Governor Ryan Praises Chicago Predatory Lending Ordinance

CHICAGO -- Governor Ryan commended Mayor Daley and the Chicago City Council for passing a landmark ordinance to crack down on predatory home mortgage lending by requiring financial institutions that want city deposits and other city business to sign a pledge that they and their affiliates do not and will not engage in the practice.

The Governor has directed his Office of Banks and Real Estate to revise the draft rules on predatory lending using the Chicago ordinance as a basis. Governor Ryan signed Senate Bill 355 last May which paved the way for the state to regulate predatory lending. The rules will eventually be submitted to the General Assembly's Joint Committee on Administrative Rules.

"I want to congratulate Mayor Daley and the City Council for showing such leadership in passing an ordinance that will help stop abusive practices that have hurt people least able to defend themselves -- the poor and elderly," Governor Ryan said.

The number of subprime loan foreclosures in Chicago and the suburbs has increased dramatically from 131 foreclosures in 1993 to nearly 5,000 last year.

"Predatory lenders take advantage of people and take away their homes that they have worked their whole life to own," Governor Ryan said. "We must stop these practices that hurt our communities."

The Governor noted that the Chicago ordinance strikes the right balance between discouraging predatory lending and still providing legitimate loans to people with poor credit histories.

"People who are recovering from financial problems still need access to subprime home mortgages otherwise they will be shut out of the housing market," Governor Ryan said. "We can continue to provide that option while curtailing predatory practices."