City councilmembers, advocates push banks to reinvest
Wednesday, September 28, 2011 - 12:16 PM
Brandishing a new report that advocates say shows banks have scaled back investing in New York City neighborhoods--despite increases in local deposits--members of the city council and others toasted lenders for growing "distant from the local community" and being "less responsive to local credit needs.”
“Banks can play a critical role in supporting and improving communities,” Council Speaker Christine Quinn said in a statement. “We at the council appreciate their many positive impacts in working class neighborhoods, but we want to ensure that New Yorkers deposits are reinvested into local communities to the maximum extent possible."
According the report, State of Bank Reinvestment in NYC: 2011 prepared by the Association for Neighborhood and Housing Development, banks in New York City saw a $38 billion increase in local deposits over the past two years but pulled back $4.4 billion in investments, such as home mortgages, multi-family apartment lending, community development lending and investment, and mortgage modifications.
"Given their role in creating the nation’s recent economic crisis, we hope that banks will renew their commitment to develop innovative programs that catalyze community development and be strong partners in the city’s efforts to build affordable housing," said the Association for Neighborhood and Housing Development's deputy director, Dave Hanzel, in a statement.
Legislation, The Responsible Banking Act, has been introduced by Councilmembers Domenic Recchia, Jr. and Al Vann that aims to make banks more accountable. It would require banks to submit a community reinvestment plan and progress reports that will be used by the city's Banking Commission to rate banks that want to hold city deposits.
"The Responsible Banking Act offers communities all over the city a first step in creating a new vision for our lives," Rev. Cheri Kroon, the associate pastor of Flatbush Reformed Church and a member of Brooklyn Congregations United, which supports the legislation, said. "The Act simply asks banks to let us know what actions they are taking in our communities.”
A copy of the report is below:
State of Bank Reinvestment in NYC 2011