A federal judge has dismissed an attempt by the New York Bankers Association to block a New York City law requiring an evaluation of community investments made by banks holding the city’s deposits.
Katherine Polk Failla, a judge in the state’s Southern District court, said in a decision Tuesday that the NYBA lacked legal standing to bring the lawsuit.
The NYBA filed the case in October 2013, arguing that members “may lose the ability to be a depository for some of the city’s more than $6 billion in deposits,” according to the decision. The group also said that the city law conflicted with state and federal requirements.
“This is a preliminary procedural decision,” said Robert Guiffra, an attorney for the NYBA, in an emailed statement Tuesday. “The court has recognized that NYBA, on behalf of its members, has brought ‘serious substantive claims,’ and we’re evaluating when to re-file our complaint.”
At issue in the case is a law passed by the New York City Council in June 2012, over the veto of then-Mayor Michael Bloomberg.
The law required the creation of a new Community Investment Advisory Board to evaluate investments made by banks that hold the city’s deposits in low-income communities.
Enforcement of the law was stalled, however, when the Bloomberg administration failed to appoint the necessary board members. The law had “no effects in October 2013, due to the mayor’s refusal to appoint members of the CIAB,” the judge said in her decision.
New York City Mayor De Blasio has taken steps to implement the law, including setting aside funds to produce the evaluations, according to the decision.
“We are pleased that the court dismissed the challenge,” said Nicholas Paolucci, an attorney for the city, in an emailed statement Tuesday.
News of the decision was first reported by Reuters.