Bill Ends Toxic Financial Deals Costing Taxpayers $19 Million/Year, Forces Banks to Act on Foreclosures and Small Business Lending

Part of National Effort Launched by SEIU, Community Allies to Hold Wall Street Banks Accountable

Los Angeles, CA--With Los Angeles facing a nearly $500 million budget gap next year and proposing to slash services at parks, libraries and public safety, the Los Angeles City Council unanimously passed historic legislation today to put an end to the banking practices that created the city's budget crisis. The move will save the city $19 million immediately.

The legislation passed today sets new community standards for banks the city does business with and ends swap deals. These new standards will ensure taxpayer money is only invested in banks actively working to help families keep their homes, expand lending to small businesses to create jobs, end toxic swap deals that put public services at stake and relieve the city's enormous budget gap. Los Angeles joins the state of Pennsylvania in targeting swap deals that are costing taxpayers billions of dollars in excessive fees and interest nationwide.

Today Los Angeles sent a clear message to Wall Street--if you continue to ravage our city, you will not get a dime of taxpayer money," said SEIU Secretary-Treasurer Anna Burger. "It's time for Wall Street banks to stop focusing on their profits and start doing their part to help our cities and families recover."

The vote comes less than two weeks after more than one hundred SEIU members, community and faith allies, community banks, and Los Angeles families converged on City Hall to voice their support for the legislation.

The legislation sets key benchmarks forcing banks to:

• Save the city $19 million each year by renegotiating or canceling toxic interest rate swap deals to protect services from being cut. Los Angeles would be the largest city to act against these deals that have already cost American taxpayers billion in fees and excessive interest;
• Stop home foreclosures and meet a minimum number of permanent mortgage modifications; and
• Restore small business lending to jumpstart job creation.

Today's effort is part of a national campaign to hold Wall Street banks accountable by moving taxpayer funds into community banks that invest back in communities and ending toxic swap deals.

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