Measure B: Establishing a Municipal Finance Corporation and a Public Bank

It doesn’t take a degree in economics to look around and see that the current financial system is failing everyday San Franciscans. What if, instead of Wall Street nickel and diming us on behalf of corporate shareholders, we could have a citizen-run bank, quite literally investing in our city?Prop B takes the first step toward establishing a public bank in SF, authorizing the city to establish a municipal finance corporation (MFC). The MFC would be able to make loans but not take deposits. After three years, the MFC would convert to a public bank that takes deposits. 

Creating a public bank has been a progressive policy goal for many years, starting with organizing from long-time Leaguer John Avalos, which led to a Public Bank Coalition, who took the fight to the State to receive enabling legislation led by former Assemblyman David Chiu. A workgroup was formed through the Tax Collector’s Office, who issued a white paper charting next steps for this process. All told, Prop B is the culmination of almost two decades’ worth of community organizing, legislative analysis, and financial modeling.

It’s been a progressive policy goal for so long because Big Banks have been failing us since before Occupy Wall Street, and it’s only gotten worse since then. Venture capital has warped the market with its priorities, and investments in the greater public good have been edged out, as a result. The City and County of San Francisco does a lot of banking, and a public bank has many benefits. There’s cost savings from having more control over public dollars not dependent on the whims of Big Banks, there’s the benefit of values alignment so we can mitigate harm, and practically this allows the city to set up its own low-cost lending program for everything from small business loans (https://www.sfpropel.com/small-businesses/good-policy-small-business-solutions-commercial-vacancy-tax-explained-m26gk) to construction loans for affordable housing. 

For affordable housing to be built, we need our own bank. Right now, when the city builds affordable housing, it needs to take out loans to fund the construction (https://www.sfpropel.com/affordable-housing/affordable-housingfor-all). These loans come from private banks and come with lots of strings attached. And if there’s no financing, none of it gets built. (https://quintinmecke.substack.com/p/the-missing-half-of-san-franciscos)  If San Francisco owns the banks, it would allow us to facilitate affordable housing construction, particularly social housing. As a recent case in point, 1633 Valencia opened up with 145 units of supportive housing for seniors. Construction was much faster and cheaper than typical projects, thanks to public financing.

The cherry on top? Prop B is the perfect pair for Prop I: the affordable housing guarantee act (#PropI). Prop I creates the dedicated funding stream for building affordable housing, and Prop B will provide cheaper construction financing for affordable housing, allowing the city to build more units faster.  Let’s write the next chapter of this public bank saga together—vote Hell Yes! on Prop B!

Source (https://www.theleaguesf.org/#PropB)

Keep moving towards a public bank

Source (https://www.sfgreenparty.org/endorsements/123-november-2026-endorsements)

Our tax dollars are currently invested in and make money for big, private banks and their private shareholders, instead of the people of San Francisco. Banks currently invest our public dollars in harmful industries like fossil fuels, tobacco, the military, and weapons manufacturing. Commercial banks continue to deny our communities loans, support, and capital based on what we look like or where we come from. Prop B changes the San Francisco charter to authorize the creation of a Municipal Finance Corporation and Public Bank. A public bank would benefit San Franciscans by creating low-interest loans for city infrastructure and affordable housing, commercial loans through credit unions and community banks, and loans to drive community revitalization. Vote Yes on Prop B in San Francisco.

YES on Prop B to create a Public Bank: San Franciscans want to address the existential threat of climate change and a legacy of environmental racism. Wall Street banks aren’t going to provide that kind of funding, as they double down on financing fossil fuels under Trump. A public bank can provide loans to unlock green energy, EV charging, toxic waste cleanups, and more. Prop B takes the next step toward that better future.

Source (https://indivisiblesf.org/endorsements)

YES ON PROP B: Public Bank

Prop B creates the legal framework for a Public Bank (https://sfpublicbank.org/) that will prioritize funding affordable housing, small business development, and climate sustainability. A public bank will serve the needs of San Franciscans and make money available for things our communities need that commercial banks don't prioritize!

