The Los Angeles City Council’s budget committee Monday debated a proposed Responsible Banking Ordinance. The measure, with strong backing from Occupy L.A. protesters, seeks to compel the city to do business with socially responsible banks.
The measure’s most vocal backer, Councilman Richard Alarcon, says the city should ask a few questions of the banks in which L.A. deposits billions of dollars.
“Were they aggressively pursuing modifications for home loans, for example, or did they sit back and foreclose on thousands of people in our community?" Alarcon asked. "Why should we give them our people’s money if they’ve been a bad player in our community?”
But rating banks, and bond underwriters, is a complicated business, says City Administrative Officer Miguel Santana. He supports asking banks about their lending and reinvestment practices, but opposes issuing a uniform scorecard for financial institutions.
“Unfortunately, the city doesn’t have the resources to do that or the expertise," Santana said. "And it’s not really part of the city’s principle responsibility.”
Supporters of the Responsible Banking Ordinance worry that Santana is under pressure from banks to water down the measure. The full city council promised to consider some form of the ordinance after hundreds of Occupy L.A. protesters filled council chambers last month demanding action on a measure that’s languished in committee for more than a year.