Equity Ordinance Provides Solutions for OIG Recommendations (Chicago, IL) – Last week the City of Chicago Office of the Inspector General (OIG) published a report of an audit of the City’s Request for Proposal (RFP) process for banks who wish to provide banking services to the City government by becoming municipal depositories. The report highlights some critical flaws in the City’s process. Namely, the report concludes that the City’s process for selecting municipal depositories, “does not ensure designation of banks that provide equitable lending and banking services throughout Chicago.” As a result, many banks maintain their ability to do business with the City “while engaging in inequitable lending across Chicago.”
The OIG report highlights many problems that affordable housing and fair lending advocates already knew existed. These problems were highlighted in last year’s reporting from WBEZ and City Bureau, and were discussed at length during a subject matter hearing in the Chicago City Council Committee on Housing and Real Estate in February of this year.
As a result of this, advocates from the Housing Policy Task Force worked with Chairman Harry Osterman to introduce the Lending Equity Ordinance (LEO), which would make the RFP process more transparent. The LEO will require banks applying to become municipal depositories to compile and disclose data on their distribution of loans by race, gender, and neighborhood, among other data points. The City will then make this data available to the public and City Council will hold an annual hearing where impacted residents can share their experiences and advocates can comment on trends in the data. Cities across the country — from Los Angeles to Boston and many in between — have implemented similar ordinances to hold municipal depository banks accountable to residents.
“The Inspector General’s report shows the urgent need for the City to hold banks accountable to Chicago residents. Too many Black and Brown families are still blocked from accessing the wealth-building opportunities of homeownership by the same institutions benefitting from taxpayer dollars and city business. The Lending Equity Ordinance is a critical first step in righting this wrong. We urge the City Council to pass this measure in September,” said Sarah Brune, Director of Public Policy at Neighborhood Housing Services of Chicago, who leads the Housing Policy Task Force.
Democratizing the banks’ data disclosures and creating a platform for the community to engage in the RFP process will better enable Chicagoans to hold banks accountable. The OIG’s report recommends that the City of Chicago government and City Council coordinate on an improved RFP process that will better accomplish the City’s equitable banking goals. The LEO is a critical step in the right direction.
Equity Ordinance Provides Solutions for OIG Recommendations
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