DeSoto city officials unanimously recommended that it pursue a responsible banking ordinance at their Sept. 21 city council meeting.
The ordinance would require the city government to evaluate how well a bank serves all of its residents, from high to low income.
In August 2020, the city council approved an amendment to the city’s investment policy that required financial institutions that provide depository and other banking services for DeSoto to have a Community Reinvestment Act (CRA) rating of “satisfactory” or higher, the city said.
This process was followed during the city’s last issuance of a banking service request for quote issued in 2020.
Council member Kay Brown-Patrick is the driving force behind bringing the responsible banking ordinance to the table and said she initially presented the idea to the late Mayor Curtistene McCowan, council member Kenzie Moore III and council member Candice Quarles.
“They asked for additional details, and I began to research the role that the RBO could provide in terms of providing economic equity in our community,” Brown-Patrick said via email. “I presented it at a city council meeting before the pandemic hit, and while the impact of the pandemic slowed down the discussion, it highlighted the importance of such an ordinance in minority communities.”
Brown-Patrick said she believes the ordinance will “work to address issues like discrimination, an imbalance in the awarding of PPP loans and necessary financial assistance that seemed to elude low- to moderate-[income] communities.”
Here is how the ordinance would work:
Banks would be required to submit loan data showing how much they lend, what neighborhoods they lend in and a reinvestment plan that sets goals for future lending, the city said.
DeSoto city officials would then be tasked with creating an oversight body to evaluate banks, publish findings and hold community hearings with the goal of promoting home ownership and providing residents with opportunity, City Manager Brandon Wright said via email.
“If done properly, implementing such an ordinance in DeSoto would likely offer greater financial protections and opportunities for our residents,” Wright said. “It could increase homeownership opportunities to strengthen our housing market.”
While city officials have approved pursuing the ordinance, Mayor Rachel Proctor said city officials are still trying to understand all of the elements of such legislation, or working out the type of framework that would be necessary before moving forward, but she said the benefits could help residents and businesses.
“As we learned during the pandemic, the health and well-being of DeSoto includes the financial health and well-being of our residents and businesses.
“It is important we take a closer look at this type of ordinance, which I’ve heard has the potential for leveling the financial playing field for residents of all income ranges and that could encourage more of them to give back to our community,” Proctor said via email.
