57 groups ask governor to sign Illinois CRA bill

Woodstock Institute, Housing Action Illinois, and 55 other organizations wrote to Gov. Pritzker asking him to support S. 1608, the Black Caucus’ bill to create an Illinois Community Reinvestment Act modeled on the federal anti-redlining law that was pioneered in Chicago.

On January 13, the Illinois General Assembly passed legislation creating an Illinois Community Reinvestment Act (IL CRA) to help ensure that state regulated financial institutions better meet the needs of low- and moderate-income neighborhoods, including areas where there is a lack of access to banking and lending services.

Here’s an excerpt from today’s letter to the governor asking him to sign the bill:

Creating the Illinois CRA will support the banking, credit, and other financial service needs of low- and moderate-income (LMI) communities throughout Illinois and, if robustly implemented, can have a significant positive impact on the Illinois Legislative Black Caucus’ efforts to promote economic access, equity, and opportunity to stop systemic racism.

As you know, areas with a Black majority population generally suffer from a lack of access to banking and lending capital, crucial ingredients to create healthy markets where locally-owned businesses and housing markets can thrive.

An example of systemic racism that IL CRA can help remedy is unequal access to affordable mortgage loans based on race. A recently published academic study, which analyzed loans originated by independent mortgage brokers across various markets throughout the nation, found that minorities pay between 3% and 5% more in fees than similarly qualified whites when obtaining a loan through the same white broker.

Locally, a June 2020 report from WBEZ and City Bureau revealed wide racial disparities in mortgage lending between Chicago’s white communities and the city’s Black and Latino neighborhoods. Calling it modern-day redlining, the analysis found that in Chicago, lenders have invested more in a single white neighborhood than all the black neighborhoods combined.

The list of signers includes: