The Inner City Public Interest Law Center advocates and provides legal representation on issues that impact low- and moderate-income communities: community reinvestment (click here for weekly CRA news), insurance and telecommunications redlining, environmental justice (click here for weekly EJ news), civil and human rights and constitutional law generally. In late 2003, the Center's founder filed suit in federal court asserting that the "citizens-only" provision of Delaware's Freedom of Information Act violates the privileges and immunities clause of the U.S. Constitution - click here for the Associated Press' coverage of the case, c/o the First Amendment Center. See also the related book Predatory Bender, available here. Also, following September 11, 2001, ICP began a Finance Watch, on issues of money laundering; and a Fair Finance Watch, on fair lending globally.
Government agencies are required to consider each of these issues, generally in comment periods on particular applications for regulatory approval. Grassroots organizations of affected citizens do their best to keep track of the various comment periods, and to effectively participate in these proceedings. But the corporate applicants are almost always represented by lawyers with years of experience -- often within the regulatory agency -- on the substantive and procedural issues which arise on protested applications.
A mission of public interest law is to try to equalize, as much as possible, this imbalance of power and knowledge. To ensure that the statutory promises of public participation, and transparency of government decision-making, are in fact fulfilled, especially for lower income people and other too-often excluded people. This, along with appropriate enforcement of those laws which supposed to benefit and/or protect low- and moderate-income communities and consumers, is the mission of the Inner City Public Interest Law Center.
Some Recent Campaigns
Some of our most recent campaign are summarized on our Bank Beat page, and in our CRA Reporter (both are updated at least weekly). ICP on July 24, 2000 began an ongoing Citigroup Accountability Project -- leading, in last 2003, to a CitiFinancial Watch, state by state. See also our Bank of America Watch page, and our J.P. Morgan Chase Watch. Other ongoing pages are our Wells Fargo Watch page, our U.S. Bancorp Watch page, our Fleet Watch page, our Wachovia Watch page, and, more globally (that is, beyond the U.S.), our General Electric / GE Capital Watch, our Deutsche Bank Watch page, our HSBC Watch page (also addressing the predatory lender Household International), Our AIG Watch (also addressing the predatory lender American General Finance), our Mizuho Watch page, etc.....
Some background: ICPILC has grown out of the work of Inner City Press / Community on the Move, a organization founded in the South Bronx of New York City in 1987. In 1992, ICP challenged an acquisition proposal by The Bank of New York, based on that bank’s exclusion of the South Bronx and Harlem from its service area. ICP prevailed: the bank expanded its service territory to include the Bronx and Harlem, and, in 1993, committed $5 million in loans to the areas.
In 1994, after having discussed this precedent with other NYC banks which similarly excluded the Bronx, but having seen few changes, ICP challenged the expansion applications of five more banks. To resolve these challenges, two banks (Dime Savings and NatWest) opened new bank branches in the South Bronx, the first new branches here in twenty years. Two other banks (Marine Midland and Republic) opened new loan production offices in the Bronx; the other bank (First Fidelity, now First Union) committed $15 million in new lending to the South Bronx. These successes were widely reported; ICP’s work was profiled on ABC News’ Nightline program on April 10, 1995 (Transcript # 3621). ICP continued -- and continues -- its local, NYC work (see, e.g., 1996 local agreement; 1997 local agreement).
As word of ICP’s successful enforcement of the CRA spread, other community groups, and consumers, began to contact ICP for advice and assistance. ICP began to collaborate with groups in other states on CRA challenges. To formalize this work, and ICP’s emerging environmental and telecommunications advocacy (which has included successful challenges to media mergers), in 1998 we founded the ICPILC, with ICP’s initial executive director becoming the general counsel of the ICPILC.
In 1998, ICPILC, representing two community organizations, challenged the merger of Household International and the Beneficial Corporation, and won a series of precedent-setting fair lending and consumer protections, and $3 billion in new lending to low- and moderate income borrowers. Later in 1998, ICPILC won even further-reaching fair lending protections, and $1 billion in new lending to low- and moderate-income borrowers, in connection with Charter One’s acquisition of ALBANK.
