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City of Chicago city council rules of conduct for public
meetings, 2023 to 2027, pursuant to the Chicago city
council Rules of Order and procedure rule, 49, the Sergeant
at Arms sets forth, the following rules of conduct to be
followed during the public comment period and the duration
of all committee and City Council, meetings, profane
vulgar, threatening abusive or disruptive language is not
permitted demeaning
Discriminatory or harassing behavior and speech directed
towards. Others is not permitted. Disruptive behavior,
including disruptive or disrespectful conduct during others
presentations is not permitted, banners flyers, or signage
are not permitted backpacks, large bags, and sharp objects
are not permitted. Clear bags, not tinted in color that do
not exceed 12 by 12 by 6. In will be permitted in our
subject to search all food and beverages including in metal
canisters are not permitted cell phones. Must be placed on
silent prior to entering the meeting room. Individuals must
remain seated, public comment speakers are permitted to
stand only when providing public comment, small handheld
devices may be used only while seated and the user must
refrain from interfering with the view or hearing of other
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These rules will be asked to see such disruptive conduct
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meeting by the Sergeant at Arms.
Good morning, everyone.
The committee on finance is called to order. Uh, today we
have a subject matter hearing
Uh, this subject matter hearing is to discuss the municipal
depositories as required by section 2-32 d400 of the
municipal code.
No votes will be taken on this matter. Um, prior to the
city council approving,
Any of the prospective Municipal depositories, we should
have at least 1 subject matter hearing.
Um, and that information is transmitted to the controller.
To the city council under the section.
We'll now have a roll call to establish quorum.
Alderman laspada.
Alderman Hopkins.
Alderman Hall, Alderman, Mitchell.
Alderman. Beale Alderman. Lee.
Alderman Ramirez.
Alderman Quinn.
Alderman Lopez Alderman, Curtis Alderman. OSHA
Alderman Rodriguez.
Alderman, Scott Alderman, CEO Lopez.
Alderman brunette.
Alderman. Ervin.
Alderman. Talia Farrell.
Alderman. Cardona, alderman waguespack.
Alderman Ramirez. Rosa.
Alderman. Viegas.
Alderman mitts Alderman spaz.
Alderman Vasquez.
Alderman, Reilly Alderman, kutson Alderman. Martin Alderman
Silverstein
We have a quorum. We have 16.
So there we go. There are a number of aldermen who have
asked for remote participation under the provisions of rule
59. They are Vice chair, Conway, Alderman, Moore Alderman,
Taylor Alderman Silverstein Alderman, Harris, Alderman,
Mosley, and Alderman, Rodriguez Sanchez and Scott.
Can I have a motion to allow these Alderman to participate
remotely? So moved by Alderman, OSHA all those in favor.
Signify by saying I
I,
Thank you, the chair, the eyes, have it and I just want to
confirm that Vice chair. Conway is on the
line.
Alderman Moore.
Thank you. Chairman. Yes Alderman, Taylor. Yes, Alderman
Silverstein. I'm here chairman Alderman. Harris.
Alderman, Mosley present Alderman, Rodriguez, Sanchez,
Preston, Vice chair, Conway.
Alderman, Harris. Okay.
At.
Alderman Ramirez, Rosa has joined us and will be counted
towards quorum.
At this time, we'll begin the public comment period, the
public comment period will be limited to 30 minutes out of
respect for everyone's time.
Each speaker is limited to 3 minutes. We have 3 speakers
this morning and no callers that have called in remotely.
Our first speaker is George Blakemore
Good morning.
Finance.
What is p money?
Who.
Has the position to invest.
Uh, this city money.
It's uh, Urban's wife.
uh, ultimate urban Urban
What do you know about her? Several 1, lady life foot and
all that Scandal 10,000.
She had to pay for that Scandal, and it's over.
She's still in office.
She's investing money in these Banks.
And and money is is, is power.
And I urge black people to stop being, uh, working for
money and let your money work for you.
This is not a democratic system, racism, Fraud and Abuse
this year. So and they all Democrats 69, each other is no
diversity is no equity is no inclusion. When it comes to
the black man, the black men, black people, you have
become, what people that spend money, you don't know about
making money in a capitalist system. The golden rule is he,
who has the gold roof? The rich people. Let their money
work for them.
The poor man worked for money.
So the reason these seats are all empty, the people are
tired of this government.
You know, the history of the finance when it come to Burke,
this is a evil system. This is a corrupt system. This is a
un
Democratic system.
Something is evil here. It's a 1 party system.
It's worse than communist China. A atheist Germany. So the
black people at the bottom
of the social economic and a cast system.
the other people are ahead, the all of my wife even the
Mexican check White
They uhuh and the white check White and the white, how
check White and the white Jews check white. So what's left
for the black men?
And the black woman, where are they?
something happened in slavery, they have a slave mentality,
we must Purge ourselves of slavery, that mentality and
become strong black men and women. You got Black Faces in
high places, telling their people out
those seats are all empty of men and when the seats are, in
fact,
Thank you, Mr. Blakemore, our next speaker is Jasmine
Smith.
Good morning. Can I please have y'all attention? All miss?
This is very important.
Um, Jasmine Smith with Chicago alliance against racist and
political repression, fighting for many wrongfully,
convicted, and tortured survivors. Such as my 2 love ones.
Lester Owens. Served 14 and a half years. His brother
Ricco, Clark, served 17 and a half years. That's fine for
crimes. They did not commit. How was this possible? Let me
tell y'all with yet another generation of corrupt torturous
CPD Detectives.
Following a suit of John Burge and his midnight crew Brian
p4b bird 1 of the highest paid Sardis on the force up until
December 10th 2023 when he was forced to retire because of
the movement families and lawyers going public, making the
news, exposing his powder in the practice and police
misconduct and the fact that not only him, but his partner.
Detective, John Foster whom is the commander. Now, over
area 5, both are married to States attorneys. That worked
in the very units that convicted, not just my 2 loved ones,
but also 23 others, his other former partner, detective
detective, Kevin Eberly. Who is 1 of the head detectives on
the FBI task force for fugitive apprehensive and Public
we have corrupt cops who falsely arrest and kidnap
innocent. People put bogus charges on them. Have
relationships with the State's Attorneys who Pro
You the cases, then we have corrupt, Cook County, judges,
Timothy Joyce, Angela, and Patron and Stanley. J Stacks,
just to name. A few who were previously States attorneys
that who, that's ruling on cases. Biasedly. And with no
fair discretion, then we have the body of Chicago city
council 50 orders, and 1 layer. 19 orders where the Fifth
Ward 9th 10th 12th,
15 1923 27, 29th, the 30th, the 32nd 3637383.
45th that received
Donations from the Fraternal Order of Police. We had this
body where some are publicly speaking out and more upset
with City corrupt, lawyers, who are selling it on cases of
police misconduct, they have absolutely no win in urging
them to keep fighting these misconduct cases all around.
We, the taxpayers are millions of dollars in on front
putting the bill other than facing. The true problem
accepting accountability that CPD is incompetent in
criminals. They're unethical dangerous and deadly actions
are the true blame this body needs to stand with us. The
people in the communities that have been
Thank you, Miss Smith.
No. In this room. Every public comment is. 3 minutes has 3
minutes. Thank you for your comments this morning. Mr.
Taiwan Sims.
Um, good morning committee. So good morning.
On the 19th I was arrested um by 111 for trespassing. I
found it amazing that I spent so much time in jail for that
under the pre-trial thing of Kim Foxx.
Um, I wonder who financed that. Um,
But the best news that I got is that Brandon Johnson is
going to go up the Capitol Hill.
To testify for why he's supposedly believes that. Our city
should be welcome and Sanctuary but for whatever thought it
is Roa could talk about it.
He held them amidst back what or we could say hostage
legally, but nobody is charging him for this. We got Daniel
as part of that sitting on a committee on this Council.
It's amazing. Chicago has failed like what
6 Leagues Under like we down what 75 points. So it's 25%.
What competency in this room.
Enough is enough. I wonder who going to pay for this 1
though. The other news that Brandon looked at the doj is
bringing charges against Chicago and Illinois for the
sanctuary thought why y'all Finance black Americans out of
the city.
Right.
That's why I'm still homeless this. Why I got to wrestle
with? Some political crap is I sit in jail extra days
because y'all had the power of the will that y'all think
it's funny. But y'all don't know when I was a kid, I went
through it already. So that's my home.
I'm sorry. And I know it sounds crazy on it. Like, why
would they be attacking a indigen father? Why would they
attack his children? Why would they attack his Finance? Why
would they attack him? But I guarantee you, he got to go up
to the hill and the people that's coming down here to deal
with y'all Law Office, y'all, corporate law, trust me, they
don't wield the same competency, see these people, do they
unwill the same power, it's just 16 point something billion
here. But when you wrestling against the federal
government, when you wrestling against the president of the
United States, for what sanctions y'all? Well I don't know
what it is.
But look, I'm just measly.
Now y'all get the full power of you, what the American
people? And I'm sorry. I feel so anxious. I just said that
thinking, wow, who would have had the power to do this to
me?
But instead of help they abuse, these was the people that
we, the people elected to take care of our situations, our
circumstances. But y'all going to steal, what will y'all
automatic power? You people are measly.
Not set up with the truth. Fullness of confidence.
Y'all measly and incompetent and the waste Fraud and Abuse
will be exposed. So go ahead lavish and linguish and what
it is y'all dealing in now. But I guarantee you, we, the
people will have the last laugh and I say that in truth,
and in confidence.
Committee.
Thank you, Mr. Sims, that ends public comment. I just want
to acknowledge that. We've also been joined by Alderman
Scott.
Alderman Harris.
And all and vice chair Conway.
All right uh this morning we're joined by uh 2 City
officials who have oversight on the approved. Municipal
depository that we have with us today.
Um, and that City Treasurer and Melissa Conor's Irving.
