Activists press Santander bank to deal locally
Santander cutting deal with D.C. group
Yawu Miller | 3/15/2017, 9:47 a.m.
Under the Community Reinvestment Act of 1977, banks are required to extend credit to businesses and residents of low-income communities where bank services historically have been lacking. While those agreements have traditionally been negotiated with community-based organizations and nonprofits, Santander Bank is looking elsewhere to negotiate benefits for communities in Boston, Worcester and Springfield: Washington, D.C.
A coalition of Boston activists is questioning why the bank decided to negotiate a CRA agreement for Massachusetts cities with the Washington-based National Community Reinvestment Coalition.
“We cannot accept and will not accept any outside group or organization to negotiate on our behalf,” said Louis Elisa, speaking for Freeze Frame Black Boston, a coalition organized around economic empowerment in Boston. “Our community is more than capable of speaking for itself. The black and Latino communities can and will speak on our own behalf.”
The Community Reinvestment Act requires that banks make loans and make available banking services in historically underserved neighborhoods. It was enacted largely in response to historical trends of banks redlining — denying mortgages and other loans — in black and Latino communities.
The law has had far-reaching effects, forcing banks to open branches and place ATM machines in low-income communities where many have long had to rely on check-cashing stores and spurring banks to fund mortgage programs aimed at first-time homebuyers and administered by local nonprofits. Programs like the Jamaica Plain-based Neighborhood Assistance Corporation of America and the Dorchester-based Massachusetts Affordable Housing Alliance have helped hundreds of working-class Boston-area residents purchase their first homes.
When Santander bought part of Sovereign Bank’s Massachusetts portfolio, the Madrid-based bank agreed to maintain existing CRA agreements that community activists had hammered out with Sovereign. But in recent years, the activists say, bank officials have backed away from those agreements and fired staff responsible for maintaining CRA obligations.
The Office of the Comptroller of the Currency, which regulates bank, gave the bank a “needs to improve” rating during a recent review.
“What it says to us is that we’re dealing with people who are rooted in the thought that they can do what they want,” said former City Councilor Chuck Turner. “As a community, we need to collectively negotiate with them.”
A spokeswoman for the bank said the downgraded CRA rating was not related its current CRA performance, citing $875 million in mortgage lending to low- and moderate-income people in Massachusetts and communities and $231 million in small business lending in low- moderate-income communities.
“Santander has never been more committed to meeting the needs of the communities we serve,” said spokeswoman Ann Davis in an email statement. “Our CRA rating downgrade is specific to the 2011 to 2013 time period and is the result of three regulatory actions not related to our CRA performance. In fact, our CRA performance evaluation states that Santander received a rating of Satisfactory for CRA performance, with a High Satisfactory in lending. Our downgrade for 2011-2013 in no way reflects our current commitment to our customers and communities, including our substantial increase in community development investments in recent years.”
But activists at last week’s press conference were more focused on Santander’s dealing with an outside group to negotiate local community benefits, many calling it racist. Turner called for an “immediate, systematic withdrawal of funds” from the bank.
“There should not be any one person or organization in this community with money in Santander,” he said.
“As we continue to see huge and ever-increasing gaps in wealth as highlighted in the Federal Reserve Bank’s report ‘The Color of Wealth in Boston’ and other reports that show barriers to capital, impediments to employment and job training, and discriminatory practices in contracting,” said Segun Idowu, speaking on behalf of the NAACP Boston Branch, “we must demand more of our banks to meet their statutory obligations to lend fairly and equitably. Black and brown families depend on it and have earned it.”
Former City Councilor Charles Yancey noted that the city could leverage its deposits of more than $3 billion a year to prompt Santander to negotiate CRA obligations with community-based organizations.
“It’s a tremendous amount of power that could be used to force compliance with the Community Reinvestment Act,” he said.