LA City Councilman Alarcon wants to establish banking districts

Los Angeles City Councilman Richard Alarcon is pushing the city to establish banking districts throughout L.A. KPCC's Frank Stoltze reports the idea is to encourage banks to open branches in poor neighborhoods.

Frank Stoltze: Banks are hard to find in neighborhoods like Pacoima, Boyle Heights, and South L.A., says Councilman Alarcon.

Richard Alarcon: We have 300,000 families that do not participate in banking, and they're using check cashing places and paying exorbitant fees to do things that we take for granted.

Stoltze: Alarcon says that's partly because many people struggling to make ends meet lack financial know-how. Mayor Antonio Villaraigosa has launched a campaign to encourage people to open bank accounts.

Alarcon's proposed banking districts would offer incentives like property tax breaks and deposits of city money to financial institutions that open in poor neighborhoods. The proposal is similar to one in New York, which has established 25 banking districts.