May 20, 2009
A Community Reinvestment Act
In 1977, the US passed legislation to compel mainstream banks to deliver a full range of services, including investment to poor areas – it proved highly effective. The Urban Forum in England has launched a UK wide campaign to persuade our govt. to introduce a similar law here – to eliminate discrimination in the provision of financial services to excluded groups.
I thought you might be interested in work that Urban Forum is doing on reform of the banking system, which we’ve been working closely with DTA on, among others. Urban Forum only works in England, but the banking system obviously affects the UK as a whole. It’d be good to link up with Scottish third sector groups on this…hence my email.
Frustrated by the lack of obvious ‘return’ on the huge public investment in the banks and a lack of vision and ambition over what our post-recession society might look like, we’ve developed some ambitious proposals under the banner of community reinvestment. Our aim is to establish a new approach to financial services that places social objectives above the pursuit of profit and creates people centred financial services fit for the 21st century.
We are calling for a Community Reinvestment Act to be introduced and for community reinvestment banking to be established within financial institutions. These measures would:
* Reduce financial exclusion and the financial burden of being poor and eliminates discrimination in availability of financial services
* Increase the range and size of investment available to support social and community enterprise and support the growth of the community development finance sector
* Establish sustainable sources of grant funding and other support for community groups and activity of public benefit
* Rebuild public trust and confidence in banks and the banking system by creating a new economic model that serves public interest.
In short we want banks to become a force for sustainable, positive social change, rather than contributing to increased social inequality and we have strong reasons for believing there is a genuine opportunity to bring about this sort of change if we move quickly to build momentum on the back of political interest.
We are keen to establish a broad coalition of support for community reinvestment and we are asking people to sign up to support these proposals (individuals and organisations). If you feel these ideas are something you want to support, it would be fantastic to get a message of support or an endorsement from you. It would also be great if you would help us to get the message about community reinvestment out, in whatever way you are able.
There are number of actions we’re suggesting people might undertake – signing our petition, contact their MPs, debating the issues etc – on our website. See: http://www.urbanforum.org.uk/community-reinvestment/calling-for-community-reinvestment
The attached paper provides further information on these proposals and the rationale behind them. I’d be happy to discuss any aspect of the paper or to clarify anything that’s not clear – feel free to drop me a line or give me a call.
We’re truly excited about the possibility of achieving something positive out of these difficult times and it would be great to have you on board! Do let me know what you think.
With very best wishes
Download paper here http://www.senscot.net/docs/communityreinvestment070509.doc