On Monday, The Seattle City Council unanimously adopted legislation to incorporate social responsibility principles into Seattle’s banking practices. The bill directs the Department of Finance and Administrative Services (FAS) to include socially-responsible banking practices when selecting vendors for depository services. It further establishes that socially-responsible banking performance be a factor worth at least 15% of the total point value in determining the winning bid.
“Today, Seattle joins cities such as Cleveland, Philadelphia, New York and Los Angeles in establishing socially-responsible banking practices,” said Councilmember Nick Licata, the bill’s sponsor. “Through this legislation, more of our public’s money will be re-invested back into our city’s neighborhoods.”
The ordinance establishes socially-responsible banking bid criteria that include community involvement and reinvestment; meeting community banking needs; supporting small business lending and community development; providing for home ownership and consumer credit; assisting distressed homeowners; and allowing for products and services that are advantageous for the City and its residents. In addition, the ordinance triggers a reporting requirement specific to residential lending, small business lending, community development loans and investing and consumer loan data. This includes reporting on modifications of distressed loans, small business loans by zip code and loans for women and minority-owned businesses citywide.
The legislation is the result of collaboration with the Department of Finance and Administrative Services (FAS) and the Mayor’s office. Council Resolution 31337 included a commitment to review the City’s banking practices, and to consider future legislation to promote responsible banking. After passage, FAS carried out a pilot project to incorporate social responsibility principles into its request for depository banking services. The legislation was drafted after reviewing the successes of the pilot project.
“State law limits what the City can do regarding banking, and makes it challenging for Seattle to do business with a small bank or credit union for city banking services,” said Licata. “Socially-responsible banking principles allow us to address community needs, while meeting state law.”
In 2011, Seattle deposited $3 billion through its operating account.
