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CHAPTER XVIII: FEES AND CHARGES
CHAPTER XIX: SCHOOLS
CHAPTER XX: CHARITABLE INSTITUTIONS
CHAPTER XXI: MISCELLANEOUS PUBLIC BUILDINGS
CHAPTER XXII: SUFFOLK COUNTY
CHAPTER XXIII: TRASH AND REFUSE DISPOSAL
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PARALLEL REFERENCES
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6-8   MUNICIPAL DEPOSITORIES AND CONTRACTS FOR BANKING SERVICES.
6-8.1   Definitions.
   For the purpose of this Section, the following definitions shall apply unless the context clearly indicates or requires a different meaning.
   APPLICANT. Any person who applies for a mortgage loan, commercial loan, home equity, consumer, home improvement or student loan as defined in this Section, whether or not the loan is granted.
   BANKING SERVICES. Products and services provided by a financial institution to the city including, but not limited to, checking and deposit accounts, lockbox services, balance retrieval and online banking, electronic or direct deposit, electronic stop payment systems, credit or debit or wire transfer systems, ACH payments, credit or debit or purchase cards and direct banking services.
   BOSTON SMSA. The Standard Metropolitan Statistical Area of the Greater Boston Region as defined by the United States Bureau of Census.
   CENSUS TRACT. A standard statistical area as established by the United States Bureau of Census.
   COLLECTOR-TREASURER. The Collector- Treasurer of the city.
   COMMERCIAL LOAN. A loan that is secured by commercial property.
   COMMUNITY DEVELOPMENT LOAN. A loan that is secured for the purposes of constructing or rehabilitating commercial or residential property.
   COMMUNITY REINVESTMENT. Residential and mortgage lending services and also meet the definition of “community development” as defined in the Federal Community Reinvestment Act of 1977 regulations, being promulgated under 12 U.S.C. § 2901 and 12 C.F.R. pts. 25, 228 and 345.
   COMMUNITY REINVESTMENT SCORE. A financial institution’s award of points, on a scale of zero to 100 total points, pursuant to Subsection 6-8.7 as determined by the Municipal Banking and Community Reinvestment Commission.
   CONSUMER FINANCIAL PRODUCT. Any product sold by a financial institution to facilitate personal consumption and include, but are not limited to, checking accounts, credit and debit cards or other unsecured revolving accounts, online bill pay services or balance transfer services.
   CONSUMER LOAN. A loan which is secured by an individual or families to finance personal consumption.
   DISTRESSED PROPERTY STATUS. The type of property which would be listed on the Real Estate Multiple Listing Service as a “distressed property sale”, due to it being sale of a bank owned property or a short sale made subject to approval by the mortgage lender.
   ELIGIBLE FINANCIAL INSTITUTION. A financial institution that scores in the top 75% of the community reinvestment rankings, as described by Subsections 6-8.9(C)(1) and 6-8.9(C)(2), and may contract with the city for banking services and serve as a designated city depository.
   FINANCIAL INSTITUTION. Any commercial bank, savings bank, savings and loan association, credit union, cooperative bank, mutual bank, trust company or other entity which makes commercial, community development, consumer, home improvement, residential, small business, student loans or which is the subsidiary, parent, servicer, trustee or Agent of any of the types of entities listed in this Subsection.
   FINANCIAL INSTITUTION EMPLOYEE. Any person employed by a financial institution or its subsidiaries or other affiliated or related entities.
   HOME IMPROVEMENT OR REHABILITATION LOAN. A loan, the proceeds of which are to be used for the purpose of repairing, rehabilitating or remodeling an existing residential dwelling.
   INELIGIBLE FINANCIAL INSTITUTION. A financial institution that scores within the bottom 25% of the community reinvestment rankings, as described in Subsection 6-8.9(C)(3) and may not contract with the city for banking services or serve as a city depository.
   JUST CAUSE. As defined in M.G.L. Chapter 186A. It shall be applied to any occupants of such property, whether those occupants are the former owners of the property or tenants of the former owners.
