San Diego Council Committee Moves to Monitor Banks’ Foreclosure Actions

by on May 16, 2012 · 0 comments

in Economy, San Diego

Ch 8 News / May 16, 2012

The City Council’s Rules Committee Wednesday directed the city attorney to draft an ordinance that would require banks with which the city of San Diego does business to submit annual data on loans, foreclosures and other issues.

The proposal by council President Tony Young calls for banks to provide information on their home and small business lending, modifications of distressed loans, foreclosure information, community investment, employment diversity and number of jobs.

Young also wants two-year community reinvestment plans to be submitted for residential and small business lending in low- and moderate-income neighborhoods.

His proposed Responsible Banking Ordinance also calls for the city to establish a Community Reinvestment Review Committee made up of council members and mayoral staff. The committee would recommend which banks should receive city deposits and handle financial transactions.

The city currently deals with three banks.

“(Banking) is a competitive businesses — make them compete for our business,” Councilman Todd Gloria said.

The mayor’s office is preparing to take bids from financial institutions that want to handle the city’s primary banking needs, but Young said his proposed ordinance would not be enacted in time to affect the process. The requirements could affect banks that want to handle other services, like taking bonds to financial markets, he said.

Representatives of several banks spoke at the council committee meeting, but did not express opposition. They were mainly concerned about losing control of proprietary information.

Young said the banks already compile the information under the federal Community Reinvestment Act, so tailoring the data specifically for San Diego would not be “an undue burden.”

Cleveland, Philadelphia, Kansas City and Pittsburgh have similar ordinances, and New York, Los Angeles and Boston are considering them, he said.

“Banks already have to do these things in other cities,” Young said.

The region already has a Reinvestment Task Force made up of city and county of San Diego officials, bank executives, representatives of community housing and economic development groups and members of the general public.

The RTF has resulted in a positive working relationship with lending institutions in the area, but additional “reviewing mechanisms” are appropriate, Young said.

The City Attorney’s Office was asked to return with a draft ordinance on June 27.

Community activists over the past year have asked the council to adopt a law to force banks to maintain the properties they own, but Young’s proposals do not address those concerns.

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