The Association of Neighborhood and Housing Development (ANHD), of which AAFE is a member, has released a new report entitled “State of Bank Reinvestment in New York City: 2013.” The report analyzes the local impact of the Community Reinvestment Act (CRA), highlights industry trends, and identifies and compares how individual banks do or do not meet the City’s credit and banking needs.
Major findings from the report include:
- Locally held deposits in NYC’s 24 largest banks increased 22% in 2011 but the volume of dollars reinvested did not keep pace in most areas.
- The number of bank branches changed little in 2011, but most branches are clustered in mid- and lower Manhattan, with fewer in the outer boroughs. Some neighborhoods still have no branches at all. Barriers such as cost and requirements to open accounts can make basic banking unaffordable and inaccessible to working-class New Yorkers.
- Multifamily lending more than doubled in 2011. Indicators of distressed multifamily housing seem to have decreased, but speculative loans still pose a threat to affordable housing. No public data exists to indicate an over-leveraged building in good condition, which means that regulators should look at other risk factors and work with tenant organizers to identify patterns of harassment and neglect.
- Community development lending and investments decreased considerably from 2010, while lending to nonprofits increased. However, comparing average loans and investments between 2008-09 and 2010-11 shows longer term trends of increasing reinvestment.
- Philanthropy increased 15%, but the number of grants remained mainly flat. The amount given to neighborhood-based organizations increased 38%. Banks continue to dedicate a very small percentage of their deposits to CRA-eligible grants – an average of 0.02% in 2011.
- 1-4 family home purchase and refinance lending decreased nearly across the board, only increasing in refinance lending to low- and moderate-income borrowers.
- The number of small business loans increased 22% overall and by 26.8% in low- and moderate-income census tracts.