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NY Banks Back Away From Community Reinvestment: Study

Wednesday, September 28, 2011

Major banks that do business in New York City aren't living up to their obligations under the federal Community Reinvestment Act — especially in low- and moderate income areas, according to a new report.

The Association for Neighborhood and Housing Development study looked at 20 large banks.

Banks got $38 billion more in local deposits from 2007 to 2008, they invested $4 billion less in things like home and business loans, according Benjamin Dulchin, the association's executive director.

He was one of several representatives of affordable housing groups who rallied outside City Hall Wednesday in favor of the Responsible Banking Act, a City Council bill would require greater oversight of banks that hold deposits from the city.

"In this time of so much bank responsibility for the turmoil that we're facing, it is particularly galling that they are pulling back from their responsibility to really meet local credit needs," he said.

Dulchin said the problem has been getting worse for the past 10 years, as more banks have consolidated.

The New York Bankers Associated said it takes corporate citizenship "very seriously."

"Every day, throughout the City of New York, the banking industry dedicates human and financial resources to neighborhood-enhancing projects from affordable housing developments to community gardens, and just about everything in-between," said Michael P. Smith, president and CEO of the NYBA, in a statement.

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