Strengthen support to improve lending in ethnic minority areas
In response to WFAA reports, some elected officials are looking for ways for local governments to impose liabilities on banks to ensure fair loans.
Dallas – Banks lend relatively little money to most of the minority people living under Interstate 30. Currently, support is being developed for solutions that can help change this. This is called the Responsible Banks Act.
You may not notice that the municipality is filing taxes in the bank. It’s the same bank we use. The Responsible Banking Act requires local governments to assess the level of service a bank provides to all citizens, from high income 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 middle income areas. The coalition has drafted a model method that allows local governments to take advantage of it.
Dallas City Council member Jaime Resendez said he learned from the WFAA report about the potential of such an ordinance and now supports its passage. It represents the Pleasant Grove area under Interstate 30.
“If there is opposition at the parliamentary level, no further opposition is possible,” Resendez said. “I am very interested in advancing and exploring the potential of responsible bank ordinances.” Declared. Here in the city of Dallas, I’ve been waiting for a long time. “
Resendez said he was discussing the details with the Dallas city manager and the city attorney.
“The City of Dallas supports responsible banking operations that ensure investment in all areas of the city and looks forward to strengthening cooperation with banks to achieve these goals,” the city said. Elizabeth Reich, chief financial officer, said in a statement: WFAA. “We are considering whether to apply the ordinance and are examining all relevant questions.”
No municipality in North 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 order. 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 Banks Order. According to him, bank deposits are well over $ 1 billion, depending on the time of year.
“I spoke to some of Goldman Sachs and they confirmed that a billion dollars would get people’s attention,” Jenkins said.
Banks must provide loan data indicating the loan amount and loan region, as well as a reinvestment plan defining the future goals of the loan. Municipalities assess banks, publish the results, and create oversight bodies to hold community hearings.
Jenkins organizes county, city, park, Dallas College District, and DISD officials to work on solutions.
“The important thing is that the banks know that there are certain indicators that a large group of tax authorities are considering. These indicators are colored, small businesses less than 30 years old, groups. We are dealing with an increase in loans to. He is excluded from the process. I think it will work. “
In Philadelphia, which passed the ordinance over 20 years ago, this has had a positive effect. Philadelphia combines several factors to rank banks based on the quality of their mortgage and commercial loan distribution 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 area by 18%.
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