image of a flyer with words Community Reinvestment Act

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. 

For more information contact: 

Brent Adams, badams@woodstockinst.org | Kristin Ginger, kristin@housingactionil.org

Creation of the IL CRA was included in Senate Bill 1608, legislation with many provisions supporting the Illinois Legislative Black Caucus’ economic access, equity and opportunity agenda to stop systemic racism.

Consumer Financial Protection Bureau research shows that, nationally, a majority of mortgages – estimated to range between 60 to 70 percent – are originated by institutions that are not covered by the federal CRA, including loans originated by credit unions and residential mortgage brokers.  

The IL CRA compliments the federal Community Reinvestment Act by providing oversight for state regulated financial institutions not covered by the federal CRA, including state charted banks, savings banks, credit unions and larger residential mortgage brokers. The IL CRA will improve access to credit for communities of color in urban and suburban areas, as well as for rural communities that often also feel the deficit of investment.

“Like the federal Community Reinvestment Act – which also originated with activists here in Illinois – the IL CRA is fundamentally a civil rights bill,” said Brent Adams, Senior Vice President of Policy & Communication at Woodstock Institute. “We’ve shown—and the past 12 months dramatically highlighted – that mortgage, small business, and consumer credit can be harder to get in communities of color. The Illinois Legislative Black Caucus led the way in addressing these issues during the January legislative session.”

The Woodstock Institute championed creation of the IL CRA, with assistance from Housing Action Illinois and other community-based partners. 

“To build more equitable communities in Illinois, we need to ensure equitable access to credit in all parts of the state,” said Sharon Legenza, Executive Director at Housing Action Illinois. “The long-lasting consequences of segregation and redlining continue to affect us today. Historically redlined neighborhoods still don’t have access to the same kind of loans and investment, and they suffer not just from greater poverty but worse health outcomes—which we’re seeing now as COVID-19 takes a disproportionate toll on communities of color. Passing the IL CRA—and strengthening the federal CRA—are critical for helping everyone in our communities not just survive but thrive.”

The Illinois Department of Financial and Professional Regulation (IDFPR) will be responsible for implementing the IL CRA. IDFPR will develop rules and procedures for the evaluation and oversight process, which must include a public participation component.

Many details remain to be addressed in order to implement this effectively and we look forward to working with legislators, state agencies, and our partners in the lending industry to develop an effective system that will make Illinois a model for the nation. 

We thank State Senator Jacqueline Collins, State Representative Sonya Harper, State Senator Christopher Belt and other members of Black Caucus for including creation of the IL CRA in their agenda.

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, and policymakers. More at HousingActionIl.org

Woodstock Institute works to create a just financial system in which all can achieve economic security and community prosperity. More at woodstockinst.org.