Chicago Housing Leaders Want Banks To Provide Mortgage Lending Data

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Banks that are, or want to be, city custodians that manage some of the Chicago funds will have to publish extensive data on their lending schemes for both purchase loans and home loans in the city, including financing terms and down payment rates as they differ in dependencies on census districts and mortgage waiver lists disaggregated by race and gender.

“It’s important to know if the dollars are going to the areas that need them if we’re going to partner with these banks,” Old said. Harry Osterman, 48th, Chair of the City Council’s Housing and Real Estate Committee. He is one of nine aldermen who supported the proposal, which was sent to the finance committee.

Because banks are federally regulated, changes in their lending policies cannot be legislated at the city level, but Osterman said he believed “transparency works.” If city officials and housing groups have access to data on where banks lend, “that tells us a lot,” he said.

A group of banking professionals argue that the ruling, if passed, could discourage some banks from working with the city due to additional reporting requirements.

“The process of becoming an approved depository in the city is already onerous as banks provide a wealth of information about their lending and community activities in the Chicago area,” said Randy Hultgren, president and CEO of the Illinois Bankers Association. prepared statement. “This regulation will impose even more requirements, discouraging local banks from filing applications to open depositories, especially in small institutions with limited resources. This will ultimately lead to fewer options for taxpayers to invest city dollars. ”

Haltgren said the banking industry is working to address racial disparities in lending that have become particularly noticeable in recent years. Other initiatives include the recent announcement by JPMorgan Chase that he will invest $ 150 million in the south and west of Chicago.

The Equity Lending Ordinance is supported by the Metropolitan Planning Council, the Woodstock Institute, the Chicago Housing Authority, and others from among the 20 member groups of the Housing Policy Task Force.

Osterman said the ruling grew out of June 2020 report from radio station WBEZ and City Bureau, a nonprofit news service. It found that for every dollar lent by banks in the city’s white quarters, they lend 13 cents in Latin American quarters and 12 in black quarters.

News outlets said they found “huge differences in loan amounts in Chicago’s whites versus blacks and Hispanics — a pattern that deprives residents of home ownership, deprives communities of desperately needed capital investments, and threatens to exacerbate racial inequalities between neighborhoods. “.

In January, the Committee on Housing and Real Estate invited 10 major banks to hearings on lending inequality in the Chicago neighborhoods, but only one, Guaranteed Rate, agreed to come. According to Osterman, the no-show “inspired these transparency efforts,” the new lending capital regulation.

Both Osterman and Sarah Brun, director of public policy at Neighborhood Housing Services of Chicago, said the ordinance does not impose new standards on banks. All that will be required is the publication of the data and at least one joint public meeting per year of the finance, housing and real estate committees to discuss the findings of the data.

Osterman said he does not suggest the data will lead to any scorecard or ranking of banks according to their credit records in black and Hispanic neighborhoods.

The release of bank lending data, Brun said, “is critical to helping us understand where they are in terms of racial equity in lending.”

Osterman said the deadline for the adoption of the decree has not yet been set.

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