KNX 1070′s John Brooks reports Trutanich says Deutsche Bank is accused of shutting off tenants’ water and power and then allowing hundreds of properties to turn into blighted homes for squatters, gang members and other criminals.
“Instead of aiding in the economic recovery, Deutsche Bank’s policies have actually hurt the most economically vulnerable in the city of Los Angeles,” Trutanich said.
Trutanich said the negligence violates a handful of local, state and federal laws, including the the Los Angeles Vacant Building Ordinance and the California Unfair Competition Law.
Most of the properties are in South Los Angeles and the northeast San Fernando Valley.
Councilwoman Jan Perry, who represents a section of South Los Angeles, said the blight leads to “graffiti, vandalism, break-ins, squatters, and in many cases, arson. It destroys a neighborhood. It takes away its character.”
Councilman Richard Alarcon said the city should divest immediately from Deutsche Bank and investigate whether other banks fall in the same category.
“We should not be depositing our $30 billion portfolio in banks that are not taking care of our community, in fact, in banks that are disrupting and destroying our communities,” Alarcon said.
Alarcon’s proposed “banking responsibility ordinance” is expected to come before the Budget and Finance Committee in June. It requires the treasury to rate banks in how they comply with the Community Reinvestment Act. Alarcon said the rating could be used to guide how the city invests its money.
“It is important that we not fear the power of large banks…They are holding our deposits,” said Councilman Richard Alarcon.
Trutanich said his lawsuit dovetails with a federal suit against Deutsche Bank for mortgage fraud. “The fraud that is committed on Wall Street turns into blight on Main Street,” Trutanich said. “We are not looking at
mortgage fraud. We are taking a look at their actions as property owners.”
(©2010 CBS Local Media, a division of CBS Radio Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. Wire services contributed to this report.)