Source (https://www.repsf.org/blog/repsf-voter-guide-nov-2026)

San Francisco does not need a public bank, especially when the law creating it, Prop B, is riddled with errors.

You should vote against Prop B on the merits. Not only will it fail to solve the problems it claims exist, it requires FDIC deposit insurance (https://dfpi.ca.gov/regulated-industries/public-banks/), which the Bank of North Dakota does not have (https://bnd.nd.gov/about-bnd/bnd-operations/) and which the FDIC will not grant a government-owned bank (https://www.talanei.com/2024/08/15/tbas-ceo-fdic-coverage-does-not-mean-bank-is-safe/), and it exempts the bank's overseers from San Francisco's Sunshine Ordinance (https://growsf.org/voter-guide/san-francisco-voter-guide-november-2026-election/measures/prop-b/legal-text/#prop-b-sunshine-exemption). If this were a more modest proposal to, for example, provide advantageous financing for infrastructure and construction projects, then we would be more sympathetic. But its ultimate goal is to hold taxpayer money in a bank where City Hall picks everyone who picks the bankers.

One central tenet of the public bank is to move the City's money "out of Wall Street," but this claim doesn't survive contact with reality. The City's roughly $17 billion in cash isn't sitting in a Wall Street vault or invested in risky stocks; the Treasurer invests it (https://sftreasurer.org/file/ccsf-investmet-report-1125/download?attachment=) mostly in safe U.S. Treasury and federal agency securities.

It also has a fundamental internal contradiction: it cites the Bank of North Dakota as an example of a successful public bank while banning San Francisco from one of that bank's signature lending lines: fossil fuels (https://growsf.org/voter-guide/san-francisco-voter-guide-november-2026-election/measures/prop-b/legal-text/#prop-b-prohibited-sectors). Prop B conveniently ignores the fact that the Bank of North Dakota is a significant energy lender (https://bnd.nd.gov/wp-content/uploads/2025-SP_RatingsDirect_BankofNorthDakota_3497716_Dec-22-2025.pdf), including oil and gas, at about 9% of its loan book. The bank's S&P rating notes its "substantial concentrations relative to most rated U.S. banks, including" (https://bnd.nd.gov/wp-content/uploads/2025-SP_RatingsDirect_BankofNorthDakota_3497716_Dec-22-2025.pdf) energy and agricultural lending. North Dakota is so committed to its oil industry that it sued the federal government (https://northdakotamonitor.com/2026/06/11/federal-government-to-pay-north-dakota-28m-for-dakota-access-pipeline-protests/) over the costs of policing the Dakota Access Pipeline (DAPL) protests, and won a $28 million settlement.

Here are a few more inaccurate claims in the measure:

Claim: The Municipal Finance Corporation can become a Public Bank once it "seek[s] all necessary regulatory approvals."
Verdict: Blocked by the FDIC.
Reality: State law requires a public bank to obtain FDIC deposit insurance (https://dfpi.ca.gov/regulated-industries/public-banks/), and no government-owned bank in America has it. The Bank of North Dakota is not an FDIC member (https://bnd.nd.gov/about-bnd/bnd-operations/); its deposits are guaranteed by state taxpayers instead. The FDIC has told American Samoa it will not insure its territorial bank unless the government sells it (https://www.talanei.com/2024/08/15/tbas-ceo-fdic-coverage-does-not-mean-bank-is-safe/). A bank owned by the City of San Francisco would face the same answer.

