Illinois State Senate District 16 issued the following announcement on Oct. 19.
Testimony from advocates, state government agencies, and banks themselves were all in agreement Thursday: Race remains the biggest predictor of whether somebody is approved for a home loan, and a major factor in how homes are evaluated in an appraisal process. The result, according to reports, studies, and testimony from the Illinois Department of Financial and Professional Regulation, is that Black homeowners in Illinois are simply not receiving loans at anywhere near the rate of homeowners in majority-white neighborhoods.
State Senator Jacqueline Collins, chair of the Illinois Senate Financial Institutions Committee, convened a joint hearing on the topic Thursday, bringing in the Senate Commerce and Economic Development and Senate Executive Committees to discuss the causes of this disparity, with testimony from IDFPR, representatives of the Illinois and Chicago housing authorities, Treasurer Michael Frerichs and representatives of various housing advocacy agencies. Some members of major banks submitted written testimony or attended the virtual hearing, but only JP Morgan Chase’s representative spoke.
“What we want to see is a lending market where race is not the largest predictor of approval for a home loan. We ultimately want to see a lending market where these disparities do not occur,” said Collins (D-Chicago). “We need an end to this cycle of disinvestment, which is at the very root of generational poverty here in Chicago and throughout the state and the country.”
The hearing highlighted findings by a recent report, a joint effort between WBEZ and the journalism nonprofit City Bureau, which highlighted a vast racial disparity in housing in the Chicago area. Among the starkest statistics: For every dollar lent to white neighborhoods in Chicago, just 12 cents make it to Black neighborhoods. The home loans lent just in Chicago’s majority-white Lincoln Park neighborhood total more, in dollars, than the combined amount of every home loan lent to every majority-Black neighborhood in the city combined.
In his testimony, IDFPR’s Acting Director of Banking, Chasse Rehwinkle, said Lincoln Park is not an outlier and that the situation arises from systemic issues that have occurred over decades.
Collins said the challenges of remedying the state of affairs lie partly in state government’s regulatory framework, but stressed also that the behavior of banks must be held to account.
“The solutions to how we achieve a fairer lending market are going to need to come from banking institutions themselves,” Collins said. “I appreciate the representatives of those institutions who have made time to participate today, but I do want to express disappointment that some have declined to do so.”
The hearing was part of an ongoing series organized by the Illinois Legislative Black Caucus. The question of fairness in economic access is among the four pillars guiding the Illinois Legislative Black Caucus’ legislative agenda to eliminate systemic racism. The pillars include:
Criminal justice reform, violence reduction and police accountability
Education and workforce development
Economic access, equity and opportunity
Health care and human services
Original source can be found here.
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