The Boston City Council unanimously passed a bill Wednesday aimed at improving banking practices in low- and moderate-income neighborhoods, including those related to mortgage lending and foreclosure prevention.
The "Invest in Boston" bill requires banks seeking city-government business to submit to an evaluation process that examines their mortgage and small-business lending practices as well as their performance in community reinvestment, personal lending and local hiring. Boston is the fourth major city to pass such a law in the past two years, following New York, Los Angeles, and San Diego following New York, Los Angeles and San Diego.
Under the ordinance, a 10-member committee made up of government, community and industry representatives will assess banks on the strength of their
The Association for Neighborhood & Housing Development, which helped New York City pass its Responsible Banking Act in 2012, backed the Boston bill.
While responsible-banking ordinances tend to garner broad public support, some industry participants are skeptical.
"These local ordinances are superfluous," banking lawyer Warren Traiger told American Banker last year. "Banks already have a sufficient degree of federal and state oversight with respect to how well they're serving their communities."
