Governing a SF public bank
SFPBC’s Proposed Governance Structure to the Reinvestment Working Group
Introduction & BackgroundIn October 2019, the state of California passed AB 857 to provide a pathway for local government agencies to charter public banks. A year and a half later, the San Francisco Board of Supervisors created The San Francisco Reinvestment Working Group (RWG) by unanimously passing ordinance No. 87-21. The RWG is tasked with submitting to the Board of Supervisors and the Local Agency Formation Commission (LAFCo), a business and governance plan to establish a non-depository lending corporation wholly-owned by the City. Also within one year of its first meeting, the Working Group must submit to the Board and LAFCo a separate business and governance plan for the MFC to become a state-licensed public bank. Among other requirements, this plan must include the business plan elements required for a State public bank license; a study required to apply for a State public bank license; and lending priorities. The plan must recommend a governance and regulatory structure for the Public Bank; modifications to City laws and regulations; and whether the City should partner with another local agency in the establishment and operation of a public bank.
The RWG began meeting in April 2022 and is being consulted by HR&A Advisors, The Findley Companies, and Contigo. The governance structure outlined below is a model generated by advocates within the San Francisco Public Bank Coalition (SFPBC), which has been organizing around a public bank since 2017. The SFPBC submitted this proposal to the RWG and its consultants for consideration.