On November 22nd the LA City Council unanimously approved the Banking with Integrity motion that directs the City Attorney to create an ordinance that works to address predatory sale goals that negatively impact consumers and whistleblower protections for bank workers that report unlawful predatory banking practices. The LA City Council heard testimony of bank workers such as, Ruth Landaverde who was pressured by Management to push unnecessary debt to the most economically vulnerable in our City. The City Council also heard from consumers such as Mrs. Beverly Roberts, a senior citizen who testified of being constantly pressured to open new accounts or get loans. The council also heard from coalition partners the Communications Workers of America and Alliance of Californians for Community Empowerment.
The Banking with Integrity ordinance will work to hold banks accountable which is necessary in order to ensure that the banks that do business with the City of Los Angeles are acting within the law and in the best interest of LA’s local economy. Taking into account the fact that on November 28th the CFPB issued a bulletin warning supervised financial companies that creating incentives for employees and service providers to meet sales and other business goals can lead to consumer harm if not properly managed. Tying bonuses or employment status to unrealistic sales goals or to the terms of transactions may intentionally or unintentionally encourage illegal practices such as unauthorized account openings, unauthorized opt-ins to overdraft services, deceptive sales tactics, and steering consumers into less favorable products. This will inform the City Attorney as they draft ordinance. The draft ordinance is expected to go back to the Budget and Finance Committee some time in February for a hearing then it will go to the full LA City Council for a final vote.