Proposition B would amend the city charter to authorize the establishment of a Municipal Finance Corporation and Public Bank, which supporters say would allow the city to tap into low interest loans to fund certain city projects, like affordable housing and small business development.
The measure would not create the public bank but rather provide the governance framework and go-ahead needed for city legislators to set up a Municipal Finance Corporation, or MFC, which acts as a government-owned nonprofit entity.
MFCs can make loans but do not take deposits. After three to five years of profitable operation, an MFC can transition into a fully regulated public bank that makes loans and also takes deposits.
With a public bank, the city would be able to store its own tax dollars and reserves in-house. Everyday citizens would not be able to set up their own checking accounts through the bank.
If the city moves forward with establishing an MFC and subsequently a public bank, finance professionals would help manage operations. A banking board made of members chosen by San Francisco's treasurer, controller, city attorney, mayor, and Board of Supervisors would make hires for the bank's operations.
Oversight commissions would also be established to provide direction and act as a liaison between the Board of Supervisors and the MFC or public bank.