   MORTGAGE LOAN and HOME EQUITY LOAN. A loan which is secured by residential property.
   PREFERRED FINANCIAL INSTITUTION. A financial institution that scores in the top 25% of the community reinvestment rankings, as described in Subsection 6-8.9(C)(1).
   REDLINING. The practice of systematically denying credit on the basis of the geographic location of the borrower or property to be borrowed against.
   RESIDENTIAL LOAN. A mortgage or home equity loan which is secured by residential property.
   SMALL BUSINESS LOAN. A loan or extension of credit to a new or established business with an annual gross profit totaling not more than $1,000,000.
   STUDENT LOAN. A loan which is secured for the purposes of financing or refinancing a student’s attendance at any degree-granting educational institution authorized by law to provide a program of education beyond the high school level, made by, or on behalf of, such an institution or a financial institution.
   WHISTLEBLOWER PROTECTIONS. Procedural safeguards established both by a financial institution and the Municipal Banking Commission that provide financial institution employees with a confidential, reprisal free mechanism for reporting actions involving city funds held in custody by a financial institution holding city funds that constitute fraud, abuse or waste.
(CBC 1985 6-8.1; Ord. 2013 c. 9)
6-8.2   Disclosure of Lending Information and Banking Practices.
   Any institution desiring a contract for banking services with the city or to become a city depository, as designated by the Collector-Treasurer in accordance with the City’s Linked Deposit Program, and for which disclosure is required by the Federal Home Mortgage Disclosure Act of 1975 (being Pub. Law No. 94-200, codified at 12 U.S.C. §§ 1801 et seq. and 461 et seq., “HMDA”), the Community Reinvestment Act of 1977 (being 12 U.S.C. §§ 2901 et seq., “CRA”) and the Dodd-Frank Wall Street Reform and Consumer Protection Act (being Pub. Law No. 111-203, see 12 U.S.C. §§ 5301 et seq., “Dodd-Frank”) or related laws, shall be required to annually disclose, on forms approved by the Collector-Treasurer, for the entire city, for each census tract within the city, for each census tract outside the city that is within the Boston SMSA and for Boston residents, the financial institution’s:
   (A)   Loan activity. The number of loans and total dollar amount, the median effective interest rate, the median down payment, the median amortization and the percentage of such applicants whose applications were denied for Boston residents, including, but not limited to, low and moderate income, minority and female applicants for the following types of loans:
      (1)   Residential lending information:
         (a)   Data shall be reported separately for property containing one to four dwelling units, five to eight dwelling units and more than eight dwelling units applied for and originated during the previous calendar year in each of the following categories:
            1.   Conventional mortgage loans;
            2.   Mortgage loans which are insured under Title II of the Housing Act of 1949, being 42 U.S.C. §§ 1471 et seq., or which are guaranteed under 38 U.S.C. Chapter 37 (FHA or FMHA loans) or 38 U.S.C. Chapter 20 (VA loans);
            3.   Mortgage loans which are insured or financed by the Massachusetts Housing Finance Agency (“MHFA”); and
            4.   Mortgage loans offered through the Mass Housing Partnership SoftSecond mortgage program or other comparable affordable mortgage products.
         (b)   The financial institution shall also include separate information and data on loans to households with incomes below 80% of area median income, to households with incomes between 80% and 120% of area median income and to demographics as reported under the Federal Home Mortgage Disclosure Act of 1975 (being Pub. Law No. 94-200, codified at 12 U.S.C. §§ 1801 et seq. and 461 et seq.
