In 1818, the City Council of Baltimore created a "sinking fund" to be run by cashiers of the three largest banks in the city to purchase city bonds at or below value to reduce the city's indebtedness. The city's debt continued to grow, however, and in 1826, the fund and the cashiers were replaced with three Commissioners of Finance.

They were in the "Second Branch" of the City Council. Either branch of City Council could hold a vote to authorize motions allowing the CoF to lend money to a business, a utility, or even a government entity such as the Mayor and Council themselves. The CoF had control over all the sinking funds of the Mayor and City Council, meaning they did have an amount of say in if loans were made. Their loans were large-scale, meant to be paid off in a number of years. They handled the city's debt, and sold bonds to raise money.

In the 1930 edition of the Code of the Public Local Laws of Maryland, the CoF is described as being the "head of the 4th subdepartment of finance." It was comprised of five members at this point: The Mayor, the Register, the Comptroller, and two persons appointed by the Mayor, who received no pay for their work. One of the two appointees was to be President of the CoF. In this way, the interests of the city government were to be represented but not overwhelming to the board. The Mayor and Register were required to sign all obligations and all city stock sold by the CoF.

In 1978, a proposed amendment to the City Charter was put forth for public vote. "Question M," as it was on the ballot, sought to rename the Commissioners of Finance to the "Board of Finance" and to change the composition of the board to be the Mayor, the Comptroller, and three appointed persons. It passed and the changes went through.