Back up your principles with your dollars

We should organize San Francisco to prioritize supporting local financial institutions over big banks — some of the least ethical corporations in the United States. Almost every dollar the city of San Francisco has is stored on the balance sheet of a big bank: more than $10 billion of city money at Citibank, US Bank and Bank of America. These banking decisions are made by the Office of the Treasurer and Tax Collector, and ultimately, by elected Treasurer Jose Cisneros.

The San Francisco Treasurer’s Office recently launched the Municipal Bank Feasibility Task Force to explore whether the city should form its own public bank. That might make sense as an option for ensuring that our dollars stay local and go toward ethical ends. There already are indications from presentations and conversations that the task force is backpedaling from a public bank structure and instead considering half measures, such as a revolving loan fund. Such a fund — instead of a public bank — wouldn’t begin to leverage the power of San Francisco’s public funds. It would just leave them at big banks.

I work in financial technology to disrupt big banks — a passion that came from graduating from college directly into the 2008 financial crisis. One of the first things I did when I moved to the Bay Area was to vote my dollars against the big banks by choosing a local bank for my banking. Why? Because corporations increasingly are responding to political pressure as consumers vote their values with their dollars.

After two black men in Philadelphia were arrested for sitting in a Starbucks without buying a coffee, people began organizing a boycott. Suddenly, Starbucks is closing all it stores for a day to give its workers implicit bias training. Delta Airlines severed ties with the National Rifle Association in response to a boycott. The #DeleteUber and #DeleteFacebook campaigns are widely seen as having effected positive change at those companies.

Activists point to the role big banks play in financing the extraction and use of fossil fuels, gun purchases, private prisons and defense contractors. These banks also have paid billions of dollars in fines for defrauding customers over the last decade. Bank of America alone has paid at least $68 billion in fines and settlements related to mortgage fraud since the 2008 financial crisis. Wells Fargo’s fraudulent-account scandal is just the most recent — every top five bank has had multiple settlements with California’s attorney general.

Since 2005, the San Francisco treasurer has received national acclaim as a leader in financial empowerment, but nearly every program has brought San Franciscans to big banks as customers:

Bank on San Francisco created an on-ramp to financial services for the unbanked, providing alternatives to the exorbitant service fees of predatory lenders and paving the way for greater financial stability. The biggest participating banks include Bank of America, Citibank, JPMorgan Chase, Union Bank and U.S. Bank.

Kindergarten-to-college savings accounts, created for every student entering the San Francisco public school system, is a great idea, but every account created adds to deposits at Citibank.

Taken together, these amount to running interference for big banks, not an ethical vision of San Francisco’s relationship to banking.

San Francisco has an obligation to manage public funds to prioritize environmental responsibility, fair labor practices, and affordable housing, among other principles. You, as a San Franciscan, can influence the placement of billions of dollars. It’s your money, so just as I would recommend that you move your personal funds out of a big banks and find a local bank or credit union for your loans and bank accounts, so too should you advocate that the city do the same.

Contact the treasurer’s office today, and request such a change.

Zac Townsend is the former chief data officer of California and a former co-founder of open banking startup Standard Treasury. He is currently a partner at San Francisco firm Deciens Capital, a venture capital firm focused on early-stage financial technolog y.