Corporate Intervention

According to Bank of America’s Community Development Lending and Investment goals, as of 2009 they had contributed $5,818,149³ toward affordable housing in the State of Texas with $1,392,729⁴ having been disbursed throughout Dallas County.  When you take that figure, $1,392,729 and divide it by the average sales price of homes in South Dallas as provided by Trulia, Inc., which is $29,933⁵ that averages to about 47 homes; at the maximum that BOA could have built out right within the community they serve. 

In relation to the Community Reinvestment Act, as cited by a J P Morgan Chase & Co. 2009 Community Responsibility Report, its Community Development Real Estate Division boasts of providing ‘$541 million in new credit commitments for affordable housing in 2009⁶.’  If you were to take that figure and divide it by the average home price in South Dallas, that would mean Chase extended credit for 18,000 homes nationwide which averages about 361 houses per state; and that’s at a sales price of $29,933. 

As you can see, the Community Reinvestment Act and the contribution of these particular banking institutions within the Fair Park area are not having an impact. Combined the two banks are ideally contributing - at best - to 80 homes within that community.  That’s liberal considering new construction in that area is almost non-existent.

Solutions: 

1.      As cited in a posting for a Personal Banker job description on the Chase website, ‘The Personal Banker is a branch based sales position whose primary goal is to acquire, retain and deepen customer relationships; As a Personal Banker, you will proactively meet with customers - face to face and over the phone - to discover their financial needs and provide product and service recommendations.⁷’     As personal bankers within the community, they should proactively go into the community and speak with business owners to see how Chase can invest in the neighborhood. 

2.      Mandate that banking institutions proactively survey the communities they are to serve to identify houses with physical and external obsolescence. 
3.      Provide a game plan as to how they intend to allocate part of their Community Reinvestment funds to rehabilitate those homes and businesses. 
4.    Stipulate an annual amount of the CRA budget that would be set aside for only new construction within the Fair Park Corridor and make those statistics easily accessible to the community both online and within the branch.

 

 

³Bankofamerica.com. Web. 14 Feb. 2012. bankofamerica.com. Web. 14 Feb. 2012.

⁴ Bankofamerica.com. Web. 14 Feb. 2012. <http://www.bankofamerica.com/community/pdf/ADA_1.5T_10-yr_summary_by_state.pdf>.

⁵ "Dallas Home Prices and Heat Map - Trulia.com." Trulia. Web. 20 Mar. 2012. <http://www.trulia.com/home_prices/Texas/Dallas-heat_map/>.

 

⁶ Jpmorganchase.com. Web. 20 Mar. 2012. <http://www.jpmorganchase.com/corporate/Corporate-responsibility/document/cr_full_report_05-14_01_noblurb.pdf>.

⁷Jpmorganchase.com. Web. 20 Mar. 2012. <https://jpmchase.taleo.net/careersection/2/jobdetail.ftl>.