Pittsburgh City Council voted Wednesday for a one-week hold on a bill that would set community investment standards for banks that do business with the city government.
Sponsoring Councilman Daniel Lavelle said the delay will allow him time to write in language for a Reinvestment Review Committee. That body of council members, administrative employees and community members would decide which banks to use as city depositories, based on a set of criteria. The city controller would oversee the process.
"Specifically, we're taking a look at low- to moderate-income neighborhoods, and what is your dedication to those communities? What is your willingness to help the redevelopment of those neighborhoods? And then, based upon that, those are the individuals who should receive our funds," said Lavelle.
The committee would rate each bank on fourteen different factors, including: the number of branches in low- to moderate-income census tracts; the percentage of its home and small business loans within those areas; and the dollar amount of loans and grants to community-based nonprofit groups.
Financial institutions that rank highly in the committee review are given precedence in the controller's bank selection decisions.
Lavelle said one major criterion for city depositories would be the bank's federal Community Reinvestment Act rating.
"If they don't even have a good rating there, then we won't even consider them at all," said Lavelle.
The city government would also keep its own interests protected: the rate of return with each bank would be another factor for the committee to consider.
Lavelle said about ten banks apply to hold city dollars each year, and the legislation would require Pittsburgh to use at least two different depositories for its roughly $500 million treasury.
He said he expects the responsible banking bill to pass council unanimously when the language is finalized.