Jacqueline Fielder has been working two restaurant jobs, but in increasingly unaffordable San Francisco, she’s had trouble finding stable, safe housing she can afford. She moved to the Bay Area to go to Stanford, where she earned a bachelor’s in public policy and a master’s in sociology in just four years. But for the past six months, she’s been couch surfing and living out of her van, a green Toyota Previa, model year 1994 — the same year she was born.
In her spare time between shifts, Fielder has continued volunteering as one of the lead organizers behind San Francisco’s push for a city-owned public bank that would hold local taxpayer dollars and finance affordable housing, small businesses, student loans and other public needs that conventional banks aren’t meeting.
That work takes another step closer with the introduction of local legislation in San Francisco that would begin the process for establishing a public bank — following the pathway laid out by AB 857, the landmark public banking bill passed into law earlier this year in California. That legislation is expected to be introduced today.
It’s a cause that is deeply personal for Fielder, and not just because of her current living situation. Originally from Long Beach, California, she’s Lakota by heritage, and she still has grandparents and other family living in the areas affected by the Dakota Access Pipeline (DAPL) in North and South Dakota. She co-founded the San Francisco Public Bank Coalition in 2017 as part of the national movement to divest public dollars from banks that were financing DAPL and other pipelines affecting Native lands and to reinvest in the communities where those dollars came from.
But, like others from Seattle to Oakland to Los Angeles and beyond, even after winning local resolutions to support divestment from “Wall Street” banks, the alternatives were either similarly invested in pipelines or too small to handle municipal banking services. With their eyes on DAPL, many organizers turned to the state-owned Bank of North Dakota — created in 1919 and until recently the only public bank operating in the U.S. — as a model for their own potential public banks (minus the financing of local law enforcement to clear out DAPL protesters).
“None of us knew anything about banking to begin with, but we haven’t let Wall Street gaslight us into thinking that this is impossible,” Fielder says. “North Dakota showed a hundred years ago that it was possible, and they did it without fintech, they did it as grain farmers in arguably a very difficult era.”
The local San Francisco legislation’s prime sponsor is Supervisor Sandra Lee Fewer, who was the first supervisor to approach Fielder after she and a group of others spoke out in support of a public bank at a Board of Supervisors meeting on February 28, 2017.
“I just threw up a Facebook event that got a lot of traction,” Fielder says. “We just showed up as strangers from the internet, it wasn’t even on the agenda, we just waited for the public comment period at the end of a six or seven hour meeting and said we wanted our city’s money out of these banks because they don’t align with our priorities and our vision for what we want our taxpayer dollars doing.”
The idea of a public bank had been floated in San Francisco’s Board of Supervisors before, in the wake of the Great Recession, by then-Supervisor John Avalos. Now a union organizer, Avalos would eventually join Fielder and others to help launch the San Francisco Public Bank Coalition.
Public banking soon became personal for Supervisor Fewer, too. She began to draw inspiration for a potential public bank from the family associations that Chinese immigrant populations have used for generations in San Francisco to pool savings and make loans to finance each other’s businesses — often at rates some might consider usurious but with no other alternative, and at least the interest paid would stay within the community. A fourth generation Chinese-American, Fewer talks about how her great grandfather got a loan from a family association to open the first Chinese produce business in San Francisco’s Chinatown, in the early 1900s.
To Fewer, a public bank would be a modern-day incarnation of a community taking control over its own resources and investing in each other in a broader way, across multiple ethnic, racial and geographic lines.
“We have seen that if you have communities that can have their own financial infrastructure and loan within their communities, they have acted as informal banks,” says Fewer, who currently chairs the Board of Supervisors’ Budget and Finance Committee. “In a municipality with a $12 billion budget, this is a bigger economy than some small countries. Really it’s kind of crazy that we don’t have more control over our money.”
On any given day, San Francisco city government typically has about $100 million in deposits across 200 or so accounts at Bank of America and U.S. Bank. A local bank, such as the proposed public bank, with $100 million in deposits would typically leverage that into $70 million in loans. Large banks typically leverage deposits at lower ratios, around $50 million in loans for every $100 million in deposits.
That said, advocates see a public bank as just one piece of a larger puzzle to solve the many crises that San Franciscans face, from housing and homelessness to climate change to declining local business ownership to student debt.