From the City Treasurer's Office and our acting controller,
Joe Flores from the Department of Finance. Their staff is
also available for, uh, to support them if needed. Um, we
have with us this morning to speak to the program or their
assessment of the city's Municipal depository program
Horatio Mendes the president and CEO of Woodstock
Institute, Anthony Simpkins, the president and chief
executive officer of the Neighborhood Housing Services.
Of Chicago, Kevin Jackson, who's the executive director of
the Chicago rehab Network and Ben Jackson, The Executive
Vice President of government relations for the Illinois
Bankers Association. Um, they have all provided statements
this morning, uh, I hope that those have been provided to
each of you, but we will hear first from our acting
controller. Joel Flores followed by our city treasurer
Melissa Kanye's, Urban
Good morning, chairwoman dowel Vice chairman Conway and
distinguished members of the committee on finance. My name
is Joe Flores acting controller for the city of Chicago.
Thank you for the opportunity, to address the committee
regarding the 2025 Municipal depositories, RFP process.
I want to thank treasure Conor zervaan and her office for
their ongoing collaboration.
in accordance with the lending, Equity ordinance to the
Department of Finance, along with the treasurer's office,
issued, the RFP for the 2025 Municipal depositories online
on September 2020, 2024 and publicized the RFP in local
newspapers on September 24th, 2024, and September 25th,
2024, to ensure that local banks were aware of the RFP,
issuance, we contacted 42 Banks and Savings and Loans
associations. The RFP was out for over 5 weeks. And the
following, 16 banking institutions,
Responded by the October 30th 2024 proposal due date.
Albany Bank and Trust Company na among of Chicago, American
Metro Bank Bank of America. National Association BMO Bank,
National Association City, Bank NA 5th, Third Bank,
National Association first Eagle Bank JP Morgan. Chase Bank
Bank NA Liberty Bank Trust and Company Old National Bank
PNC, Bank National Association, the Huntington National
Bank, US Bank National Association Wells. Fargo Bank NA and
win trust N8. The Lending Equity ordinance provides a list
of information that is requested from bids as part of the
RFP process which includes but is not limited to the
information regarding statements of resources and
liabilities residential lending. Consumer lending, say
in checking accounts the community reinvestment act
mortgage applications and the repository information such
as number and locations of each of the bidder's facilities
located within the city.
The RFP responses, which includes this information and
other details are posted under the department of finance's
website. And the link to them was provided in the letter
from the former controller to All, City Council Members on
December 13th 2024. I would like to thank all of you for
your time this morning and your continued partnership. I am
happy to answer any questions that you may have. Thank you.
Treasure Urban.
Good morning everyone. Chairwoman Dal Vice chairman Conway,
all of the members of the finance committee as well as
other City Council Members. Um, I do thank you for the
opportunity to speak today. Um, as you know, the municipal
depository process, the selection process is something that
um is very near and dear to me as this ordinance that
really called for us to have this subject matter hearing
today really came into play throughout these last couple of
years um, with the city council. So thank you for the work
that you've done. I certainly thank those that are here as
well. Today, that we will be hearing from with Anthony,
Simpkins hadish Mendes Kevin Jackson and Ben Jackson. Um, I
am certainly proud to stand along with not only them but
with chairwoman Dow, Vice, chair, Conway, and members of
the city council, because it's really important to us to
ensure that the city's Investments positively,
Impact the communities that we serve. And as many of, you
know um certainly the controllers, the previous
controllers, departure really came at a critical time for
us during the municipal depository selection process. The
municipal depository selection process is already a high
stake and time-sensitive operations. As Joel mentioned,
between September through October to, for even to apply.
But really
The departure we believe, as the treasurer's office stepped
up really worked well with acting controller. Joel Flores.
We wanted to make certain that the process stayed on track
which it has and certainly, as an office we provided
institutional knowledge and operational continuity. So that
no steps were missed. We reinforced our commitment to
collaboration and working with the controller's office. And
as you know, in the past, even before 2019, when I took
office as Treasurer the controller and the Department of
Finance was the sole office that handled the municipal
depository process and so we are happy that on today. We
can say in 2025 that this is a collaborative process that
we have been working on together because I believe as the
treasurer that in the past it it really was a, a misfortune
for the Department of Finance to do the process.
On their own presented to the city council members. And
then at that point, the treasurer's office would be
presented with this is the list of banks that you work
with. And so now we take a more proactive approach. We
think the Department of Finance the controller, the acting
controller for working with us to ensure that we have
consistency continuity, and that the selection matches our
mission.
And so, 1 thing that I do want to to state before I
complete, my my statement is that this is an opportunity
for this Committee of Finance to help to refine this
process. I think that throughout the past couple of years,
we have done a great job in helping to encourage more
smaller to mid-size Banks to apply and as you can hear from
the list that was presented by Joel certainly more smaller
to mid-size banks have applied including our community
development, financial institutions, what we call cdfis
which are critical and expanding lending in underserved
neighborhoods. And so the smaller Banks, however, have
still advised us and spoke to us about challenges that are
presented throughout the RFP process.
It can be complex and it still can be costly which creates
a barrier.
And so, when we think about collateral requirements that
often make it difficult for small Banks to meet eligibility
criteria. We also have to look at the complexity of the RFP
process of the application process. And if we truly want
Equitable Investments across Chicago, we must make the RFP
process more accessible. So that these institutions can't
compete on the Level Playing Field. Now, 2 banks, in
particular, I just want to mention when we talk about how
we have done Outreach and we are excited about those
smaller to mid-size banks that have applied. I am reminded
particularly
Of 2 banks that we have invested 25 million each. In first
Eagle Bank in Albany bank and it really reinforces our
commitment as a city to impact the community. And really I
think of that process, very similar to the state's linked
deposit program. We are investing in these smaller to
mid-size Banks because we want them to directly invest with
community members. And so I urge this committee as you have
have done in the past, please continue to work with us so
we will continue to do reforms to make it easier and and
and much more better for our residents and small business
owners as we will be able to provide this capital resources
to them.
Oh, finally, in case this question comes up, I do want to
mention this and I mentioned this during the budget hearing
that we had this past October I guess or November, I don't
know when but a recent meeting, we had with JP Morgan Bank
and I know that is always a Hot Topic that comes up in this
committee. So I do want to address that. Um, it really
allowed our team, the opportunity to address directly with
Chase Bank. Our concerns about discriminatory lending and
financial access for underserved resources, and I think
those type of examples, as well as our advancing equity and
banking commission. Really puts us on Target and making
certain that we have meaningful inclusion and equity in the
banking process. I will be here to answer.
questions, as well as I have our um, Chief investment
officer Craig slack, as well as Mauricio bonwell beno's.
Our portfolio manager that is with me as well. If there are
any questions.
Thank you treasure, and thank you acting controller. Um,
we'll take question Alderman. Keson, I see you over there.
I hope you're feeling better.
I will add you to Quorum. Do we have any questions
Alderman? Hopkins.
Yeah, thank you, madam chair. Um, appreciate the list of
uh,
Uh me just pulled a depositories but I'm wondering uh if
shouldn't we disclose the changes like uh who was
previously authorized as a municipal depository and fell
off the list for whatever reason who is new uh and who has
been continuing? I see some familiar names on there that I
know are renewals but uh I just think at this point at
towards the end of the process, it would be interesting to
see that disclosure
yes, so I'm sure of Flores
Thank you. Thank you for that question. Uh, so in in 2014
2024, there were 2 banks that did not did Associated Bank
and GN bank. And the 2 new ones for 2025 for American, uh,
Metro Bank and Old National Bank
Thank you.
All the uh, Vice chair Conway.
uh,
Thank you. Madam chairwoman um,
How much interest are we earning in our on our deposits,
um, across the board here.
Our chief investment officer, Craig can answer that.
Our highest rate is. It was the question, I'm sorry. Well,
the well the, um,
Yeah. I mean the average total I guess I'd say well we we
do ultimate Conway. We do keep about, can you just say
identify yourself with? I'm sorry. Uh, Craig slack Chief
investment officer for the City Treasurer's Office,
automate Conway, we typically keep between 2 and 400
million dollars, uh, in cash and cash equivalent
Securities, it's a little bit deceptive to say what's
earned at the banks because a lot of that sweeps out into
money market accounts uh, as well as like CP programs that
are offered through the banks. So uh, our rates are between
3.8% and 4, uh, so uh, we could probably get a total
interest calculation for you. Um, certainly, we could get
it for 2024. Uh, I don't have a total number, uh, we'd have
to calculate that for you and send it through the chair.
Yeah, you you don't need to do that. I just think that, uh,
what we're earning in our deposits,
Should also be a criteria under which banks we are Cho
choosing to deposit. Our money and noting the financial
Straits that our city is in. Yeah excellent point. Um and
and that is our, our fiduciary duty to seek the highest
risk adjusted returns certainly when we're keeping higher
uh higher cash reserves like we had to do through coid uh
and then as we transition into ministrations we typically
will accelerate and and and sort of uh uh, add to our cash
reserves uh, for uncertainty and communication gaps that
with people in their seats for the, for the first time. Um,
and so what we are doing is is moving that money on a daily
basis to the highest, uh, compensating rates. Uh, it's what
my team does every day.
And as, you know, Alderman comma with a list of 40 Banks.
Obviously, we do not have all the funds and all 40 Banks.
So there is a process on how we make that decision daily
and that that's great. And I think it, I just hope that we
are. It sounds like we are that we are ensuring our
deposits are
in the places where we can get the, uh, highest I guess,
risk adjusted yield
That that's all I have. And I and I don't need that through
the chair. I just want to make sure that's something we're
taking into account. Thank you. Okay, excellent point
though.
Uh, thank you alderman laspada.
Thank you very much. I also give a shout out to former
colleague ottoman austman, who sponsored and helped pass.
The ordinance, that is the reason this hearing is
happening, that is the reason that banks are actually
required to turn over their lending data to the city, so
that we can analyze it for patterns of racial inequity. Um,
I want to ask because in the past
Um, 2 hearings have been a part of. We actually saw
an analysis of that data and received it so that we could
at least understand help Banks were performing
peer-to-peer.
