measure considers harmful, including fossil fuels, tobacco, weapons, prisons and detention centers, predatory lenders and businesses that violate labor laws.
After operating for at least three years, the institution could seek state and federal regulatory approval to transition to a public bank, which could accept deposits. Under Proposition B, San Francisco could not open a bank until the treasurer-tax collector determined there were enough money and other resources to do so.
Proponents are working against a clock. California’s authority to issue new local public-bank licenses is to close in 2028 unless state lawmakers extend it.
The San Francisco Board of Supervisors voted 9-to-2 on July 7 to put Proposition B on the Nov. 3 ballot. Supervisors Stephen Sherrill and Alan Wong voted against it.
A simple-majority “yes” vote would authorize the municipal finance corporation and establish its mission, governance and pathway toward becoming a regulated public bank.
A “no” vote would leave the Charter unchanged.
A different kind of bank
Unlike a conventional commercial bank owned by private shareholders, a public bank is government owned. It can use its earnings to make more loans or support other public purposes.
Public banks are rare in the United States. The Bank of North Dakota is currently the only state-owned public bank in the country. Founded in 1919, it reported $231.8 million in net income in 2025 and generally works with local banks rather than competing with them.
Public banking is far more common overseas. Germany has hundreds of locally based public savings banks, known as Sparkassen, that take deposits and make loans to households and businesses. Generally backed by municipalities or municipal associations, they are required to focus their business on their local regions and serve the needs of the regional economy.
In his Aug. 20 fiscal analysis for the voter information pamphlet, Controller Greg Wagner said establishing and operating the municipal finance corporation and transitioning it into a public bank could cost approximately $310 million to $460 million over eight years. The estimate is based on a 2023 city working group’s financial models and could be significantly higher or lower depending on interest rates and economic conditions.
Some of the corporation’s capitalization and funding could come from city grants and forgivable loans “which are unlikely to be repaid,” Wagner said, adding that the corporation becoming financially sustainable “is not guaranteed.” Income generated by the bank could eventually offset some operating costs.
“There may be significant unforeseen costs to the city in the event the Public Bank is not financially sustainable,” Wagner wrote in his fiscal analysis.
Supporters say bank could circulate more money locally
Proposition B proponents say a public bank could provide affordable-housing developers, homeowners, small businesses and environmental projects with lower-cost financing than private-sector lenders and other market-rate sources, sometimes working through local banks and credit unions. They say it could also reduce the city’s reliance on taxes and bonds to finance public projects and keep more money circulating in San Francisco.
A group called San Franciscans for Social Housing wrote in a paid endorsement submitted for the San Francisco Department of Elections’ voter information pamphlet that a “major impediment” to building social housing is the cost of borrowing. Cheaper borrowing could help get projects that are difficult to finance off the ground.
“A Public Bank would be an excellent tool to provide reasonable loans to help build the housing San Francisco families desperately need,” the group wrote.
During debate on the measure at a June Board of Supervisors meeting, Supervisor Chyanne Chen said a public bank would accomplish several of the city’s most pressing goals.
“A public bank would open the doors to build an engine for affordable housing, a lifeline for struggling small business, and the financial backbone for our climate goals,” Chen said.
Supporters and opponents of the measure held back-to-back rallies at Mission Playground Park on the same day in August.
Rallygoers in favor of the measure included members of Indivisible SF, the San Francisco Labor Council and the Democratic Socialists of America. Speakers included supervisors Jackie Fielder, Chen and Bilal Mahmood, former Supervisor Dean Preston and San Francisco Public Bank Coalition spokesperson Misha Steier. The San Francisco Green Party also endorsed Proposition B as a step toward a public bank.
In an online endorsement, Indivisible SF has said that such a bank could finance renewable energy, electric vehicle infrastructure and environmental cleanup while reducing the city’s reliance on Wall Street banks.
“Projects like these are frequently scorned by the large commercial banks, since they do not offer the large returns on investment those banks want,” the group wrote.
That argument also animates some of the online discussion around the measure. Supporters have pointed to public or publicly backed financing systems overseas that help fund housing and other public priorities. One commenter on a San Francisco Reddit discussion cited Germany’s network of locally oriented public savings banks, while another pointed to France’s system for channeling regulated savings into social housing.
“Hate predatory banking,” the commenter wrote. “Public banking when done right is a critical part of shifting money towards longer term / locally minded projects.”
A publicly owned institution, they say, could help fill that gap while putting money it earns back into local projects rather than distributing profits to private shareholders.
In an official ballot argument submitted to the Department of Elections for inclusion in the voters’ information pamphlet, Proposition B supporters framed the bank as an alternative to repeatedly turning to taxpayers and bond markets.
“A public bank can help reduce pressure to raise taxes and issue bonds by providing steady, long-term financing for core public infrastructure,” they wrote in their submission, which was signed by state Controller Malia M. Cohen, Assemblymember Matt Haney, Board of Supervisors President Rafael Mandelman and supervisors Myrna Melgar, Matt Dorsey and Mahmood.
