• Rose A. Zitiello, Manager Bank Relations, City of Cleveland How to use local Banking services Ordinances to increaseinvestment in your community
•,Rose A. Zitiello, ESQ. Manager Bank Relations City of Cleveland Thursday April 19th-3:45-5:15 PMHow to use local Banking Services Ordinances •To Increase Investment In Your community
How local Banking Services Ordinances can increase investment in yourcommunityThe City of Cleveland’s CRA Program began with legislation in 1991, to addressthe disinvestment of lending of financial institutions in the City of Cleveland.Between 1991 and 2008 the City has negotiated more than 10 Billion Dollars inCRA Agreements with Depository Banks.In 2010 , the City of Cleveland’s CRA program and its banking servicesordinance was recognized & published by the National CommunityReinvestment Coalition as a national best practice for a local banking servicesordinance as it provides transparency in the award of municipal bankingservices and deposits to banks that support CRA responsible lending, investment& service practices to low moderate income residents.Since 2010 the following cities have passed or introduced legislation similar tothe City of Cleveland’s ordinance and program, Philadelphia, Boston, LosAngeles, New York, & Pittsburgh.
City Responsible Local Responsible Local Banking Banking Services Services Ordinance Ordinance Pending PassedBoston √Chicago √Cleveland √LA √Philadelphia √Pittsburgh √New York √
Any depository desiring designation as an eligible depository shall submit annually information needed for evaluation of policies and practices regarding housing and economic development of such depository. Residential lending information; Home purchase, refinance, home improvement, Commercial lending information; small business lending CD lending & CD investing Branch & ATM distribution A statement with timetables describing current and proposed initiatives to address the credit needs of the city, its residents and businesses, including low and moderate income and minority residents.
Section 178.05(a) (11) (b) provides that no depository shall be eligible to be designated as an eligible depository under this Chapter unless it has executed a Community Reinvestment Initiative (CRI) containing provisions acceptable to the Director of Community Development.
Section 178.05, L (9) Requires all eligible depository institutions to have a written initiative (“Community Reinvestment Initiative”) regarding community reinvestment within the City containing provisions that are acceptable to the Director of Community Development”. These are essentially MOU’s that include (4) year goals for: Residential lending information; Home purchase, refinance, home improvement, Commercial lending information; small business lending CD lending & CD investing Branch & ATM distribution A statement with timetables) describing current and proposed initiatives to address the credit needs of the city, its residents and businesses, including low and moderate income and minority residents.
Total reported CRA lending & Investing of all eligible depository banks in 2010 totaled 639,102 MM. 2011 marked the first time in 15 years that more bank branches closed than opened across the United States. Between 2008 and 2011 the number of branches among our local depository banks has remained stable. Since 2008, six new branches were opened in low or moderate income census tracts in the City of Cleveland
Between 2008-2010 individual bank performance of (4) year goals ranged from 58.13% to 124.13% As a group, the aggregate percent of reported lending for 2008-2010 represents 95. 22% of their aggregate (4) year lending goals for 2008-2011
FDIC reports that 7.2% of all US households are unbanked & 17.9% are under-banked: Cleveland 6.2% unbanked & 14.2% under banked Baltimore 6.9% unbanked & 21.2 under banked Chicago 7.4% unbanked & 13.8 under banked Philadelphia 7.5% unbanked & 18.4 under banked New York 9.6% unbanked & 14.8% under banked Los Angeles 9.2% unbanked & 14.4% under banked Results from 2009 FDIC national Survey of unbanked & under banked Households, EconomicInclusion.gov
1. % of their 4 year aggregate lending & investing goals met; 2. % of their 4 year categorical lending & investing goals met for home purchase, refi, home improvement, small biz, CD loans & CD investments 3. Branch distribution-branches opened & closed in L/M CTs4. Employment of minorities & women in executive level positions 4. Bonus points for specific CRA activities & services
Participation in the City of Cleveland Consumer Mortgage & RepairBulletins see: http://www.livecleveland.orgAgreed to participate in the evaluation of developing a capitalinvestment pool with the goal to increase potential debt capitalinvestments in qualified community development financial institutions(CDFIS.Provides more than 90 days notice of a branch closing or consolidationProvides a senior level CRA staff that is responsible for CRA lendingand investing in the City of Cleveland.Provides an REO staffer responsible for inquiries and or disposition ofvacant properties in the City of Cleveland.Agreed to participate in supporting the City of Cleveland Department ofAging’s Economic Senior Initiative Program- A national initiative co-sponsored by the Cleveland & McGregor Foundations & providesservices to seniors by at or below 225% of poverty providing casemanagement services with a team of trusted NEO partner agencies.
* What other government agencies, taxing authorities, state agencies, school boards could benefit from adopting CRA guidelines for awarding banking services? * Short of a municipal ordinance or a statute can the objectives be achieved voluntarily with local bank? * Allow for administrative flexibility in your ordinance or policies * Develop & Maintain internal staff capacity for administration and compliance of the ordinance and or policies adopted * Build partnerships with community development based organizations
THANK YOU!To follow up with the speaker:Insert contact information here Rose a. Zitiello, Esq, Manager Bank relations, City of Cleveland firstname.lastname@example.orgPresentations will be available at www.ncrc.org/conference byApril 30, 2012