Banks’ Philanthropy Needs Greater Oversight, Says Watchdog

The federal government should scrutinize claims banks make about their charitable giving before approving their requests to merge, a watchdog group said in a new report today.

Banks often tout the possibility of bigger philanthropy budgets and greater charitable impact when they seek to merge, said the National Committee for Responsive Philanthropy. But the watchdog, a left-leaning organization in Washington, says those promises may not pan out.

“A bank should not be allowed to make exaggerated claims about its past philanthropy and hazy promises about future largesse to obtain approval of a proposed merger,” Aaron Dorfman, the committee’s executive director, said in a statement.

Mr. Dorfman’s group released guidelines to help government officials evaluate the philanthropy of financial institutions. The criteria discuss ways to assess how much information banks share about their giving; whether they count gifts employees make in payroll campaigns, such as United Way drives, and noncash giving in their philanthropic totals; and whether an adequate share of their money is being spent on efforts to help the poor.