DALLAS — For more than a year, WFAA’s Banking Below 30 investigative series has shown how banks lend relatively little money in minority neighborhoods. In response, the state of Texas says it will now develop new strategies that improve lending to low-income and minority communities across the state.
In 1999, the state created the Texas Community Reinvestment Work Group, which was tasked with developing strategies that "...encourage financial institutions to lend money to Texas’ low-income and moderate-income families and individuals..."
The group was supposed to pull together powerful state agencies, like the Department of Banking, the Comptroller and the Department of Housing, as well as federal bank regulators from the Comptroller of the Currency, the Federal Reserve and the FDIC.
“I think it's a great concept,” said James McGee, a former bank compliance manager who now heads the nonprofit Southern Dallas Progress, advocating for economic justice. “I think, collectively, working together as far as a development strategy, that's how you move -- technically -- an entire state forward.”
By law, the work group was supposed to meet quarterly, but the last meeting was four years ago.
Why did the group stop meeting? A representative of the state Comptroller's office said, "...because it no longer served a purpose..."
“The fact is, you’ve got to have someone from the legislative branch of government saying, 'You have a responsibility to do this and you're not doing it,’” said State Senator Royce West, D-Dallas.
After West intervened, state officials agreed to reboot the work group. West says he expects the group will collaborate with the banking industry to recommend new rules and legislation that encourages banks to lend.
West said WFAA’s investigation spurred officials to act. “They knew the eye of the media was on them, frankly,” he said. “How can you justify having something put in law back in 1999, and it's defunct?”
But this time it won't just be bureaucrats and regulators at the table. McGee will be there too. He's been invited as a special guest for his real-world perspective about how banks deny credit in minority communities, and how to fix the problem.
“I think there is tremendous potential in this working group,” McGee said. “I hope they will continue to invite me back so we can work on a strategy together, then work on that strategy also.”
The group's first meeting in four years is scheduled for January.