LOS ANGELES, CA - With the support of the New America Foundation and other groups, Los Angeles City Councilman Richard Alarcón today asked the City Attorney's office to draft an ordinance bringing Banking Development Districts to Los Angeles. The ordinance would use state and local deposits to encourage banks to open branches in lower-income neighborhoods and develop products and services tailored to local residents.
"I applaud Councilmember Alarcon's attention to what is a very important and often unaddressed need, banking the unbanked. It's difficult to believe that over 300,000 Angelenos lack a basic checking and savings account. But this is a reality in too many low-income communities throughout Los Angeles and across the state where banks and credit unions are nonexistent," said Olivia Calderon, California Legislative Director of the Asset Building Program at the New America Foundation. "The Banking Development District program is a proven way to connect families with the tools they need to get on the path to saving and investing."
Today, approximately 1.5 million Californians are "unbanked" - meaning they do not have a simple checking or savings account. Recent research indicates that Los Angeles has the third highest percentage of unbanked residents in the country. Without a bank account, these Angelenos often pay large fees to cash their checks and save their money at home, leaving them vulnerable to robberies and fires.
"Banking Development Districts are an opportunity for new investment in low-income communities that have historically been neglected for decades," said Forescee Hogan Rowles, President and CEO of the Community Financial Resource Center.
New America's Asset Building Program has long called for the creation of banking development districts. In 2007, the New America Foundation partnered with the city of Los Angeles and co-sponsored legislation to create a statewide banking development district program in California, intended to spur increased and enhanced banking services in underserved communities.
Please contact Elizabeth Wu with press inquiries at (510) 295-9859 or firstname.lastname@example.org.