7-38. The Treasurer shall make a monthly report to the Comptroller, under oath, for each calendar month, of all interest monies received by or credited to the Treasurer or to the City by any depositary in which is deposited any interestbearing monies of the City, including trust funds and special deposits.

Such report shall show the name of the depositary where any interest-bearing monies are deposited, the average sum of money on deposit in each depositary during the calendar month, the interest paid or credited thereon by each depositary, and the average rate of interest paid or credited.

Such report shall be made and verified to the Comptroller on or before th fifth day of the month next succeeding the month for which the report is rendered.

SECTION 2. Chapter 7 of the Municipal Code of Chicago is amended in Section 7-41 by inserting new language as underscored below, and deleting therefrom language as contained in brackets below so that Section 7-41 reads as follows: 7-41. The Comptroller and Treasurer jointly shall have authority to use any and all funds in the City Treasury which are set aside for use for particular purposes and not immediately necessary for such purposes, for the purchase of the following classes of securities:

a)

b)

c)

d)

e)

Interest bearing general obligations of the United States,
State of Illinois, and City of Chicago.

United States treasury bills and other non-interest bearing
general obligations of the United States when offered for
sale in the open market at a price below the face value of
same, so as to afford the City a return on such investment
in lieu of interest.

Tax anticipation warrants issued by the City of Chicago.

Short term discount obligations of the (Federal National
Mortgage Association) United States Government of United
States Government agencies.

Certificates of Deposit in banks located within the City
of Chicago.

All securities so purchased, excepting tax anticipation warrants, shall show on their face that they are fully payable as to principal and interest, where applicable, if any, within one year from the date of purchase.

SECTION 3. This ordinance shall be effective upon passage and due

publication.

The CHAIRMAN. Thank you, Dr. Naparstek.

Our next witness is Mr. Carl Holman, National Urban Coalition.

STATEMENT OF CARL HOLMAN, PRESIDENT, NATIONAL URBAN

Mr. HOLMAN. Thank you.

COALITION

Mr. Chairman, Senator Garn, I'm president of the National Urban Coalition and I'm pleased to be able to testify on this legislation and I'd like to say one or two things briefly about it.

I think it's an important step in the right direction. I happen to come from spending some 12 or 14 years in a city called Atlanta, Ga., and I used to hear people come by and remark on what beautiful homes black people had in the city of Atlanta. One of the chores I took on was to try to see how this state of affairs came to be and lo and behold it did not come about out of some benevolence nor did it come about because people naturally have a tendency to do good things, but because it just so happened that a very extraordinary entrepreneur came out of Oklahoma and came into Atlanta and established a number of institutions, among them a black bank, a black Federal savings and loan, an ex-barber established a black insurance company. It was through those three institutions that blacks who were able toshould have been well able to secure home loans were able to get the first loans that made it possible for the building of Northwest and Southwest Atlanta.

It was only after it had been seen that these so-called-these greenline areas, because they're cornfields in many cases where some of them originally were only after the bias in practices supported I must say by the Federal Government in many cases, because it didn't ask certain hard questions-only after these three institutions had proven that you could make loans to these black people did those other major institutions which are still there begin.

So I would say about the present law that one of the problems we find as we talk with bankers, savings and loan people, our own local coalitions, that this law itself seems to be one of the best kept public secrets of our time. There must be clear requirements it seems to me that financial institutions more aggressively advertise the availability of market placement information.

Now any suggestion I make is not going to be liked by somebody or other and I will only pass on that some of our local coalitions have suggested that a brief notice accompanying monthly statements to depositors might be one way of doing it. In Newberg, where we have a new coalition, one of our coalition board members works for a savings and loan which has put its information out in supermarkets, libraries, community centers. Whatever way is found to do it, we ought to have something which will create a situation which would destroy the shyness of the lending institutions in some cases.