      (2)   Refinancing of home purchase loans. The financial institution shall also include separate information and data on loans to households with incomes below 80% of area median income, to households with incomes between 80% and 120% of area median income and to demographics as reported under the Federal Home Mortgage Disclosure Act;
      (3)   Home improvement loans or rehabilitation loans made on residential properties;
      (4)   Home equity loans;
      (5)   Multi-family loans;
      (6)   Loans to non-occupant owners of single family housing;
      (7)   Modifications of distressed loans and type of modification, including interest rate reductions, principal reduction or repayment plans in which the outstanding loan amount increases, and an indication of whether the modification was executed under the federal Home Affordable Modification Program (“HAMP”) or another federal program, Massachusetts’ Home Modification Loan Program (“HMLP”) or another commonwealth program, or the institution’s own modification program;
      (8)   Defaults and delinquencies on home loans, the number of resulting foreclosures, the number of eviction actions filed and the financial institution’s policies around foreclosure activities, including interactions with the occupants of the property and any actions taken to evict or otherwise displace them;
      (9)   (a)   The financial institution shall also provide information on the total number of foreclosed (REO) property in the city of which the financial institution, or its parent or subsidiary, is the owner, in addition to the number of such properties owned by an entity for which the financial institution is the servicer, trustee or Agent and the length of time each REO property has remained on the market.
         (b)   For each of the above categories, fixed rate loans shall be reported separately from adjustable rate loans. For residential loans and home equity loans, financial institutions shall disclose, as applicable: age and credit scores of applicants and borrowers; points and fees at origination; rate spread (the difference between the APR for the loan and the benchmark for all loans); terms of prepayment penalties; property value; actual or proposed term of any introductory period after which rate may change; presence or any contractual terms that would allow a borrower to make other than fully amortizing payments during the term of the loan; actual or proposed term of loan; mortgage channel through which application is made (e.g., retail, broker or other category).
      (10)   Small business lending information. Data should include resident owned business enterprises in the entire city and in each census tract. Loans to small businesses with revenues above $1,000,000 shall be reported separately from loans to small businesses with revenues under $1,000,000. The financial institution may use the data reporting procedures mandated by the Federal Community Reinvestment Act of 1977 (being 12 U.S.C. §§ 2901 et seq.) for reporting small business loans;
      (11)   Community development loans and investments. For each loan and investment, the institution shall indicate if the loan or investment was for affordable housing, small business development, community facilities and other such categories requested by the Collector-Treasurer or Municipal Banking Commission;
      (12)   Consumer loans and other lines of credit. Data shall including the minimum, median and maximum nominal and effective interest rates applied; the number and dollar amount of all credit card loans charged above an 18% rate of interest;
      (13)   Student loans;
      (14)   For consumer loans, home improvement loans or student loans, financial institutions shall also disclose information which includes the rate spread and the terms of any prepayment penalties; and
      (15)   Any additional information requested by the Collector-Treasurer.
   (B)   Participation and services.
      (1)   Branches and deposits. The number of branches, ATMs and number and dollar amount of deposits for the entire city and for each census tract; deposit information, including, but not limited to, the number of savings and checking accounts and the total aggregate dollar balances in savings and checking accounts; the percentage of accounts held by city residents assessed with overdraft fees; and the value of such fees;
      (2)   Workforce composition. Compliance information with the Boston Jobs and Living Wage Ordinance, Chapter 24;
      (3)   The most recent annual report or SEC 10-K report with quarterly financial updates;
      (4)   The most recent “Community Reinvestment Act Evaluation” issued by the commonwealth and federal regulatory Agency authorized to conduct such evaluations; and
      (5)   A copy of the financial institution’s branch closing policy. It shall be the policy of the city to require that financial institutions give written notice to the Mayor, Boston City Council and Collector-Treasurer 120 days prior to the closing of any branch of such financial institution located within the city. The notice shall identify the location of the branch, the date on which the branch is expected to close and the reason for the closing of the branch.
(CBC 1985 6-8.2; Ord. 2013 c. 9)
6-8.2A   Financial Strength.
   Any institution desiring a contract for banking services or designation as a city depository with the city shall be required by the Collector-Treasurer in the process for request for proposals to provide evidence of its financial strength. At minimum, the financial institution shall provide an audited balance sheet and income statement for its two most recent fiscal years. If the financial institution is a subsidiary of a larger organization, this information should be included for both the parent and offering entities.
(CBC 1985 6-8.2A; Ord. 2013 c. 9)
6-8.3   Pledge.
