Gloria Angelina Castillo , Eastern Group Publications
Hundreds of parishioners from Dolores Mission and Our Lady of Talpa churches, both located in the Boyle Heights district, were among the participants.
"We are here to say to big lenders, open your fists, and share our wealth. Invest in us, give us money and lend it fairly, and if you don't, or if you won't, than you have no right to do business in our city," said Dolores Mission Pastor Scott Santarosa during the event held at Blessed Sacrament Church in Hollywood.
Santarosa and other religious leaders said they have heard hundreds of stories of job losses and struggles to survive during the economic meltdown. Angelenos are unable to get home mortgage loan modifications, and small businesses are closing because they are unable to get the financing they need to survive through a rough patch. The result is pain, depression, and anger in households across the city, said clergy members.
"I am frustrated and angry too because financial institutions are doing well in this economic recovery," said Father Michael Mandala of Blessed Sacrament. "Some of them have even received billions of government dollars to help them out of a crisis that many of them, not all, but many of them caused. In the meantime, most of them have not stepped up to help the struggling people in our cities."
Myreya Pena, Chair of Board of Directors of LA Voice, an interfaith advocacy group, said unemployment rates are the highest ever recorded. She said communities of color have been hit the hardest.
Of the $12.8 trillion spent to help banks, little has gone to help homeowners, said Santarosa.
"$600 million doesn't even compare to the $12.8 trillion used to protect and help banks, he said, adding that while small businesses create jobs, lending to small businesses in California has dropped 49 percent since 2006.
"You are hearing the cries of people whose homes have been foreclosed upon. You are hearing the cries of businesses that have been shut down... You are hearing the cries of people who need help from the banks," said Councilmember Richard Alarcon (CD-7), who has proposed the ordinance to the Los Angeles City Council. "We're not trying to kill the banks, we just want to work with the banks to create a better Los Angeles and create a better America."
Alarcon said he originally proposed the ordinance two years ago, but it fell on deaf ears until LA Voice, the organization that put on Monday's event, and organizations like SEIU started engaging its members.
The proposed "Responsible Bank Initiative" was considered in the LA City Council on Monday, but a decision to support it was postponed until city analysts can determine the cost of its implementation.
The ordinance would have major ramifications on banks and borrowers. Banking institutions would be required to report annually to the city's treasurer on their lending activities within Los Angeles, as well as on their "community investment goals." Information on home mortgage loans, refinancing activities, loan modifications, and foreclosed properties would have to be disclosed under the ordinance.
In addition, banks would also have to list their small business loans and community development loans, which ordinance-backers hope will boost job creation.
Other details include requiring banks to state if they have policies that allow unemployed borrowers to qualify for home loan modifications based on unemployment insurance, and allow tenants in foreclosed homes to continue to rent the properties until they are sold.
Local residents, such as Highland Park homeowner Mae Chinn Keng, stand to benefit from more borrower-friendly bank policies. On Monday, Keng, an architect, said she and her husband have both had their salaries cut. She said their property value has dropped $200,000 over the last two years, and they have been unable to get a loan modification.
"I hope the ordinance will mean banks will pay attention to us and work with us," Keng said, noting they recently defaulted on their mortgage payment.
Jim Roman, owner of East Los Angeles eatery AJ's BBQ Pit, said he was unable to get a loan to "keep us going."
"We were turned down by big banks because I was looked at as a number, as a FICO score," he said. "They didn't care about my dreams, my goals. They didn't look at what I was doing. They didn't look that I was trying to give back to my community, which I believe in. They just saw a number."
Roman credited Pan American Bank, headquartered in East Los Angeles, with helping him keep his business afloat with a small loan to cover utilities.
Angelenos who are not property owners or business owners could reap the benefits of this ordinance too, according to Lourdes Albarran, speaking in Spanish. Albarran lost her job after the business where she worked for over 10 years closed when it was unable to get a loan to keep them going. She said she has been unable to find another job and her family is struggling.
Jesse Torres, CEO of Pan American Bank, and Wayne Bradshaw, president of Broadway Federal, were at the rally on Monday; both committed to continue to help homeowners and small businesses.
Pan American Bank has modified one hundred percent of its loan modification requests, and 100 percent [of them] are performing as agreed, said Torres.
Wells Fargo & Company, which did not participate in the rally, on Nov. 5, announced it is Los Angeles County's number one SBA79(a) lender to small businesses in dollars and units for the second consecutive year. During the 2010 federal fiscal year, which ended Sept. 30, Wells Fargo extended $59 million in SBA79(a) financing to Los Angeles County small business owners, according to the Small Business Administration.
Under the ordinance, data such as this on a bank's lending practices would be used to assign banks a score, much like restaurants receive a letter grade. L.A. city managers would be encouraged to give preference to banks with better community-investment practices when awarding contracts.
Concerns regarding the ordinance have arisen. During Monday's council meeting, Interim City Treasurer Steve Ongele said his office would have to hire more personnel in order to review bank reports required under the proposed ordinance.
Councilman Greig Smith stated his opposition to the ordinance noting that the city has had to let go 4,000 employees over the last two years and would require additional hires to track banks' performances under the ordinance.