43% of the city’s population lives below Interstate-30 – about 560,000 people – but only gets 26% of bank loans. The majority are black and Hispanic.
DALLAS – A bank is supposed to do two things: collect deposits and make loans. And many do – if you live in the right part of town.
Banking Below 30, the WFAA’s ongoing investigation of banking practices, found that south of Interstate 30, where most residents are black or Hispanic, many bank branches accept deposits, but these same banks do not lend much to customers in surrounding neighborhoods.
“It’s devastating and it’s costing you years financially,” said Traswell Livingston III. “You can’t make up for this.”
The first time Livingston tried to buy a house in South Dallas, three banks turned it down.
“Very frustrating, very disheartening,” he said, “It makes you build thick skin.”
Today, Livingston owns a house in a historic building near Fair Park where, he says, many neighbors don’t trust banks.
“They don’t even inquire anymore because they don’t even think it’s possible to get a loan,” he said.
The homeownership gap
Without mortgage, there is no home ownership. And homeownership is an important way for parents to build and transfer assets to their children, experts say. Research shows, however, that many black families fall far behind.
According to Federal Reserve, at age 55, the homeownership rate among blacks is 32% lower than that of whites. And the houses that black families own are worth 35% less.
The disparity gets worse as people get older. According to Brooking, at age 75, the median wealth for a black family is $ 46,000, compared to $ 302,000 for a white family.
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Livingston channeled his negative experiences into a career in real estate and today he worries about some of his neighbors who have lived here for decades and are desperate for a small loan to maintain their properties.
“But most of them know that won’t happen, ”he said, adding that many are forced to defer maintenance, further eroding their home’s value. “Fix. Close the door. Don’t enter this room. Keep moving. Do it with money or don’t do it at all.
Analysis of WFAA banking data shows that in the northern half of Dallas, there are 296 bank branches. In the southern half, there are 55.
But, according to the Child Poverty Action Laboratory43% of the city’s population lives below I-30, or about 560,000 people. And our analysis shows that they only get 26% of bank loans.
But among the banks that have branches in South Dallas, how are they performing?
The neighborhoods of DFW are divided into census tracts. The one where Livingston lives is near Fair Park and includes a Bank of America and a Chase Bank.
We grouped this sector together with adjacent sectors – to create a large area that a bank branch could serve. Then, using data on federal home loans, which banks are required to report publicly, we counted all of the bank’s loans – although not necessarily from this branch – made here in 2018 and 2019.
In two years, Chase made four home loans and Bank of America made five.
By comparison, six miles away, in a cluster of census tracts around Chase and Bank of America in Lakewood, Chase had 171 loans. Bank of America reported 143.
“It’s a smoking gun, ”said John Taylor, fair credit advocate and chief financial officer. National Coalition for Community Reinvestment. The NCRC assisted the WFAA in analyzing data on government loans throughout the survey of banks below 30.
“Should Banks Invest in Creditworthy Borrowers in South Dallas?” If they can prove that they can repay these loans, that they have sufficient income, should the banks do it? The answer is yes, of course. It’s the law, ”he said.
What’s the big picture for Chase and Bank of America north and south of I-30? In the neighborhoods around Chase’s northern branches, there were, on average, 102 loans around each branch. In the south, there are 32. Around the northern branches of Bank of America, the average was 67 and 23 in the south. Wells Fargo averaged 65 around its northern branches and 18 in the south.
In statements to the WFAA, Chase wrote that it “consistently ranked first or second in South Dallas for all mortgage lenders and generally ranked first among banks. However, we recognize that too many people do not share the prosperity of the region. In South Dallas and within communities of color, we know we can do better… ”
Bank of America told WFAA that loan data for 2018 and 2019 does not reflect the bank’s most recent affordable homeownership initiative in South Dallas, which recently loaned $ 75 million to 365 low- and moderate-income borrowers and paid $ 4 million in down payment grants to first-time buyers.
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Bank of America’s latest initiative “focuses on bridging the racial wealth gap in black and Hispanic-Latino communities with a focus on affordable housing, health and healthcare, employment / recycling and small business, ”the company said in a press release earlier this year. “Through the Community engagement in homeownership, Bank of America is tackling two of the biggest barriers to homeownership – down payments and closing costs – which will increase homeownership for thousands of people who historically have not been able to own a house. “
Wells Fargo told the WFAA that in its bank reviews its distribution of loans to low to moderate income borrowers “exceeded total loans and received a rating of ‘good,’ despite accessibility issues …” in Dallas.
“Wells Fargo remains committed to helping the South Dallas community and others prosper with a variety of offerings to cater to low to moderate income (LMI) communities and small businesses,” the bank wrote in a statement to the WFAA.
“If regulators just raised the question, “Well, you’ve only made four or five loans in all of South Dallas, what’s going on here?” “- that’s what examiners, regulators are supposed to do,” Taylor said. “They won’t, unfortunately, unless someone makes it a problem.”
Large banks are regulated by the Office of the Comptroller of the Currency. In a statement to the WFAA, it says: “… examiners do not have the authority to require a bank to grant mortgages or grant such loans in a specific area. And that the localized loan data used in our history can be influenced by the level of owner-occupied housing, income level, market volatility and demographic trends, the OCC said.
A call for activism
Again, the definition of a bank is a “Financial institution authorized to receive deposits and grant loans”. Lawyers say a keyword is “licensed”. The government grants a bank the right to operate and make big profits. But in return, there are rules.
And they include the Community Reinvestment Act. It’s a powerful federal law that says banks are required to meet the credit needs of the entire community and reinvest in minority neighborhoods they have long ignored.
“We have to face their greed, ”said Diane Ragsdale, former Dallas City Council member with Intercity Community Development, a nonprofit that helps working families in low to moderate income (LMI) neighborhoods access to the property.
“The law was created for a reason – the banks refused to lend to LMI communities,” Ragsdale said. But she acknowledged that the law only works if the public knows it and takes action. “And that’s where a movement comes in,” she says.
She said people need to understand their role as defenders of themselves and their neighborhoods, and that banks need to understand – and take seriously – their roles under the law.
“What’s your role? Sit there and do nothing? Just sit and get deposits. No!” Ragsdale said. “Your role is to go out and develop relationships with people – communicate with people and figure out what I can do to meet your loan needs.
“We are more than willing to embarrass you publicly because you have disrespected us and our needs,” she added.
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