City to Set Standards for Banking Relationships

City Council President Tony Young plans to introduce an ordinance Wednesday to set standards on the city of San Diego's relationship with the banks with which it does business.

Young wants to have banks submit data every year on their home and small business lending, modifications of distressed loans, foreclosure information, community investment, employment diversity and the number of jobs.

He 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 mayor's staff. The committee would recommend which banks should receive city deposits and handle financial transactions.

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

The region already has a Reinvestment Task Force made up of city and county of San Diego officials, bank executives, and 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.    Community activists over the past year have asked the council to adopt a law to force banks to maintain the properties they own, but it was not clear if Young's proposals would address those concerns.