HomeMy WebLinkAboutIR 10690
INFORMAL REPORT TO CITY COUNCIL MEMBERSNo. 21-10690
October 12, 2021
To the Mayor and Members of the City Council
Page 1of 2
SUBJECT: RESEARCH FOR PROPOSED RESPONSIBLE BANKING
ORDINANCE
The purpose of this informal report is to a provide a brief overview of Responsible Banking
Ordinancesadopted by other cities and to propose next steps to research the possible
implementation of this type of ordinance in Fort Worth.
Background
According to the National Community Reinvestment Coalition (NCRC), since 1991 more than a
dozen municipalitiesincluding Cleveland, Boston, Chicago, Philadelphia, San Jose, Seattle,
Pittsburgh, Los Angeles, Kansas City, Portland, and New York have adopted Local Responsible
Banking Ordinances(“RBOs”)that seek to achieve various policy goals, including increasing the
amount of responsible loans, investments, and financial services provided to minority and low-
and moderate-income communitiesand to older adults,through heightened public accountability
to municipalities and their residentsfrom financial institutions receiving municipal deposits and
other city business.At least two Texas cities,Dallas and Desoto,are considering similar
measures.
Using publicly accessible data reported through the Community Reinvestment Act (CRA),
banking institutions’ performance in serving low-to-moderate-income(LMI)individuals and
householdsthrough various financial investments are graded and reported using a standardized
scale. RBOs leverage this data and attempt to increase performance of financial institutions
within the municipality.Someordinances customizeanalysisto the communities they serve by
establishing city-specific processesfor reviewing publicly accessible CRAdata, evaluation
methods, and public input mechanisms, and direct how the resulting data is to be used to
produce measurable outcomes and inform city decisionswith the goal ofholdingfinancing
institutions publicly accountable andincentivizingthem toincrease their responsible lending and
investing in local neighborhoods.
The City currently has multiple banking relationships that, combined, represent total deposits of
roughly $2.6B.The largest roles are played by JP Morgan Chase, which is the City’s general
depository bank, and Wells Fargo, which handles revenues from City mineral leases and serves
as trustee for the Permanent Fund, consisting of previously received gas-related revenues.The
City, directly or through component units, also has financial relationships with UMB Bank,
Citibank, US Bank, Pinnacle Bank, and Simmons Bank.If the City Council were to adopt an RBO
for Fort Worth, one of the determinations to be made would be whether all banks doing business
with the City are subject to such requirements or only those with an as-yet-to-be-established
minimum amount of City business.
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS
INFORMAL REPORT TO CITY COUNCIL MEMBERSNo. 21-10690
October 12, 2021
To the Mayor and Members of the City Council
Page 2of 2
SUBJECT: RESEARCH FOR PROPOSED RESPONSIBLE BANKING
ORDINANCE
Next Steps
Staff recommendsconvening an internal working group comprised ofthe following individuals or
their designees: City Manager, the Director of Finance, the Director of Economic Development,
the Director of Diversity and Inclusion, the Director of Neighborhood Services, the Director of
Planning and Data Analytics, the Director of Development Services, the City Attorney, and the
Director of Communications and Public Engagement. The working group’s task would beto
research, report and recommend a path forward for the City.
As part of its analysis, the working group will review existing RBOs in other municipalities and
their outcomes, recent state legislation impacting local banksand the potential impact on the
City’s depository services, changes to the CRAand its reporting requirements, legal challenges to
RBOs, andother relevant considerations. Public engagement with local and regional financial
institutionsandresidents will also be conducted. It is anticipated thata final recommendationwill
be presentedto the City Councilby February 2022.
If you have any questions about this information please contact Christina Brooks, Chief Equity
Officer | Director Diversity and Inclusion Department 817-392-8988.
David Cooke
City Manager
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS