Illinois officials responsible for implementing a controversial anti-predatory lending program in predominantly black and Hispanic neighborhoods in Chicago have scheduled a Nov. 27 hearing to hear complaints that it’s driven away lenders and chilled housing sales.
The Predatory Lending Database Pilot Program, which requires some borrowers in 10 Chicago ZIP codes to receive credit counseling before signing off on a home loan, took effect Sept. 1. Soon afterward, the Illinois Association of Mortgage Brokers circulated a list of about two dozen lenders the group said had curtailed or stopped doing business in the affected ZIP codes.
The state legislation that created the program, House Bill 4050, was aimed at curbing predatory lending practices in high-risk ZIP codes with above-average foreclosure rates. The program does not apply to federally chartered banks. But critics say it has chilled housing sales in the mostly minority neighborhoods.
Dean Martinez, the secretary of the Illinois Department of Financial and Professional Regulation, said regulators are willing to discuss ways to improve the four-year pilot program through rule changes or further legislation, the Chicago Tribune reported.
The DFPR hearing will take place from 1 p.m. to 3 p.m. Nov. 27 at the James R. Thompson Center.