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On January 13, 2009, the Chicago City Council unanimously adopted a resolution introduced by Alderman Billy Ocasio (26th) calling on that legislative body to defer its selection of 2009 Municipal Depositors until qualified bidders formulate a plan to address Chicago’s foreclosure crisis. According to the City Treasurer’s office, over $50 million in public funds are currently held by 30 banks enjoying Municipal Depositor status with the City of Chicago.
The Municipal Depositor status is a boon for financial institutions; it gives them access to credit they wouldn’t otherwise receive. All we’re asking is that if you expect to benefit from the public, then you should do something to benefit the public,” said Ocasio.
Financial institutions actively seek Municipal Depositor status because it strengthens their financial ledgers and allows them to seek more credit. In this current economic downturn, Municipal Depositor status can mean the difference between solvency and collapse to a financial institution.
The resolution calls on financial institutions to form a committee to come up with a uniform foreclosure prevention plan that is acceptable to all lenders. The City of Chicago will not confer Municipal Depositor status until the City Council Committee on Finance receives this plan.
The City Council Committee on Finance will meet again on February 9th to discuss this resolution.
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