Now one of our Detroit board staff members tried to get this kind of information and as he went from bank to bank he found it very difficult to secure the information. He was treated almost as though he were some sort of spy trying to get information which supposedly was not-he called the suburban savings and loan and they said you have to come here in person and then I suppose go through a kind of clear

ing exercise. I don't think it's a matter of heroes and villains. There are very few of those in this whole urban scene. But I do think that even if you get simplified forms-and I'm all for one beautiful simplified form that will give us the things that we need-I think we are going to have to know that when you want to reach a market in this country most people in business know how to reach it and you don't, as in the case of one of the institutions in the cities we checked—you don't put it in the classified ad section as was done.

I think there ought to be a central clearinghouse for mortgage disclosure reports at the national, State and local levels, one of the reasons being that none of us will know what we have done when we have done it or if we have done it unless there is some way of doing this which does not require that anybody who now want to find this information out must go from one main bank to the other and try to get that information.

This whole business structure of ours well understands, the political structure well understands the clearinghouse approach and anybody dealing with data, and I do think we need good data. We do need to know whether, for example, we are being unfair and only so many loans were made when it may be in some cases that this does not give a picture of how many loans were actually processed. In some cases somebody may look good because they made a lot of loans and turned down a lot of others, but I do think it's important to see to it that we get some kind of central clearinghouse which makes it possible for us to have at some central place the data that we need.

Now we don't believe simple geographic disclosure is enough. It tells you very little about what is happening to city residents if they happen to be black or brown or Asian or white working class, low income Americans or elderly Americans about whom we profess to care so much but as in the case of children seem to show anything but that in terms of our policies.

Mayors and people in the urban coalition business have a real dilemma here because we want middle income people living in cities. As long as we are stuck with the property taxes as a way of providing schools and other services, it's very clear that we need a mix of incomes, but what we're finding has been discussed already by some of the others here. The elderly people in this town on fixed pensions are being pushed out of neighborhoods where they thought they were going to live for the rest of their lives. Many minority people who ran or were pushed from Georgetown and then into southwest and then into Anacostia and then into Capitol Hill are now being pushed again. We are conducting a study of this displacement process. It probably won't yield precise kind of data wealthier institutions might be able to come up with but I do think it will show that as we have seen already we are moving a number of people out of neighborhoods who would qualify for certain kinds of loans-this whole Federal home loan bank thing after all was based on a proiect which began by some black people in the city of Pittsburgh deciding that they would take a stand to save their neighborhoods involving some bankers in there. with them and that same neighborhood, if looked at now by the socalled reinvestment task force would probably be passed over, and yet

One way of getting at this is you might try to look at disclosure information by three income categories: Mortgages to those with incomes below $10,000, between $10,000 and $20,000 and above $20,000; and after that, of course, we will need governmental policies which make it possible at least for some of our local minority and white and elderly people to remain in cities when restoration is rapidly becoming a small-scale version of urban removal.

Now State governments and local institutions are moving faster and far more effectively and I think one of the things that, having worked in local communities, you overlook about what the Federal Government does the Federal Government gives cues very often to governments at other levels as to, well, now this perhaps the climate is right for moving in this direction. I think, for example, that there would be more State income taxes levied much earlier had it not been for the fact that every Governor felt that if he backed the State income tax he would quickly get himself run out of office.

In California they have a fair lending law on which the banking commissioners said they have not been able-since it was only instituted in August-to tell what its true total effects would be, but that the early reports were good. This one requires that lending institutions report their lending records, including breakdowns by race, income groups and census tracts. These reports are compiled by the State Department of Savings and Loans and monthly reports are required. Onsite investigations are taken as well. Complaint procedures are clearly spelled out. Loan denials must be explained in writing to the clients. The year-old banking consortium in Philadelphia, as you already know, the Philadelphia mortgage plan, has developed a marketing procedure which provides more effective service to low income people in that urban community.

