In response to the recent release by the Office of the Comptroller of the Currency (OCC) of an extremely rare “Needs to Improve” reinvestment rating for City National Bank, Rise Economy CEO Paulina Gonzalez-Brito issued the following statement:

“We are pleased to see the OCC, the national bank regulator, finally use the Community Reinvestment Act (CRA) examination process to hold City National Bank accountable for discriminating against Los Angeles area communities of color. An “F” is the only appropriate grade for a bank that was subject to the largest redlining settlement in U.S. history.

Unfortunately, City National’s lending disparities do not end there. Using the latest available data for 2022, we find that City National Bank performed worse than many of its peer banks for mortgage lending in Black and Latino neighborhoods compared to mortgage lending in white neighborhoods, particularly in metropolitan areas like Los Angeles/Long Beach/Anaheim, San Francisco-Oakland-Berkeley, and Oxnard-Ventura. City National Bank’s lending in Oxnard-Ventura MSA’s Black and Hispanic tracts, for example, was only 12% of the market average lending in these neighborhoods.

And City National Bank is failing our communities not only by refusing to lend in BIPOC neighborhoods. CNB and its RBC parent company are destroying the physical and economic health of BIPOC neighborhoods in California and elsewhere as one of the worst funders of fossil fuels in the world. Royal Bank of Canada is actually an outlier in the financing of fossil fuels, ranking as high as banks with twice as many total assets like JP Morgan Chase.

RBC also has one of the worst ratios of financing green, low carbon intensive projects compared to financing of fossil fuels. While researchers estimate that the ratio of spending on new investment in low-carbon energy to fossil-fuel supply must reach 4 to 1 by 2030 in order to limit the global temperature rise to no more than 1.5°C, RBC’s ratio was a mere 0.4 to 1.

RBC dollars are financing substantial polluters and bad actors in California. Since the Paris Accords, RBC has provided nearly $68 billion in financing to 8 companies that are among the largest emitters of greenhouse gasses in California. RBC finances companies that operate over 24,000 wells and 63 refineries in California, resulting in over 33.4 million metric tons of greenhouse gas emissions in 2021 alone.

Rise Economy will be releasing further analysis of RBC and CNB actions that are harming California communities in the coming weeks. Ultimately, CNB and RBC must commit to measurable and impactful enhancements to their lending practices in BIPOC neighborhoods, and to ceasing their financing of new fossil fuel extraction projects and companies.”

 

Media contact:
Kevin Stein, Chief of Legal and Strategy
kstein@rise-economy.org