DESOTO, Texas — The DeSoto City Council voted unanimously to adopt a "responsible banking ordinance" at its regularly scheduled meeting Tuesday night.
The ordinance amends the city's "General Provisions" chapter of its Code of Ordinance, to include specific requirements for banks that wish to do business with the City of DeSoto.
WFAA's "Banking Below 30" series, a multi-part investigation into discriminatory lending practices, was the first bullet point listed in the city's slideshow, laying out the problems the ordinance was created to address.
The series, which began airing in the fall of 2020, found that 20% of banks operating in Dallas County purposely chose not to do business with customers south of Interstate 30 where the majority of the population is Black and Hispanic.
Those same banks, WFAA found, got passing scores from regulators evaluating them on their commitment to equitable lending.
On Tuesday night, DeSoto's presentation on its new ordinance pointed out that despite the fact that the federal Community Reinvestment Act (CRA) encourages banks to provide loans and financial support equally and equitably in the communities it serves, many major banks aren't doing it.
Similar to other cities' ordinances featured in WFAA's reporting, DeSoto's responsible banking ordinance will hold banks accountable at a local level by making transparency in equitable lending a requirement for the city to deposit and invest taxpayer dollars.
The city's ordinance states it will review data, which is available to the public, from financial institutions when making decisions about which institutions it will use for commercial banking accounts. That data includes small business loans, single and multi-family loans as well as the fair lending review component of CRA exams.
The city will also review the percentage of those loans are granted to minority borrowers and low-to-medium income borrows. More than half of DeSoto residents are minorities.
The ordinance goes into effect immediately.
DeSoto is now the second North Texas city to make this move following WFAA's banking investigation. Dallas adopted a similar ordinance this past summer.