Claim: "Existing financial institutions have historically failed [...] to provide adequate lending products to serve the unmet financing needs for affordable housing."
Verdict: Misleading.
Reality: Banks are the main private funder of subsidized housing, supplying about 80% (https://www.cohnreznick.com/insights/2024-lihtc-equity-market-volume-survey) of low-income housing tax credit equity nationally. They do it largely because the Community Reinvestment Act pushes them to invest where they take deposits, which is why CRA-motivated banks bid credit prices up in big cities and leave "CRA deserts" in rural areas (https://www.advantagecap.com/news/cra-lihtc-equity-affordable-housing-2025/). San Francisco is no desert. What stalls projects here is a shortage of subsidy, not lenders: San Francisco Planning counts a gap-funding backlog of more than $1B (https://www.bisnow.com/san-francisco/news/senior-housing/bay-area-senior-housing-pipeline-shows-divide-between-market-rate-affordable-projects-135072) for affordable projects that are already approved, and a 199-home senior project in the Outer Sunset paused this year for lack of gap funding, not for lack of a loan. A public bank makes loans that must be paid back; it cannot fill a subsidy gap. Subsidy is what Prop C (https://growsf.org/voter-guide/san-francisco-voter-guide-november-2026-election/measures/prop-c/) provides.

Claim: The City's deposits would give the bank money to lend out.
Verdict: False.
Reality: California requires banks holding government deposits to pledge collateral worth 110% of every dollar deposited (https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=GOV&sectionNum=53652). City deposits wouldn't free up capital to lend; they'd consume it. Even the Public Banking Institute's legal advisor calls the collateral rules "really a killer." (https://archive.is/apfO6#selection-4041.0-4041.263:~:text=Staelin%20said%20that%20the%20FDIC%27s%20guidance%20on%20collateralization%20of%20public%20deposits%20is%20%22really%20a%20killer%22%20because%20the%20city%20does%20not%20%22even%20have%20%2450%20million%20sitting%20around%20that%20they%20can%20easily%20part%20with%20for%20capital%2C%20let%20alone%20%24200%20million%20for%20capital%20for%20110%25%20collateral.%22)

Claim: "Public banking has a long history of success supporting equitable economic development internationally and domestically (https://growsf.org/voter-guide/san-francisco-voter-guide-november-2026-election/measures/prop-b/legal-text/#prop-b-public-banking-record)"
Verdict: False.
Reality: The most cited study of the question, Government Ownership of Banks (https://www.nber.org/papers/w7620) by La Porta, Lopez-de-Silanes, and Shleifer, found the opposite: government ownership of banks was associated with slower financial development and slower growth in per capita income. Domestically, there are only two public banks: North Dakota, opened in 1919, and American Samoa, opened in 2016.

Claim: "one quarter of the world's assets [are] currently held in public banks"
Verdict: False.
Reality: The true number is closer to 10%, or under 5% if you exclude the Chinese Communist Party's state-run banks. The "one quarter" claim traces to academic research (https://www.cambridge.org/core/books/public-banks/world-of-public-banks/A0BA12538F7DE8A1A1FF3A85B0376B0B) counting roughly 900 public banks holding just under $49 trillion, the same figure the Public Banking Institute (https://publicbankinginstitute.org/public-banks-101/) promotes. That is close to a quarter of global banking assets, which notably excludes assets like land, buildings, machinery, infrastructure, companies, etc. The Financial Stability Board (https://www.fsb.org/2025/12/fsb-reports-continued-growth-in-nonbank-financial-intermediation-in-2024-to-256-8-trillion/) estimated $256.8 trillion in non-bank financial assets as of 2024, and puts that at 51% of all global financial assets, which would place public banks closer to a tenth of global financial assets. The four largest banks in the world (https://www.spglobal.com/market-intelligence/en/news-insights/articles/2025/4/the-worlds-largest-banks-by-assets-2025-88424232) are all Chinese state-owned lenders: Industrial and Commercial Bank of China, Agricultural Bank of China, China Construction Bank, and Bank of China. They hold about $25.5 trillion (https://www.visualcapitalist.com/ranked-the-worlds-50-largest-banks-by-assets/) between them, roughly half the $49 trillion held in public banks globally. The figure is not evidence about community-reinvestment municipal banking. It is mostly a fact about the Chinese Communist Party state-run banking system.

