San Francisco could become the first major city in the US to open its own public bank—and voters may get the final say in November.
The Board of Supervisors Rules Committee voted unanimously this week to advance a City Charter amendment that would create a Municipal Finance Corporation (MFC), a nonprofit that would deploy $27 million in startup capital to make low-interest loans for affordable housing.
If, after three years, the MFC can prove that its revenues exceed its operating costs, the city would convert it into a public bank authorized to accept deposits and provide loans to small businesses and public-interest projects.
The measure now goes to the full Board for consideration. If at least six supervisors sign off, the question goes to voters in November, and a simple majority of voters approving it would make it law.
How we got here
Gov. Gavin Newsom signed the California Public Banking Act (AB 857) in 2019, paving the way for cities, counties, and joint powers authorities to establish their own local public banks.
In 2023, the San Francisco Board of Supervisors unanimously accepted a business and governance plan outlining how the city could create a public bank through an intermediate entity called a Municipal Financial Corporation and San Francisco Public Bank.
In May, District 11 Supervisor Chyanne Chen proposed changing the city charter to create a San Francisco-owned bank, laying out who would run it and how, but not yet funding it. Chen’s legislation is co-sponsored by Supervisors Jackie Fielder, Shamann Walton, Myrna Melgar, and Bilal Mahmood.
How a public bank would work
Currently, San Francisco borrows from private banks, which earn interest, while taxpayers bear the brunt of that cost. Advocates of AB 857 say the charter amendment will offer low-interest loans for city infrastructure and finance affordable housing and multifamily construction projects, targeting more than 10,000 units in the city’s pipeline.
Proponents point to the Bank of North Dakota (BND), the country’s only state-owned public bank, as proof that the idea can work. It’s been running for more than 100 years, and advocates see it as the blueprint for a bank that answers to the people and keeps its money in the local economy.
Chen told NBC Bay Area in May that the bank’s focus is on filling the gap where the market falls short—especially as small businesses struggle in the aftermath of the COVID pandemic.
“Our city has some small site acquisition programs for affordable housing where it’s really difficult to get a loan from a big bank,” Chen said. “Also, for a small business owner who is really trying to expand, it’s hard for a mom-and-pop shop to get a loan to buy and expand their business.”
Money stays local
Supporters say the bank would give small business owners more places to turn than the big national banks. It would put city money behind loans from local credit unions and small banks—so if a borrower can’t pay, the lender isn’t on the hook alone. That could mean approvals for people who’ve been turned down before, and maybe cheaper loans, since a public bank doesn’t have to make money for shareholders.
The profits would stay in the city, too. Instead of going to Wall Street investors, what the bank earns would go back into local housing programs.
Supporters hope the bank could take some pressure off people living in a city where everyday costs run 64% higher than the national average.
According to polling data released by the SF Public Bank Coalition, the advocacy group behind the effort, in October of 2025, 67% of likely San Francisco voters supported creating a public bank.
If voters approve it, San Francisco would be charting new territory—no other major US city runs a bank like this, according to Local News Matters. And the amendment only creates the bank’s structure; it doesn’t fund it or commit taxpayer money, KALW reported. How it gets its money would be decided later.
