The Chronicle On Philanthropy-Lawmaker Urges Banks to Continue Charitable Giving
April 21st, 2009
Rep. Barney Frank, chairman of the House Financial Services Committee, is urging banks that have received federal bailout money to continue to support charities and lend to moderate- and low-income neighborhoods.
Mr. Frank, a Democrat from Massachusetts, sent a letter last week to federal regulators that said financial institutions in the Troubled Assets Relief Program, or TARP, should provide charitable contributions and continue their Community Reinvestment Act efforts.
“Given that one of the goals of the TARP was to help stabilize communities, including traditionally underserved communities, I urge you to make it clear to banks that they should continue their CRA-related lending activities, including philanthropy,” Mr. Frank wrote in a letter dated April 17.
Mr. Frank’s letter was sent to Ben S. Bernanke, chairman of the Federal Reserve Board; Sheila Blair, chairwoman of the Federal Deposit Insurance Corporation; John C. Dugan, who heads the Office of the Comptroller of the Currency; and John E. Bowman, acting director of the Office of Thrift Supervision.
Several nonprofit leaders have raised concerns that TARP banks will sharply reduce their giving and lending to poor people because the companies are receiving federal assistance.
While many banks may be forced to decrease such efforts because of their precarious financial situations, they shouldn’t use TARP as an excuse, said Adam Briones, legislative coordinator at the Greenlining Institute, a public-policy advocacy group in Berekely, Calif.
Greenlining asked Mr. Frank to encourage financial institutions to continue their community-development efforts despite receiving bailouts. “We asked Chairman Frank to clarify this,” Mr. Briones said.
He said Greenlining would be checking to make sure banks honor their charitable and Community Reinvestment Act commitments.
TARP recipients include some of the corporate world’s largest donors. They include Citigroup, which awarded $145-million in 2007, and Bank of America, which gave $211-million, according to The Chronicle’s most recent survey of corporate philanthropy.