Associated Press: LA council gives green light to banking ordinance

LA council gives green light to banking ordinance

Wednesday, February 29, 2012

Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2012/02/29/state/n193614S86.DTL#ixzz1npsVOJ00

(02-29) 19:36 PST Los Angeles, CA (AP) --

The City Council on Wednesday voted to move ahead with a "responsible banking" ordinance that would evaluate financial institutions that do business with the city on their efforts to be good corporate citizens.

The council voted unanimously to authorize the city attorney to draft the ordinance, which has been under debate for the past two years, after a lengthy stream of people advocated both for and against it.

Under the proposed law, banks that have contracts with city agencies would have to provide information about how much money they invest in the city, how much is given out in loans to small businesses and homeowners, and the number of foreclosures, branches and jobs in low income areas.

The plan did not include a system to grade banks on their level of socially responsibility, as originally proposed by Councilman Richard Alarcon. Alarcon said he still supported the idea but did not have the votes to get it through.

Activists with Occupy LA and anti-foreclosure groups lobbied for a grading system, while representatives from business organizations voiced reluctant support for the proposed solution.

"It is an imperfect compromise on an issue that frankly, we believe the city has no business dealing with at all," said Carol Schatz, president of the Central City Association, which represents business owners in downtown Los Angeles.

The proposal also did not include an advisory group comprising bank and community representatives that would have decided on the information the banks should provide and how it should be publicized. Instead, City Administrative Officer Miguel Santana will draw up those details and report back to the council in 90 days.

Santana said the compromise proposal struck "a balance between our responsibility as a city to get the best deal for taxpayers, while at the same time seeking to do business with those organizations that do good to our community."

Alarcon called the ordinance "a giant step forward in accountability."