The Los Angeles City Council on Tuesday passed an ordinance requiring banks that do business in Los Angeles city to disclose their lending practices to communities within the city.
The unanimous vote represents a victory for unions and other progressive organizations that have been pushing for so-called responsible banking ordinances across the country. Momentum for these ordinances picked up with the emergence of the Occupy movements last fall. The New York City Council approved a similar ordinance on Tuesday.
Under the L.A. ordinance, which goes to Mayor Antonio Villaraigosa for his expected signature, banks receiving city contracts must disclose data on the loans they make and other services they provide to communities with few financial institutions.
Large banks opposed this, saying it would be too costly to break out specific information on Los Angeles neighborhoods from the lending data they submit to federal and state agencies.
The ordinance initially introduced by Councilman Richard Alarcon required the city to compile a “community reinvestment score” for each bank seeking city business and gave the city authority to ban the awarding of contracts to banks with subpar reinvestment scores. Those provisions were removed from the final version.