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.