Los Angeles will require banks to release information on loans to homeowners and small businesses under an ordinance passed May 15.
The Los Angeles City Council on Tuesday voted unanimously to require banks that do business with the city to release information about loans to homeowners and small businesses.
The ordinance grew out of concerns raised in the wake of the housing crisis and credit crunch. A similar ordinance is being considered in New York.
"If you can't do something about bank irresponsibility, than you can't take action to protect your interest," Councilman Richard Alarcón, who introduced the measure, said at a recent rally. "And you can't take action to hold the banks accountable for all the trouble they've caused."
In addition to requiring the banks to release information about small-business and home loans, the ordinance also asks for details on banks' investments within the city, and their participation in anti-foreclosure programs.
All 13 members of the City Council voted for the ordinance, which was first introduced two years ago by Alarcón.
Leland Chan, general counsel for the California Bankers Assn., said major banks support the ordinance's goals, but many are not in a position to crunch the data in the way that the ordinance would require.
For example, he said, banks already report information to the federal government on how many loans they make to moderate and low-income homeowners, as well as to small businesses. But they don't necessarily report all of their loans, or drill down to offer the information by census tract, as the ordinance would demand.
"We do all that but we just don’t do it the way they want," Chan said.
Two Largest Cities in United States Simultaneously Adopt Responsible Banking Ordinances
Councilmember Richard Alarcón’s 2009 Motion Leads National Movement Toward Banking Accountability
(LOS ANGELES, CA) – City Councils in Los Angeles and New York City today simultaneously adopted similar Responsible Banking Ordinances, becoming the latest victories in a nationwide movement toward improved banking accountability. The Los Angeles ordinance, authored by Councilmember Richard Alarcón in 2009, began a series of local efforts to improve social responsibility in how banks operate. Last month, Councilmember Alarcón was recognized for his leadership in the national responsible banking effort when he received the “National Community Reinvestment Award” from the National Community Reinvestment Coalition.
“Every elected official has an obligation to ensure that taxpayer dollars are invested wisely – in institutions that are committed to our cities and our communities,” said Councilmember Alarcón. “The Responsible Banking Ordinance will protect taxpayer money by allowing us to invest with better information. We have come a long way since we first introduced the responsible banking ordinance in 2009, and I am proud to have helped achieve this victory for taxpayers in Los Angeles, and across the country.”
Councilmember Alarcón’s Los Angeles Responsible Banking Ordinance, which was approved by a unanimous vote at today’s City Council meeting, will create a public, transparent process for gathering information about banks’ history of service in communities in Los Angeles when considering which financial institutions to award future City contracts. The Ordinance would not preclude any financial institutions from doing business with the City of Los Angeles, but would rather require banks interested in doing business with the City to provide specific information about their work in Los Angeles.
The ordinance was supported as it navigated the Council committee process by a coalition of progressive and faith-based organizations, including LA Voice, OneLA – Industrial Areas Foundation, the Alliance of Californians for Community Empowerment (ACCE), the Good Jobs LA Coalition and SEUI 721. The groups rallied in support of the ordinance before Tuesday’s Council meeting and dozens of supporters submitted public comment at the meeting
“OneLA has worked with Councilmember Alarcón over the last three years to protect families and their homes,” said Samuel Chu, Board President of OneLA – Industrial Areas Foundation. “This Responsible Banking Ordinance is the latest critical step toward much needed public transparency and accountability.”
After Councilmember Alarcón introduced the Responsible Banking Ordinance to the Los Angeles City Council in 2009, he helped start a coordinated national effort to achieve better banking accountability by bringing the program to the National League of Cities annual conference in 2010. Based on programs that have yielded tremendous community reinvestment in Cleveland and Philadelphia, responsible banking ordinances have recently been approved or are being considered in cities including Seattle, Berkeley, Boston, Portland, Kansas City, San Francisco, and now New York and Los Angeles.
“Councilmember Alarcón is a true champion for community reinvestment and bank accountability,” said National Community Reinvestment Coalition President and CEO John Taylor. “By leading the efforts to pass a responsible banking ordinance in Los Angeles, the Councilmember has stepped up and set an example for public officials at every level of government across the nation.”
The Los Angeles Responsible Banking Ordinance will now be sent to Mayor Villaraigosa for his concurrence.
NCRC LAUDS PASSAGE OF RESPONSIBLE BANKING ORDINANCES IN NEW YORK AND LOS ANGELES
Washington, DC -- Today, the National Community Reinvestment Coalition (NCRC) applauded the passage of responsible banking ordinances in New York City and Los Angeles, and commended the Association for Neighborhood and Housing Development (ANHD), an NCRC member organization, and Los Angeles City Councilmember Richard Alarcón for their efforts advancing the initiatives.
“This is a beacon of things to come,” said NCRC President and CEO John Taylor. “Local governments are becoming empowered to hold banks accountable to investing in our communities in a responsible way. In effect they are saying if you want to do business with our city, you have to play fair. We expect this trend will grow and continue in cities and localities across the nation.”
“We congratulate the Association for Neighborhood and Housing Development in New York, and City Councilmember Richard Alarcón in Los Angeles for this accomplishment. Their hard work played a key role in making these responsible banking ordinances happen.”
NCRC has been a leader in organizing local advocates to advance responsible banking ordinances. In 2010, NCRC released a model city ordinance to create community reinvestment requirements for depository institutions. The model ordinance is designed to increase the amount of responsible loans, investments, and financial services in minority and low- and moderate-income communities through heightened public accountability to municipalities and their residents.
In San Diego, City Council President Tony Young plans to introduce a responsible banking ordinance to the Council’s Rules Committee tomorrow.
About the National Community Reinvestment Coalition (NCRC):
The National Community Reinvestment Coalition is an association of more than 600 community-based organizations that promote access to basicbanking services, including credit and savings, to create and sustain affordable housing, job development, and vibrant communities for America's working families.
Los Angeles, New York to Simultaneously Consider Adopting Responsible Banking Ordinances
Two Largest Cities in America Could Approve Similar Landmark Laws on Same Day
(Los Angeles, CA) – Tuesday, May 15, 2012 could become a banner day for banking responsibility in the United States, as the City Councils of the two largest cities in the nation will simultaneously consider adopting similar banking responsibility ordinances. The ordinances, which would each create public, transparent processes for gathering information about bank’s history of service in communities, will be considered by Councilmembers in Los Angeles and New York at each respective city’s Council meeting on Tuesday.
WHAT: Los Angeles Responsible Banking Ordinance
WHO: Los Angeles City Councilmember Richard Alarcón
WHEN: Tuesday, May 15, 2012 10am PT
WHERE: Los Angeles City Hall 200 N. Spring St. Los Angeles, CA 90012
MEDIA AVAILABILITY – LOS ANGELES
RALLY PRECEDING COUNCIL MEETING Activists “from a coalition representing the 99%” - including ACCE, SEIU Local 721 and Good Jobs LA – will host a rally on the Spring Street steps of Los Angeles City Hall at 10am PT. For more information about the rally, please contact: Jacob Hay, email@example.com or 310.855.2640.
COUNCILMEMBER ALARCÓN PRESS CONFERENCE Councilmember Alarcón will host a press conference in the City Hall Third Floor Media Room (behind Council Chambers) immediately following the Council vote. For more information about this press conference, please contact David Graham-Caso at firstname.lastname@example.org or 213.473.7007.
For more information about the New York Banking Responsibility Act, co-authored by Councilmembers Al Vann and Domenic M. Recchia, Jr., please contact Mandela Jones in the Office of Councilmember Vann at 212.788.7354.