   Beginning in January of 2015, any institution desiring a contract for banking services with the city shall be required in the process for request for proposals, or prior to the deposit of any city monies in a financial institution, the Collector-Treasurer shall obtain the following pledges from an authorized official of the institution:
   (A)   Community reinvestment. To develop lending and financing opportunities and make best efforts to undertake a defined lending program in support of residential and commercial development in Boston’s neighborhoods, to cooperate and support non-profit neighborhood development organizations through financing programs and investments, to offer banking products and services that would work with qualified borrowers who become unemployed to be eligible for loan modifications to avoid foreclosure and cooperate and support non-profit neighborhood development organizations in their purchase of occupied properties in foreclosure or owned or serviced by the financial institution;
   (B)   Just cause evictions. To refrain from taking any steps to evict from foreclosed or otherwise distressed residential property in the city owned or serviced by the institution, other than for “just cause” as that term is defined in Subsection 6-8.1, any occupants of such property, whether those occupants are the former owners of the property or tenants of the former owners;
   (C)   Non-retaliatory practices. To establish whistle blowing mechanisms that protect employees if they bring forth any evidence of acts that they reasonably believe constitute a fraud, abuse, misuse or waste of city funds on deposit by a financial institution selected under this Section, and to provide information obtained through these procedures to the Collector-Treasurer;
   (D)   Usury laws. To make best efforts to abide by commonwealth usury laws, M.G.L. Chapter 140, Section 114B, which sets a maximum interest rate on consumer credit cards at 18%;
   (E)   Predatory lending. Not to engage in predatory lending activities, including marketing consumer financial products, consumer loans, commercial loans and residential loans to residents of the city that cannot reasonably repay those loans without undue hardship;
   (F)   Discrimination. Not to discriminate against any individual or group seeking a commercial, community development, consumer, home improvement, residential, small business or student loan in the fixing of the amount, interest rate, duration, down payment, modification or other terms or conditions of the loan, because of race, color, religion, sex, disability or handicap, gender identity or expression or national origin of the individual or group or of any individual or group associated with, him or her in connection with the loan or other financial assistance for the purposes of the loan or other financial assistance, or the dwelling or dwellings, if any, in relation to which the loan or other financial assistance is to be made or given; or
   (G)   Redlining. Not to engage in redlining activities against any city neighborhood, including arbitrarily rejecting mortgage loans for residential properties within a specific geographic area in the city because of the location or age of the property; and to make and affirmatively market loans available to low and moderate income individuals in all the neighborhoods of the city within the limits of legal restrictions and prudent financial practices.
(CBC 1985 6-8.3; Ord. 2013 C. 9)
6-8.4   Statement of Community Investment Goals.
   Beginning January of 2015, any institution desiring a contract for banking services with the city or designation as a city depository shall submit annually to the Mayor, Boston City Council and Collector-Treasurer a plan and statement of community reinvestment goals. The plan shall describe goals in terms of loans, investments and services. The statement shall describe the financial institution’s current and proposed policies and initiatives to address the credit needs of the city’s residents and businesses, including, but not limited to low and moderate income, minority and female residents, in each of the following categories:
   (A)   Home mortgage and home improvement loans;
   (B)   Affordable home mortgage loans, including commitments to the commonwealth’s Housing Partnership SoftSecond program;
   (C)   Mortgage loans to non-occupant borrowers for small rental properties;
   (D)   Commercial and small business loans for small business enterprises and minority women business enterprises;
   (E)   Participation in city-sponsored neighborhood development programs and consortiums;
   (F)   Equitable contributions to community based non-profit organizations in the city;
   (G)   Full service banking in city neighborhoods;
   (H)   Products and services, including programs for loan modifications, principal reductions for borrowers and foreclosure prevention programs;
   (I)   Goals established for production and service levels for demographic targets as described in the first paragraph of Subsection 6-8.2;
   (J)    Reasonable account fees and maximum and minimum interest rates; and
   (K)   The statement shall also contain a description of and declaration that the financial institution has or shall pursue:
      (1)   A program that allows borrowers who become unemployed to qualify for loan modifications based on unemployment insurance and forbearance for six months to one year;
      (2)   Programs that allow borrowers whose personal financial circumstances change during the life of a loan, or for other reasons are at risk of defaulting on their loans, to qualify for loan modifications in order to avoid default and otherwise continue their relationship with the financial institution;
      (3)   A policy that allows an occupant to remain in the property after foreclosure at the same rental or for a reasonable use and occupancy throughout the period of time that the property is owned by the institution, its parent or subsidiary, or owned by an entity for which the institution is the servicer, trustee or Agent; and
      (4)   Programs that allow local non-profit organizations to purchase occupied one four-unit residential properties, through short sale or post foreclosure bid, at fair market value reflecting the distressed status of the property.
