The Council’s proposed bank requirement ‘sets probably a new low for idiocy,’ Bloomberg says
The City's Council's new banking bill, which would impose new reporting requirements on banks, "sets probably a new low for idiocy," according to the mayor.
Here's a good description of the Responsible Banking Act from the Times:
The Council bill, called the Responsible Banking Act, would require the Department of Finance to create a new advisory board, which would publish an annual report on how banks that apply to take city deposits were doing in meeting the credit needs of the city’s neighborhoods.
Banks would be required to provide detailed information, by census tract, about branch locations, loans, delinquencies, foreclosures and loan modifications.
The information, as well as the advisory board’s evaluation of the banks, would be published on the Department of Finance Web site and, in the language of the bill, “may be considered” by the mayor, comptroller, and finance commissioner in deciding which banks should be allowed to take city deposits.
During his regular Friday-morning radio appearance on the "John Gambling Show," the mayor called the bill idiotic and said, "We've got the federal government and the state government, and they're having trouble doing it, in case you hadn't noticed. And for the city to get involved, all this is going to do is make the requirements to do business with the city so complicated, onerous and expensive, most banks, they're just not gonna deal with the city."
"The banks just gonna say, 'What do I need this for? I'm doing them a favor as it is,'" he said. "You don't make any money off of these small things. And, it doesn't accomplish what the bill was set out to do."
Other cities have kept similar laws on the books for a while now. Again, from the Times:
Cleveland and Philadelphia have had laws in place for over a decade similar to the one being proposed in New York, and now the financial crisis has led several other cities to consider them. Pittsburgh recently passed a bill that requires banks that want city deposits to submit community reinvestment plans every two years. Los Angeles, Boston, and San Diego are all considering similar measures