Strengthening Community Development Amendment Act of 2017
Introduced: November 7, 2017
Co-introducers: Councilmembers Anita Bonds, Robert C. White, Jr., Trayon White
FACT SHEET | BILL TEXT | PRESS RELEASE
Summary: To amend the Community Development Act of 2000 to require the Chief Financial Officer to regularly evaluate the community development plans of deposit-receiving institutions and to seek public comment prior to the execution of an option year on a contract with a deposit-receiving institution; and to amend section 47-351.05 of the District of Columbia Official Code to increase the weight the Mayor or CFO must give to a financial institution’s community development score in competitions for District banking business.
Councilmember Grosso's Introduction Statement:
In 2014, the Council unanimously passed the Community Development Amendment Act of 2013, a responsible banking law designed to ensure responsible loans, investments, and services are being provided to our low and moderate income and minority communities.
That law required, among other things, an evaluation of financial institution performance in servicing these communities as part of the criteria for deciding which institutions receive municipal deposits and other city business.
The bill was an enormous victory and step in the right direction to hold large financial institutions accountable to historically underserved communities and ensure their continuous investment in these neighborhoods.
Today, that law needs to be strengthened.
In March, Wells Fargo, the city’s bank of record received a national rating of “Needs to Improve” on community lending from its federal regulator.
Despite the misdeeds cited in the evaluation, the city continues its relationship with the much-maligned Wells Fargo.
While there is certainly no perfect financial institution, we should endeavor to prioritize partnerships with business entities, banks, and other financial institutions that are committed to engaging in fair and responsible business practices and those that fulfill their obligations to meet the credit and other needs of the communities they serve.
My legislation seeks to improve upon the existing community development law in three key ways. First, it requires that financial institutions seeking to do business with the city must, in addition to submitting their community development plans, highlight the programs, products and any partnerships they’ve established to promote affordable housing and equitable development.
Second, the bill increases the weight the CFO must give a financial institution’s community development score in competitions for District banking business.
Finally, the bill requires the CFO to seek public comment, prior to executing an option year on a contract with banks doing business with the city.
Public transparency and accountability should always be paramount when the District seeks to conduct business with financial institutions. We must ensure that these banks will serve the convenience and needs of their local communities and invest responsibly to help maintain the vibrancy of our neighborhoods through sound services and lending.