Testimony of Comptroller Brad Lander before the Committee on Finance

Good afternoon, Chair Brannan, Majority Leader Powers and members of the Committee on Finance and thank you for inviting me to testify about the transparency legislation before you this afternoon and my office’s commitment to ensuring the City’s deposits further community reinvestment goals.

As Comptroller, I am one of three members of the New York City Banking Commission, the body responsible for designating banks eligible to provide treasury services or hold deposits of City funds. The Commission has long embraced its role to ensure that banks entrusted with the City’s funds are properly and equitably serving and lending to City residents; indeed the Charter and the Commission’s own rules mandate that the Commission secure and evaluate non-discrimination commitments from banks. Consumer banks play a vital role in New York City’s communities, and their practices in lending, employment, and banking products and services reverberate through all five boroughs. In pursuit of a shared and prosperous economy for all, the City must be vigilant in evaluating the banks that hold its money and hear from New Yorkers about their experiences with these institutions. I am grateful to Mayor Adams and Commissioner Niblack for their partnership in this work, as we continue to take a hard look at who the City is choosing as banking partners. In February, we announced two important transparency measures that will help gauge the consumer and community service experience of the city’s designated banks and provide a tool for better assessing the commitment of banks looking to hold City deposits to non-discrimination in lending and employment. Starting with this year’s biennial designation cycle, the Banking Commission will include a public comment process culminating in testimony on May 25 ahead of the Banking Commission’s vote to designate banks that will be eligible to hold deposits of City funds. Additionally, the certificates banks must submit ahead of designation have been revised to reinforce the obligation for depository banks to provide detailed plans and specific steps to combat different forms of discrimination in their operations.

Since taking office, my office has been vigilant in monitoring the banks currently designated by the Banking Commission in 2021. On April 8, 2022, Mayor Adams and I wrote to Wells Fargo to express grave concerns about the alleged disparate mortgage practices revealed in reporting by Bloomberg. We indicated that this required a swift response by Wells Fargo and that in light of a persisting track record of discrimination, New York City would not be opening any new depository accounts with them. The letter invited Wells Fargo to make clear how it would seek to resolve its pattern of discrimination and take public steps in partnership with community reinvestment and civil rights organizations to institute additional best practices for fair lending. After the CFPB fined US Bank last summer for violations of consumer financial protection law, I wrote to their CEO to elicit responses regarding the number of impacted New Yorkers, the measures taken by US Bank to remediate harm caused to consumers, and problematic employee incentive compensation programs. And on March 2 of this year, I sent a letter to senior executives at JPMorgan Chase seeking information about an announced set of early closures by the bank with potential deleterious impacts on BIPOC and low- and moderate-income communities.

Turning to the legislation being heard this afternoon, I am proud to testify before the Committee, as a former cosponsor of previous versions of Res. 203 and Int. 498 and 499 and to organize alongside a broad coalition of community groups and elected officials to help build support for and shape a public bank for New York City.

Embracing New York’s reputation as a center for prosperity and opportunity requires addressing financial inequities facing communities of color. A history of discriminatory banking policies have left low-income New Yorkers struggling to build credit and receive loans. Albany can act now to establish public banking opportunities so that all communities have the path to build wealth and achieve the prosperity that New York promises. A public bank rests on the underlying principle that the bank must serve the interest of working New Yorkers, especially in the communities of color that big banks have neglected for so long. A public bank would create new opportunities to support existing community development financial institutions to dramatically expand their footprint and provide basic high-quality banking services to the 780,000 New York families who remain unbanked or underbanked; support social housing models citywide; and support a just transition away from fossil fuels towards community- and municipally-controlled renewal energy sources and fund weatherization and climate impact mitigation infrastructure the City desperately needs.

We however do not need to wait for the State Legislature to take steps to actualize this bold, transformative vision. This starts with transparency measures like Int. 498 and 499 which provide New Yorkers with detailed information on New York City’s current holdings in major financial institutions including what we are spending on services. My office coordinates many of these services through the Bureau of Asset Management and I look forward to participating in conversations about legislatively providing sunlight to these dealings. The taskforce proposed by Int. 999 will prepare a draft plan to satisfy the governance and charter requirements for a public bank, allowing the City to take prompt advantage of this important opportunity as soon as the law permits.

The necessary investment in the preservation and fostering of a thriving and equitable city cannot come with racial wealth extraction, predatory lending, and the degradation of our environment. Such equity stripping actions harm not only the citizenry but also undermine our commitment to community wealth building. Bringing sunlight to our existing financial relationships and investing in new mission-driven institutions is integral to live up to that abiding obligation and protect New Yorkers and New York City alike. I appreciate the ongoing collaboration my office shares with Mayor Adams and Commissioner Niblack to address our shared commitment to making a deposit in equity and resiliency via the Banking Commission and look forward to the continuing conversation about moving forward with the critical measures before the committee.

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