Socially Responsible Banking

To meaningfully include social responsibility in the City’s banking partnerships, the Office of the Treasurer & Tax Collector (TTX):

1. Assessed current banking products and services, including areas for improvement.
2. Developed Request For Proposals (RFP) with a robust social responsibility component, informed by interviews with experts and stakeholders, other cities’ responsible banking ordinances and recent RFPs, and other research.
3. Weighted the social responsibility component more heavily during proposal evaluation than in prior processes.
4. Negotiated contracts with new banking partners that include commitments to ongoing improvement in the area of social responsibility.

Throughout the process, TTX prioritized feedback from internal experts, external departments, and community advocates.

The process emphasizes: 

• Community reinvestment products, services, and data analysis
• Activities intended to meet local needs, particularly for low-income and BIPOC households and communities.

For the 2021 RFP, TTX developed a process that evaluated respondents not just on past and current performance, but also on future commitments to invest in the community and meet the needs of low-income and BIPOC communities.

To develop the RFP, the TTX team first reviewed other jurisdictions’ RFPs and responsible banking ordinances, spoke with experts, community groups, advocates and stakeholders, and did a deep dive into related research. Drawing on these sources, the RFP: 

• Set a minimum bar that disqualifies banks promoting predatory or harmful products, services and practices
• Required local data on lending; retail banking; investments, loans, grants; and crisis relief that would not otherwise be available
• Requested community reinvestment plans
• Created a plan to utilize banking contract(s) as a vehicle for improving community reinvestment activities through a collaborative and transparent process.

Seeking to expand its banking partners, the City broke its banking service needs into six modules on which applicants had the option to bid. Ten banks responded to the RFP.  Applications included a written response and a virtual presentation.

To evaluate the proposals, the Office of the Treasurer & Tax Collector recruited a panel of SRB reviewers, both internal and external. Together this group had decades of experience in banking partnerships, lending, retail banking, Community Development Financial Institutions (CDFI), the regulatory environment, and related knowledge.

Respondents were evaluated not only on current and prior performance (“what have you done for our community?”) but also on their commitment to strengthening community reinvestment through a community planning process (“what will you do for our community going forward?”). The SRB reviewers evaluated proposals on the following:

• Clarity and transparency
• Understanding of & responsiveness to local needs, especially historically excluded groups (low-income/BIPOC) 
• Well-defined and implemented vision to meet these needs
• Specific initiatives (not generalized promises or assurances)
• Targeted, impactful activities and investments (not minimum efforts to meet CRA obligations)
• Policies and practices that mitigate harm to consumers and communities
• Commitment to increase community investments and collaborate with community stakeholders to improve targeting and effectiveness of those investments

SRB scores accounted for 16.67% of each respondent’s first-round score, and 33.3% of the scores for the finalist presentations. This is substantially more weight than SRB was given in the 2011 RFP process. The Environmental, Social, and Governance team also analyzed each applicant for each module; these metrics were circulated to reviewers to inform their final scores. 

Three banking partners were selected:

• J.P. Morgan Chase
• Bank of America
• U.S. Bank

The banking contracts include a process for collecting community input. Future contracts will include a process for banks to report on their progress toward their community reinvestment goals, as noted below.

The Office of Treasurer & Tax Collector (TTX) is responsible for the tax collection, banking, and investment activities of the City and County of San Francisco. The Office makes extensive use of banking services to collect, disburse and manage its cash, investments, payables, and receivables. TTX has a history of innovating in the banking sector, leveraging banking partners’ technology and expertise to secure more affordable and reliable services for city departments and citizens.

TTX must handle transactions as large as payroll for over 39,000 employees and as small as individual parking meters. San Francisco’s banking partners are crucial to the smooth operation of the City.

The Treasurer is committed to facilitating more inclusive financial services by including social responsibility metrics in its contracts with banking partners. San Francisco pioneered this approach in 2011, becoming one of the first jurisdictions to include socially responsible banking metrics in its Request For Proposals (RFP). Since then, many other cities have adopted similar strategies and municipal responsible banking ordinances.  In 2021, TTX further strengthened this approach by emphasizing Socially Resonsible Banking in the contract process. Building on these foundations, the 2024 "From Listening to Action" report now guides the City's ongoing efforts to advance equity, inclusion, and financial access through its banking partnerships.