City of Pittsburgh Council District 6
Councilman Lavelle leads the charge to protect minority communities!
Responsible Banking Bill passes City Council today!

Greetings,

On Tuesday, January 10, 2012, I sponsored Bill #2012-0014, which requires financial institutions seeking to become City depositories to make a commitment to community reinvestment in low to moderate income neighborhoods.  The bill also instructs the City Controller to evaluate banks with which the City does business as to their success or failure in meeting this commitment.  

This legislation was prematurely passed by Council last year but vetoed by the Mayor last year because of the lack of community input from low to moderate income neighborhoods.  Also because as written the bill would have likely had the adverse effect on the communities it purports to serve.  Changes in the Responsible Banking Bill were the result of an inclusive community process where I met with and discussed amendments with community leaders and organizations from low-moderate income communities.

City Council approved the Responsible Banking Bill today, April 17, 2012, which includes amendments introduced by me last week that incentivize financial institutions to make loans in low-moderate income neighborhoods in the City of Pittsburgh.  This legislation now has stronger language that is aimed at ensuring banks are committed to investing in low to moderate income communities.  A few of the important changes that my office has made to this legislation include the following:

  • Provision requiring financial institutions to meet a minimum of a satisfactory Federal CRA rating (Community Reinvestment Act) in order to be deemed eligible as a city depository.  Institutions that do not meet this minimum criteria will not be evaluated further for consideration.
  • Language pertaining to Community Development Financial Institutions (CDFI).  Prospective depositories are now asked to provide a plan to engage with CDFI's, and prospective depositories are to be rated based on their grants and loans to CDFI's.  Examples of CDFI's include Bridgeway Capital and the Northside Loan Fund.
  • Additional language asking Financial Institutions to provide lending information on a census-tract-block level, if information is complied by the institution at that level.  Normally, lending information is compiled at the census-tract-level, a much broader range where upper and low income communities can be found in same census-tract.
  • Provision creating a Reinvestment Review Committee (RRC), which includes members from low-moderate income communities, and which assists the Controller in the evaluation of prospective depositories.  The Controller rates the financial institution on the evaluation criteria, and the RRC provides a set of recommendations to the City's Finance Director for review.

It is my hope that this legislation will better assist low to moderate income communities economically grow and thrive within the City of Pittsburgh.  I am determined to stimulate investment in communities of need.  The amended Responsible Banking Bill is not a solution in itself, but one of many tools to be used towards this goal.  Going forward, I will continue to look into creative and innovative ways to leverage resources and legislative tools to support policy initiatives aimed at revitalizing our low-moderate income communities.

I am very thankful the community partners that assisted my office in crafting this important legislation for the City of Pittsburgh.  Community stakeholders that assisted in the process include Pittsburgh Community Reinvestment Group, Hill Community Development Corporation, Operation Better Block, Manchester Citizens Corporation, Northshore Community Alliance, and the Hill House Economic Development Corporation.

Regards,

R. Daniel Lavelle

Published:
Tuesday, January 10, 2012
Contacts
Harry Johnson, II
City Council - District 6
Office: 412-255-2134
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Office of Councilman R. Daniel Lavelle
414 Grant Street, 5th Floor | City County Building
Pittsburgh, PA 15219
telephone: 412-255-2134 | facsimile 412-255-0737


 

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