CRC Announces Support for Community Benefit Plan by Banc of California as Part of Banco Popular Branch Acquisition
BANC’S PUBLIC COMMITMENT WILL BENEFIT COMMUNITIES, CONSUMERS, AND SMALL BUSINESSES
Los Angeles: September 4, 2014: The California Reinvestment Coalition (CRC), a coalition of over 300nonprofits working to increase access to banking and other financial services in low income communities and communities of color, is pleased to join Banc of California in announcing that the bank has created a Community Benefit Plan as part of its acquisition of 20 Banco Popular branches in Southern California. The bank will submit the plan to its regulator, the Office of the Comptroller of the Currency, and it will be a public document.
Paulina Gonzalez, executive director of the California Reinvestment Coalition, explains: “Community reinvestment by banks is vital for low income communities and communities of color. Our coalition members are pleased to have worked with Banc of California to develop its Community Benefit Plan. Communities will see concrete benefits as the bank executes on its commitment to engage in Community Reinvestment Act activities that set a standard for the industry at a level that meets or exceeds 20% of the bank’s deposits in the first year.”
Under the Community Reinvestment Act, banks are required to lend and invest in the local communities where they do business, but regulators do not prescribe the level of reinvestment by each bank. Community Reinvestment Plans, like the Community Benefit Plan crafted by Banc of California and CRC, serve to set these levels and provide transparency to local communities. Banks can meet reinvestment goals through lending and technical assistance to small businesses, philanthropic contributions, investments in affordable housing via tax credits and loans, community development investments in local community development financial institutions and loan pools, supplier diversity programs, and more.
To enable the public to evaluate the benefits communities will derive from Banc of California’s Popular Community Bank branch transaction, Banc of California developed these public goals in conjunction with the California Reinvestment Coalition and its members.
As part of its commitment, the bank will develop a checking account for low and moderate income consumers that meets CRC’s SafeMoney™ standards, including an account that doesn’t allow debit card purchases to overdraw account balances which is the source of expensive overdraft fees, and will also focus its small business lending on the smallest of small businesses, especially those who are owned by women and people of color.
The Bank has also committed to reconfiguring its ATMs so that CalWORKs recipients aren’t charged ATM fees when withdrawing their benefits from Banc of California ATMs. The California Reinvestment Coalition is also asking larger banks like Chase, Bank of America, and Wells Fargo to follow Banc of California’s lead in waiving these fees. Importantly, Banc of California also committed to setting annual goals with input from CRC,its members, and other community leaders.
Gonzalez continues: “Former Los Angeles Mayor Antonio Villaraigosa, senior advisor to Banc of California,played an important and pivotal leadership role in helping the bank craft a plan that reflects CRC’s input including with respect to the needs of the historically underserved communities currently served by Banco Popular. As a result, Banc of California’s Community Benefit Plan sets the standard for the industry and is a testament to Banc’s commitment to serve the needs of the diverse neighborhoods the bank will be entering as it moves forward with the purchase of Popular’s branches.”Additional Background:
Banc of California’s Public Community Benefit Plan can be viewed at this link: http://bit.ly/BancofCAplan
Community Reinvestment Act: The California Reinvestment Coalition has negotiated with the largest banks in California to create strong agreements for the banks to engage in Community Reinvestment Act activities,resulting in billions of dollars of economic activity in local communities. Learn more about CRC and the Community Reinvestment Act on our website: http://rise-economy.org/crc-issues/community-reinvestment-act
CRC’s SafeMoney™ standards are an outline of checking account features that should be included in all bank accounts, such as not allowing costly overdrafts on debit card purchases, low opening deposits, and waived monthly fees with direct deposit. To view the full list of SafeMoney™ standards, visit: CRC SafeMoney™standards
Small Business Lending in California: In December 2013, CRC released an analysis of Small Business Administration data for FY 2013. There was a 60% drop in small business lending in California from federal fiscal year 2007 until federal fiscal year 2013, with African-American, women, and Latino-owned businesses seeing even larger reductions. To view the full report, visit: New Report Finds 60% Drop in Small Business Lending