When the Occupiers took an interest in moving San Francisco's money
into a city-owned bank in 2011, it was chiefly on principle, in sympathy
with the nationwide Move Your Money campaign. But recent scandals have
transformed the move from a political statement into a matter of
protecting the city's deposits and reducing its debt burden. The chief
roadblock to forming a municipal bank has been the concern that it was
not allowed under state law, but a legal opinion issued by Deputy City
Attorney Thomas J. Owen has now overcome that obstacle.
Establishing a city-owned San Francisco Bank is not a new idea.
According to City Supervisor John Avalos, speaking at the Public Banking
Institute conference in San Rafael in June, it has been on the table
forover a decade. Recent interest was spurred by the Occupy movement,
which adopted the proposal after Avalos presented it to an enthusiastic
group of over 1000 protesters outside the Bank of America building in
late 2011. David Weidner, writing in the Wall Street Journal in December
of that year, called it "the boldest institutional stroke yet against
banks targeted by the Occupy movement." But Weidner conceded that:
Creating a municipal bank won't be easy. California law forbids using
taxpayer money to make private loans. That would have to be changed.
Critics also argue that San Francisco could be putting taxpayer money at
risk.
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