City of Angels Keeps Watch Over Banks
Los Angeles is cracking down on banks. City officials on Friday approved an ordinance requiring financial institutions that do with business with the city to report on their local lending, foreclosure relief and other activities in the city.
That could be big. With financial reform tied up in Washington, municipalities nationwide could follow L.A.’s lead to tighten the leash on banks. Under L.A.’s “Responsible Banking” initiative, institutions that handle the city’s nearly $30 billion in pension and other funds must report annually on their small business lending, community development investments and efforts to help stem foreclosures, among other things. Institutions that fail to comply could be barred from city business.
The ordinance requires banks to detail what steps they’ve taken to help keep struggling borrowers in their homes, including the number of mortgages they’ve permanently modified. In a related requirement, lenders must offer unemployed homeowners a minimum six-month forbearance on their loans or allow them to continue renting a property until it’s sold. L.A. officials will study whether to withdraw city deposits from any financial institution that fails to offer a temporary moratorium on foreclosures and renegotiate mortgages. [Read story at BNET.com/by Alain Sherter].
Posted by Bruen
at 12:01 AM PST
Updated: Tuesday, 9 March 2010 9:57 PM PST
