Housing

Single Family Mortgage Lending

Market Share - Increase bank lending to low- and moderate-income (“LMI”) people and areas, including expansion into un- and underserved markets.     

• The Bank concurs with a goal of reaching a cumulative metropolitan six county area total of 35,879 LMI residential HMDA loans by the end of the year 2004 (attachment breaks down totals by year and product.)

• Progress will be measured by number of loans, percentage increase and market share.

• Generally, lending in low- and moderate-income areas should be commensurate with lending increases to low-and moderate-income people over all.  (Sub-prime lending should not be included in these increases.)

• The bank will work with community organizations to determine underserved markets, and ways to penetrate these markets.

• The bank will participate in the design and development of an analysis of credit and service needs in LMI communities, and will contribute to its implementation.

Credit Scoring - Ensure that increased use of credit scoring does not become a barrier to accessing credit for people with non-traditional or problematic credit histories.   

• Applicants with marginal credit scores will be offered another loan product, and denied applicants will be given information on homeownership counseling programs.

• The bank will continue second reviews of all low/mod applications, as well as second reviews of all minority loans which are received.

• The bank's Community Outreach and Education Division (COED) will work with the Credit Counseling Services of Chicago on credit repair workshops.

Other - Reduce inappropriate subprime lending        

• After the merger, the bank will conduct credit analysis on all subprime applicants and refer them to appropriate loan product.

• Increase Downpayment Assistance (“DPA”) Pool             

• The bank will increase the DPA pilot to $150,000/yr. for 6 years, with $1,500 per borrower. 1/3 of these funds will be set aside for borrowers below 60% of median income, with the remainder for those at 80%; areas will include EZ, City EC, and all low/mod tracts in South Suburban Cook County.

• Within the Downpayment assistance program, $2,500 will be offered for people with disabilities, with no geographic limits on the home purchase, and income eligibility extended up to 100% of median.

• The geography and subsidy amounts are open to annual adjustment at the suggestion of the bank or the Neighborhood Lending Review Board.

Multifamily Lending

Renew and increase the Neighborhood Lending Program    

• Targets for multifamily lending are found in attachment.

• The activities of the Neighborhood Lending Program will be continued.

• 1998 Goal - $65 million in loans closed, 1999 goal - 7.5% increase to $70 million.

Encourage mixed-income development         

• The bank concurs with the importance of mixed-income development including rental and for-sale units, and will encourage proposals for these.

Housing Policy        

Partner with City of Chicago to preserve affordable housing stock and expand home ownership opportunities       

• The bank will continue to partner with the City of Chicago and community organizations in projects that support the goals of the new 5-year Department of Housing Affordable Housing Plan.

• They will partner with the Chicago Rehab Network to identify methods to finance low income housing as described in the City’s 5 Year Plan, such as: family housing prioritization; preservation; Section 8 & public housing; and, capacity of non-profits.

Economic Development

Increase bank lending to small businesses in low- and moderate-income areas.      

• The bank concurs with a goal of reaching a cumulative metropolitan six county area total of 5,190 LMI small business loans by the end of the year 2004 (attachment breaks out totals by year and loans to very small businesses.)

• The bank will continue to report small business lending to Neighborhood Review Board.

• The bank agrees to approach DCCA (with CRA Coalition members) for higher matching levels in order to market CAP to small firms in minority communities, if and where necessary.

• The bank will increase the number of affordable lines of credit for working capital that address customers rejected on the basis of current underwriting criteria.

• The bank introduced a small business credit card in the fall of 1997, and will monitor the progress of this product.  The bank will increase the marketing of this product in LMI communities.

• For interested community organizations, the bank will partner on credit repair programs.

• The bank is investigating the listing of a technical assistance organization name and contact on all rejection letters.

Increase Technical Assistance (T.A.) to low- and moderate-income commercial areas in under-served neighborhoods            

• The bank will work with community organizations and an appropriate T.A. organization toward increasing T.A., esp. accounting, bookkeeping, computer systems in LMI communities.

• The bank will increase its funding of such activities by 10% for each of the next two years, and agree to evaluate results regularly.

More flexible underwriting     

• The bank will extend the owner-occupied mixed-use pilot program established in 1996, and will explore expanding it to include commercial industrial properties contingent upon the continued performance of the portfolio.

Services Task Force Issues

Establish and market lifeline accounts           

• The bank will convene a group to study the feasibility of offering an Access Account, with the goal of implementing this account.  The study will be completed by November 30, 1998.  (Attached letter from Chairman Istock describes more on this.)

• The bank will monitor and review EFT guidelines when  published this summer for the development of an EFT account.

• The bank will increase marketing of lifeline accounts to unbanked individuals including EFT and/or EBT recipients.  The bank will ensure that this issue is discussed at the Chicago Clearinghouse.

• The bank will increase marketing of these accounts through various means and will consider contracts or grants with community organizations.

Increase financial literacy training     

• The bank will allocate $50,000/year for financial literacy training through internal staff resources, workshops, publication of marketing and other materials, and /or grants to qualified organizations.

• This program will be evaluated every two years, with consideration of renewal for another two years at the same level.

Branch Network          

Increase the number of full-service bank branches in under-served communities     

• The bank will open two new Dominick's full-service supermarket branches in low/mod areas in 1998 and 1999.

• The bank will open, in addition, two new full-service branches in low/mod areas in the next four years.

Investments and Grants Issues

Community Development Investments - Establish a base for yearly increases of community development investments and grants, including bank CDC and equity investments in CDFIs.     

• The bank will establish the combined 1998 totals of Banc One and First Chicago NBD as a baseline year for community development grants for the new corporation, and will increase such grants in the Chicago area by 5% annually for the next two years.   The program will then be evaluated, with the goal of extending these increases for an additional two years.

• The bank will set a goal of $16 million in funding commitments of the Bank CDC for 1998.

• The bank will provide $500,000 over three years in long-term, below market equity equivalent investments or similar instruments, at which time the program will be evaluated, with consideration for renewal for an additional three years at the same level.

• The bank will work with Chicago CDFIs on the development of credit enhancement/letter of credit pools.

Housing Education and Counseling   

• The bank will continue to support homeownership education and counseling programs, particularly in low- and moderate-income areas.

• If there is demand for education on reverse equity mortgages, the bank will work with organizations on its development.

Other Issues

Evaluation/Monitoring:           

• The bank will continue the quarterly meetings of  the Neighborhood Lending Review Board

Vendor procurement:

• The bank will maintain its Supplier Diversity Program.

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