Council Speaker Christine Quinn was joined by advocates and her Council colleagues on the steps of City Hall this morning to tout a report that shows that the banking industry reduced lending, investment and other services in the working-class neighborhoods of NYC.
According to a release, the report:
shows that some of the banks have not fulfilled expectations in regards to meeting the needs of local communities. The report reveals that there was a $38 billion increase in local deposits over the past two years at the same time as there was a dramatic $4.4 billion decrease in all forms of reinvestment needed for our communities to thrive, including home purchase lending, multi-family apartment lending, community development lending and investment, and mortgage modifications.
Members of the New York City Council are pushing for something called The Responsible Banking Act which would require greater oversight of banks that hold NYC Central Treasury and Agency deposits.
“We want to ensure that New Yorkers deposits are reinvested into local communities to the maximum extent possible,” Quinn said. “I am optimistic that our legislation will increase transparency and encourage banks to reinvest in the communities they serve.”
The report notes that banks are failing to address the problems they created during the economic crisis, including failing to modify sub-prime home loans to stop foreclosures and end speculative “predatory equity” lending and notes that due to the federal Community Reinvestment Act banks are required to help meet the credit needs of low- and moderate-income communities.
The Responsible Banking Act would require banks to submit a Community Reinvestment Plan and progress reports that will be used by the city Banking Commission to rate banks that want to hold city deposits.
Mayor Bloomberg has signaled that he approves of the legislation.
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