The presentation below is from the City of Chicago’s annual subject matter hearing on municipal depositories. Woodstock President & CEO Horacio Mendez shares 2022 data made available by the Lending Equity Ordinance (LEO) to evaluate whether the City’s banks are making progress in closing historical racial and economic disparities in both mortgage and small business lending.

Passed in September 2021, the Lending Equity Ordinance increases transparency around how financial institutions the City banks with are serving Chicago’s communities. The ordinance requires banks to submit data on their lending practices, loan distribution across different neighborhoods, branch locations, and demographics of local employees in order to do business with the City. The law also mandates annual public hearings evaluating whether progress has been made in closing lending gaps.

Click below to see the video of the presentation and the full 2023 City Council Finance Committee Lending Equity Ordinance hearing on municipal depositories



My name is Horacio Méndez and I’m the President and CEO of the Woodstock Institute. As many of you know, we’ve been digging into bank lending data for the past 50 years. As the result of a question by Alderperson Lee when we made our presentation to this body last year, we’ve expanded our analysis into much more detailed lending trends specific to Black, Brown and Asian borrowers in Chicago. While we don’t have time to go over those findings today, I wanted to let you know that you’ll each receive those reports in the coming weeks.

As to the banks that responded to the City’s request to become municipal depositories, there’s a lot of information to share, so we sent you our assessment late last week. I’d need about 10 minutes to go through it in any reasonable manner. But with half that time, I’m going to skim through it and give you the highlights.

First, we’re glad to see smaller banks toss their hats in the ring. Aside from Amalgamated’s small business lending, none of them have enough publicly available lending data from which to highlight their activities in Chicago, so the information I provided to you doesn’t include two of them and really only relates to Amalgamated when discussing small business lending.

Our assessment of the lending performance of banks wanting to do business with the city consists of small business lending data from Cook County due to the limitations of publicly availability information, and the most recent Home Mortgage Disclosure Act data for the City of Chicago. We compared them to each other in 3 bands, below peer, average, and above peer, and did so in mortgage applications (which gives us an idea of how much of an effort the bank is making to be visible and welcoming), loan originations (which is where the rubber meets the road), and the diversity of their lending based on the borrower and the community. You can find more information on all lending institutions, including rankings, foreclosures and branches broken down by each community area on the Woodstock Institute website.

  • On this 1st slide, we see data on the applications received from minority borrowers. Overall, we saw an increase in these numbers from a majority of responding banks and for all Chicago lenders.
  • 4 banks performed above peer: Bank of America, BMO, Citi and Chase. But we also saw significant year-over-year improvement from Chase, Huntington, and BMO.
  • In terms of turning those applications into homeownership, we went from 3 banks performing above peer last year, to 5 banks performing above peer this year. Overall, we saw the majority of banks’ data improve on this metric, as well as for all Chicago lenders
  • We saw the most improvement from Bank of America, US Bank, Chase, and Huntington.
  • We have some concerns about FHA loans being originated to borrowers who qualify for conforming mortgages, but that should be the topic of another subject matter hearing.
  • Here we have 5 above-peer performers when it comes to the applications they received from LMI borrowers.
    • Most improved from last year were Bank of America, Huntington, BMO, and Chase.
  • 4 of those 5 performed above peer in turning those applications into originated loans, and were joined by Chase and US, both of which went from average or below average in terms of attracting applications to above average in terms of approving what applications they got from LMI borrowers.
  • Compared to last year’s data, we were impressed by the improvement at Bank of America, US Bank, and Huntington.
  • In these next 2 slides, we turn our focus on community.
  • In this slide, we have 7 banks performing above average in terms of applications received from communities that are majority minority, but that’s a bit deceiving. Overall, we saw a decline in this metric, not just for the responding banks, but for all Chicago lenders. It wasn’t huge, but it’s worth further investigation and discussion with lending institutions.
  • Of the responding banks, only Huntington saw any improvement of note.
  • In terms of turning those applications into actual homeownership, we have 6 banks that are performing above peer, but again, that’s deceiving. All 6 of those banks showed declines in this metric, which also shows up in the numbers for all lenders in Chicago
    • As in the previous slide, the most improved was Huntington
  • These next two slides look at small business lending, where there’s a lot less publicly available information. In these two slides, you can see the share of loans made by these banks to small businesses in terms of both number (in this slide), and dollar amount (in the next slide).
    • Take a look at banks like Citibank, US, and Huntington where over 3/4ths of their business lending activity is focused on small businesses.
    • In terms of dollar amount, over half of the dollars lent by Amalgamated Bank, Citibank, Chase, and Huntington went to small businesses.

What does this all mean? It’s a mixed bag. We see improvement as it relates to outcomes for minority and lower-income borrowers, but not to majority minority communities. On the upside, by highlighting this data, it allows housing organizations to work with lenders to figure out a way to address this issue.

Even though we acknowledge that the average, or even the above average bank serving Chicago isn’t doing enough. Our ultimate goal is to see the baseline of “average” increase year over year … and I think this data shows that we are, indeed, improving.

As for an institution consistently ranking above peer and/or showing the most improvement, we’d like to tip our hat to Huntington and award them 1 month where Woodstock won’t say anything mean about them.

Thank you for the opportunity to share this information with you.