Summary

Banks that wish to compete to be King County’s financial services provider would have to develop plans to address the credit and financial needs of the County's diverse and historically underserved communities, under new guidelines for socially-responsible banking proposed this week by King County Executive Dow Constantine in collaboration with members of the County Council.

Story

Banks that wish to compete to be King County’s financial services provider would have to develop plans to address the credit and financial needs of the County's diverse and historically underserved communities, under new guidelines for socially-responsible banking proposed this week by King County Executive Dow Constantine in collaboration with members of the County Council.

"Any institution that wants to serve as the people’s banker must share our commitment to equity and social justice, and to the needs of our communities with low or moderate incomes,” said Executive Constantine.

The proposed guidelines would implement an ordinance developed by the Executive and King County Council and adopted by the Council in February, adding the requirement for socially responsible banking to the competitive bidding process for the County’s banking contract. 

“It’s thrilling to see our Socially Responsible Banking legislation put to work,” said Councilmember Rod Dembowski, prime sponsor of the original ordinance. “I look forward to seeing the proposals from banks working to contract with King County and their plans for investing in the county and all of its communities.”  

“This is an exciting step forward in King County’s efforts to ensure that all our residents have access to equal opportunity,” said Councilmember Joe McDermott, who chairs the Council’s Budget and Fiscal Management Committee.

An innovative provision in the specifications requires that any firm competing for the banking contract must submit a community reinvestment plan that targets King County communities. The plan must highlight past performance and include future actions that fall into three categories:

• Lending practices to individuals, non-profit organizations, and businesses
• Investments in communities
• Services provided within communities.

The plan must also describe the services and efforts of the bank to address the credit needs of low- and moderate-income individuals and communities, including affordable check cashing, alternatives to payday loans, and other outreach and education opportunities aimed at assisting homeowners with distressed mortgages.

The current annual value of the banking services contract is about $700,000, of which $435,000 is for services provided to County agencies. The remaining $265,000 is for services provided to and paid for by nearly 100 special districts –including school, fire, sewer, and water districts –for which King County serves as treasurer.

The County’s current banking services contract is scheduled to expire by the end of 2014. King County is expected to solicit proposals from banks in June, pending the Council's review and approval of the new contract specifications.