I would finally say that there is a need for some incentives perhaps to encourage banks to more aggressively market credit in inner-city areas and those on our task force who have suggested this have called on our old friend the tax credit, but whatever incentives might be used, I think that incentives is one answer. The other answer is the answer suggested by one of the gentlemen who appeared before us. that is, to get more competition into the lending arena in cities, to get pension funds, to get individuals and to get groups other than just the savings and loans and the banks into that area.

I think that all of us know how tough and complex our urban problems are. I don't think we are as starry-eyed as we once were. We are perhaps a little more tough-minded than we were and I don't think anybody thinks that redlining will disappear with the waving of a wand. but I think if we can get simpler, if you will, but stronger laws. and if we can get State and local governments working with the community people, those of us in these private national community organizations will not be found wanting in the determination, the resourcefulness, and I hope the rationality required to get a very diffi cult task completed over the next few years.

Thank you.

[Complete statement follows:]

STATEMENT OF M. CARL HOLMAN, PRESIDENT, NATIONAL URBAN COALITION

Chairman Proxmire and members of the Senate Banking Committee, I am M. Carl Holman, president of the National Urban Coalition. I am particularly pleased to be able to testify on this legislation, the Mortgage Disclosure Act. Pleased because it is no longer at the laborious stage of a developing concept; but rather already at the early stages of implementation.

(1) The law is clearly an important step in the right direction. But from what we have been able to determine, even its admittedly limited potential has been crippled by the fact that its very existence is one of the best-kept public secrets of our time. This must be corrected. There should be clear requirements that financial institutions more aggressively advertise the availability of mortgage placement information. One possibility is a brief notice on or accompanying monthly statements to depositors.

(2) If the intent of the original legislation was to encourage a less restricted lending market, then there should be a central clearinghouse for mortgage disclosure reports at the national, State and local levels.

Otherwise, as we are finding in our queries to our local affiliates, community groups, banks and savings and loans-it is very difficult to establish benchmarks against which progress can be measured. At the moment, local residents, local government officials and bank officials themselves have to go to the main office of each lending institution to secure this information. What the people who desperately want to purchase or hold on to their houses need are clear road maps for action, not jigsaw puzzles with most of the pieces missing. This same information is required for Government and financial institutions if they are to rightly measure what is happening in their own jurisdictions, and if they are to work effectively for the future.

(3) But is simple geographic disclosure enough? We think not. Geographic disclosure sometimes tells you very little about what is happening to city residents if they happen to be black, or brown, or white working class low-income Americans. There are few unmixed blessings in urban America, and so it is that as middle class predominantly white people are getting loans and moving back into some central city neighborhoods, minorities and white low-income and elderly residents are being pushed out.

The Urban Coalition is now in the process of conducting a survey of this kind of displacement in cities across the country. We already know, however, that it will not be possible to cope effectively with the problem of displacement or to balance off equity among the people of our cities until we have two very necessary things. One of these is mortgage disclosure information by income category; e.g., mortgages made to those with incomes below $10,000, between $10,000 and $20,000, and above $20,000. We shall then need governmental policies and programs which make it easy for low income minority, white and elderly people to remain in areas of some cities where "restoration" is rapidly becoming a small scale version of "urban removal".

(4) State governments and local institutions, in some instances, are moving far faster and more effectively to deal with redlining than is the Federal Government. California has recently activated its fair lending law, a broad set of regulations to combat discriminatory practices.

Some of the specific measures included to deal with redlining are:

Lending institutions must report their lending records, including breakdowns by race, income groups, and census tracts. These reports are compiled by the State Department of Savings and Loans.

The clear establishment of complaint procedures.

Loan denials must be explained in writing to the client.

Although no hard data is available as yet on the impact of the law, the reports have been favorable.

The year old banking consortium in Philadelphia, the Philadelphia mortage plan, has developed a marketing procedure which provides more effective service to low income people in that urban community.

(5) Finally, there may be a need for some incentives to encourage banks to more aggressively market credit in inner city areas. Our familiar friend, the