Mayor Lightfoot, Chicago Advocates Decry Plan to Weaken Anti-Redlining Rules

During Pandemic, Federal Banking Regulator Intends to Gut Community Reinvestment Act


PRESS CONTACTS: For Woodstock Institute: Jenna Severson, 616-914-2844 (

For Housing Action: Kristin Ginger, 312-854-3333 (

CHICAGO, IL – In the midst of the COVID-19 pandemic, the Office of the Comptroller of the Currency (OCC), issued new rules regarding the Community Reinvestment Act without the support of the other two banking regulators: the Federal Deposit Insurance Corporation and the Federal Reserve. The OCC’s new rules weaken the Community Reinvestment Act, a critical tool for promoting bank investment in low-income communities and communities of color. OCC Comptroller Joseph Otting, a Trump appointee, announced his departure from the agency two days after publishing the final rules. 

The news of the CRA overhaul sent shockwaves in Chicago, where the law has its roots.

Chicago Mayor Lori E. Lightfoot, whose office commented on the rule proposal in March, explained her concern about the future of this civil rights law.

“While Chicago is battling against an historic threat to our health and economy, the Trump Administration is busy attempting to gut laws meant to drive resources to lower-income communities – the very families and small businesses that need our help the most,” stated Mayor Lightfoot. “It is another example of this administration’s misplaced priorities. This great city, whose activists birthed the movement against redlining, will continue to fight so that banks meet the needs of all our neighborhoods, not just the wealthy ones.”   

Activists in Chicago, including Gale Cincotta and Woodstock Institute, spurred a movement to address discriminatory policies blocking non-white neighborhoods from bank loans, a practice known as “redlining.” Congress passed the Community Reinvestment Act in 1977, which worked in tandem with the Home Mortgage Disclosure Act of 1975, to affirmatively obligate banks to invest, serve, and lend to low-income and historically underinvested areas.

Numerous organizations in Chicago united to oppose the OCC’s Proposed Rulemaking, including Woodstock Institute, Housing Action Illinois, Chicago Community Loan Fund, IFF, The Resurrection Project, the Chicago Community Trust, and others. Collectively, around 15% of comments critical of the proposal came from groups and individuals in Illinois.

Woodstock Institute and Housing Action Illinois issued the following preliminary policy analysis of the final rule as it compares with January’s proposal.

“Comptroller Otting’s brazen approach to unravel historic anti-redlining regulations failed to win support from other regulators, banking industry, and community partners,” said Jean Pogge, Woodstock Institute Interim Director and former banker in a statement on Wednesday. “We look forward to the opportunity to push for new CRA rules that bring needed certainty for the industry while still fulfilling the spirit of the law: to meet local community needs. The fight against redlining continues.”

Since the April 8, 2020 deadline for comments on the proposed rule, the coronavirus pandemic has not only caused widespread illness and death, but also ravaged the economy. According to the Federal Reserve, households with income below $40,000 comprised almost 40% of all layoffs and furloughs by early April. In Illinois, the unemployment rate jumped to a record 16.4% last month, according to the Illinois Department of Employment Security. Low-income, Black, and Brown Americans have been disproportionately impacted. The Chicago Urban League reports that while Black residents are 15% of the state population, they account for 25% of COVID-19 cases. In Chicago, Black residents are 30% of the city’s population but account for 60% of COVID-19 deaths. The virus has also spread rapidly among Latinx individuals; the positive rate for those tested has been 60%, roughly three times the state average, according to Governor Pritzker’s May 6 briefing.

“By adopting this rule change now, in the midst of a pandemic, the OCC shows a complete disregard for the needs of low-income communities, many of which are being the hardest hit by COVID-19,” stated Sharon Legenza, Executive Director of Housing Action Illinois. “This flies in the face of what CRA is intended to do. However, we’re heartened that the FDIC and Federal Reserve are taking a more judicious approach, and we will continue to advocate for a strong, uniform CRA rule that benefits all Illinois communities.”

CRA is a primary driver of bank investments in Community Development Financial Institutions (CDFIs). Chicago, which is home to 14 CDFIs, has benefitted from investment in these institutions, which are able to finance smaller-scale projects in neighborhoods.

Calvin L. Holmes, President of Chicago Community Loan Fund, a CDFI, said, “Removing protections for underserved communities under the guise of reforming CRA while African American and Latinx populations are dying from COVID-19 at unprecedented rates is not only an insult to all populations, but a dangerous path toward compounding disparities CRA was meant to rectify.

The organizations plan to issue a more in-depth analysis of the rulemaking with other members of the Illinois CRA Coalition in the future.  


About Woodstock Institute 

Woodstock Institute is a leading nonprofit research and policy organization in the areas of equitable lending and investments, wealth creation and preservation, and safe and affordable financial products and services. Woodstock Institute works locally and nationally to create a financial system in which lower-wealth persons and communities of color can safely borrow, save, and build wealth so that they can achieve economic security and community prosperity.

About Housing Action Illinois

Housing Action Illinois is a statewide coalition that has been leading the movement to protect and expand the availability of quality, affordable housing in Illinois for more than 30 years. Our 160+ member organizations include housing counseling agencies, homeless service providers, developers of affordable housing, financial institutions, and policymakers. We bring everyone together to work toward our vision of an Illinois where everyone has a stable, good home.