The University Banking Committee announced their decision to renew the University's contract with Citibank on Tuesday, despite student environmentalists' worry over the social and economic ethics of the bank. The University will begin working on the new Citibank contract in the near future.
"Their willingness to put in tellers, their offer of services at no cost to students, and their national and international presence, as well as the important role that they play in the South Side community, all helped us decide to continue our relationship with Citibank," said Bill Michel, deputy dean of students for development and student activities and assistant dean of the College.
The unanimous decision to renew Citibank's contract was made by a nine-member committee of seven administrators, one graduate student, and one undergraduate student. This was the first time that students were involved in the bank selection process. "Citibank was the best choice because of its ability to provide the widest variety of services," said Ryan Nelson, the graduate student on the committee.
This fall, more than 650 members of the University community signed a petition calling for the University to change banks. The petition discussed problems with the social and environmental record and customer service of Citibank. Citibank has been accused of funding destroying rain forests.
Fifteen banks were invited to submit proposals to the Banking Committee, six of whom responded. Three banks made it to the final round, including Citibank, a local bank, and a regional bank.
The banking committee found that students were interested in a bank that provided no-fee checking, more ATMs, and tellers. Last spring, the committee distributed a survey about banking to student leaders. This fall, it held an open meeting with students to hear their concerns and suggestions.
Representatives from Citibank visited campus last month in order to discuss students' concerns about the bank's service, lending policies and environmental practices.
"We got Citibank's attention they flew out one of their top executives from New York to have a meeting with us," said Justin Rolfe-Redding, a second-year in the College and the lead organizer of the Campaign for Responsible Banking, a campus organization that is protestingCitibank's practices. "We've generated pressure that social and environmental concerns need to be a part of their agenda."
According to Michel, students have had mixed reactions to the Banking Committee's decision. "I've had several students tell me that they were pleased with the decision, and certainly I recognize that there are a few students who have expressed their concern to us," he said.
According to Rolfe-Redding, Citigroup has been called "The world's most destructive bank" by a coalition of human rights, environmental, and economic justice organizations. The Rainforest Action Network has discussed Citigroup's role in projects that destroy the rainforest, increasing global warming and displacing indigenous people. The National Training and Information Service had said that within Chicago, Citibank targets poor and minority residents for loans that are often negotiated deceptively.
While Rolfe-Redding was disappointed with the University's decision, he was glad that the Banking Committee was open to the concerns of the Campaign for Responsible Banking throughout the decision process. "I can't say anything bad at all about the way Bill Michel, Student Government, or anyone else in the administration has handled this," Rolfe-Redding said.
The Banking Committee said that Citibank was given the highest ranking for compliance with the Community Reinvestment Act by the Treasury Department's Office of Thrift Supervision (OTS). During 2000, Citibank reported a total lending of $110.7 million on the South Side of Chicago, $48.5 million of which was given to low- and moderate-income individuals and $7.4 million of which was given to small businesses.
As Citibank's current agreement ends on June 30, members of the University Banking Committee and Bill Hogan, the University comptroller, will begin to work out a new agreement in the near future. An advisory committee will be formed to work with Citibank to improve communication between the bank and the University community.
"We'll work on it to ensure that all the things we learned don't go to waste," Michel said.
The Coalition for Responsible Banking hopes to influence the University's new contract with Citibank. "We could stipulate in the contract that they need to maintain a certain community lending rating," Rolfe-Redding said. "We can stipulate in there that if the University is going to do business with a bank or any company or institution that those partner institutions have certain ethical or social standards for their practices."
Rolfe-Redding said the Campaign for Responsible Banking will continue to pressure Citigroup to change their practices as part of an international effort against Citibank. "I think it's important to see the efforts of our work on this campus in the larger context of this larger international campaign," Rolfe-Redding said.
"[We will] continue to encourage people to boycott Citibank and tell people that they shouldn't do business with a corporation that has these contracts."
Citibank has been on campus since1996, when it replaced Hyde Park Bank. Currently, 7,200 University students have accounts at Citibank and the bank's client retention rate is 94 percent. As part of its first contract with the University, Citibank opened a branch on 47th Street and Lake Park Avenue.