A banking initiative for Dallas-area underserved neighborhoods has a lot to prove

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Several neighborhoods in Dallas-Fort Worth with little or no access to banks will now see 30-foot-long mobile units from PNC Bank on their streets.

It’s a symbolic move and an important outreach because predatory lending remains a problem across the country and particularly in Texas, which has one of the worst average payday loan interest rates in the country. But this initiative alone will not solve the need for banking partners that take deposits and also make loans in underserved areas.

This is a step forward in trying to reverse the effects of systemic disinvestment in low- and moderate-income communities, especially in South Dallas neighborhoods. The city recently passed an ordinance designed to incentivize banks to invest in racially diverse neighborhoods, though the City Council cannot force banks to do so. Meanwhile, federal regulators rarely move to investigate and cite banks for discriminatory lending practicesaccording to the US Government Accountability Office.

We congratulate PNC Bank, the fourth largest bank in the region, for its leadership in correcting a historic mistake. Dallas Morning News reporter Colbi Edmonds wrote that mobile banks will help residents access an ATM (with the option to withdraw $1 bills), open bank accounts, pick up or replace debit cards, apply for loans or discuss finances.

South Dallas will have at least two mobile branches: one at Jubilee Park and Community Center and the other at CitySquare, a nonprofit organization. The bank will deploy additional units to areas of need in North Texas as it finds other nonprofits to partner with to build trust within communities.

What must follow is significant and sustained investment by major banks to undo the effects of the red line that unfairly labeled large swathes of South Dallas as dangerous investments.

Low-income people should be able to tap into credit that can help them build lasting wealth, much like a mortgage. Home ownership is commonly viewed as the primary way to accumulate and maintain wealth, but black and Hispanic families are less likely to own their homes than white families. According to a data analysis by the National Community Reinvestment Coalition, the gap in homeownership rates for black and white families is the largest in nearly 120 years.

We welcome efforts to replace predatory payday lenders in Texas, who on average charge $645 in interest on a $500 loan.

Banks must be willing to absorb more risk with their investments. In this sense, the PNC is also advancing by leaps and bounds. The bank said it intended to spend $60 million to renovate Rosemont at Ash Creek Apartments, an affordable housing complex, and $21 million to build Highpoint at Wynnewood, according to WFAA-TV (Channel 8).

More work will be needed to boost South Dallas. PNC Bank is laying the foundation that we hope others will build on.

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