There are issues, however, which do not lend themselves this type of resolution. Financial services companies, for example, are seeking through various loopholes to narrow the applicability of the Community Reinvestment Act. Click here to view the Center’s and ICP’s 1998 comments opposing the combination of Citicorp and Travelers. Click here for a summary of T. Rowe Price’s attempt to gain an exemption from the CRA for a savings bank it is proposing to create; click here to view ICP's 1999 challenge to the bank charter application of televangelist Pat Robertson and the Bank of Scotland (the application was withdrawn after ICPILC's protest); click here to view ICP's 1999 challenge to Fleet-BankBoston (after the protest, Fleet made a unilateral $14.6 billion CRA pledge); and, more generally, see ICP’s and the Center’s Current Campaigns page, and News about ICP's and the Center's work. See also, "Community Reinvestment in a Globalizing World: To Hold Banks Accountable, From The Bronx to Buenos Aires, Beijing and Basle," by Matthew Lee, in Organizing Access to Capital: Advocacy and the Democratization of Financial Institutions, Prof. Greg Squires, ed., Philadelphia: Temple University Press, 2003.
In 1999, the ICPILC won several more important CRA precedents. One involved the investment bank Lehman Brothers, which sought to acquire the failing Delaware Savings Bank with scarcely a CRA plan in place, and while being active in underwriting the mortgage-backed securities of various subprime lenders, including Delta Funding, which was sued by NYS authorities for predatory lending. After ICPILC's comments, the OTS encouraged Lehman Brothers to pledge $2.2 billion in low and moderate income lending, and to identify and avoid predatory lending practices, including in the loan pools Lehman does the underwriting for. Another ICPILC protest ended with GMAC pledging $6 billion in low and moderate income lending. In mid-2001, ICP's advocacy resulted in a commitment by the insurance company AIG that its consumer finance units would cease single premium credit insurance (see, e.g., New York Times of July 21, 2001; click here for the campaign story).
Along with other ongoing projects, ICPILC is advocating for the appropriate application of the Community Reinvestment Act to Internet banks. Some background: when the CRA was enacted in 1977, few could have foreseen, 23 years in the future, the inroads that non-brick and mortar, Internet banks are making. The initial CRA directs regulators to ensure that insured depository institutions meet the credit needs of their communities, particularly low and moderate income neighborhoods. Each bank’s “community” (or delineated assessment area in which the bank’s performance would be judged) was defined as an area around its deposit taking branches -- because this was the way that deposits were collected in 1977. By regulation, the definition of assessment area was later expanded to include the communities where a bank’s deposit-taking automatic teller machines are located.
The use of the Internet to solicit deposits and offer credit products, however, leaves those notions of a bank’s community outdated. Non-brick and mortar banks need only a single headquarters office, the location of which has little to no relation to the communities from which the Internet bank can draw deposits. Nevertheless, many Internet banks seek to limit their assessment areas -- the communities in which they would have a CRA duty to meet credit needs, including of low and moderate income people -- to the city in which they place their headquarters office.
Internet institutions like E*TRADE Bank are running television advertising campaigns nationwide, with the following message: “We can pay higher interest rates on deposits because we don’t have the expense of branches. Move your money to our bank.” Since the traditional banks in the cities where E*TRADE Bank is running these ads have CRA duties in these cities, each dollar withdrawn from them, and placed in E*TRADE Bank (which seeks to limit its CRA assessment area to Arlington County, Virginia, where its headquarters office is) is a dollar taken out from under a CRA duty in that city.
How have the regulators been dealing with this issue? In short, haltingly, even irrationally. In 1996, the Internet brokerage Waterhouse Securities set up a deposit taking bank, Waterhouse National Bank. Waterhouse Securities has its headquarters in New York City, on Wall Street. It placed the headquarters of its bank, however, in the more affluent suburbs, in White Plains, New York, and got the Office of the Comptroller of the Currency to agree to limit its CRA assessment area to White Plains. When Canada’s Toronto Dominion Bank applied to the OCC to acquire Waterhouse and its bank, ICP submitted comments. The OCC did very little. The Federal Reserve Board did inquire into the deal, but went on a tangent, focusing on TD’s lack of experience with the CRA. The Fed ended up requiring TD to make a three to five year CRA plan, but did not meaningfully address the CRA responsibilities of this Internet bank, which does very little to ensure that its credit products are offered and accessible to low and moderate income consumers.
In 1998, another Canadian bank, the Royal Bank of Canada, applied to the Fed and to the Office of Thrift Supervision to acquire one of the first pure-Internet banks, Security First Network Bank, with its headquarters office in Atlanta. The Fed entirely punted on this one, stating in a footnote that the OTS was in the middle of a rulemaking on Internet banks (which has come to nothing). The OTS explained to ICP that the application had to be expedited, and therefore the OTS would not follow its own rules for a public meeting / oral argument.
An interesting hybrid proposal was submitted to the OCC in 1999: yet another Canadian bank, Canadian Imperial Bank of Commerce, wanted to set up a “direct bank” in Florida, using kiosks in Winn Dixie supermarkets which would have direct Internet and phone access to CIBC’s bank. When the ICPILC raises CRA assessment area issues, CIBC made a commitment that all substantial business would have to be done from the kiosks -- from a home computer, a consumer could not even apply for a loan. On that basis, the OCC defined CIBC’s MarketPlace Bank’s assessment area as the communities around its kiosks.
On a policy issues like this, one might assume that each administrative decision is a precedent, a sort of mark in the sand. Not so. In late 1999, the Dutch insurer ING applied to the OTS to set up a “direct bank” to be headquartered in Wilmington, Delaware, but targeting consumers from Delaware up to and including New York City. ING proposed that its assessment area be limited to the Wilmington MSA. The ICPILC submitted a timely comment to the OTS on ING’s application; the CRA assessment area was broadened somewhat. And the battles continue... Click here for weekly Community Reinvestment Act news.
ICP is also engaged in a number of open government campaigns, for example against the Federal Reserve Board, for that agency’s refusal to comply with the Freedom of Information Act and other rudiments of fair procedures. Click here to view ICP’s Freedom of Information guide.
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More generally, there are several fields in which the Center is currently engaged in persistent and cutting edge oversight and advocacy (with links to ICP info):
Access to Telecommunications, Broadcasting and the ‘Net
Community Reinvestment Act / anti-predatory lending
Open Government: FOIA and the Sunshine Laws
In these fields, the Center both submits its own comments, and provides representation to other grassroots groups.
Other fields in which the Inner City Public Interest Law Center works include:
Educational Equity; Fair Housing; Antitrust (esp. as to lower-income people); Health Care; Police Brutality; and, over-archingly
There are many restrictions on lawyers, most of them with good intentions, but which limit the dissemination of information about rights and the law to those who most need this information. Below you will see a disclaimer to this effect. If you have a question, or issue, with one of the above topics, contact a lawyer of your choice, a library, or call the Inner City Public Interest Law Center, at (718) 716-3540.
Inner City Public Interest Law Center Links:
Federal Register Daily Contents
Law.Cornell.Edu -- Many links: statutes, regulations, etc.
The U.S. Constitution -- Which needs no introduction (?)
Law Reviews / Journals c/o Yale Law School
National Association for Public Interest Law (NAPIL)
Brandeis Papers c/o louisville.edu
Discussion of Critical Legal Studies & Roberto Unger
Antitrust c/o ripon.edu -- Supreme Court cases, etc.
Law in Popular Culture links c/o Law.UTexas.Edu
DISCLAIMER: The information contained in this web site should not be construed as legal advice on any subject matter. The Inner City Public Interest Law Center (“ICPILC”) and its coordinators expressly disclaim all liability in respect to actions taken or actions not taken based on any or all the contents of this website. The viewing of this website, in part or in whole, and/or communication with the ICPILC or its coordinators via internet e-mail through this website does not constitute an attorney-client relationship. The content of this website has been included for informational purposes only, and may not reflect current legal developments, verdicts or settlements. No recipients of content from this website, clients or otherwise, should act or refrain from acting on the basis of any content included in this website without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue.
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This page copyright 1999 - 2003, Inner City Public Interest Law Center and Inner City Press/Community on the Move, Inc.. All rights reserved. For further information, or to request reprint or other permission, contact: Permissions Coordinator, Legal Administration, Inner City Public Interest Law Center, P.O. Box 580188, Mount Carmel Station, Bronx, NY 10458. Phone: (718) 716-3540. Fax: (718) 716-3161. E-mail: ICPILC [at] innercitypress.org