THE NEED TO PROVIDE AFFORDABLE HOUSING LOANS TO WORKING CLASS FAMILIES

Through a review of regional bank disclosure data, CIOP discovered that many Central Illinois banks were failing to provide affordable housing loans to working class families. Though many tenant families pay rent equal to a home mortgage, they are often denied mortgage loans by banks. In America, there are still generations of families who have never achieved the "American dream."

Low and moderate income neighborhoods have been traditionally excluded from housing finance, a problem known as 'redlining.' Entire neighborhoods are purchased by outside speculators or slum landlords. These properties and neighborhoods are often neglected by financial institutions. This results in lower property values for home owners, dilapidated housing and ultimately abandonment.

These problems are even more acute for minority families. CIOP analysis of bank disclosure data reveal African Americans and Hispanics have much higher loan denial rate than Caucasians. CIOP's research reveals that African Americans regularly have higher mortgage loan denial rates over Whites within each income category. Further, middle and upper income African Americans often have higher denial rates than lower income Whites.

CHALLENGING REGIONAL BANKS

CIOP has challenged three regional banks to increase their lending to low and moderate income borrowers. These challenges were possible due to a law called the Community Reinvestment Act. CIOP's challenges were met with initial resistance but ultimately resulted in negotiations with each bank.

VICTORY!

In the last 5 years, over 6000 low and moderate income families in Central Illinois are now home owners directly or indirectly as a result of CIOP banking reinvestment partnerships with National City, Bank One and Union Planters Bank.

Today, the three largest banks in Central Illinois have individual reinvestment partnerships with CIOP. These written agreements outline increased lending goals and targets, increasing affordable lending officers, charitable giving, neighborhood banking services and equalizing origination rates between African Americans and Whites.

CIOP leaders from Bloomington, Normal, Springfield, rural Logan County, Peoria and Champaign traveled to Chicago to participate in the Federal Reserve Board hearing regarding the buy-out of Bank One by J.P. Morgan/Chase Manhattan. The CIOP group was the largest group traveling the furthest to the hearing.

As a result of the hearing, CIOP meeting with Bank One officials in Springfield and national negotiations along with NPA, J.P. Morgan is currently negotiating on a comprehensive CRA partnership.