Ordinance to Help Inform Treasurer’s Office New Banking Scorecard
Chicago City Treasurer Kurt Summers today announced a new ordinance that would amend the Municipal Code to hold local banks accountable by ensuring their investment in each of Chicago’s 77 neighborhoods. The ‘Municipal Depositories’ ordinance was introduced by Mayor Emanuel at today’s City Council meeting. In coordination with the City’s Department of Finance and co-sponsored by Alderman Tom Tunney (44) and Alderman Roderick T. Sawyer (6), the ordinance would require all banks who work with the City, also known as Municipal Depositories, to provide further reporting including their own lending practices to and support for small businesses, non-profits and entrepreneurs located in their communities.
The ordinance would also specify what information regarding community investment is gathered from banks and how frequently it is reported. The Treasurer’s Office will utilize that information to create a new Banking Scorecard to ensure Chicagoans can identify if and how frequently their local banks are investing back into their communities. The initiative was first proposed by Treasurer Summers during his first 90 days in office.
“This new ordinance and banking scorecard will allow our offices to hold local banks to a higher standard when it comes to meeting the credit needs of our communities and investing back into the neighborhoods where they are located,” Treasurer Summers said. “Because access to capital is one of the biggest concerns for entrepreneurs and small businesses all over Chicago, ensuring our banks are providing support is a top priority of the Treasurer’s Office.”
“As we seek innovative solutions to addressing community needs, this is an opportunity for our City’s banking partners to further invest in the well-being of each of Chicago’s neighborhoods,” Mayor Emanuel said. “I commend Treasurer Summers for seeking out this amendment to the City’s Municipal Code and look forward to our continued collaboration in supporting a thriving network of small businesses and entrepreneurs across Chicago.”
Municipal Depositories allow the City to conduct business with financial institutions that can effectively and efficiently handle the City’s extensive financial operations. Historically, the City has solicited bids from area banks interested in becoming Municipal Depositories of the City of Chicago and Chicago Board of Education through a Request for Proposals (RFP) process. Since 1974, Chicago’s banks wishing to receive designation as Municipal Depositories have provided a detailed breakdown of lending and deposit activity within each of the City’s 77 neighborhoods. The new ordinance would modify the current RFP process for banks who wish to do business with the City and the Board of Education and will require the banks to provide more detailed information regarding their employment status and community involvement and investment.
“I welcome these changes in disclosure rules for banks that do business with the City,” Alderman Roderick T. Sawyer, Chairman of the Chicago Aldermanic Black Caucus said. “As government budgets are getting tighter it is important that we ensure that investments are being made in every part of the City. It is a big help for our neighborhood economies as well as the bottom line of the City. I would like to thank Treasurer Summers for his leadership on this issue.”
Upon review of the bid packages, the Comptroller’s Office submits a list of the qualifying bidders to the City Council for its information and consideration. The City Council has the power to designate as many depositories as it deems necessary to protect the City’s assets. Upon designation, these institutions are referred to as Municipal Depositories. The Office of the City Treasurer is then permitted to deposit funds with any of the Municipal Depositories in the upcoming calendar year.
The City currently has 18 approved banks designated as Municipal Depositories.
Previous criteria for selected banks included having a presence in Chicago and serving its community’s needs, including liquidity to the City. Designated Municipal Depositories are used by the City Treasurer’s Office and the Chicago Board of Education for bank deposits including CD’s and banking services tied to deposits, lock box deposits, payroll and credit card processing.