The San Francisco Ethics Commission reported $164,030 in contributions to Yes on B, Our City Our Bank, the committee supporting Proposition B, as of Sept. 23. Of that, $150,000 came from Saikat Chakrabarti, a former tech executive and progressive organizer who ran for Congress in San Francisco earlier this year.
Opponents question where money would come from
Opponents focus much of their criticism on two questions: Where would the city get the money to launch the institution? And why create it when San Francisco already subsidizes housing, small businesses and infrastructure through other programs?
Sherrill said the city already has mechanisms for subsidizing affordable housing and other public priorities. Such programs include the city’s Housing Trust Fund or lending through municipal bonds, where private investors evaluate and assume much of the financial risk.
“A public bank is a slow, costly answer to problems we could be solving right now with tools the city already has,” Sherrill said.
Several individuals active in moderate and conservative Bay Area politics attended the No on Proposition B rally in August. Speakers included Edward Escobar and Tuan Ngo, both with the Coalition for Community Engagement, and active in pro-Flock camera advocacy in the East Bay and in the recalls of Oakland Mayor Sheng Thao and Alameda County District Attorney Pamela Price.
Escobar said voters are being asked to approve the framework for an expensive financial institution without knowing how the city would ultimately pay for it.
“Voting ‘no’ on B is about protecting San Francisco from yet another experiment with a downside our communities will be forced to carry,” Escobar said.
Also speaking against the measure were ConnectedSF founder Marie Hurabiell, who helped lead San Francisco’s 2022 recalls of District Attorney Chesa Boudin and three school board members, and Larry Marso, Larry Marso, a former member of San Francisco’s Republican County Central Committee.
Hurabiell said North Dakota’s prosperous public bank system is not a good measure for success locally because state funds are required by law to be deposited in the bank, giving it a built-in deposit base that San Francisco’s proposed institution would not automatically have.
“San Francisco is proposing something much riskier in a tighter budget with no such captive funding,” Hurabiell said.
Marso said a public bank could become a way for the city to finance projects that might otherwise require voter-approved bonds, reducing voters’ direct say over that spending.
Prasad Krishnamurthy, a professor at the University of California, Berkeley, School of Law who specializes in financial regulation, wrote in a July Chronicle opinion article that subsidized bank loans could make the true cost of government assistance less transparent and that taxpayers could ultimately absorb losses from if borrowers fail to repay their loans.
Mayor Daniel Lurie has also come out against Proposition B, arguing the city should invest directly in housing, small businesses and other needs rather than spend resources creating a new financial institution.
A formal No on B committee called San Franciscans for Fiscal Responsibility has registered to oppose the measure, but as of the Ethics Commission dashboard’s Sept. 23 update, it had reported no campaign contributions or expenditures.
Who would run it?
One of the central questions surrounding public banking is how to prevent elected officials from influencing lending decisions.
Wong raised concerns about political interference at a July Board of Supervisors meeting. He said running a public bank means making professional banking decisions about who gets loans, how credit risk is evaluated, how much risk the institution takes and how losses are managed.
“Those decisions carry real financial consequences,” he said. “They demand institutional discipline, insulation from political pressure, transparency and deep banking expertise.”
Proposition B would put those lending decisions at arm’s length from elected officials.
The municipal finance corporation would be overseen by a nine-member commission: four members appointed by the Board of Supervisors, two by the mayor, and one each by the Treasurer-Tax Collector, Controller and City Attorney. The commission would help choose an experienced board to run the corporation but could not interfere in individual lending decisions. If the corporation later became a public bank, it would get a larger oversight commission.
Supporters point to that separation as protection against political interference. But Wagner identified the same structure as a potential concern. The controller’s analysis said the governing commissions and boards would have “a high degree of independence” and the city would consequently have limited control over financial outcomes and decisions about how funds are used.
Years in the making
San Francisco’s public banking movement predates Proposition B by nearly a decade. Then-Supervisor John Avalos began pushing for a city-owned bank in 2011, in the aftermath of the Great Recession. Then in 2017, long before she was elected to the Board of Supervisors, Jackie Fielder and other activists renewed the push in connection with efforts to divest San Francisco money from banks financing the Dakota Access Pipeline, which transports light sweet crude oil.
That year, Fielder co-founded the San Francisco Public Bank Coalition, which advocated for the California Public Banking Act that became law in 2019 and created a process for local governments to establish public banks.
In 2021, San Francisco created a Reinvestment Working Group to develop a business and governance plan for a city-owned financial institution. The group produced its plan in 2023.
Unlike many ballot initiatives, Proposition B qualified not through voter signatures but through the Board of Supervisors placing it on the ballot.
A separate effort by the Our City Our Bank campaign sought signatures for Proposition B that would have provided funding for a public bank, but that proposal was withdrawn. That has left voters considering the structure of a public bank without deciding how to pay for it.
