A bank or credit union that loans a big share of its money to local businesses could get a leg up on the competition the next time the city government selects a financial institution to provide banking services.

A bank or credit union that loans a big share of its money to local businesses could get a leg up on the competition the next time the city government selects a financial institution to provide banking services.

The Ashland City Council voted unanimously Tuesday to conduct a review of the city's criteria for selecting a financial institution for city banking needs.

Local residents bearing petition sheets with 300 signatures asked the city of Ashland to use a responsible local bank or credit union that makes loans to small businesses.

Residents — including members of Occupy Ashland, Occupy Medford and Oregon Action — asked council members to reconsider the city's use of Bank of America, which they said lags far behind when it comes to providing small business loans.

Ashland resident Andrew Seles said he has already moved the bulk of his money out of Bank of America, and he asked city officials to do the same with the city's money.

He said Bank of America doesn't provide enough loans to small businesses, which either have to give up on their growth plans or turn to high interest credit cards.

Bank of America won a contract to provide banking services for the city of Ashland beginning in June 2009.

Bank of America Media Relations Manager Britney Sheehan said Bank of America is committed to helping small businesses succeed.

She said the bank extended $168 million in credit to small businesses in Oregon in the first nine months of this year. The bank loaned more to small businesses during the first three quarters of this year than it did during all of 2010, she said.

Bank of America generally defines businesses as small if they have $20 million or less in annual revenues, she said. The bank also plans to hire 1,000 small business bankers nationwide by the middle of next year, she said.

Beyond lending, Bank of America has pledged to buy $10 billion in products and services from small, medium and diverse businesses over the next five years, and has already spent $4.1 billion on that effort, Sheehan said.

The city government has a three year contract with Bank of America for banking services, with options for two one-year extensions. The three year contract expires in a year and a half.

City Recorder and Treasurer Barbara Christensen said the amount of money the city of Ashland has with Bank of America varies each day, depending on what bills the city has to pay, such as its payroll expenses.

On Wednesday, for example, the city had about $325,000 deposited with the bank, she said.

Local residents have urged city officials to invest more with local credit unions.

Changes in state law have made it possible for cities to invest public money in credit unions, they said.

Vickie Aldous is a reporter for the Ashland Daily Tidings. Reach her at 541-479-8199 or vlaldous@yahoo.com.