Unveiling what he called a “historic banking initiative” this week, Freeholder Chairman Bill O’Dea said he hoped to modify the way the county does business with banks in order to better support those banks that provide good services to Hudson County residents.
A committee report was scheduled to be presented to the freeholder board at its caucus meeting on March 28. It is the result of a year-long examination of the investment practices and services provided by banks located in Hudson County.
This report is the first in the county’s history, O’Dea said, and one of the first in the country to provide an analysis of a variety of topics, including account fees, commitments to local not for profits, bank investments in mortgages, small businesses, affordable housing and tax credit programs, and the growing problem of identity theft.
“Large banks tend to be less consumer friendly.” – Bill O’Dea
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“Up to now, Hudson County and almost every other government entity has looked at where they keep their deposits from only one perspective, and what services and interests rate does the bank offer the government on its deposits,” he said. “We will now also ask each year, ‘What investments are you making into our neighborhoods and residents of Hudson County? What services are you providing them? What fees are you charging them?’ ”
Questions about Bank of America
Earlier last year, O’Dea tabled a motion that would have named Bank of America as one the official banks for county funds.
While he said the staff at the local branches tended to be good, corporate policies seem to have created problems for local people, such as monitoring accounts for potential theft and user fees.
Unable to get a public accounting for consumer practices by banks holding county cash, the freeholders established a Minimum Consumer Protection in Banking Initiative, designed to look to determine if the banks the county uses offer basic consumer services to residents in the county.
“The purpose of the committee is to set minimum consumer protections within banks that do business with Hudson County,” O’Dea said.
While some banks that serve as depositories for county funds do offer minimum standards to people doing business with them, Bank of America appears not to, and O’Dea said the county needs to steer its business to banks that do.
“Large banks tend to be less consumer friendly,” O’Dea said. “In some cases, people have to wait six months to get their money back if there is a mistake.”
Committee looked at a variety of issues
The committee was asked to investigate “best practices” currently used in the banking and credit card industries to protect consumers against account theft and fraud, and to thoroughly investigate breaches and take appropriate actions.
O’Dea pointed out that eight banks went through the full review process in 2010, and that the committee came up with several strong recommendations: Banks the county does business with will be required to submit an Annual Performance Indicator Report; and that the county will only do business with banks that have a Satisfactory or Outstanding CRA rating.
“Banks,” he said, “need to become more pro-active in the areas of purchasing and deploying low-income housing, and new market and neighborhood revitalization tax credits in projects in Hudson County. [They] need to do more outreach and training to county not for profits and assist them in applying for Foundation Grants their banks and foundations offer, and the county and the banks need to improve efforts in informing the public about how to best protect themselves from identity theft.”
In addition to these, the committee will continue to look at other areas of concern, such as redlining, mortgage foreclosures, and small business lending.
“This is only the start,” O’Dea said. “Our banks can and need to do more.”
O’Dea wants to meet with federal elected officials to discuss the ways Community Reinvestment Act ratings are given to banks.
O’Dea pointed out that since Hudson County is in the New York City region, banks may get an outstanding rating, but it is because of the investments they are making in New York City.
“This is unfair to Hudson County,” said O’Dea. “We need to develop a way to do our own CRA rating on these banks based on what loans and investments they are making in Hudson County.”
O’Dea said the committee will continue to look at where banks are locating their branches and where they are closing them.
The banks that made full presentations to the committee were: Capital One Bank, Bank of America, Wells Fargo, TD Bank, PNC Bank, Valley National Bank, The Provident Bank, and Hudson City Savings Bank. O’Dea praised the members of the committee that included the county administrator, several department directors, HCEDC, and a representative from the County Prosecutor’s Office, as well as staff assigned to writing the report for their hard work on this endeavor. He also recognized the County Executive, who acted on the suggestion of the Freeholder Board in January of 2010 in naming the task force.
Al Sullivan may be reached at asullivan@hudsonreporter.com.