Building support to improve lending in ethnic minority areas

In response to reports from the WFAA, some elected officials are looking for ways for local governments to impose accountability on banks to ensure fair lending.

Dallas — Banks lend relatively little money to most minority people living below Dallas’ Interstate 30. Currently, support is being built for solutions that may help change that. It’s called the Responsible Banking Act.

You may not notice that the municipality deposits taxes in the bank. This is the same bank we use. Responsible banking law requires local governments to assess how much service a bank provides to all citizens, from high to low income, before choosing to do business with the bank.

This concept was partially developed by the National Community Reinvestment Coalition, which advocates increased reinvestment by banks in low to medium income regions. The coalition has drafted a model method that allows local governments to take advantage of it.

Jaime Resendez, a member of the Dallas City Council, said he learned from the WFAA report about the potential of such an ordinance and now supports its passage. He represents the Pleasant Grove area under Interstate 30.

“If there is opposition at the parliamentary level, no further opposition is possible,” said Resendez. “I am very interested in advancing and exploring the potential of responsible banking ordinances.” Stated. Here in the city of Dallas, I’ve been waiting for a long time. “

Resendez said he is discussing details with the Dallas city manager and city lawyer.

“The City of Dallas supports responsible banking operations that guarantee investment in all areas of the city and looks forward to strengthening cooperation with banks to achieve these goals,” said the city. Elizabeth Reich, Chief Financial Officer, said in a statement: WFAA. “We are considering whether to pursue the Ordinance and are considering all relevant issues.”

No municipality in northern Texas has such a policy. However, 13 cities across the country, including Cleveland, Minneapolis, Los Angeles, Kansas City, and Pittsburgh, have some form of responsible banking ordinance. In theory, this idea works because local governments are good customers of banks and influence local governments.

Earlier this year, we asked some local government agencies which banks to use and what their deposit balances were at the end of February. The total taxpayer was $ 917 million.

  • Dallas uses Bank of America with a deposit of $ 257 million.
  • Dallas County is also using Bank of America for $ 215 million.
  • Dallas ISD has deposited $ 39 million with Wells Fargo.
  • The Parkland Hospital District has $ 6.7 million for JPMorgan Chase, $ 28 million for Regions Bank, and $ 371 million for BNY Mellon.

Dallas County Judge Clay Jenkins also supports the Responsible Banking Ordinance. According to him, bank deposits are well over $ 1 billion, depending on the time of year.

“I talked to some of Goldman Sachs and they confirmed that $ 1 billion would get people’s attention,” Jenkins said.

Banks need to provide loan data showing the amount of the loan and the region of the loan, as well as a reinvestment plan that sets future loan goals. Municipalities evaluate banks, publish findings, and create oversight bodies to hold community hearings.

Jenkins organizes county, city, parkland, Dallas College District, and DISD leaders to work on solutions.

“The important thing is that banks know that there are certain indicators that a large group of tax authorities are considering. These indicators are of color, small businesses under the age of 30, groups. We are dealing with an increase in lending to. It is locked out of the process. I think it will work. “

In Philadelphia, which passed the ordinance over 20 years ago, this had a positive effect. Philadelphia combines several factors to rank banks based on how well they distribute their mortgages and business loans in low-income areas.

Between 2008 and 2018, banks that chose to make deposits in Philadelphia became more aggressive lenders, increasing their share of business loans in the low-income census zone by 18%.

Do you have any hints for the story? Email dschechter@wfaa.com..

Building support to improve lending in ethnic minority areas

Source link Building support to improve lending in ethnic minority areas

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