City Council Approves Bank Ordinance

The City Council voted unanimously today to assess banks that do business with the city on how much they reinvest in Los Angeles.

The so-called responsible banking ordinance, which was debated and studied for more than two years, was drafted by City Councilman Richard Alarcon and amended by City Administrative Officer Miguel Santana.

Banks that have contracts with the city will be required to provide information by census tract on how many foreclosures they do, how many bank branches they have, how many people they employ in low-income areas of the city and the amount of small business and home loans provided to residents.

The approved plan was watered down from Alarcon's original request to grade banks based on the information they submit. Alarcon said he still supported a grading system, but did not have the votes to get it through the council.

It's caveat emptor. Let the buyer beware. Well, with this ordinance, we will be more aware of who we are buying services from, and that's all it's about," Alarcon said.

The council heard public testimony from nearly 20 speakers, including religious leaders and anti-foreclosure organizers, who urged the council to pass the ordinance.

Representatives from business-friendly organizations, including the Los Angeles Area Chamber of Commerce and the Valley Industry and Commerce Association, expressed reluctant support for the plan, saying it does not directly increase costs to the city.

"While VICA maintains its position that the (Responsible Banking Ordinance) is counterproductive to the city's goals, we are going to accept the compromise that arose," VICA spokesman Doug Arsenault told the City Council.