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City Council Passes Landmark Legislation
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On May 15, New York City Hall was packed to capacity. Hundreds of housing and labor advocates came to let their faces be seen and voices heard in support of one of the most progressive and effective responses to the 2008 recession: "The Responsible Banking Act" (Intro 485). Crowding the balcony in the Council's Chamber, ANHD, our members and citywide allies including NEDAP, Legal Services, and UHAB held neon "Pass Intro 485" signs and cheered as Speaker Quinn introduced the bill and its co-sponsors--Council Members Al Vann and Domenic M. Recchia. Late attendees, blocked from entering the meeting for fire safety concerns, knew the bill had passed as the euphoric cheer echoed throughout City Hall. It was official.
After two years of struggle, Intro 485 had passed. The bill passed by a vote of 44 to 4. What the passing of the RBA means to New Yorkers is as important to what it means to this nation. “We think of this as a local-level Community Reinvestment Act,” said Benjamin Dulchin, executive director of ANHD. “It’s a modest, moderate, carefully-structured bill that is well within the way this type of bank oversight works. At a federal level, it has done a lot to get banks to the table to work with low-income communities.” In short, the RBA allows NYC to enact several key measures. First and foremost, it brings a beam of sunlight to what the city's depository banks are doing to meet or not meet the credit needs of local consumers and communities.
It does this by giving Charter authority for the creation of a new eight member oversight entity, the Community Investment Advisory Board (CIAB), made up of representative from government, the business community, and advocates. First, the board, housed and staffed within the Department of Finance, will request data annually from banks across seven core reinvestment criteria at the city, borough and community district levels. Second, using this data and input gleaned from public hearings in every borough, the Board and DOF will develop a citywide credit "needs assessment".
These hearings--the first of their kind in the country--will give Gothamites the ability to speak truth to power. As part of their annual data submission, banks will have to discuss their plans to respond to the credit needs detailed in the assessment. As described in a recent edition of the New York Times, the bill asks for “banks to describe efforts in poor areas.” The individual assessment of each bank done by the Board will measure a bank’s progress in meeting its goals relative to the needs assessment, holding banks accountable to an outside standard.
Finally, the board's annual report will be sent to the New York City Banking Commission in order to inform and impact the Banking Commission’s process for designating banks to be eligible for holding New York City deposits. ANHD’s annual "State of Bank Reinvestment in NYC" reports played a catalyzing role in bringing the attention of city officials to the need for a local-level CRA measure.
New York City now joins Cleveland, Philadelphia, Pittsburgh and Los Angeles as American cities that have enacted local responsible banking measures, though NYC is alone in having a formal role for the public. For ANHD, passage of the RBA is one of the biggest legislative wins in recent years. Mayor Bloomberg’s promise to veto the bill has done little to dampen the spirits of community leaders across the city because the bill enjoys a veto-proof majority in the City Council.
All the benefits of the RBA will be initiated 120 days from its enactment. Then, New York City will have at its disposal a brand new, hyper-local tool to bring banks' attention back to our communities in a meaningful way.
RBA Legislation In The News
Disclaimer: By providing links to other sites, the Association for Neighborhood and Housing Development does not guarantee, approve, or endorse the information or products available on these sites.
Council defies mayor on wage and banking bills May 15, 2012 - Crain’s New York Read More
Council to Pass Legislation Aimed at Pressuring Banks to Invest More in Local Neighborhoods May 15, 2012 - WNYC Read More
NYC Council Set to Require Banks to Report Community Practices May 15, 2012 - Bloomberg News Read More
New York Council Wants Banks to Describe Efforts in Poor Areas May 14, 2012 - New York Times Read More
See more news coverage of ANHD activities in our press page