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'Responsible banking ordinance' approved by LA City Council

A Chase bank is seen in this undated file photo.

May 15, 2012 12:00:00 AM PDT
The Los Angeles City Council on Tuesday unanimously approved an ordinance requiring banks to prove they have invested in the community.

The Responsible Banking Investment Monitoring Program requires investment banks seeking to do business with the city to prove they have invested in the community. They would have to file a statement of corporate citizenship that could include participating in charitable programs or scholarships in Los Angeles.

Commercial banks will also have to release an annual statement on home mortgages, business and home improvement loans, along with the number of foreclosures.

Banks will also have to participate in the city's foreclosure prevention and home loan principle reduction programs. The ordinance had been in the works for a while, and the vote comes days after JPMorgan Chase revealed its $2 billion trading loss.

Other cities, including Cleveland and Philadelphia, have responsible banking laws. New York City will also consider a similar measure on Tuesday.

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