ANHD 2016 Building the Community Development Movement
ANHD cheers Boston for passing one of the strongest, if not the strongest, Responsible Banking Ordinances in the country, a victory led by City Councilor At-Large Felix G. Arroyo. Today, the Boston City Council overrode a mayoral veto of the law passed last month just as New York City did in June 2012 when our own City Council overrode a mayoral veto and passed the Responsible Banking Act (RBA), also one of the strongest ordinances in the US.
Unfortunately, New York’s RBA has not been implemented yet. Instead, Mayor Bloomberg refuses to follow the law and appoint his members to the Community Investment Advisory Board. Meanwhile, the New York Bankers Association is getting into the act by filing a lawsuit challenging NYC’s Responsible Banking Act. They claim that the city is trying to become a bank regulator and, as such, the law preempts federal and state Community Reinvestment Act (CRA) legislation.
These challenges are baseless. As the banking industry has consolidated and grown, it has become increasingly difficult to hold them accountable to our communities. At the same time, banks benefit greatly from doing business with NYC, some handling billions in deposits throughout the course of a year. The RBA is a necessary, reasonable tool to increase reinvestment activity and transparency among the banks that seek to do business with our city. And, unlike the federal and state CRA legislation, the New York bill establishes regular, local public hearings that provide everyday New Yorkers a vehicle to engage in the process in a meaningful way by speaking to their local credit needs and how the banks are responding to these needs.
And, contrary to what some opponents are saying, responsible banking ordinances do not drive out banks nor discourage them from seeking city business. In Cleveland and Philadelphia, both of which have long had responsible banking ordinances, the number of banks seeking city deposits has grown as has the level of reinvestment. For example, Lenders in Philadelphia are now making more loans to small businesses and more home loans to minority borrowers. Similarly, the city of Cleveland, from 1991 through 2008, negotiated over $10.1 billion in lending commitments & investments with designated depository banks.
ANHD has a deep respect for the CRA and the money it has leveraged to finance affordable housing and community development in NYC and nationwide. However, the CRA does not adequately capture the diverse banking needs of individual communities and cities, nor has it fully kept up with the changing nature of banking.
ANHD urges the NYBA to drop its lawsuit and for the new mayor to promptly fully implement the Responsible Banking Act.
ANHD blog team: Benjamin Dulchin, Moses Gates, Ericka Stallings, Jaime Weisberg, Barika Williams, Eric Williams. Anne Troy, editor.