And after all these errors, remember what Prop B actually provides toward building a bank: nothing. Its own text concedes the corporation "cannot be established unless the City secures the required capitalization," (https://growsf.org/voter-guide/san-francisco-voter-guide-november-2026-election/measures/prop-b/legal-text/#prop-b-no-funding) and the tax that would have supplied the money was withdrawn in March. San Francisco is facing a $643M two-year deficit (https://growsf.org/news/2026-04-03-deficit-shrinks-cuts-loom/), and the Controller prices (https://media.api.sf.gov/documents/Proposition_B__Establishing_a_Municipal_Finance_Corporation_and_a_Public_Bank__eb1cXQz.pdf) the corporation and bank at $310M to $460M over eight years. Let's at least get our own finances in order before trying to run a bank. Vote no on Prop B.

Source (https://growsf.org/voter-guide/san-francisco-voter-guide-november-2026-election#prop-b)

SPUR's Recommendation

SPUR recognizes the significant potential of a public bank as a tool to advance San Francisco’s public priorities and expand the city’s capacity to invest in communities. A well-designed public bank could help address gaps in access to capital by financing affordable housing, small businesses, climate resilience, and environmental justice projects that traditional financial institutions may underserve. It could also keep more public resources circulating locally, provide flexible financing, and create revolving loan programs that allow public dollars to support multiple projects over time.

However, Prop. B’s proposed charter amendment does not reflect SPUR’s principles of good governance. The measure embeds detailed governance structures for the proposed Municipal Financial Corporation, future public bank, and multiple oversight commissions directly into the city charter, limiting future flexibility and adding complexity to a document that should focus on fundamental governmental structures. Importantly, establishing a public bank does not require these governance provisions to be in the charter. The city could pursue a public bank through ordinance, administrative action, and existing oversight processes. At a time when San Francisco is working to simplify its charter and improve governance, SPUR does not believe adding new charter-defined commissions and requirements is the right approach.

What Prop. B Would Do

Proposition B would amend the city charter to establish the mission and governance structure of a municipal finance corporation (MFC) and future public bank that could invest in local priorities, including affordable housing, homeownership, small businesses, environmental justice, and sustainability.

Two-Step Process
The measure would authorize the creation of a nonprofit MFC once sufficient funding is available. The MFC would operate as an interim entity, building institutional capacity and making loans while preparing to transition its assets and liabilities to a public bank. It could not accept deposits and would make most loans through community finance institutions (CFIs) and community development financial institutions (CDFIs), with the remainder of loans offered directly.

After three to five years of profitable MFC operations and successful accreditation, the MFC could transition to a state- and federally chartered depository institution, or publicly owned bank. The public bank could accept government deposits, such as tax revenues and agency funds, but would not accept personal deposits or operate ATMs. These deposits could provide the city, affordable housing developers, small businesses, nonprofits, low-income homeowners, and other aligned borrowers with a lower-cost source of funding for longer-term loans than those typically available through CDFIs or private banks. The California Department of Financial Protection and Innovation and the Federal Deposit Insurance Corporation would regulate the public bank. The MFC and its governance structures would dissolve upon transition to a public bank.

Both the MFC and the public bank would have a two-tier governance structure: a board of directors and an oversight commission. The oversight commissions would provide public accountability and non-binding advice on lending priorities, while the boards of directors would oversee operations.

Both entities would be prohibited from investing in fossil fuels, weapons manufacturers, prisons and detention centers, or businesses with labor law violations.

The proposed MFC and public bank could fill financing gaps while advancing San Francisco’s public priorities. The MFC could offer low-interest loans, credit enhancements, guarantees, and revolving loan funds to reduce costs and attract private capital. The public bank could accept public deposits and further expand its lending capacity. A public bank could stretch existing housing dollars, such as the city’s Housing Trust Fund, by providing low-cost, revolving loans. This financing could complement subsidies by addressing the need for affordable loan capital. These tools would complement — not replace — those of existing public, private, and community lenders.

