Boston City Council overrides Mayor Thomas Menino’s veto on banking ordinance
A simmering battle over the city’s banking services came to a boil last week when the City Council overrode a veto from the mayor for the first time in 19 years, passing Councilor Felix G. Arroyo’s Invest in Boston ordinance over Mayor Thomas Menino’s objections.
Under the new ordinance, banks will be required to disclose data including loans made to small businesses in Boston, mortgages loaned to Boston homeowners and other banking activities in order to bid for contracts to provide banking services for the City of Boston.
The city government deposits account for more than $1 billion in payroll and other services.
“Invest in Boston means that as a city, we will only do business with banks that invest in our neighborhoods,” Arroyo said.
The ordinance, modeled after similar laws in cities like Cleveland and Philadelphia, is aimed at using the city’s cash as an incentive for banks to invest more in Boston’s local economy. By disclosing data on lending, the banks would enable city officials to better evaluate their lending activities, according to Arroyo.
“Invest in Boston will strengthen our economy by supporting small businesses, stabilizing our neighborhoods by promoting home ownership and helping end the cycle of poverty by creating jobs in our city,” he said.
The Menino administration argued the proposed ordinance would place too many conditions on banks in exchange for providing services that do not earn them much profit. Earlier in October, he proposed his own legislation, which greatly reduced the amount of information banks would be required to disclose.
While Arrroyo’s ordinance calls for banks to report lending to small businesses, mortgage loans, personal loans, lending to community development corporations and information on foreclosures, Menino’s ordinance would not require banks to disclose such data.
The showdown at last Wednesday’s council meeting began with Arroyo’s motion for a vote to override the mayor’s veto. Councilor Mike Ross countered, suggesting the council had an obligation to hold a hearing on Menino’s ordinance.
Council President Murphy then called for a delay on the vote to override, pending a hearing. But Arroyo, arguing that he still had a motion on the floor of the council, countered by asking councilors to vote on whether the vote should take place that day.
Speaking on behalf of Arroyo’s call for a vote that day were councilors Frank Baker, Tito Jackson, Ayanna Pressley and Charles Yancey.
“Transparency and accountability are key,” Jackson argued. “Every student in the Boston public schools gets a report card,” he said. “Someone who’s holding a billion a year is asking that they not have to hand in a report card.”
Arguing against reviewing the mayor’s proposal, Baker noted that the council had held hearings on his proposed ordinance over the last four years before the council’s unanimous vote in support.
“The mayor’s plan is a reaction to what we’re trying to do here,” Baker said. “We voted 13 to zero in favor of this. People in my neighborhood are looking for banks to invest in Dorchester. So I’ll be voting yes today.”
In the final vote, the motion to override the mayor’s veto passed 10 to 3, over the objections of councilors Rob Consalvo, Sal Lamattina and Mike Ross.
Activists from community-based advocacy groups including City Life/Vida Urbana celebrated with Arroyo and his staff outside the council chamber after the vote.
Municipal Research Bureau President Sam Tyler said he didn’t think the ordinance would have much immediate effect on the city. Menino administration officials just approved a three-year contract with Citizen’s Bank to provide banking services to the city, Tyler noted.
“It’s an issue that’s going to have to be addressed by the next mayor and the next council,” he said.