WFAA: Local governments deposit millions of tax dollars in banks. Some say it’s time they demanded racial equity in return.

WFAA, May 9, 2021, Local governments deposit millions of tax dollars in banks. Some say it’s time they demanded racial equity in return.

Decades after the term “redlining” was coined, an ongoing WFAA investigation has shown that many banks are still choosing not to make loans, or do meaningful business, in low-income parts of town, even though federal law mandates they act equitably and don’t discriminate.

Since last fall, our “Banking Below 30” series has explored how banks extend credit to richer, whiter customers north of Interstate 30 and withhold it from low- to moderate-income ones to the south

Now, it’s time to talk about a solution. It’s called a responsible banking ordinance. 

You may not realize it, but local governments keep your tax dollars in banks – the same banks we all use. A responsible banking ordinance requires a local government to evaluate how well a bank serves all its citizens, from high- to low-income, before choosing to do business with the bank.

The concept was developed in part by the National Community Reinvestment Coalition which advocates for greater reinvestment by banks in low- to moderate-income neighborhoods and has drafted model legislation that local governments can work from.

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Redlining and Neighborhood Health

Before the pandemic devastated minority communities, banks and government officials starved them of capital.

Lower-income and minority neighborhoods that were intentionally cut off from lending and investment decades ago today suffer not only from reduced wealth and greater poverty, but from lower life expectancy and higher prevalence of chronic diseases that are risk factors for poor outcomes from COVID-19, a new study shows.

The new study, from the National Community Reinvestment Coalition (NCRC) with researchers from the University of Wisconsin–Milwaukee Joseph J. Zilber School of Public Health and the University of Richmond’s Digital Scholarship Lab, compared 1930’s maps of government-sanctioned lending discrimination zones with current census and public health data.

Table of Content

  • Executive Summary
  • Introduction
  • Redlining, the HOLC Maps and Segregation
  • Segregation, Public Health and COVID-19
  • Methods
  • Results
  • Discussion
  • Conclusion and Policy Recommendations
  • Citations
  • Appendix

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