Los Angeles elected officials have been wooing the Occupy L.A. movement, which took over the grassy area around downtown’s City Hall. But council members who cheered the Occupy movement’s larger themes are concerned about one of the demonstrators' main demands: cracking down on banks, reports the Los Angeles Times
Last week, lawmakers asked city analysts to continue developing a plan to use the city's financial heft to punish misbehaving financial institutions. On Tuesday, City Administrative Officer Miguel Santana warned that such a move could cost the city at least $58 million.
Severing agreements with major lenders could trigger sizable termination fees and lead to higher interest rates, Santana said. That could in turn complicate financing for an array of city initiatives.
Councilman Bernard C. Parks, who represents much of South Los Angeles, said, "I don't think we ever want to stand here at the mic and say to the public, 'We showed Bank of America. We just cost you $2 million because we didn't use them.’”
But Councilman Richard Alarcon, whose 2-year-old "responsible banking" ordinance has found new life and a groundswell of support in the Occupy L.A. Movement, said Santana is "pandering to the banks" and "out of sync with the social dynamic" that has emerged across the nation in recent weeks.
Santana said he sympathizes with the protesters' concerns but argued that rating banks on their level of social responsibility is not a core mission of a financially strapped city. Severing ties with major banks, he warned, could send borrowing costs soaring.
"We strongly urge the council to maintain, as their primary duty, getting the best deal for taxpayers," he said.
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