On the housing front, Fewer has also introduced and passed legislation like the Community Opportunity to Purchase Act, and supported both of the ballot propositions passed this month — one to authorize a $600 million bond issuance to finance affordable housing preservation and development, and another to reduce zoning barriers for affordable housing across the entire city.
Fewer sees external organizers are crucial to moving all of the needed pieces forward, including a potential public bank.
“I know as a legislator I have to create legislation, but I can’t do it alone, it takes a whole group of people who are saying we can do better with our money,” Fewer says.
People Organizing to Demand Environmental and Economic Rights, or PODER, has become a key organizational member of the San Francisco Public Bank Coalition, offering its office space in San Francisco’s Excelsior District for coalition members to meet on a regular basis over the past year, often with Supervisor Fewer.
PODER members also car-pooled and packed vans to make multiple trips to Sacramento earlier this year, joining allies from across the state in lobbying efforts to ultimately pass AB 857, the legislation outlining a process for cities and counties in California to obtain a public bank charter from the state.
“We have affordable housing in the pipeline but it’s held up because of lack of financing,” says Reina Tello, a community organizer with PODER. “We always have to wait until big corporate banks want to give us crumbs or they want to look good and give some charity. With a San Francisco public bank, we can begin to stabilize the community by building up that affordable housing.”
Starting in January, PODER anticipates continuing a series of town halls in each of San Francisco’s supervisorial districts. They’ve held one so far, in District 10, which includes San Francisco’s largest historically black neighborhoods of Bayview and Hunters Point. There’s still a lot of education advocates see as necessary to build broader support for a public bank.
Public banking opponents are justifiably concerned that a public bank will be open to political abuse and fraud, given it will technically be city-owned. Supporters have thought deeply about how to prevent that from happening, but haven’t had the time or resources yet to hold broader conversations to allay those concerns among constituents.
“It’s a valid concern, but I also don’t understand how we entrust hedge fund managers and executives at Wall Street banks to make any better decisions for our livelihoods than the bankers that we’ll be hiring,” Fielder says. “The bank itself is going to be a separate corporation owned by the city but not operated by the city. Supervisors won’t have direct say about who it loans to. There are still going to be bankers running the bank.”
There’s also more education needed on how public banks are expected to function. Modeling off the Bank of North Dakota, the enabling AB 857 legislation in California requires public banks to avoid competing with local financial institutions, requiring them instead to partner with local financial institutions, functioning as a network of bankers’ banks like the Federal Reserve or the Federal Home Loan Banks.
The startup cost of a public bank is another concern that warrants broader discussion. The San Francisco Board of Supervisors passed earlier legislation in 2017 that directed the San Francisco Office of the Treasurer & Tax Collector to convene a Municipal Banking Feasibility Task Force to study public banking and advise the city on possible business models for a public bank. The task force final report included analysis of three different business models, one of which doesn’t even involve taking on city deposits. The report estimated it could take anywhere from 25 to almost 50 years for a deposit-taking municipal bank to reach a break-even point. The task force did not make a final recommendation on whether to move forward or not.
Fielder disagrees with some of the task force’s conclusions. “The task force report was, to put it nicely, inconclusive about public banking and over-estimated the cost,” she says.
Advocates are anticipating the city will eventually have to go back to voters in order to approve startup funding for a potential public bank.
“As there was a whole community movement to push through the legislation in Sacramento, we imagine the same will be needed locally here in San Francisco,” adds Charlie Carlo Sciammas, lead community organizer at PODER. “There’s this myth that a public bank is this really technical thing, but we really showed how to popularize it, because the conversations we have in the community, with our membership, about a public bank, we get straight to the point very quickly because folks get it.”
Meanwhile, in Fielder’s hometown of Long Beach, Mayor Robert Garcia has already expressed his intent to push that city to join San Francisco in the race to charter California’s first public bank. He’s already got at least one supporter behind him.
“My mom is super excited about public banking, and if my mom knows about public banking, that’s next level,” Fielder says.
This article is part of The Bottom Line, a series exploring scalable solutions for problems related to affordability, inclusive economic growth and access to capital. Click here to subscribe to our Bottom Line newsletter. The Bottom Line is made possible with support from Citi Community Development.
Oscar is Next City's senior economics correspondent. He previously served as Next City’s editor from 2018-2019, and was a Next City Equitable Cities Fellow from 2015-2016. Since 2011, Oscar has covered community development finance, community banking, impact investing, economic development, housing and more for media outlets such as Shelterforce, B Magazine, Impact Alpha, and Fast Company.