Banking initiative for Dallas-area underserved neighborhoods has a lot to prove
Several Dallas-Fort Worth neighborhoods with little or no access to banks will now see 30-foot-long PNC Bank mobile units rolling down their streets.
It’s a symbolic decision and an important awareness-raiser, as predatory lending remains a problem nationwide and especially in Texas, which has one of the worst average payday loan interest rates in the country. But this initiative alone will not solve the need for banking partners who both accept deposits and also provide loans in underserved areas.
This is a step on the road to trying to reverse the effects of systemic divestment in low- and moderate-income communities, especially for South Dallas neighborhoods. The city recently passed an ordinance to encourage banks to invest in multiracial neighborhoods, though City Hall cannot force banks to do so. Meanwhile, federal regulators rarely travel to investigate and cite banks for discriminatory lending practices, according to the US Government Accountability Office.
We commend PNC Bank, the fourth largest bank in the region, for its leadership in righting a historic wrong. Dallas Morning News reporter Colbi Edmonds wrote that mobile banking will help residents access an ATM (with the ability to withdraw $1 bills), open bank accounts, recover or replace debit cards, apply for loans or discuss finances.
South Dallas will have at least two mobile branches: one at Jubilee Park and Community Center and the other at CitySquare, a nonprofit organization. The bank will deploy other units around areas of need in North Texas as it finds other nonprofits to partner with to build trust within communities.
What must follow is significant and sustained investment by big banks to undo the effects of the redlining that has unfairly marked large swathes of South Dallas as dangerous investments.
People with low incomes must be able to benefit from a credit which can help them build up a lasting wealth, as is done through a mortgage loan. Home ownership is generally considered the primary means of accumulating and retaining wealth, but black and Hispanic families are less likely to own their homes than white families. According to an analysis of data by the National Community Reinvestment Coalition, the gap between homeownership rates for white and black families is the widest in nearly 120 years.
We welcome efforts to replace predatory payday lenders in Texas, which charge an average of $645 in interest on a $500 loan.
Banks must be willing to absorb more risk with their investments. In this regard, the PNC is also making progress. The bank announced plans to invest $60 million to renovate the Rosemont at Ash Creek Apartments, an affordable housing complex, and $21 million to build the Highpoint at Wynnewood, according to WFAA-TV (Channel 8).
It’s going to take more work to energize South Dallas. PNC Bank is laying a foundation that we hope others will build on.
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