Gov Pritzker at podium speaking on IL CRA after signing

Governor Pritzker signed the Illinois Community Reinvestment Act into law, making Illinois the second state with oversight to ensure equitable investment

Looking for the legislative bill text? View the relevant language in the state law here

Cross posted from Housing Action Illinois

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CHICAGO –On March 23, 2021, in a historic victory for low-income and communities of color in Illinois, Governor Pritzker signed the Illinois Community Revitalization Act (IL CRA) into law. With the passage of this legislation, Illinois joins Massachusetts to become the second state with an oversight system to ensure that residents are equitably served by all three main segments of the mortgage lending market: banks, credit unions, and state-licensed mortgage companies.

This legislation, if strongly implemented, creates a critical opportunity to address an inequity that has long persisted—the unequal access to credit particularly for people of color and low-income communities. This inequity was laid bare by a WBEZ report on mortgage disparities in Chicago. One of WBEZ’s key findings was that mortgage lenders in Chicago have invested more in a single White neighborhood than in all the Black neighborhoods combined.

These inequities are not confined to Chicago. In Springfield, where a set of railroad tracks separate majority white areas of the town on the west from majority Black areas on the east, more mortgage dollars were lent in a single census tract west of the railroad tracks as were lent in all census tracts east of the tracks combined.

Housing Action Illinois, Woodstock Institute, and our CRA allies applaud Governor Pritzker, Senator Jacqueline Collins, Representative Sonya Harper, Senator Christopher Belt, and the Illinois Legislative Black Caucus for enacting this and other system-level policies which allows all of us to make real progress towards a more equitable Illinois. 

The IL CRA provides the State with the authority to assess the performance of financial institutions serving Illinois and to hold them accountable for actions deemed predatory and/or discriminatory. This extends to institutions not covered by the federal CRA, such as credit unions and mortgage companies. This broader coverage is particular important because national research by the federal Consumer Financial Protection Bureau shows that a majority of mortgages—estimated between 60 to 70 percent—are originated by residential mortgage brokers and credit unions.

“The IL CRA will complement the federal Community Reinvestment Act,” states Horacio Mendez, Executive Director of the Woodstock Institute. “A state CRA will enable Illinois to help direct state-chartered financial institutions’ lending, services, and investments to promote state-specific priorities, such as efforts to prevent displacement and enable lower income residents in gentrifying areas to be able to remain in affordable housing in their neighborhoods.”

The State of Illinois will also be able to facilitate local community input and involvement, as well as a robust assessment of community needs, which are the core components of the CRA. For credit unions and mortgage companies, which do not have federal CRA obligations, the IL CRA can be used to spur significant investment in LMI neighborhoods and communities of color. 

“We applaud the enactment of the IL CRA as a key step forward in promoting economic access, equity, and opportunity while addressing systemic racism,” says Sharon Legenza, Executive Director of Housing Action Illinois.  “The IL CRA is a critical way for the state to ensure financial institutions are serving the residential, small business, and consumer credit needs of all Illinoisans. This matters for our urban, suburban, and rural communities, particularly those that most suffer from systemic disinvestment based on race.”

“Now that the IL CRA is law, we are eager to work with the Illinois Legislative Black Caucus, the Illinois Department of Financial and Professional Regulation, community advocates, and industry leaders to develop strong, but fair, rules,” concludes Mr. Mendez of Woodstock.

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 150+ member organizations include housing counseling agencies, homeless service providers, developers of affordable housing, and policymakers. We bring everyone together to work toward our vision of an Illinois where everyone has a stable, good home.

About the Woodstock Institute Woodstock Institute’s mission is to create a just financial system in which lower-wealth persons and communities and people and communities of color can achieve economic security and community prosperity. Since its foundation in 1973, Woodstock Institute has been a recognized leader in building bridges between low- and moderate-income communities, financial institutions, regulators, and policymakers. We conduct high-quality research on financial products, services, investments, and policies at the local, state, and national levels. Our findings and recommendations inform and influence efforts to build a more equitable financial system.