The D.C. City Council gave final approval yesterday to a measure allowing some of the nation's largest banks to provide full banking services here by acquiring existing District banks.
Under the legislation, New York's giant Citicorp and other so-called money center banks would be allowed for the first time to acquire District banks provided they make a substantial financial commitment to the city, including creating 200 jobs and providing between $50 million to $100 million in loans and lines of credit to commercial and industrial development projects mainly in underserved areas of the city.
In other action, the council gave initial approval to a bill aimed at protecting nursing home residents from physical and emotional abuse and unnecessary patient transfers. The bill establishes a system for placing badly run homes in receivership, rather than closing them and subjecting the residents to disruptive transfers. The bill also establishes a fine of $5,000 and 90 days in jail for anyone, including city officials, who directly or indirectly give advance disclosure of city inspections of nursing facilities.
Nursing home operators had been alerted in advance by city employes of inspections, according to recent newspaper reports.
Most of yesterday's council debate focused on the banking bill, which was passed by a 12-to-1 vote.
Council member John Wilson (D-Ward 2), the only member to vote against the bill, argued that the financial commitments required would limit the number of banks outside the region that could afford to acquire a District bank.
"Under the situation we have developed, a lot of business people will make substantial amounts of money but I'm not sure the consumers are going to benefit," said Wilson, who maintains that the District will become a center of branch banks controlled from other cities by the big money center banks.
Council member Carol Schwartz (R-At Large), who agreed with Wilson, tried unsuccessfully to reduce the minimum requirement of $50 million in loans and lines of credit for outside banks to $20 million.
Council member Charlene Drew Jarvis (D-Ward 4), who had developed the legislation, told the council that she opposed any reduction in the requirements because they had been carefully worked out during negotiations with local banks and outside banks, including Citicorp.
Maurice J. Cullinane, executive vice president for the D.C. Bankers Association, said local bankers, who are concerned that the money centers could have a competitive edge over District banks, viewed the financial requirements as a way of limiting an influx of big out-of-town banks.
Some council members wanted to make certain that the council had a major role in recommending whether an acqusition should occur.
Council member Wilhelmina J. Rolark (D-Ward 8) amended the legislation to give the council the final say in stating the city's position on applications for acquisitions. Previously, a banking superintendent created under the measure could have recommended approval of an application after the council had rejected it.
The council debated Rolark's amendment for 90 minutes. Schwartz questioned why the city should pay a banking superintendent if the council wanted to make the final decision. Council member John Ray (D-At Large) insisted that the amendment was a clear attempt to take over an administrative executive branch function.
Dwight Cropp, the mayor's director of intergovernmental relations, said the amendment would not diminish the mayor's support for the bill.