Is that analysis going to be presented at a forthcoming
hearing or what is the plan there?
Well, we have Woodstock here that has uh,
Yeah, that is going to give a presentation later. Oh, that
presentation is coming. Yes, they get love it. Um, my only
other question was for controller Flores
Controller.
Did I hear accurately that Liberty Bank was among the 16
banks that applied to be Municipal depositories? Yes,
that's correct.
so, I found it interesting that there were 16 that applied
15, that were selected.
to the
I've only been a part of the finance committee for a short
time, but this is the only time I've heard of a bank.
Not being selected, there may be other examples. Can you
help me understand? Particularly, because this bank is in
my ward, what was in their application? That was
disqualifying, or deficient know,
Great question. So as part of the municipal code to 32400,
1 of the requirements is that you have to have brick and
mortar in the city of Chicago,
And they do, because the building is in my ward, I walk
past it on a regular basis, Liberty Bank. You Liberty Bank
is is on the list.
As applying.
And I, I didn't Liberties in Chicago in your ward. I, I
think Carlos. Can you confirm this fact as well? We're not
familiar with that.
That's a different Liberty, different Liberty. So the
Liberty Bank in your war did not apply for this Municipal
depository selection process.
That's a different Liberty Bank from my understanding. We
are the Liberty Bank that um that Flores is speaking of is
the 1 that is located in Forest Park or River Forest, which
have a location, I forget which city that is. However, we
would love to reach out to the Liberty Bank in your ward.
Understand. I just wanted to confirm that. Yeah point
because it was
Briefly confounding, but thank you for that no other
question right now.
Seeing that there are no other questions. I'd like to move
on to presentations from, uh, the not for-profit
organizations that do this work as well. Um, we'll first
hear from Horatio Mendes president and CEO from Woodstock
Institute.
Madame Treasurer, you're welcome to stay with us. Um, and
Mr. Flores, you're welcome to stay with us as well.
From.
Mr. Mendes, you've supplied us with a presentation, which
we will. Um,
Move forward. And if you could speak from the box, we would
appreciate it.
Thank you, I need it to get my steps in. Um
Good morning, everybody.
I can do this in 5 minutes in Spanish or 6 minutes in
English.
Uh, good morning and 5 minutes in English, okay?
I'll do a quick then. Uh, good morning and thank you for
having us back again, uh, to discuss how banks are serving
Chicago. I'm oracio Mendes, president, and CEO of the
Woodstock Institute. We're a 52 year old nonprofit that
uses research and policy advocacy to support Community
Development and Consumer Financial Protection.
Uh as we all know, I don't have a lot of time so I'm going
to dive right into the data that we have for 2024 and the
16 banks that responded to the cities RFP to serve as
Municipal depositories. Now on the upside, we have 3 of
those respondents. Uh that are new from last year. American
American Metro Bank Liberty Bank and Trust and Old National
National Bank. Even better 2 of those are minority
depository institutions, meaning that their ownership, uh,
Andor communities. They serve our predominantly people of
color and those are American American Metro and Liberty.
Uh, 1 of the respondent banks. First Eagle Bank is also, as
you mentioned, a cdfi commut development, financial
institution, which is a designation that both nonprofit and
for-profit financial institutions, get from the treasury
Department to show that their mission-driven institutions,
that provide credit and financial services to underserved
communities.
Publicly available information about each institution is
unfortunately somewhat limited, but we're going to show you
what we have that can serve as an indicator on how they're
serving communities of color and low, and moderate income
communities in mortgage lending and in small business
lending, and just because we can and it's fun. We also
compare them to each other. Uh, so that we, we could see if
any, of them stand out for the better or for the worst as I
go through these slides. Uh, you'll notice that these
charts exclude, some of the banks from the list. In order
to be fair, we didn't want to pit bank. That do a lot of
loans in this market against some that don't really do as
many mortgage or small business lending. And it's not a big
part of their business model. Being excluded, is not a bad
sign. We just wanted to be honest about the critical mass
of data. We need for good Fair analysis. 1 last Quirk to
note in the charts as a Community Bank
When trust does things a little bit differently. The bank
does most of their mortgage lending through their affiliate
Berrington bank and small business lending through their
affiliate Village Bank and Trust. And while we combine the
loans under both of those names for this analysis, some
small business lending is scattered throughout some of
their other entities and
And it's kind of hard to aggregate. So it is um, relatively
accurate. It's not something I would want to die on that
hill, but we figure that it's good enough to give you a
good picture of what's going on. So let's dive into the
the data right off the bat here. Let's start by looking at
how well these Banks do at attracting mortgage applications
from borrowers of color.
This chart shows how many of each bank's mortgage
applications came from Minority borrowers, the overall per
average here is just under 50%. And I mentioned that
because it's a big improvement from last year's number of
40%, which tends to indicate that these banks are doing a
much better job of being visible present and marketing.
Their products US Bank came out on top with nearly 61% of
their applications coming from Minority, borrowers with
bimo and Wells. Not too far behind in this category, most
improved Falls to Wells. Fargo who was well below Pier last
year at 37% and then jumped up above Pier at 54%.
The next chart shows, how many of these applications
actually turned into mortgage loans? The highest performers
here are B of A City and Wells, although Bank of America
was below Pier on the previous slide, they're the highest
performer here which suggests the minority applicants that
they did get were well-qualified and mortgage ready. We saw
US Bank at the top of this group for the number of
applications for minorities. They received, but they're
below peer in terms of turning those into actual mortgages.
We don't want to read too much into that because there
shouldn't be a penalty for marketing, your products,
effectively. And, and
um in a pretty wide manner to minority borrowers and getting
a lot of applicants that may not quite be mortgage ready,
but this does does give us an opportunity to talk with them
about how to improve these outcomes.
Moving on to the same analysis but for low and moderate
income borrowers, the high performers on getting
applications are PNC Huntington. And us, most improved goes
to us who was below here last year and approved this number
by 20 percentage points this year.
In terms of turning these into actual mortgages, the next
chart, shows PNC, and Huntington doing a good job of
turning those High application numbers into mortgages with
BFA, doing a good job of doing the same. But with
significantly fewer applications
Our last 2 mortgage charts shift, the focus to communities
rather than individual borrowers. Um, chart 5 looks at how
well these Banks did at attracting applications from
majority minority census tracks. You'll recall that US Bank
and beimo were high performance on getting applications
from Minority borrowers. So it's no big surprise. Our top
performers in getting applications from majority minority
census tracks. Our other high performer here is Huntington
and likewise BFA and city were below here on the minority
borrowers, application chart, and they're below peer here
as well.
Chart 6 looks at how many of each Banks originations came
from majority. Minority census tracks on this chart. I want
to highlight that the spread between the lowest and the
highest number here is only 7 percentage points. So none of
the banks were really dramatically higher or lower on this
number that could be 1 of 2 things. They're all doing a
decent job or they all suck. I'll keep my own opinion to
myself on which I think is the case, but they might be a
little bit of both for different reasons.
Finally chart 7 shows, how many of each Bank small business
loans went to low and moderate income sensitive tracks.
Small business data is pretty limited and unfortunately
Republicans in Washington DC are going to make sure it
stays that way. So we can't do as detailed and Analysis
here as we can for mortgage. We also only have access to
countywide data for small business loans, so this is for
Cook County.
The high performers here, are BFA City, and US Bank, and
their numbers. Here are pretty much on par with prior years
as well.
So which banks down stand out for good or for bad. First,
the bank that most consistently underperformed compared to
peers that responded to the RFP was Old National Bank. The
middle of the pack on the charts looking at majority
minority census tracks but are below their peers on charts.
Looking at minority borrowers and low and moderate income
borrowers. US Bank was the highest performer on all of
these charts. They were a bit below, pure on charts,
looking at originations to minority borrowers in LMI, but
they were the highest performer on the charts. Looking at
applications from those groups and the chart looking at
applications for majority minority census tracks.
in general, we need Banks, making a conservative effort to
reach potential borrowers and groups that have been
marginalized and have not had Equitable access to the
banking system, these charts show that US Bank is doing
their Outreach work. We wanted to Spotlight that and
encourage other Banks to step up their game equally. I know
I ran through a lot of data quickly so I'd be happy to
revisit any of these slides during the questions during the
hearing part. Thank you. Uh, thank you Mr. Mendes.
Very good. We will have, um,
Anthony Simpkins. Give a presentation. We're going to hear
all the presentations and then take questions at the end.
Mr. Simpkins is from The Neighborhood Housing Services of
Chicago.
And while we're uh queuing up his uh presentation, I want
acknowledge that Alderman seicho Lopez has joined us and
will be counted towards quorum.
Mr. Simpkins, am I doing it?
Good morning, Madam chair.
Um,
Vice chair Conway and uh, members of the committee. Uh, I
am Anthony Simkins uh, president and CEO of Neighborhood,
Housing Services of Chicago.
Yeah, there we go. It works. Most of you know NHS. Um, we've
served Chicago's South and West Side, um, low and moderate
income neighborhoods, and communities of color in Chicago
for 50 years. Uh, we're a cdfi nonprofit mortgage lender.
We're a HUD certified, housing, counseling, agency, and
program, administrator for a number of City programs. We've
We've served over a quarter of a million Chicago residents
during that time, um, through the community.
And household wealth, building power of home ownership as
our Focus.
Uh, I want to commend the members of the city council, uh,
for passing the lending Equity ordinance and holding these
subject matter hearings where we look at how Banks seeking
to be Municipal depositories. Our lending providing banking
services and investing in Chicago neighborhoods. Uh of
course as NHS. Our focus is particularly on how they
perform in mortgage lending.
Um, why is this important for your consideration?
Because of the Stark racial disparities in the rates of
home, ownership Nationwide. And in Chicago nationally,
there's a 30% disparity between black home ownership and
white home ownership and Chicago reflects a similar trend.
The home ownership rate is 1 of the main drivers of the
racial wealth Gap in the United States. And in Chicago, a
recent study by the Chicago Community. Trust reports that
in Chicago while The Average White household has a median
net, wealth of 210,000
The median, Hispanic household has only 41,000 in wealth
and the average African-American family has none.
