• Rose A. Zitiello, Manager Bank Relations, City of Cleveland How to use local Banking services Ordinances to increase investment in your community

•, Rose A. Zitiello, ESQ. Manager Bank Relations

City of Cleveland Thursday April 19th-3:45-5:15 PM

How to use local Banking Services Ordinances •To Increase Investment In Your community

How local Banking Services Ordinances can increase investment in your community

The City of Cleveland’s CRA Program began with legislation in 1991, to address the disinvestment of lending of financial institutions in the City of Cleveland.

Between 1991 and 2008 the City has negotiated more than 10 Billion Dollars in CRA Agreements with Depository Banks.

In 2010 , the City of Cleveland’s CRA program and its banking services ordinance was recognized & published by the National Community Reinvestment Coalition as a national best practice for a local banking services ordinance as it provides transparency in the award of municipal banking services 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 to the City of Cleveland’s ordinance and program, Philadelphia, Boston, Los Angeles, New York, & Pittsburgh.

City Responsible Local Banking Services

Ordinance Passed

Responsible Local Banking Services

Ordinance Pending

Boston   √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 timetable's 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 timetable's) 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 & Repair Bulletins see: http://www.livecleveland.org

Agreed to participate in the evaluation of developing a capital investment pool with the goal to increase potential debt capital investments in qualified community development financial institutions (CDFI'S. Provides more than 90 days notice of a branch closing or consolidation

Provides a senior level CRA staff that is responsible for CRA lending and investing in the City of Cleveland.

Provides an REO staffer responsible for inquiries and or disposition of vacant properties in the City of Cleveland.

Agreed to participate in supporting the City of Cleveland Department of Aging’s Economic Senior Initiative Program- A national initiative co-sponsored by the Cleveland & McGregor Foundations & provides services to seniors by at or below 225% of poverty providing case management 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

Presentations will be available at www.ncrc.org/conference by April 30, 2012

Rose a. Zitiello, Esq, Manager Bank relations, City of Cleveland

rzitiello@city.cleveland.oh.us