(CBC 1985 6-8.4; Ord. 2013 c. 9)
6-8.5   Failure to Provide Information.
   If any financial institution refuses or fails to provide any of the information described in Subsections 6-8.2 through 6-8.4, inclusive, the Collector-Treasurer shall report the refusal or failure to the Mayor and the City Council. If such institution has previously been designated by the Collector-Treasurer as an eligible financial institution, the City may, upon recommendation of the Mayor and City Council, withdraw such designation. The Collector-Treasurer shall also maintain a list of all financial institutions that refuse or fail to provide information and that list shall be a public record.
(CBC 1985 6-8.5; Ord. 2013 c. 9)
6-8.6   Municipal Banking and Community Reinvestment Commission.
   There shall be, in the city, a Commission known as the Municipal Banking and Community Reinvestment Commission for the purposes of analyzing data and information submitted to the Collector-Treasurer by financial institutions wishing to accept city deposits and contracts for banking services.
   (A)   The Commission shall consist of six members appointed by the Mayor, one member appointed by the Boston City Council President and three ex officio members. The Commission shall consist of the following persons:
      (1)   The Collector-Treasurer of the city ex officio or his or her designee;
      (2)   Two Boston City Council members ex officio appointed by the Boston City Council President and approved by the City Council;
      (3)   One individual from an organization that seeks to address community reinvestment needs;
      (4)   One individual from a nonprofit organization which seeks to address the housing needs in the city;
      (5)   One individual residing in the neighborhoods of the city most affected by redlining activities or underserved by traditional financial institutions;
      (6)   One individual representing a public or quasi-public Agency that has experience in providing loans in city neighborhoods;
      (7)   One individual representing the business community; provided that if an appointed individual is an employee of a financial institution then that institution is disqualified from contracting with the city for banking services or designation as a city depository;
      (8)   One individual representing a labor organization or union; and
      (9)   One interested member of the public appointed by the Boston City Council President and approved by the City Council.
   (B)   The term for each member shall be three years; provided, however, that of the members first appointed to the Commission, two shall serve for two years and two shall serve for one year. Thereafter, the Mayor or, if applicable, the Boston City Council President with approval by the Boston City Council shall appoint each successor to a term of three years. Any vacancy occurring otherwise than by expiration of term shall be filled by an appointment of the Mayor or, if applicable, the Boston City Council President with approval by the Boston City Council for the unexpired term. The Chair shall be elected by the members of the Commission from among the non-ex officio members of the Commission.
   (C)   The Commission shall meet at least twice annually.
   (D)   All members of the Commission shall be residents of the city at the time of their appointment and throughout their tenure. The members may not otherwise be employees of the city or on its payroll, but shall be special municipal employees for the purposes of M.G.L. Chapter 268A. The members shall serve without compensation; provided, however, that each member may be reimbursed by the Commission for all expenses reasonably incurred by them in the performance of their duties.
   (E)   The Commission shall submit an annual report to the Mayor and the Boston City Council evaluating financial institutions that seek contracts for banking services with the city, or that seek to be designated as city depositories, and recommend to the Collector-Treasurer those institutions whose performances best reflect the city’s goal of community reinvestment. The report shall contain a description of the scoring and ranking system and the criteria and methodology by which points in each category, pursuant to Subsection 6-8.7, are awarded to or deducted from a financial institution.
