How Occupy Los Angeles May Get the City to Go After Banks
First introduced more than two years ago, the proposal had lost steam until the zeal of Occupy Los Angeles gave it momentum, according to its sponsor, councilman Richard Alarcon. “We felt the resolution kind of captured the spirit of the entire movement,” Alarcon says. “We were sort of kindred spirits.” If implemented, the initiative would set up a report-card system to rate banks and deny them business if they score too low. Banks’ scores would be determined by factors such as the number of home-loan modifications they give to homeowners to prevent foreclosures, how much lending they do to small businesses and whether the institutions have committed fraudulent activity. And there is reason to suspect fraud. In 2008, the city of Los Angeles filed a lawsuit against 35 financial institutions alleging wrongdoing like rigging bidding processes to manage city debt. The suit has yet to be settled as the city waits for state and federal investigations to conclude amid similar accusations in other cities. “If we find that companies are bid rigging and defrauding the city’s taxpayers out of money with their actions, then why should we do business with them?” Alarcon says.