COMMISSIONER CHLOE EUDALY'S first order of business when taking office was to push the strongest renter protections the city’s ever seen. Her next quest might be to sever the city’s cozy relationship with big banks.

Earlier this month, Eudaly began casually mentioning what would be a mammoth undertaking: She wants to study how Portland might create its own municipal bank, an unprecedented move advocates say would allow Portland to keep much more of its cash local and help fund vital city priorities.

Cities around the country, including Seattle and San Francisco, have mulled over public banks for years. But to date, none have taken the plunge—a fact that speaks to the complexities and uncertainties around such an experiment. Portland doesn’t appear to have ever seriously looked into it.

Here’s a rundown of what public banking could mean for Portland, and what’s standing in the way.

Where’s this coming from?

Portlanders have increasingly railed against the city doing business with big financial institutions. Not only did banks’ risky lending practices led to the Great Recession nearly a decade ago, but there’s more awareness that outfits like Wells Fargo, where the city parks some of its money, have investments in controversial projects like the Dakota Access Pipeline.

It was in reference to those investments that Eudaly broached the issue of a public bank at a council hearing earlier this month.

“None of the banking institutions that can provide the level of service we need have clean investments,” she said. “I’d venture to suggest that all of them are invested in the Dakota Access Pipeline. It’s a reason we’re looking at putting together a resolution to convene a study on the possibility of a municipal bank.”

The commissioner’s being spurred on by the efforts a group called the Portland Public Banking Alliance, which formed last year and has been lobbying on this issue since she was a candidate. Eudaly’s chief of staff, Marshall Runkel, has actively been pursuing the matter, he tells the Mercury, and has asked the City Attorney’s Office to look into it.

How would it work?

Public banks can theoretically take different forms, but they share some broad strokes.

The gist is that the city would create an institution that could leverage public money in ways that meet its objectives. Not only could that help small businesses and affordable housing projects secure funding that other institutions aren’t offering, it could help keep Portland’s money local.

A 2016 overview of public banking from the left-leaning Roosevelt Institute [PDF] notes that cities are increasingly reliant on borrowing money from the municipal bond market. Portland routinely uses bonds for big projects, and Mayor Ted Wheeler is proposing to bond hundreds of millions more to fix the city’s crumbling infrastructure.

That money comes at a cost—the interest rate—which the city pays out to investors. This, the Roosevelt Institute study contends, “creates a significant drain on local tax revenues, which must be paid out to the institutional fund managers and wealthy households that are the primary owners of municipal debt.”

According to numbers from the city’s Office of Management and Finance, Portland has spent nearly $3.2 billion to pay off borrowing since 2005. Nearly half of that money went to interest.

Advocates suggest a public bank would be able to buy up some piece of those bonds, thereby keeping money spent on interest available for lending to local causes.

The bank would almost certainly be operated by a board of directors selected by city officials, but independent of them. Also: Citizens wouldn’t be able to put their own money in a public bank. Instead, the city’s bank would work with community banks, helping them issue loans.

Has anyone done this?

Yep. North Dakota’s had its own state bank since 1919, and it’s doing fine.

According to its most recent annual report [PDF], 2015 marked the Bank of North Dakota’s 12th consecutive year of record profits. It made $130 million, and increased its total assets to $7.4 billion.

With heightened public awareness about unethical banking practices, more and more jurisdictions have considered forming their own public bank. So far, no one’s followed North Dakota’s example—though Santa Fe is said to be close.

"When you actually get past the feasibility study... it’s very hard to organize the political momentum and the impetus to make it happen," says Karl Beitel, author of the Roosevelt Institute paper and an expert who’s worked with San Francisco and Seattle on exploring public banking. "There’s a tremendous amount of entrenched opposition. This is a major innovation."

So what’s the downside?

Critics have argued that public banks can lead to conflicts of interest for city officials, and that governments aren’t equipped to operate a lending institution of this scale. Advocates counter that these banks would be managed by experienced and qualified financial professionals, but with the public interest in mind rather than a goal of securing maximum profits.

For Portland, though, a central sticking point could be the Oregon Constitution. The City Attorney’s Office is in the midst of studying whether the city is pre-empted by Article XI, which prohibits "state banks." The question is whether a court would rule that this provision would also apply to banks owned by a city.

Runkel, Eudaly’s chief of staff, says the city attorney’s initial stance is that Portland is pre-empted. City Treasurer Jennifer Cooperman, meanwhile, tells the Mercury she’s heard a public bank would be illegal.

But such opinions have been known to change. San Francisco’s city attorney had a similar snap judgment some years back, when officials there began looking into the notion of a public bank. When John Avalos, a former San Francisco elected official, pushed for a more thorough review, Beitel notes the city attorney’s office concluded in 2013 that a public bank would be allowed.

Even if the city attorney’s office ultimately comes to the same conclusion, don’t expect the People’s Bank of Portland to show up any time soon. As Eudaly noted earlier this month: "That is a very long-term process. It’s not coming in the next year."