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MEDIA RELEASE

Monday, June 29, 1998

SENATOR, BANKERS CALL FOR A COMMUNITY REINVESTMENT ACT IN CANADA

"U.S. banks have found that when they were under pressure [under the Community Reinvestment Act] to look at investment in communities in which they were doing business, they found investment opportunities they otherwise might have overlooked . . . And these local opportunities in many, many cases turned out to be profitable."

Senator Michael Kirby, Chairman Senate Committee on Banking, Trade and Commerce (as quoted in The Globe and Mail, Friday, June 19, 1998, p. B1)

"I've always been in favour of scorecards . . . If you have scorecards it spurs your people on . . . I would like to see comprehensive scorecards . . . All players in the market should be included."

John Cleghorn, Royal Bank Chairman and CEO before the Liberal Caucus Task Force on Financial Services (Thursday, June 11, 1998)

OTTAWA - Today, the Canadian Community Reinvestment Coalition (CCRC) urged the federal government, and its appointed Task Force on Financial Services, to respond to the broad-based support for the enactment of a "Community Reinvestment Act" in Canada by committing to enacting the law in the next session of Parliament, and placing a moratorium on bank mergers and takeovers until the law is in place for two years.

In the past few weeks, the heads of the Royal Bank, the Bank of Montreal, the CIBC and TD Bank, and Senator Michael Kirby (quoted above) have all expressed their support for the enactment of legislation in Canada based upon the U.S. Community Reinvestment Act (CRA), which has been in place since 1977. The CCRC, a broad-based, nation-wide coalition, has been pushing for community reinvestment legislation in Canada since it was formed in the fall of 1996.

When questioned at hearings of the Liberal Caucus Task Force about a community reinvestment law for Canada, Royal Bank's John Cleghorn expressed support (quoted above), and Matthew Barrett (Chairman and CEO of the Bank of Montreal) said he was "all for" the federal government setting out a performance scorecard based upon the U.S. CRA. Al Flood, Chairman and CEO of CIBC said "If you want to have some commitment to the communities, we can give you the information"; and Charles Baillie, Chairman and CEO of TD Bank said he was "open to" anything that would be constructive.

The U.S. CRA sets out a detailed disclosure and review system for financial institutions, and the U.S. federal government rates their performance in lending, investment and service to communities in which they have branches. If a financial institution receives an overall failing grade, the government can deny any application to merge or take over another financial institution. Banks have reinvested over $435 billion in communities across the U.S. over the past 20 years, investments that would not have been made if the community reinvestment law did not exist.

"We are 20 years behind the U.S. in terms of bank accountability," said Duff Conacher, Chairperson of the CCRC, "and it's about time our federal government responded to the broad-based call for enacting a community reinvestment law here. We should not let our banks get bigger if, among other things, they are not serving all Canadians fairly and well."