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We have a rare opportunity to shape a critical new oversight system in Illinois.
The Illinois Community Reinvestment Act (IL CRA), signed into law last spring, compliments the federal CRA by providing oversight for state-regulated financial institutions. With this legislation, Illinois became the second state with an oversight system to ensure that residents are equitably served by all three major segments of the credit and mortgage lending markets: state-chartered banks, state-chartered credit unions, and state-licensed mortgage companies. Read our IL CRA overview here »
Right now, rules are being made that will determine how strong of a tool the IL CRA will be for building a fair, inclusive system of lending and investment that meets the needs of low- and moderate-income Illinoisans, especially people of color.
Comments are due by March 16, 2023.
Organizations can sign the IL CRA Coalition comment letter here »
Copy and paste any of the suggestions below to bring attention to different issues in your comment.
Inclusion of All Segments of the Credit and Mortgage Lending Markets:
The IL CRA’s inclusion of three critical sectors of the credit and mortgage markets are of singular importance as traditional banks continue to provide a smaller portion of credit and mortgage lending.
Relation to the Federal Rules:
The federal regulators are currently reviewing proposed rule changes to the federal CRA. To the extent that the IL CRA NPR references the federal CRA, IDFPR should modify the state rules once the federal CRA rules are finalized so that there are no areas or issues where the IL CRA is narrower than its federal counterpart.
Racial Equity Lens:
The state CRA must explicitly have a racial equity lens in order to directly address historic and systemic redlining. Without this, the IL CRA repeats the same central flaw of the federal law, limits its ability to ensure equitable access to credit in all Illinois communities, and frustrates legislative intent.
Discriminatory Practices Impact on IL CRA Ratings:
The standard for consideration of discriminatory or other illegal practices impacting institutions’ ratings should be expansive, covering any discriminatory or other illegal practices.
CRA Credit for Loan Purchases
I support limiting qualifying loan purchases to only loans originated by that bank/mortgage lender or purchased from the originator. This will provide the necessary secondary market liquidity for lenders to originate more mortgages, while also incentivizing ongoing mortgage access to LMI households and people of color.
Predatory Lending
The proposed rules do not take sufficient steps to prevent predatory lending in LMI or minority communities. While the types of products offered directly by a covered entity are considered in IL CRA exams, entities can choose whether or not to include the activities of and products offered by affiliates in their exams.
Data Collection and Reporting
The proposed rules do not include any mention of Section 1071 data, which is an oversight that should be corrected in the final rule. This data, which will be available shortly, will provide HMDA-like data on small business loans and make it easier to assess small business and home mortgage lending performance based on race, ethnicity, gender, etc. Additionally, the NPR proposes to provide aggregate data on small business, small farm and community development lending activity by covered entities. However, this information should be provided at both the aggregate and disaggregate level.
The Illinois CRA Coalition is a group of organizations dedicated to protecting and strengthening the Community Reinvestment Act as a tool for building more equitable communities.
Want to learn more or join? Email Housing Action's Capacity Building Associate, James Miller »
Individualization matters. As a rule of thumb, try to make at least 20% of your comment unique so it gets through content filters and the agency will respond to your individual concerns. Your comment will have more impact if you share your own perspective or story about the importance of the IL CRA to you, your organization, and your community.
You can also highlight different issues by using the text available to the left. Try to put the suggested text into your own words. Space limitations will make it challenging to cover more than one additional point.
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