Smith, Research Director, Woodstock Institute: (312) 427 8070

Bush, President, Woodstock Institute,

Jessica Brown, Project Leader, new economics foundation,


Full Disclosure

Why Bank Transparency Matters: a Comparison of the U.S.
and the U.K.


[Chicago]-This new report issued by the new economics foundation in
London, England,
and Woodstock Institute in Chicago,
shows the huge disparity in the amount of bank performance data from
lower-income neighborhoods available in the U.S.
and the U.K.  This disparity is most stark when considering
available data on mortgage lending and small business lending patterns in
underserved lower-income and minority neighborhoods.  To illustrate these differences, the report
describes the data provided by two banks belonging to the same bank holding
company.  The U.S.
case study uses data from Charter One Bank in Chicago,
the U.K. case
study data from Charter One’s parent bank, Royal Bank of Scotland
in Manchester. 


The report concludes:


• Banking services are a central part of tackling
financial exclusion in lower-income communities


• Full disclosure allows for assessments of who the banks
are reaching and who remains outside of the banking system.


• Without area-based bank disclosure, communities are in
the dark as to how their savings and resources are being invested. 


In the forward to the report, Sir Ronald Cohen, a leading
European venture capitalist, and chairman of the U.K. Social Investment
Taskforce, questions the current British reliance on voluntary bank disclosure.  Co-author of the report, Geoff Smith,
comments that while the report shows that mandatory disclosure in the U.S.
results in far more useful data than reliance on voluntary data produces in the
U.K., there are
large gaps in the U.S.
system.  “At the very least”, he said,
“we need small business disclosure at the loan level as we have for mortgage
data, since small business activity is critical to the economies of
lower-income communities.”  Woodstock’s
president, Malcolm Bush added, “The U.S. data disclosure system has not kept up
with changes in the very dynamic financial services sector.  It is critical to extend disclosure and
indeed Community Reinvestment Act responsibilities to all financial
institutions that provide bank-like services including independent mortgage
companies and credit unions. 


icon  Full Disclosure: Why Bank Transparency Matters


Woodstock Institute, founded in 1973, is a
nationally-recognized resource on credit and capital needs of low-income and
minority communities. The Institute engages in applied research, policy development,
and technical assistance to promote community economic development.