Funding and Fiscal Impact
The measure would not authorize or appropriate funding to provide capital for the MFC or public bank and therefore would not directly create new city costs. Instead, it would establish a legal and governance framework for future capitalization from sources such as state and federal funding, philanthropy, and other public financing. The mayor and Board of Supervisors would retain authority over the initial bank capitalization decisions. The board could dissolve the MFC and public bank at any time by unanimous vote.

The Backstory

Traditional Banks and Public Banks
Today, billions of dollars in state and local government deposits flow through San Francisco’s traditional banks, where they may finance investments that do not align with public goals and fail to equitably serve several city priorities, including building affordable housing. Greenlining Institute data show significant disparities in Bay Area home lending from traditional banks: Black households represent 6% of the population but receive less than 1% of home purchase loans, while Hispanic households represent 16% of the population but receive only 4%.

Unlike traditional financial institutions, such as privately owned banks and credit unions that are primarily accountable to shareholders and members, a public bank would have an explicit public mission and could prioritize investments that generate broad community benefits.

Previous Legislation and Policy
The proposed measure builds on years of state and local planning. In 2017, the San Francisco Board of Supervisors recommended studying the creation of a public bank, leading to a feasibility study focused on affordable housing and small-business lending. Although the feasibility study was important, the models it examined do not directly reflect the MFC and public bank governance proposal the city is putting forth in Prop. B.

In 2019, then-Assemblymember David Chiu authored Assembly Bill 857, the California Public Banking Act, establishing a legal pathway for local governments to charter public banks. Los Angeles put a measure before voters, but it was defeated in 2018. This election, Berkeley will vote on a proposed six-year parcel tax generating approximately $9.2 million annually to capitalize a public bank.

In 2021, the Board of Supervisors established the San Francisco Reinvestment Working Group, which developed an analysis specifying how the public bank and its precursor entity, the MFC, would operate. According to this study, the MFC and public bank would require $90 million in capitalization and funding during their first three years. Potential funding sources studied included city appropriations, new taxes, state or federal grants, philanthropic contributions, and bank investments seeking Community Reinvestment Act credit. The board unanimously adopted the study’s recommendations, which form Prop. B’s basis.

After the withdrawal of a ballot measure to raise business taxes on credit card companies, consumer lenders, and mortgage brokers to provide $400 million in funding over 9 years to capitalize a public bank, five supervisors — Chen, Fielder, Melgar, Mahmood, and Walton — sponsored Prop. B. It passed the Board of Supervisors with a 9–2 vote to reach the November 2026 ballot.

The measure requires a simple majority (50% plus one vote) to pass.

Equity Impacts

A public bank can advance equity by expanding access to affordable financing for communities and projects historically underserved by traditional financial institutions. The extent to which San Francisco’s MFC and public bank would advance equitable outcomes would depend on their capitalization by the mayor and the Board of Supervisors, in addition to the lending policies of the MFC Board of Directors and Oversight Commission members and eventual equivalents for the public bank.

Pros

• A public bank could keep more public resources circulating locally while advancing priorities such as affordable housing, small businesses, climate resilience, and environmental justice.
• Once chartered, the California Department of Financial Protection and Innovation and the Federal Deposit Insurance Corporation (FDIC) would regulate the bank. FDIC insurance would protect insured city deposits if the bank failed.
• Subsidized lending and revolving loan funds could stretch public dollars further than direct grants.

Cons

• Embedding detailed governance structures in the city charter runs counter to San Francisco’s pursuit of charter reform.
• The measure does not identify how the public bank would be capitalized. It may require General Fund or new revenues alongside grants, which is challenging given the city’s current budget deficit. Without capital, the MFC would remain inactive and unfunded.

Source (https://www.spur.org/voter-guide/2026-11/sf-prop-b-public-bank)

Allows San Francisco to establish a nonprofit Municipal Finance Corporation that could finance affordable housing, small businesses and other public priorities and potentially evolve into a city-owned public bank. CADC opposes Prop. B because the measure creates the institutional framework without identifying a secure source for the substantial capitalization needed to establish the bank. Members were concerned about financial risk and committing the City to a banking structure before its funding and long-term viability were clear.

