Open letter to the West Side about our banks

August 6, 2010
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Dear Neighbors and Colleagues,
Here is some background information to help you plan your testimony for the upcoming Aug. 12 hearing on strengthening the Community Reinvestment Act, from National People’s Action.
Community Reinvestment:  Holding Banks Accountable
Congress just passed Wall Street Reform – it’s a good first step and will help prevent the banks and Wall Street from causing another economic disaster like the one we’re all living through now.  But it won’t do much to fix the mess of foreclosures, job losses, abandoned buildings and bankrupt state and city budgets that the banks left behind.  Community investment is what will fix the mess and keep our economy strong for everyone.
Banks have a legal responsibility to fix the mess and get back to the business of building up America by investing in all of our neighborhoods.
The Community Reinvestment Act is the law that spells out that responsibility.
  • It’s about what banks do with our money.
  • It’s about them rebuilding what they destroyed.
  • It’s about jump-starting and sustaining the economy and job market.
  • It’s about helping rebuild wealth in America’s cities, towns and rural communities and families.
National People’s Action has been demanding that the banking regulators do the job that Congress gave them and update the rules that make community reinvestment work. They heard our call and are holding hearings around the country, taking comments this summer to find out how to best update the law. Attend next week’s hearing here in Chicago:

WHEN: Aug. 12, 2010

WHERE: Federal Reserve Bank of Chicago, 230 S. La Salle St.

Please note: All hearings will begin at 9 a.m. Security clearance is required for entry. You will be contacted to obtain information necessary to enter the building locations and will be required to present picture identification. To ensure timely entry, please arrive 30 to 45 minutes before the published time for the hearings, as noted on your registration form.

The banks will be telling the regulators to leave the law alone or weaken it. Stand up.  Stand together.  Fight for reinvestment in our jobs, homes and neighborhoods.
What Do We Want?

Real Accountability and Fairness
The system for grading a bank’s Community Reinvestment record needs a complete overhaul. Financial institutions like Bank of America and Wells Fargo took down our economy, have put millions of families into foreclosure and starved our communities of the credit they need, but they’ve both gotten “outstanding” community investment grades, the very highest rank a bank can get. They’ve received high grades like this in part by gaming the system. They get to decide where they get graded for their investments and loans, not based on where they’re actually making loans. They get to pick which parts of their company get counted for their grades, not on all their loans and investments. They don’t get marked down for the predatory loans they make or the predatory investments in payday lenders, or the lack of foreclosure prevention work they do. Imagine how many high-school students would love it if they could pick which classes actually ended up on their report card. It’s like the big banks never went to class; in fact they burned down the high school but graduated as the valedictorian.

End Financial Discrimination
Banks and predatory lenders targeted African-American and Latino borrowers with toxic loans – when those exploding loans blew up, the greed and discrimination took down our whole economy. Now that banks and lenders can’t make some of the worst loans, they’ve abandoned communities of color all together. We need the regulators to make sure that banks get an automatic failing grade if they discriminate by offering less credit, worse credit or inadequate services to people and communities of color.  And if a bank fails, it can’t be allowed to continue with business as usual until it fixes the problem.

Put the Community Back in Community Reinvestment
The purpose of our community reinvestment law is to make sure that banks are serving the credit needs of the whole community. They can’t do that from a downtown office tower or a headquarters across the country. Banks need us to tell them what the needs are on the ground. We’re the experts on what will build our neighborhood economies, what kinds of loans and accounts we need and where the good investments are. The regulators need to strengthen requirements for the banks to work with us to find out about and serve our credit needs. And if banks aren’t doing the job, we will be the first to know and must have ways to hold banks accountable. We need opportunities to challenge the banks directly and to their regulators. If a bank isn’t doing its job, there have to be community led consequences and community led solutions.

Sent to you by the Coalition For Community Banking
We’re banking on OUR Communities!

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