As a partial owner of North Chicago Auto Service, which does car repairs and towing for the city’s police department, Otero-Cintrón makes serving the community central to his business. If a customer is having trouble paying for badly needed repairs, he works with them so they can pay when they are able and still be able to drive to work. Located down the street from the Great Lakes Naval Base, he’s always willing to negotiate a deal with the men and women serving our country. He has built long-standing relationships with high-ranking officers and enlisted soldiers alike, and out-of-towners even come to visit when they’re in the area. All in all, North Chicago Auto Service is a solid small business with deep ties to its community—a community that can’t afford to lose more successful businesses.
Which is why Otero-Cintrón was so surprised to learn that, after months of waiting, he had been rejected for a $35,000 loan from his long-time bank that would have allowed him to buy out his partner. “We had been banking with them for almost twenty years,” he said. “We had more in our bank deposits than we were asking for in the loan!” Otero-Cintrón thought that, with a prime credit score and little debt to his name, he should have been able to qualify for a loan. So he tried again at North Chicago Community Bank, a division of Lake Forest Bank and Trust, and, sure enough, he was approved in three days.
Now that Otero-Cintrón has full ownership of his shop, he is free to pursue the dreams he had while working on cars and talking to customers. He’s expanded his truck fleet from three to six trucks so he can take on more business. Previously, the shop had been on a month-to-month lease; now, Otero-Cintrón has a five-year lease with an option to buy. Owning the property is very important to Otero-Cintrón, especially since so much of his equipment is tied down to the location. “I’m 41 years old,” he says. “I got my family here, and I don’t want to go anywhere. I’m not one of those guys who wants to get rich: I pay my guys every month, I pay my bills, I bring food home to my family, and that’s enough.”
“I’ve been very blessed,” Otero-Cintrón reflects. “The blessings keep coming. North Chicago Community Bank took a weight off my soul.”
Businesses like North Chicago Auto Service are the cornerstone of communities across America. However, very small businesses in low- and moderate-income communities like North Chicago are often left behind when it comes to obtaining safe and sustainable financing to stabilize, expand, and create jobs. The Community Reinvestment Act (CRA) requires banks to meet the financial needs of all the communities they serve—and that includes working with creditworthy small businesses that might be otherwise overlooked because they request relatively small loans or are located in low- and moderate-income communities.
Until recently, CRA had a flaw that seriously impeded advocates’ and regulators’ ability to make sure banks weren’t excluding certain racial or gender groups from low-cost small business credit: CRA did not require banks to disclose the race and gender of small business loan applicants. Advocates have used similar data for home mortgages to track how communities of color are impacted by banks’ lending practices and hold banks accountable for discriminatory lending practices. The federal financial reform bill requires banks with more than $1 billion in assets to report race and gender information. However, smaller banks play an important role in providing credit to small businesses and we need to be able to ensure that businesses working with small banks are getting a fair deal as well. Banks with more than $250 million in assets should also be required to publicly report race and gender data at the loan level. We must be able to make sure that small businesses in low-wealth communities can have access to credit to expand and do what they do best: create badly-needed jobs.
The American Community Investment Reform Act, sponsored by Rep. Luis Gutierrez (D-IL), would expand CRA so it better reflects our rapidly changing financial landscape, but it would not change the reporting requirements for small business data. Please seize this opportunity to strengthen CRA and ask your representative to support the American Community Investment Reform Act and the expansion of small business loan reporting requirements to institutions with more than $250 million in assets.