From the data and Analysis that, uh, harass you and
Woodstock, and Woodstock Institute provided, we see that
lending to borrowers of color by Banks under review.
Is a bit better than in Prior years. Although it's not
where we'd like it to be. I want to applaud our banking
partners for their efforts and improvements in these areas.
as a nonprofit mortgage lender NHS, understands the
importance of making home ownership attainable for Chicago
families in the 20 years that NHS has been providing
mortgages to low and moderate income families and
households of color. We have helped these families of
Cuban, accumulate over 400 million dollars in the household
wealth, with the average family. Uh, accumulating about a
hundred thousand dollars in household wealth. As a
homeowner homeownership is in fact, a key factor in our
ability to close the racial wealth Gap and to improve.
The overall Chicago economy.
Now once a family has achieved home ownership, the ability
to leverage that home as Americans have done for
generations to build. Wealth is critical.
That includes the ability to make repairs and improvements
to maintain and increase the value and the safety of that
home.
But despite the improvements in purchase, mortgage,
origination rates that we've seen uh, in the data today we
continue to see a dramatic racial disparity in Home
Improvement, Lending.
This is 1 of the areas of focus lending by NHS. As a matter
of fact, over 60% and 50% of black and Latino home
improvement loan applicants.
Are denied uh, their home improvement, loans respectively.
Uh, and cannot fix and improve their homes. And this is by
the banking partners with us today. Our banking Partners
must be required to do better.
There we go, um, NHS and other community.
Um development financial institutions or cdfis like Lisk
cclf, Greenwood Archer, cni and c and cic work. Every day
in Chicago neighborhoods to provide mortgage and small
business loans and grants to promote economic equity and
spur, economic development in our neighborhoods.
We are nonprofit, mission-driven rooted in communities, and
we're more flexible. And, and we deny fewer uh, clients. We
We create real economic impact and have been partners with
the city for decades, uh, to drive resources, to Chicago
residents and neighborhoods.
As members of the Chicago city council along with the mayor
and his administration, there are, in fact, concrete steps
that you can take to ensure greater lending and investment
by banks in Chicago neighborhoods and for residents of
color,
number 1, encourage
Bank investment in Chicago, South and West neighborhoods
and investment in cdfis.
So that we can expand home ownership opportunities, 2
provide City incentives, like subsidies.
Loan loss reserves guarantees and other credit enhancements
to encourage Banks to invest in cdfis. These are small but
are small but very powerful methods of public investment.
And we all 3, you should track and hold Banks accountable
for investment in Chicago, South and West Side
neighborhoods are and their small businesses, and in cdfis
and 4. Most importantly, today, the city must work only
And I emphasize the word only with those institutions who
do lend and invest in all Chicago neighborhoods.
Which can be seen from the data. We want to focus on those
that are in fact doing better than their peers. And those
who like the city of Chicago itself will keep and not
abandon their commitments to racial and economic equity.
Thank you.
Thank you, Mr. Simpkins
Our next speaker is Kevin Jackson, the executive director
of the Chicago rehab Network.
Will be.
And so, well, first I got a little bit of application
process, so that's something they take into consideration
and Joel. I know you may be new to the whole. It's a long
application process, but they look at that.
Mr. Jackson, please begin your comments.
And members of the committee and vice chair Conway, thank
you for the opportunity to present our testimony on behalf
of the Chicago rehab Network. Chicago's network of
Community Development, corporations committed to our
mission of community empowerment and development without
displacement. The rehab network does not own real estate.
Or affordable housing ourselves, our members, do they build
and preserve affordable housing and other community assets?
Crn, organizes and delivers capacity, building training
reports and Analysis, as well as our leadership for
affordable housing policy, I'm sorry. Kevin, can you speak
into the mic a little more? Sure.
Crn has joined together with Woodstock and NHS among
others, over the decades to embrace, and expand the
community reinvestment Act of 1977 cdc's and crn have been
recipients of CRA investments from our financial partners
and this public. Private partnership often anchors the
strategies for Community Revival.
Vitalization and reinvestment Chicago. By the way, has been
a national leader in Community Development and it's
demonstrated in neighborhoods across the city. The critical
factors included in successful developments as you as
members of the Chicago finance committee. Well, understand
1, local agency, like Community Development, corporations
accountable, to the neighborhood 2 committed, and patient
investors and 3 a collaborative and responsive government
leadership recently. The University of Chicago released a
couple of studies on Community Development, 1 on POA, and
wood lawn, and the other on cni investments in the Pullman
neighborhood. Both developments are instructive and
woodlan, government Investments such as Choice.
Neighborhood Award stimulates noteworthy, private sector
And entrepreneurial Investments to follow in Pullman
Community, we investment benefit agreements. Late leads
with the private Investments side leveraging.
Significant public and private Investments that have been
utterly transformative. These are strong effective projects
that ought to be replicated while keeping in mind, that
different communities have different scale opportunities
but all deserve investment strategies. This is the
foundational question for us. What can we do better and how
do we mitigate risk for all involved? A key question for
Community Development in Chicago remains who benefits from
the city Investments and how to
Maximize leveraging public. Private, Investments
Partnerships for Investments. What can the city do to
induce private and reliable investments in areas long void
of Market capital?
We discussed in last year's hearing among other things. The
concept of Chicago's Community Catalyst fund fund 77 that
reportedly never really materialized conceptually. The fund
was created to Foster Investments, which create Community
stability and opportunity. What can be established today
that will make those funds available
Can they be constructed in a loan loss? Reserve? That
encourages private sector investment in our neighborhoods?
A word of precaution though. Protect against financing
gentrification. That displaces neighborhood residents.
Much of the rest today with re-engineering, and outright
disruption of federal government programs. Like, the US
Department of Housing and Urban Development that have long
secured safeguards for consumers and communities alike. We
encourage the committee and the City of Chicago to
establish new Pathways for landing with attention, to hard
to serve communities and low to moderate income households.
We know firsthand that the loss of Shore, Bank has impaired
access to Capital on the South and West sides. We know too,
that financing for condo owners town, homes and Cooperative
housing is very difficult to obtain but would be a
significant boost and stabilizing
Investment for the long term. This is the type of investment
that expands wealth making strategies. And without the city
will continue past practices that led to wealth, stripping
of whole communities. The philanthropic work of impact.
Investing, could provide Direction and encouragement and
thinking, new and harnessing collaborations. So too
preserving and strengthening financial institutions,
special credit purpose, programs will be helpful in
building on what works for neighborhood Investments.
Chicago has significant, Mega projects underway or in the
planning stages. Local neighborhood development requires an
equal foothold in investment strategies. We recommend
reconvening together with this Committee in 90 days to
better understand the changes that are happening in the
federal landscape and plan, accordingly, we will continue
accordingly, we will continue our work to preserve and
strengthen investments in communities. Crn shares this
committee's commitment,
To making affordable housing and Home Ownership accessible
to all Chicagoans with a priority on LMI communities, his
who historically and currently have faced, the greatest
obstacles to housing, security and wealth. Building our
shared Equity Housing and Development capacity. Building
project addresses. The community need for housing. That
promotes Community engagement, prioritize, affordability,
and fosters wealth building. A need that is only growing
amidst the rising housing costs. Prior to the pandemic
housing, Advocates, already warned 120,000 affordable
units, shortage now the threat of housing insecurity from
temporary or long-term unemployment, additional health care
costs and the return. Prospect of eviction looms even
for many Chicago households, according to the Institute of
housing studies at to Paul, nearly 87% of renter
households, earning less than 30% of a
Ami face housing cost burdens meaning they pay over 30% of
their income toward rent. Meanwhile, increasing housing
prices, coupled with historic disinvestment, continue to
escalate the risk of displacement. In the city already
seeing a loss of low-income renters. As of 2021, Chicago
has seen roughly 15% decline in the affordable Supply since
since 2012. Nearly 50% of this loss occurred between 2019
and
2021, while during the same time, demand for affordable
housing increased nearly 2%.
Thank you.
All right. Thank you, Mr. Jackson. That was more than 5
minutes but away, but, but we'll move on, uh, Ben Jackson
our last speaker, who is the executive VP of government
relations for the Illinois, Bankers Association.
Uh, thank you, madam chair members of the committee, no
relation feel like I just heard it several sermons in a row
here, so I'll uh maybe bring it down a notch. Uh I am the
Executive Vice President for the Illinois Bankers
Association. Um, all, but I think 2 of the applicants are
members of our association and I want to, it's been
mentioned many times. I want to applaud uh, the controller
and especially Madame treasure for their hard work and
reaching out to Banks to try and get more Banks to, uh,
serve as depositories for the city of Chicago. I also want
to applaud the, the treasure and her staff, uh, for and she
mentioned this for collaborating with the industry because
um, you, you know, you couldn't achieve the gains in
ensuring that there's local bank rep representation within
the depository, space without collaboration and that's been
a productive partnership that we've had with the
controller's office, the department on finance, the
committee on finance and
Uh, and of course, Madame treasure. I'll give you a couple
examples of this, uh, practical ones.
1, when we restructure the ordinance, a few years ago, um
there was a desire, certainly to have more lending data.
And we've talked about that today at length. Um, and we've
seen it displayed up here on the big screen. Uh, that's a
positive. It's something that our members didn't object to,
but we compromised on what form that would take that we
would provide that data in the same way that we provided to
Federal Regulators under the um under HDA, the form Home
Mortgage disclosure Act
Another example of the treasures office and Madame
Treasure. Moving this forward together with this committee
is collateralization requirements. So a couple of years
ago, there was an initiative from uh the City, Treasurer's
Office to just bump down, just a slight. Bit those
collateralization requirements for depositories collateral
is expensive, particularly for smaller institutions. So, as
we're talking through attracting smaller Banks, who's in,
who's out, why maybe 1 or more have have dropped off and
recruiting more local banks to become depositories. And
then, in turn, invest that Capital locally. You know, we
have to think about measures like that, that make it more
affordable, uh, to become depositories related to that, you
know, there was a question earlier regarding, um, you know
what?
Rates. Are we getting on on CDs or deposits with the banks?
Oftentimes, when we're talking about some of the cdfis and
the smaller institutions that apply uh you know I talked
with a lot of them before this hearing just to prepare for
it and they can't pay the same rate, okay? So you know
larger institutions that are also our members, we love
them. They provide a lot of service to the city but the
smaller Banks if there's a desire and a policy desire for
the council uh and the controller and the treasures office
to invest in local banks, you do have to in, you know, in
turn, except that maybe the rates aren't quite as as
attractive. Um, I do want to mention some perspectives from
from some of the, uh, particularly the smaller applicants
areas for additional Improvement, going forward. And I
know, you know, we've talked to Madame treasure about this.
I think we're very much aligned as she mentioned, during
her remarks on moving, this forward in a productive way
that doesn't diminish.
The data that is provided to all of you to properly vet
these applicants, but 1 that just kind came to light. Um,
we had a small bank that that told me, it took them 2
months to complete this application 2 months. This is a
small institution, they had to put us together, a special
task force um to to bring this all together 2 months.
That's a lot of time, not working with customers, not
investing in local neighborhoods in the city.
And 1 thing that was particularly difficult for them, is the
ordinance right now, requires that data, be provided in
several ways including that, you have to separate out, uh,
within Cook County loans that are in Chicago and loans that
are not. We don't think that probably we hope the council
agrees that that's not particularly helpful data. What you
want to look at, is loans within the city. There's
bases of comparisons that we could run, uh, and and the
other groups here could run as well to compare to other
other areas, whether that's the larger Chicago, MSA, for
or of some other measure that we want to look at. So that's
So that's I think a reasonable easy fix that we could do
at Chicago loans. So those Banks don't have to manually go
through and separate. Another area of concern, over the
years has been affidavits, there's affidavit requirements.
In the ordinance and those are positive because they
require Banks to certify, that they are not participating
in certain discriminatory activity. The problem that we've
encountered over the years is those have kind of ballooned
on the back end. And I know the treasures office has been
working to streamline those, uh, to become a catch-all for
policies that are unrelated and that's outside of what's in
the ordinance. I will say. So we want to continue to
collaborate with the treasures office and perhaps the
council to kind of remove those barriers because the
ordinance requires high level officers,
to sign off on these very lengthy affidavit requirements
that you know, they sign under per penalty of perjury
because they are affidavits and they're very broad policy
statements so that thing that obviously needs to be
streamlined uh, in my written remarks. There's some
economic data in there, I won't go into detail on that. I
think that's been covered, uh, but I do want to mention
that you can see from the filings that Banks large and
small. Who are applicants are certainly committed and
remain committed to equity to Economic Development to
Workforce Development. In this city, we're very proud of
our members commitment to that, even going to the length,
where, you know, they're committed to the Long Haul and
they're resisting, a lot of the political Trends we're
seeing out there that seek to curtail businesses Equity
initiatives. So, with that, I'll close, um, my written
remarks, which are a little longer, we're submitted to the
committee. Um, but in
Conclusion, our banks are committed to this city, uh,
that's borne out in the data and also through the filings
talking about individual initiatives and we pledged to work
with the committee, certainly Madam treasure uh the
department on finance um for further streamlining and work
together to get this, right? Thank you. Happy to answer
questions at the conclusion. Thank you, Mr. Jackson. And
all of the uh, presentations you've heard today are have
been emailed to members of the committee.
So you do have all this information and the comments that
were made um Madame Treasurer and acting commissioner or
controller Flores. Uh, would you like to respond to what
you've heard before? We open it up to questions. Please.
Absolutely. Um, so first of all, these hearings has been
stated before these are very enlightening. Um, and I
thank the city council for the commitment to this subject
matter hearing um, it was even enlightening for me this
morning and I was just thinking as I was listening to the
presenters and thank you, Anthony had a AIO as well as
Kevin and been um and it was a lot of different
perspectives. We had this morning and as I was thinking how
far we've come certainly, I think that there is more work
to be done. And I think that there's more collaboration
that not only my office and the controller's office need to
have, but that we've been doing, I would like to really
work with the committee on more of
Of a a force together with those presenters in your
organizations. Um, because you all have a lot of
information and resources that we may not necessarily have.
and we may have some things that we can offer to you as
well and working together. So that's number 1. But I think
a theme that came out of this morning from the presenters
as well as even myself. And Joel speaking earlier was, um,
we still have some more work to do to encourage smaller to
mid-size Banks.
And we do not want to overlook that and that's 1 of our
points that we want to take away on today. Um, I think that
it's going to be important when we talk about
collateralization. Um, certainly we've done some work, but
maybe there needs to be a different application process for
smaller to mid-size Banks, versus the larger Banks who have
the resources to do, what needs to be done for this, 200300
1,000 page application process. Um, and so, I would
encourage us to work on that, then we can have a different
process that we can, possibly even present to city council.
Um, but also, I just wanted to State. Um, I Heard Anthony
talking about the Neighborhood Housing Services, and by the
way, I didn't even realize that it's only been a little
over 20 years. And I think that did you mentioned 2003?
So Neighborhood Housing Services has been around. Um,
For 50 years, we're celebrating our 50th anniversary on
March 15th at the museum of science Industry, by the way
everybody. So please try to get that in. But neighborhood
lending Services, which is our mortgage lender, uh, has
been lending for uh, actually about 36 years now, but the
analysis that we did for the wealth, building went back to
20033. And I think that was about the time where I actually
this is before and I want to share this with the committee
before I was even an elected official before I do anything
about government. Um, as you know, my prior life, I was
working in Corporate America, I would travel from Chicago
Chicago to the suburbs and I actually contemplated
purchasing my first home in the suburb being closer to my
job. And if it was not for the new homes, for Chicago
program, that partnered with Neighborhood, Housing
Services, at that time, that I purchased my home in North
Londale and
Even long before I became an elected official.
Neighborhood Housing Services offered programs to help me
not only purchase my home, but keep my home, which we know
very important with home ownership. And I know many people
on that block still in North, Londale that still own their
home today. Over 20 years later, and on paper, even as an
executive in Corporate America as a single woman, I would
not have qualified for that mortgage, but because of that
program, that gave me a chance.
I still own that home today along with many other
homeowners, so it's just programs like that, that maybe we
need to talk about that. We can provide to homeowners in
Chicago, those that desire to be is just a matter of
working with banks. When you talk about incentives, those
were incentives for those banks. At that time, I'm just
being honest, they weren't just being doing, just giving me
a loan out of the kindness of their heart. It was because
of the incentives that the city provided that I was able to
acquire My First Mortgage.
Thank you. Thank you madam Treasurer, uh, controller
Flores.
So I was I was going to talk about the application process,
but the treasurer stole my thunder a bit. Uh I think the
Department of Finance can do a better job in terms of the
data that's provided by all the banks. Um that's something
that I'm going to look um into in 2025.
Uh, better Maps.
Um, in cutting down on some, some of the application
process based on, um, discussions that we can have with a
lot of Department.
Thank you. Um, alderman laspada.
Thank you so much cheer. Um,
To all of the gentleman with us. Thank you so much for the
presentation today. Um,
uh, I will say broadly
in a time where
equity for Nono, people is bizarrely under attack to go
through the website for many of these Banks and see them.
Maintaining their commitments to diversity and equity and
inclusion on the corporate level and the workforce level.
And then they're lending practices is very heartening. So I
wanted to say that out loud, um, now that we can always be
be better and let's, let's talk about that side of things.
I have, um, a couple questions for Rocio. I have a couple
questions for uh, Anthony. And then I have a toss up. Um,
Or else you're like, uh, the presentation. Great very
helpful. I'm very curious when we looked at this.
Data.
not only quantitatively where mortgages are originating
from, but also the the quality of the mortgage products, we
know that not every loan instrument, not every mortgage is
created equally.
Do we do? We receive that data currently? Do we see
patterns in terms of qualitatively, the types of
Uh, loan products, being offered it to low moderate income
in Chicago Ones, in majority minority communities.
Yes, thank you. Um,
So, first and foremost um, under that category Sunshine is
the best disinfectant.
so, the ability to have a hearing,
Where some of the status publicly available?
Can spur a conversation, not in this room.
But between Woodstock Institute or our partners like
Chicago and HS or crn and some of the financial
institutions where we highlight, there's some room for
improvement.
Um, I share all of this data on these slides that I shared
with you.
With every institution mentioned.
Ahead of time, just in case they want to understand our
context and it's already started those conversations
because of the limitations in time, we don't have the
ability to include the type of mortgage.
or the costs of that mortgage, as many of, you know,
The loan is just, the starting point, you know, their
issues of closing costs, appraisal fees, everything else to
get through the process and we have consistently found that
uh borrowers of color primarily pay more
As a percentage of their mortgage to close the loan.
Than borrowers, who are not of, I mean, I guess white as a
color, but, you know, white white, white borrowers. Um,
and, uh, through a partnership that we had last year with
Chicago Neighborhood Housing Services. Um, we broke down
every single step of the Continuum of how mortgage lenders
go through the process with the borrower.
And identified specifically where steering might end up
going into effect or where some of those costs start adding
up and asking why. And the idea was to have mortgage
Executives, explain to us not a justification of their bank
and why they do it but to use their expertise and ask them.
If you could start over again, what would you do
differently? We presented some of those findings through
the Chicago.
Community Trust hosted an event, um, late last year or
middle part of last year to be able to do so, but some of
it also has to do with Realtors. So now we're getting
involved with them because we found out that sometimes
borrowers that aren't really secure. In the process will
turn to Realtors and say so which loan do you think I
should take?
And even though that's unfair to put so much of the
decision-making process on the Realtors, they're The
Trusted party.
Really, I I mean nobody goes into a bank and sort of feels
I'm sorry, been nobody goes into a bank, it sort of feel
like okay you know, I can really trust you. Uh, I wish that
were the case, I think it's getting better. I know the OCC
is has a whole initiative about building trust in banking
banking but we're a long way there. So there is additional
that we'd be happy to share with this body or with yourself
to be able to show some of the granularity of how low and
moderate income borrowers and some borrowers of color end
up getting steered towards more expensive options when
that's not an exactly necessary. And we've worked with the
industry to try to figure out in some cases, they didn't
even realize that was happening because it was happening
outside of their process. So yes, there's a lot more there
that we can work with, but it's the opportunity to have
these conversations. That brings them to the table willing
to talk to us about these issues.
No, I appreciate that. And I think, I think in digging into
that, it's really helpful like
a very hopeful, I'm also curious because this was it, it
was touched on
Uh, I think by Kevin from the Chicago rehab Network. Do do
we see the financing of what we would? Consider
gentrification I wonder if we ever parse the data in ways
to understand,
If it is loans to white bars being made for homes in
majority minority communities or to take that a step.
further like,
How do the loan origination numbers that we see for
majority minority communities compared to those. We would
see in white communities in Chicago.
That um that's actually something that I think some of you
know, I'm a recovering California. So this is an issue that
uh we've tried to study and sort of and try to assess.
Where where does that J curve moment where all of a sudden
that gentrification takes off and what are the components
of what that looks like? There hasn't been any sense of
consistency except for a factor of 2 issues. The first 1 is
a shortage of units.
That that is the 1 thing. That is consistently an indicator
of likelihood of gentrification because then what you have
is a bidding war for what few units are there. And the
second 1 obviously is 1 that we're dealing with, which is
access to Capital to be able to allow that bidding war to
happen in the first place.
So, unfortunately there's no tried and true formula to be
able to try to figure out. This is the structure that it
looks like to try to prevent it. And all of the examples,
I've seen banking a lot of communities and cities that have
dealt with gentrification.
Trying to prevent, it is usually has about a 5 to 7 year
shelf life. You can try to hold it back. You've seen
subsidies through the city or special programs through
lenders. But at some point, the tsunami of the capitalistic
infrastructure, just overwhelms it and it just continues to
go down that path. How do we stretch that to 10 years or 50
years? So you start building generational wealth. It's
something that we're really digging into now. We'd love to
continue to have that conversation.
I appreciate that. Um, Mr. Simkins 1 of your slides. Can we
put back up the slide related to the denial rates for Home
Improvement loans?
I mean it's disturbing on its face but I'm, I'm wondering
when we look at that slide. If that also
um,
corrects for or takes into account, uh, varying income
levels because I know in the past you've presented to us,
at least in some cases anecdotal, uh, evidence
Where folks are qualified in every particular way that
we've corrected for income, so to speak but still see
higher denial rates for black and latinx accounts.
Uh yeah that's so that's interesting. If uh I thought I
brought it with me to put apparently, I didn't we do have
the statistical analysis of the Home Improvement, lending
uh, for 2022 and 2020 now, 2023 and 2024 and you'll see
that there's a slight Improvement in 2024, but that slight
Improvement actually comes because there was less overall
Home Improvement lending across the board. So it's
basically the same, it's about a 60% denial rate for
African-American applicants and, uh, um, about a 50% denial
rate for, um, Hispanic applicants compared to like a
30% denial rate for, for white applicants for Home
Improvement, uh, lending. Um, and that has a lot of
factors. Um, we know that we have issues of undervaluation
of homes, um, through appraisals and African-American
particularly African-American. Uh, but also uh, Latino
communities, um,
There is um, and actually because of that what you've often
often find is that homes and majority minority
neighborhoods, generate less equity in a generated slower.
Um, so so there's that too. Um, however, I want to make the
distinction between being approved for a home improvement
loan and how much Equity you may be able to tap, once
you're, once you're approved. So those are 2 different
things just because homes in my majority, minority
neighborhoods may have less Equity, uh, is not necessarily
connected to the fact that they're, they're continuously
not approved. So that's 1 area where we continue to, to see
that. Um, it's an area, um, that, um, NHS is lending in.
Now, we actually have a below Market Home Improvement,
lending product. Um, you also mentioned our, um, we have a,
um, a below Market, uh, home purchase mortgage product,
too. Um, this is a very important, um, it, we, we were able
to develop this product uh, through support from um,
Community Trust, um and that is a 3 and a half percent
interest rate. Um,
30-year fixed mortgage. No, no, private mortgage insurance.
3%, down payment requirement, um, we do hand underwriting
as well, so, we don't have a bright line, um, you know,
credit score requirements. And what we found was that a
family at 80% of area meeting income, the, the, the
interest rate, differential between where interest rates
were 78%. Um, and no PMI can give a home buyer as much as a
hundred thousand dollars in buying power. Um, and still
have a mortgage that they can afford for the long term,
what we're looking for? What we need is capital and we need
a secondary Market solution to be able to actually
originated those mortgages. Um,
Widely, um, it's a small pilot program. Now, that's limited
to about 25, uh, people um, in the uh, Garfield Park and
Humble Park areas, we'd love to be able to, um, originated
that mortgage the city and, and the suburbs in in Cook
County, um, and hopefully working with our banking Partners
in the city on on incentives, we can create some
Partnerships where we can lend like that, um, across the
board because 1 of the things that Horatio was talking
about was when we did this mortgage access initiative,
that's when we sat down with the banks, credit unions The
Advocates um to look at that mortgage process, 1 of the
things we found was that
uh applicants of color were disproportionately steered into
FHA Loans, even when they qualified for conventional loans,
and FHA, Loans are far more expensive than regular loans,
including life of the loan private mortgage insurance, and
private mortgage insurance alone. Can sometimes add as much
as 4 $500 a month, uh, to your mortgage if you can
Get people into homes that they can afford in communities
that are on the cusp of gentrification. It means that you
can create home ownership.
For working class families in communities, before the
tsunami comes. And then, once the tsunami comes, they can
actually take advantage of all the amenities that come with
that tsunami because they're in a home that they can afford
to stay in as the community changes. Cheer, may I ask 2
final questions. Yes. And and can I please piggy back on
this? This this is so very important. What Anthony was just
speaking of. And so we have to figure out a way to partner
with these type of organizations, to provide more loan
opportunities, mortgage opportunities for our residents,
this program that I spoke about that the city of Chicago
had
20 years ago, the new homes for Chicago program. The there
was no PMI and it was a conventional loan not an FHA loan.
Now a PMI can make a difference as to whether someone even
can qualify for the mortgage because the PMI adds to their
payment. And so a lot of people cannot qualify simply
because this is an FHA loan that has this PMI. So no PMI
low interest rate forgiving of of the credit report and
also looking at the down payment, conventional loan. This
is so very important. What Anthony just spoke about
treasurer for those who may not know a PMI is
Private mortgage, it's private mortgage insurance and let
me point out something else, which is very interesting,
which I think a lot of people don't know. It's kind of like
PMI Pi 5 in mortgage insurance. Not only asked to the cost,
but it also asked to the underwriting. So a bank or even a
cdfi lender can approve, uh, a borrower for a mortgage and
the insurance provider, the private mortgage insurance
advisor, provider can reject them. Um, so it adds another
layer of, um, of denial rates as well. Um, and I just want
to point out in the over the, you know, 35 years that we've
been doing lending. These are the kind of products that we
lend for and 75% of our homeowners are still in their
homes. That's right.
and unless we put closure to Anon point to an point, the
banks are not going to do this on their own unless we put
some stake into it. We are not going to see the fruition
that we want. Well, here we go. Let me hit on that with the
last 2 questions here. Number 1 Anthony. It's a marvelous.
Pro product that y'all are able to offer right now.
Institutions who are interested in providing Capital into
the loan product that you're talking about, how should they
get in touch with NHS.
They can, uh, talk to me directly or they can talk to my
Chief credit officer. Janice Crawford, who is here who
runs, uh, neighborhood lending services and does all of our
all of our lending. It's, it's a proven product, and we can
tell them the default rates and everything else. Um, we
just need capital and, uh, Partners on a secondary Market
solution. So when we originate the loans, we can sell them
which creates Capital, so that we can do more lending
helpful fee final questions. So, so much of the work that
we're talking about
Good actions, add actions. A lot of what has been positive
Arguably, you could say comes out of the federal Community
reinvestment act. I am very curious if the
New Administration.
Has signaled.
Interest in alter.
let's talk about it then as signaled, any interest in
altering the community reinvestment act and how can we in
Chicago, uh, be
A bull work, a defense account about balance against those
actions.
Mr. Jackson. Oops.
Mr. Jackson Mr. Jackson and Mr. Mendes. They're all point,
they're all pointing at the former regulator in the banker.
Okay um you know I I spent the last couple of weeks in
Washington DC talking to people about what the future looks
like.
We already know that the Department of Justice has
terminated actions with regard to their, Auntie redlining
campaigns that has been going after financial institutions,
mortgage companies, uh, the Consumer Financial Protection
Bureau today at announced actually during this hearing that
they're going to stop enforcing some of these laws on
non-banks.
And we all know that most mortgage lending is happening at
non-banks. I Guaranteed Rate and Quicken and Rocket
mortgage.
Um, the playing field is becoming increasingly less even.
Which means the existing infrastructure to really comply
with fair housing. Fair lending. And the community
investment.
That's hardwired and I'll take an act of Congress to take
it uh away but it applies to Conventional Banks.
More and more of the lending that our communities, the ones
that we care about more and more of that debt is coming
from institutions other than Banks. And that's where we're
seeing the infrastructure start falling apart. So what I'm
hearing, even from our own Congressional Delegation in
Illinois, is you guys are on your own. We're going to have
to create the safety net. And we're not really in a
financial position to create a whole new, a bunch of new
programs. You have, you know, a city, that's a billion in
debt, a state. That's 3 billion in debt, it doesn't help
when your Governor trolls the president and calls them not
a real billionaire, you know, you know, we're not going to
get a whole lot of friends and a lot of help from
Washington DC. So, we have to think creatively with what
few resources we have, how do we move things around, and
make sure that people are held accountable for what they're
doing and disclosure and making it public showing up
getting engaged and Publishing this information I think is
really going to be much more important at least for the
next 2 years.
Maybe the next 4.
Madam chair. I I would just add to the question. I would
agree that I don't think we're in a space where we're in
danger of the community. Reinvestment act being repealed
because that would require an act of Congress. I think we
are in a situation where we probably won't see reform to
CRA is was being contemplated in the last 2
administrations, uh, but CRA exams are not going away.
Those are, uh, you know, banks are regularly examined on a
typically an 18-month to 2-year cycle for their compliance
with the community. Reinvestment act. You know, I don't
believe sitting here today, that that is going to change.
Although, um, colleague, just informed me. We're, we're now
under, this has been a 100 days of the Trump Administration
already which is shocking and who knows what shocking
things. We'll see coming out in the next couple of weeks.
We don't think that CRA is going anywhere and to, to add to
that. There's also a
A state level Community reinvestment act and it applies to
other entities, including as was referenced in the, um,
previous comments. It does apply to State chartered Credit
Unions, who are not covered under the federal, CRA, as well
as residential mortgage lenders. And if you look at the,
the mortgage originations that have been uh, you know,
accomplished in the last few years, you'll see a a a larger
and larger market share.
There of mortgage loan, originations done by um, residential
mortgage lenders. Now before the 08, 09 crisis, uh you know
we called those mortgage brokers. They're the same kind of
companies. There are more safeguards in in place because of
the Dodge, Frank act that was passed following the crisis.
Uh, but you know, those those companies, um, still don't,
you know, sit for CRA exams at the federal level. But now
in Illinois, they have to their covered by the CRA as well.
So, there are additional safeguards which we don't think,
uh, can necessarily be eroded, um, at the state level.
I appreciate it. I hate to break it to you but it only
feels like a 100 days. Um, so but I appreciate the
responses from everyone. Thank you. Thank you, cheer. Thank
you Alderman. Laspada. I wanted to ask, uh, uh uh Mr.
Simpkins talked about wanting to see
These Banks and financial institutions invest in cdfis. And
my question is, is that a
Specific question on the application process.
Yes, I'm asking that to the, to the RFP, to the controller.
Or or Mr. Jackson, I, uh, Madame chair just to add in. I
don't want to step on anyone's toes but I'll just mention
because CRA reports are built in as part of the application
process. You know, a lot of what banks do for you know to
get CRA credit when they sit for their exam and are audited
by Regulators for compliance and giving us score on CRA
directly relates to their Community Investments. And that
often includes investments in cdfi in community groups and
Community organizations. So, every bank that applies has
extensive, um, not only direct Investments where they make
money, but also donations to a lot of these groups. And,
um, I know that there's a pretty vibrant, um, core of banks
that your organization works with already. I'm sure you'd
like to expand that but, um,
How many banks do you?
Uh so we as a so NHS. Uh our affiliate neighborhood.
lending Services is a cdfi. It's a nonprofit lender. Uh,
and we we do work with banks. Uh, however, if you take a
look at the, um, CRA exams, um, and Reporting, uh, for most
banks, their Community investment and Community lending
usually falls in the category of, um,
Tax credits and and bond placements. That's where the
majority of it is. Um, and Rental housing is, is, is very
important. So these will be multi family rentals. These
would be facilities, um, infrastructure stuff like that.
Um, when it comes to home mortgage lending.
That usually not the case. Their home. Mortgage lending is
much, much smaller part of their Investments. What's
important about cdfis is because cdfis do the kind of
lending, uh, home Home Mortgage purchase lending, Home
Improvement loans. Um, purchase Rehab, lending that Banks
generally don't do or they do, uh, very small volume of it.
Um, and they can invest in cdfis and we can get that out
into the community because we're already in the community,
we're not going on the doors. We know who needs a, a
mortgage. We know the young couple that wants to buy a
home. We know the senior that needs, um, um, some small
improvements to their home and can afford a, a small home
improvement loan. Um, so working together, uh, we can
probably get them better scores on their CRA exams and we
can also bring the resources that we need uh, to the
neighborhood. So, I think a collaborative partnership is
really important and many years ago. There used to be a
much more
More collaborative relationship, um, in the home ownership
space. Um, and and the neighborhood investment space
between Banks and and, and cdfis, not so much anymore. So
we we'd love to see how we might be able to encourage
greater Partnerships, thank you for that. Um and I guess my
other question is to Mr. Mendes and Mr. Jackson Ben
Jackson, um you talked about some low performing or poorer
performing financial institutions that may be on our
Municipal depository list.
Is there any conversation that goes on to tell these
institutions? How they might improve?
Prior to the city council.
Um, approving the list.
Yes. Um, last year, 1 of the institutions that we shared
this data with, uh, we offered to sit down and talk to them
about their program. Uh, primarily a mortgage
Uh, and they may change it as a result. This year, uh, even
though you have some of the high performing, let's, you
know, and I'll just call out uh, US Bank and doing a really
good job of attracting applications for minority borrowers,
but not doing as good. A job as other peers, in terms of
turning those into originations
That gives organizations like Woodstock Institute and
others, the opportunity to sit down with them and say,
okay, next year, let's see what we could do to bump that
number up and they're willing to have those conversations a
because it's going to help their numbers for fair lending
and CRA but also because they know that we're going to be
back here next year with a slide up there with their name
on it and a bar chart and that helps you know it's like
public. Shaming is always a good encouragement. You don't,
you know, kind of like kids. You wish you don't have to but
it gets a moving a little bit better than most but also
there's an opportunity for the city to be much more
engaged.
And holding financial institutions accountable when the
opportunity is right. Uh, I think over the course of the
next few years, you may see much more applications for
financial institutions to merge.
Or do acquire other institutions or for a credit union to
buy a bank. We've seen a lot of these things. There are
applications that are open for public comment and those
aren't just for comments from advocacy organizations, like,
Chicago rehab Network, or Woodstock Institute or others. I
have seen cities also get engaged as entities in
conversations about whether or not they feel that merger is
going to be better for their city or whether or not they
feel that that's an opportunity to ask for those
institutions to do better. There's a good example right
now.
And you know this is maybe not a great example, it's almost
a apoplectic example there's a cryptocurrency company out
of Dallas Texas at wants to buy a bank in Chicago called
Burling Bank.
Now we're having a there's no way in hell, first and
foremost, and in their application, they say, don't worry
about it. Only 49% of our assets are going to be tied to
crypto.
You know, it's like how do you say that without throwing up
in your mouth like, 49%, you're just going to fail and they
referred to an executive order making the United States,
the digital assets. Frontier leader from a guy who's
bankrupted his company 6 times.
So we're not really getting a whole lot of good advice here
with regard to anybody involved anywhere? So Chicago has to
take care of itself and Woodstock and other partners are
getting engaged to see. How do we bring them to the table
and talk about what Burling Bank can do for Chicago? And
how do we make it safe? Because we may not be able to put
the crypto back. You know, cat back in the bag but how do
we make sure this new institution and we may or may not be
able to talk to you is going to be good for Chicago versus
bad for Chicago. And I think the city can be engaged just
as much as the Woodstock Institute can be in these
conversations and if you're not, then we'd be happy to
invite you to the table.
You know, can I just add to that? That um, Mr. Simpkins,
thank you. Sorry. Uh, just add to that. Just quickly. Um 1
of the depository institutions 1 of the depository
institution applicants is Old National Bank, um, and they
have a community benefits agreement, that we were involved
in and we're helping track that Community benefits
agreement. Um, they're sort of headquartered in in
Indianapolis and so Chicago is New Market, but it's now
their largest market. Um, so 1 of the things you can do and
this is something that, um, Madam Treasurer, um, kind of
started with, which was taking a look at, how are they
fulfilling? The commitments that they've made their public,
commitments that they've made for Lending and investing,
um, in Chicago and lending and investing in uh, low and
moderate income neighborhoods. So as you look at the
depository institutions, 1 of the things, I would encourage
you to do is take a look at how their numbers compared with
the commitments that they've made.
In their Community benefits agreements and then some of
their uh public statements about how much they're going to
invest in um minority neighborhoods.
Uh, thank you for that because that was the, I didn't want
to call them out, but that was the bank that was on my mind
based on the presentation for Mr. Mendes, um,
Treasurer, are we able to get
That comparison or that information prior to our vote.
When is the vote?
Uh, actually it's Monday.
We can help, um, we can get in touch with the organization,
The national Community investment Coalition that negotiated
that Community benefits agreement. Provide that to whatever
office makes sense in the city. Um, we also know that some
of their folks here in Chicago, want the institution to do
better. So they would be more than happy. I'm sure to sit
down and have a plan and develop a plan on how to make sure
that they're not below peer. The next time we have this
conversation next year and all national chairwoman let me
to to be clear Old National Bank will be considered what
size Bank.
Large. Okay.
They're the institution that bought First Mid?
Alderman. Sichel Lopez.
Thank you. Um thank you chairwoman and appreciate the
opportunity to have this hearing in this important
conversations. Um,
my first, my first question is around the effect that
the new diversity and employment and inclusion policies, at
the federal level could have in in the banking industry.
Um, what are the things that um,
that you are seeing I I heard and I'm glad to hear that.
You agree with many of us that not only there's room for
improvement here but there's real urgency on small
homeowners small businesses from our community to have
access to um
To to badly need a capital. Um, and I am really concerned
about what these policies at the federal level are
encouraging or incentivizing in the banking industry. So,
um, and again, this is, you know, for perhaps, everybody in
the panel, what effects you are seeing or could result of
such policies at the federal level.
So I I can start Alderaan. Um that's okay with you madam
chair. Um,
I I think that what we're seeing is a lot of unknowns and
this was discussed a little bit earlier regarding um what
the policy changes are but banking law and regulation is
pretty difficult to change at the federal level. Um, I
that as was mentioned earlier by Alderman laspata um our
more very proud that our our membership overall and
virtually all of the small and large Banks who submitted
applications. First of all, I want to say, you know, we're
talking about a class of applicants who would not have
applied if they weren't performing well on their Community
Investments. So it's kind of like looking at an All-Star
team in saying, okay, well, there's got to be a weak 1 in
the All-Star team. They're absolutely. There's absolutely
is the other speakers indicated room for improvement in
terms of uh, Outreach mortgage lending Etc. But is that
the data Bears out and I verified this through looking at
humidity data um you know they're measurable increases in
mortgages in lending to minority communities. That's a
positive. Um our members have also recommitted the
applicants that I should say here uh to their
De Andy policies, I think Alderman, when you're looking at
the attacks on those. Um, a lot of those right now are
coming from the private sector. We're seeing lawsuits
against corporations and smaller companies on their de Andy
policies and that is compelling some changes in some
Industries. We're not seeing that our banking industry at
this point in time and we hope it stays that way, uh,
however, these private attacks these lawsuits against
companies. Uh, you know, if you read the headlines that's
happening a lot and forcing change, unfortunately.
As far as the regulations, that's a slower change and it
requires a very formal process, a lot of public, uh,
comment and input. Um, and, you know, obviously we have a
congress that's narrowly divided and it's going to be hard
to make major changes, uh, to regulations through the
Congress.
There are, um,
Subtle changes and there are overt changes.
uh, the subtle changes right now and a lot of the financial
institutions we partner with
has to do with um, their recognition that finding a way to
bank low and moderate income communities, and communities
of color is profitable and it makes them A Better Bank.
Um, not every bank is saying that and I'm sure not every
Bank believes that but the ones that we're working with and
are actively engaged. And we've seen improvements here,
Are allowing us to see that translated into numbers.
And we continue to want to see those numbers to improve.
What they're telling me behind closed. Doors is don't get
worried. If you see us have to code switch in this
environment, we may not be able to use the same words or
else. We're going to get Steven Blum up in our business,
and we don't want that to happen.
So that may be some of the subtle changes in our response.
As always, we're going to have to take a look at the data
and see whether or not what you're saying is actually true.
So what words they use to us is less important than seeing
capital and programs in the communities we care about. So
that's where hearings like this are really important to be
able to have that the more or overt challenges though are
coming from Republican state, attorney generals that are
sending letters to bank CEOs.
Saying it is illegal for you to be able to create credit
and financial products specific.
To certain races and sexes.
Now.
Unfortunately, for them, you know, they don't have very
good staff. The Equal Credit Opportunity Act in the 70s.
In law, specifically allows financial institutions to do
their research to figure out, which individuals and
communities have been marginalized and disinvested.
and allows them to create what's called special purpose
credit programs specifically
To be able to find ways to profitably and safely Bank.
Those individuals and communities.
No, Attorney. General of any state has the ability to
overwhelm or ignore state law. Unfortunately, we brought
this issue up even with the Biden Administration and they
did not come to that laws defense.
And now we're starting to see these attacks. Again, that's
what I think we need to be more careful about because we
have seen financial institutions, even in Chicago,
utilizing the ability to create both for mortgage and small
business loans. Special purpose credit programs,
That are testing the very edges of what we're considered.
Conventional lending. Hopefully going that box a little bit
bigger.
So that way institutions small businesses and borrowers that
were considered underwriter.
Through these programs and through the performance of those
loans, the box of what's considered under writable gets
bigger. So it's those threats that I'm more concerned about
than anything that the federal government may do because
like what uh, Ben Jackson said,
Um, we have a safety net in terms of the existing laws that
exist.
that the challenge with regard to that existing
Safety net is whether or not we're going to have a soft on
crime Administration when it comes to Red lining.
When it comes to fair housing, when it comes to Fair,
lending, in which case your fair housing, organizations
organizations, like Woodstock Institute, and others are
going to have to fund raise to do the federal government's
job for them. And hold financial institutions accountable
for their performance.
But the data will continue to come and we're going to
continue to have conversations like this. So, there's a
little bit of the Dual, uh, The Duality
Are they going to code switch and take some of these Dei
words off their website and off their programs, but we're
still going to see Improvement. Well then I'm okay with
that.
Or if something else going on and then we're in the process
of drafting a letter to each 1, of these attorney generals
generals that have challenged banks on that, and telling
them, you can't do that. Federal law allows financial
institutions to try to find innovative ways.
To serve these communities, and that's protected, and they
can't take that away.
I have a follow-up, this is more specific and I think it
can go to maybe Anthony. Um, or
Um or anybody else but particularly around home home
ownership and mortgages. I know that 1 of the reason 1 of
the things that was mentioned is incentivizing working.
More closely with community development, financial
institutions that are investing in Chicago that are
following. Um,
perhaps, um,
more inclusive, more inclusive. Um,
Policies, and I think that, you know, certainly in home
ownership and I think that's my concern that some of the
gains that have been made over time, um, again could be
reversed and I'm glad that we able to document the data.
And the data was very clear on how damning was redlining to
the communities, uh, that we represent so around home
ownership and mortgage lending. Um, what are those policies
that you recommend and thinking here in city council? And
again I think that we will have to be more diligent
around how we use our Municipal depositories, uh, to
incentivize that I for 1 being more vocal about being able
to have a public option in terms of lending, just given the
the things that are happening. But in your opinion, I know
and I appreciate it in your slide how intentional you were
about, how can we partner and incentivize City cdfis that
that care about the city that promote the policies that we
like to see in a more intentional way. How can we as a city
incentivize partner and be part of this conversation?
Uh, thank you, uh, Alderman, Anthony Simkins uh, NHS. Um,
thank you for that question. Um,
and um, so a couple things I think that uh, number 1 um,
The uh, resources um, for investing in uh, law and
marketing income communities communities of color that, um,
regularly come from the federal government either directly
to organizations, like an NHS uh, or
Come to, uh, government like the city of Chicago or the
state of Illinois. Um, we may see, um, less less of that
Those Federal resources specifically going to, um,
organizations and programs like NHS that, um, are
specifically focused on
Providing support and resources to communities of color,
and to lower and moderate and working class income, uh,
neighborhoods. Um, so
Being able to partner with uh other institutions
corporations Banks. Non-depository lenders foundations is
going to be critically important to make sure we have the
resources to continue the progress that that, that you
mentioned in this area.
Um,
yeah, and um, so there's some very specific things that the
city can do, right? Um,
What I was talking about was in incentivizing Banks to
partner with and to invest in um, cdfis. So for instance,
I'm looking for Capital so that I can originate um
mortgages that are affordable to Working Families in our in
our neighborhoods, I need Capital to do that.
Uh, 1 source of capital would be from a bank, right? Who
would give me low cost patient capital in order to do that
cdfis were created to often do what banks can't to do
Investments that have different risk profiles that are
underwritten different from Banks. Uh, and sometimes in
order to get the bank to make that investment. If the city
were to provide a loan loss, reserve for a guarantee or,
know, deposits to the bank. Um, cash collateral, there are
lots of different ways that the city can do that. These are
Are safe Investments that in theory have a return.
Uh, you know, in order, in other words, the money's coming
back. Um, and incentivize the banks then because it
mitigates the bank's risk for the banks, then to make that
investment, which is CRA, uh, eligible Investments. So it's
it's of of benefits. It's of benefit to the, uh, to the
banks themselves. So, those are some of the things that. So
if I came to 1 of his Banks and said, listen, I need
Million dollars. Um, in order to originate these affordable
loans for borrowers in the neighborhoods that we work in.
If the city said to the bank,
we'll give you a guarantee of a million dollars.
towards that $3 million, then the bank would say, okay,
well I'm
33% risk mitigated, it's easy for me now, to to give that
money or they could give a subsidy, they could give us a.
The city could give us, uh,
Money for a subsidy pool. So we could give people the the
down payment assistance, that they need to buy the homes
and make the homes more affordable. And if you know, 1 of
The Borrowers, came to us or another lender and said, I'm
buying this home, but I've, you know, I've got this subsidy
that's going to make your mortgage smaller on this loan and
and decrease your loan to value. Um, that's incentive for
the bank to, to do that mortgage or to give the money to
the cdfi to do that mortgage. I mean, it gets a little bit
in the weeds but you have
Have to understand right? That this is a much smaller
investment, public investment, right? Because we're not
asking the city to give us to do lending. We're asking them
to set aside some money as a guarantee, or as a loss,
reserve a lot less money, right?
Some several hundred thousand dollars, a million dollars,
or something like that. And that allows us to leverage all
the private capital.
To to to do the lending or to the development or whatever
it is. So there are definitely ways that they can do it.
That is is safe and sound for the city and their relatively
small Investments that allow us to leverage large amounts
of private capital.
Thank you, chairwoman and I look forward to working. I know
with the treasurer's office to maybe work more closely
especially when it comes to housing with um some other
organizations Kevin Anthony and um looking ways. Again I
think to me the public option is is important right now and
looking at more alternative and creative ways to get
funding towards small businesses and homeowners talk to a
lot of Chambers of Commerce, special in immigrant
communities. Access to Capital is really, really difficult.
Thank you.
Thank you, chairman.
Well, I don't see anyone. Any other questions? I think
we've had a robust and enlightening conversation this
morning about the municipal depositories and I want to uh,
thank our city treasurer Melissa, Conor serving and our
acting controller, Joe Flores, um,
Joel Flores in addition to uh the people in the Box. Uh,
Mr. Mendes, thank you so much Anthony Simpkins. Thank you.
And the 2 Jacksonville over there. The Jackson 2, um, Ben
Jackson, and Kevin Jackson. Thank you so much for your
participation this morning, uh, to the members of the
committee, the ordinance, designating the municipal
depositories for our city and the board of education for
fiscal year 2025. We'll go before the committee on finance
at the next meeting scheduled on Monday, uh, at 10:00 a.m.
and there being no further business before the committee.
can I get a motion to adjourn so moved by vice mayor
brunette. All those in favor signify by saying I I opposed
and the opinion of the chair of the eyes, have it and the
ordinance, the finance committee is hereby adjourned.
All right.