L.A. council endorses watered-down bank accountability plan
Months after activists with Occupy L.A. demanded an aggressive crackdown on misbehaving Wall Street banks, the City Council approved a watered-down proposal to obtain yearly reports from financial institutions that seek to do business with the city.
On a 13-to-0 vote, the council voted to draft a law requiring those banks to disclose information about the number of foreclosures, small-business loans and other activities in local neighborhoods.
Council members dropped plans for having the city rate the banks after being told that such a move would be too expensive. And they took no action on a proposal, offered months ago during the Occupy demonstrations outside City Hall, to sever the city’s ties with financial institutions found to have committed wrongdoing.
City Administrative Officer Miguel Santana warned last year that efforts to punish banks for criminal misdeeds could cost the city $58 million. And he said scoring such institutions on their handling of the community was not a “core mission” of a financially strapped city.
“I think this is a fair compromise,” he said. “We were able to listen to the concerns of both the advocates and the financial institutions.”
That message did not entirely satisfy 41-year-old Cook Wayne, a musician who wanted the ordinance to be stronger. “The city is more or less influenced by the banks, rather than the other way around,” he said.
Councilman Richard Alarcon, who authored the various bank initiatives, said he was not troubled by the compromise. He promised that council members would use the reports produced by the banks to decide whether they should receive city contracts in coming years. “Just having access to that information is a tremendous leap forward,” he said.
Alarcon said the reports submitted by the banks would also include any criminal convictions and civil judgments -– information that will be available when those institutions seek city business.
Efforts to hold financial institutions responsible for their community activities have been in the works for years. But they drew new support last fall from activists affiliated with the Occupy L.A. encampment outside City Hall.
One business leader said she was ready to accept the council’s latest plan. “It’s an imperfect compromise on an issue that frankly, we feel the city has no business dealing with at all,” said Carol Schatz, president and chief executive of the Central City Assn.
-- David Zahniser at Los Angeles City Hall
Photo: Los Angeles Councilman Richard Alarcon, who proposed bank accountability legislation. Credit: Irfan Khan / Los Angeles Times