An ordinance, passed unanimously this week, will require data transparency and annual hearings to vet banks that do business with the city of Chicago.
By Bettina Chang
Chicago City Hall. (Photo: J E Koonce/Flickr)
Where does the city of Chicago keep its money? A new law, passed Tuesday in City Council, will give public officials more information about the banks that hold hundreds of millions of city dollars and invite more public scrutiny into which banks are selected for this lucrative business.
Last year City Bureau’s joint investigation with WBEZ, “Where Banks Don’t Lend,” revealed that the city’s biggest home lenders, including banks like Chase and Fifth Third, make the vast majority of their home loans in Chicago’s white neighborhoods. Overall, “For every $1 banks loaned in Chicago’s white neighborhoods, they invested just 12 cents in the city’s black neighborhoods and 13 cents in Latino areas,” we wrote in June 2020.
The report struck a chord across the city and state, with activists showing up to Chase Bank branches; a state law passed to hold more financial institutions accountable; and city and Illinois state officials holding hearings to find ways to encourage more equitable lending practices. Housing advocates cited the report as proof of banks’ discriminatory treatment of Black and brown borrowers that has continued despite numerous attempts at reform since the Fair Housing Act was passed in 1968.
According to followup reporting by WBEZ, the so-called Equitable Lending Ordinance “directs the city to post each bank’s annual lending record neighborhood by neighborhood on its data portal, showing information like loan amounts, down-payment amounts, interest rates and fees for each loan originated, as well as loan denial rates. … The proposed ordinance would also require the City Council to hold an annual hearing on banks’ lending records before approving or renewing their designations as municipal depositories.”
The law’s passing comes on the heels of a report by Chicago’s Office of the Inspector General, which found that the city had not voted on its bank selection since 2015, and that at least one bank hadn’t shared required data with the city since 2012.
More on equitable home lending:
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