   (F)   In anticipation of this annual report, the Commission shall hold a hearing for public testimony and receive written comments tor 30 days prior to the hearing. At the hearing, the public may testify concerning the efforts and extent to which the deposit banks are meeting the banking needs of the city’s low and moderate income individuals as well as comment on any data collected and posted online pursuant to Subsection 6-8.8. A summary of comments collected and any role played by such comments in the annual report shall be included in the annual report.
   (G)   The Commission shall be authorized to receive information from whistleblowers regarding fraud, abuse, waste or misuse of city funds by a financial institution holding such funds, and to ensure that no reprisal is taken against any such employee. The Commission shall establish whistle blowing procedures to further the purposes of this Subsection.
   (H)   The Commission shall be authorized to investigate the accuracy of any information it receives pursuant to any whistleblower procedures, and to make its findings public within 14 days of determining that city funds are being subject to fraud, waste, abuse or misuse by the financial institution.
(CBC 1985 6-8.6; Ord. 2013 c. 9)
6-8.7   Evaluation of Data; Community Reinvestment Performance.
   (A)   Consistent with Subsection 6-8.6(E), the Commission’s report and recommendations shall be based on review of the information submitted required by Subsections 6-3.2 through 6-8.4, inclusive.
   (B)   The Commission shall devise a scoring and ranking system that will evaluate the lending and banking practices of each financial institution that desires a contract for banking services with the city or wishes to begin or maintain a business relationship with the city as a city depository. Each such financial institution shall be ranked against its peers and be scored on a scale of zero to 100 total points, which shall then be known as the financial institution’s Community Reinvestment Score.
      (1)   Each financial institution will be evaluated in five categories, each earning 20 points towards its total point score, which shall include the following:
         (a)   Residential and mortgage lending performance, which shall be determined utilizing information submitted pursuant to Subsection 6-8.2(A)(l) through (9) and (15);
         (b)   Small business lending performance, which shall be determined utilizing information submitted pursuant Subsection 6-8.2(A)(10) and (15);
         (c)   Community reinvestment performance, which shall be determined utilizing information submitted pursuant to Subsections 6-8.2(A)(11) and (15);
         (d)   Personal lending performance, which shall be determined utilizing information submitted pursuant to Subsection 6-8.2(A)(12), (13) and (15), and Subsection 6-8.2(B)(4) and (5); and
         (e)   Boston resident lending and hiring performance, which shall be determined utilizing information submitted pursuant to Subsection 6-8.2 as a whole, Subsection 6-8.2(B)(2) specifically and Subsection 6-8.2(A)(15).
      (2)   Each financial institution may be awarded additional points for the following:
         (a)   Compliance with commonwealth usury laws, M.G.L. Chapter 140, Section 114B;
         (b)   Confirmation that no steps were taken in the prior year to evict from residential property in the city obtained via foreclosure, other than for “just cause” as that term is defined in M.G.L. Chapter 186A, any occupants of such property, whether those occupants are the former owners of the property or tenants of the former owners; and
         (c)   Other factors as may be determined by the Commission.
      (3)   Each financial institution may be deducted points for the following:
         (a)   Unreasonable percentage of default in any of the five categories identified in division (A) above;
         (b)   Excessive charge of overdraft fees, as determined by the Commission;
         (c)   Use of unfair marketing practices targeted at financially vulnerable populations, as determined by the Commission;
         (d)   Unfair discrimination or retaliation against employees who bring forth evidence of acts that they reasonably believe constitute a fraud, abuse, misuse or waste of city funds on deposit by a financial institution contracted with for banking services with the city or designated as a city depository under this Section;
         (e)   Eviction from foreclosed or otherwise distressed residential property in the city of which the institution, or its parent or subsidiary, is the owner, or such property owned by an entity for which the institution is the servicer, trustee or Agent other than for “just cause”, any occupants of such property, whether those occupants are the former owners of the property or tenants of the former owners; and
         (f)   Other factors as may be determined by the Commission.
   (C)   Each financial institution’s rank and score shall be disclosed publicly pursuant to Subsection 6-8.8.
(CBC 1985 6-8.7; Ord. 2013 c. 9)
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