CADC 認為提案在尚未確定巨額啟動資金來源及長期財務可行性之前便建立公共銀行架構，會增加市府財務風險，因此反對提案 B。

Source (https://www.sfcadc.org/11_2026_propositions)

This charter amendment would authorize the establishment of a Municipal Finance Corporation (MFC) and a Public Bank as non-profit corporations, subject to the availability of adequate funding and resources. It would also set forth the mission, principles and governance structures of those organizations, including authorizing the creation of an MFC Oversight Commission, Bank Oversight Commission, MFC Board of Directors and Bank Board of Directors.

We recommend voting No on B. There's good reason to be skeptical that a public bank would be well-run in SF, especially given that the city's current deficit stems from overspending. Financial experts have also warned (https://www.sfchronicle.com/sf/article/public-bank-san-francisco-22264570.php) that the conditions that make the Bank of North Dakota successful (a state economy that benefited from a fracking boom) don't exist in San Francisco, making the comparison a weak basis for the proposal.

Source (https://www.sfblueprint.org/advocacy/november-2026-voter-guide)

San Francisco's municipal government lacks the competence, integrity, and incentives to run a bank. We believe they would make lending decisions based on cronyism - not risk. Vote NO.

Source (https://sfgop.org/nov-2026-endorsements)

Prop B - Public Bank

What it does: Prop B would amend the City Charter to authorize establishing a Municipal Finance Corporation and Public Bank, requiring financial backing either by the General Fund, a new future tax, or philanthropy.

Endorsement: HARD NO on Proposition B

Prop B will keep defaults local, placing losses squarely on the shoulders of tax payers and growing that ginormous deficit steadily. The measure itself comes with a potential $310 to $460 million set-up tab, complete with front-loaded staffing, capitalization that the City’s own studies described as unlikely to be recouped, and a plan to make highly risky loans.

What could go wrong…besides everything? Supporters point to a successful bank in North Dakota, which sticks to narrow, conservative lending; conversely, Prop B’s policies would be about as loosey-goosey as it gets. While 29 public banks have been chartered in the United States since 1917, 28 have failed; only one has survived. The odds are staggeringly against this venture.

Banks reject some loans because the odds are bad. That is not a moral failing. It’s basic math…and CYA. San Francisco already runs a $16.9 billion operation with a deficit and has a reputation for accountability that arrives late and averts its eyes. We do not need a new special-purpose vehicle so someone who could not survive a credit check can finance a project.

Vote NO. If the deal is too spicy for a bank, it is too risky for a city that still cannot close a budget without discovering a new “structural” hole.

Source (https://www.connectedsf.com/2026-voter-guide#prop-b)

What it does: Prop B would amend the City Charter to authorize establishing a Municipal Finance Corporation and Public Bank, requiring financial backing either by the General Fund, a new future tax, or philanthropy.

Endorsement: HARD NO on Proposition B

Prop B will keep defaults local, placing losses squarely on the shoulders of tax payers and growing that ginormous deficit steadily. The measure itself comes with a potential $310 to $460 million set-up tab, complete with front-loaded staffing, capitalization that the City’s own studies described as unlikely to be recouped, and a plan to make highly risky loans.

What could go wrong…besides everything? Supporters point to a successful bank in North Dakota, which sticks to narrow, conservative lending; conversely, Prop B’s policies would be about as loosey-goosey as it gets. While 29 public banks have been chartered in the United States since 1917, 28 have failed; only one has survived. The odds are staggeringly against this venture.

Banks reject some loans because the odds are bad. That is not a moral failing. It’s basic math…and CYA. San Francisco already runs a $16.9 billion operation with a deficit and has a reputation for accountability that arrives late and averts its eyes. We do not need a new special-purpose vehicle so someone who could not survive a credit check can finance a project.

Vote NO . If the deal is too spicy for a bank, it is too risky for a city that still cannot close a budget without discovering a new “structural” hole.