Mayoral challenger touts ‘Bank of Chicago’ as way to create 10K homeowners, ‘repopulate’ South, West sides

Community activist Ja’Mal Green is campaigning for mayor on a promise to create 10,000 new homeowners who will “repopulate” South and West side communities.

Now, he’s proposing the financing vehicle he hopes will help deliver on that lofty promise: the “Bank of Chicago.”

Green sees a public bank as the only way to bridge the wealth gap and reverse decades of redlining that, a study by WBEZ-FM showed, has banks lending 12 cents in Black neighborhoods and 13 cents in Hispanic neighborhoods for every $1 they lend in white neighborhoods.

Mayor Lori Lightfoot’s signature Invest South/West plan to rebuild 10 long-neglected neighborhood commercial corridors is nowhere near good enough, he said.

“We have more vacant properties in these communities than we have people. We need new homeowners. We need grocery stores. We need affordable housing. We need to rebuild communities similar to what they did in Pullman, where they brought jobs. They brought retail. They brought homeowners. They did everything that needs to happen,” Green said in announcing his plan this week.

“With a public bank, we can look at the quality of life of these neighborhoods and see how we could tackle all of those things at one time instead of just saying, ‘We’ll throw a few dollars at this project or this project.’ These communities have been suffering for too long. That’s too slow to develop. We have to do it all en masse.”

Patterned after the century-old Bank of North Dakota, Green’s version of a public bank would start with $500 million in assets.

Half of that money could come from the city’s “cash on hand,” Green said, without specifically mentioning either the long-term reserve fund generated by the sale of the Chicago Skyway or city assets invested by the city treasurer’s office. The other half could come from federal stimulus funds. If need be, the Illinois General Assembly could be asked to provide “matching funds,” Green said Tuesday.

The public bank would have a nine-member governing board. Three mayoral appointees would come from banking and finance. Three other mayoral appointees would be community leaders. The remaining three would be elected from diverse areas of the city.

Over the years, there have been numerous proposals to create a public bank. It’s never happened. Green said he believes he knows why — and that it has nothing to do with the inherent risks of lending public money to home and business owners who may or may not be able to afford the payments.

“Private banks are powerful. They have lobbyists. Even in other states, they have spent a lot of money to stop this from happening,” he said.

“This is a city’s bank for the people, by the people and invested back into the people. … We’re taking a risk on creating new homeowners, on creating affordable housing, on opening small businesses. … That’s the only way we can start to see a reduction in violence. This is how you create a new property tax base.”

Former Ald. Ameya Pawar (47th) campaigned for city treasurer in 2019 on a promise to create a public bank that could be used to implement a universal basic income pilot program.

Now a senior fellow at the Economic Security Project, Pawar applauded Green for boldly pursuing an idea viewed as a “very radical policy in the past” but which now has been embraced by “liberal think tanks.”

“TIF (tax increment financing), low-income tax credits, Invest South/West, grants, philanthropy — all of the tools the city currently utilizes — are well intentioned. But they will never work on scale. When you look at history, it is systematic bank lending to homeowners and business owners that gives you Lincoln Square, Ravenswood and Lincoln Park,” Pawar said.

“Black and brown people were historically denied systematic bank lending through redlining and other racist policies. That’s why, in their communities, you see an overlap of every single kind of desert: food, pharmacy, broadband, child care, housing and banking.”

Pawar said it’s time to stop “trying to solve for a lack of systematic lending in Black and brown communities with everything but systematic lending.”

“Why are grants and philanthropy the only option in Black and brown communities?” asked Pawar, who made a similar argument last year in an op-ed he co-wrote for the Sun-Times with Alderpersons Daniel LaSpata (1st) and Matt Martin (47th) and state Sen. Robert Peters (D-Chicago).

City Treasurer Melissa Conyears-Ervin could not be reached for comment on Green’s proposal.

Conyears-Ervin told the Sun-Times in a joint interview with Pawar during the 2019 campaign that it was fine to “look at concepts that will benefit us down the road,” but she was more concerned about demanding that banks holding city deposits provide capital for struggling inner-city businesses.