Insurance & Redlining Laws
Redlining Laws
In the past it was no secret that banks and other financial institutions divided up maps of their areas with red lines to designate communities where they would not do business due to the racial or ethnic makeup. Unfortunately, while the maps have perhaps disappeared and new laws have made the practice illegal, it does still occur.
The state of Illinois, however, has made significant strides in combating redlining. In fact, the "Illinois model" of insurance is seen by many to the best solution to the insurance crisis, i.e. the free market.
More than thirty years ago, due to the lapse of an experimental law, Illinois found itself without a law on insurance prices. The result has been that Illinois state has a wealth of companies wanting to sell policies at rates far lower than average.
Illinois Fairness in Lending Act
The Illinois Fairness in Lending Act prohibits the following in the making of any loan to any person:
- Deny or vary the terms of a loan on the basis that a specific parcel of real estate offered as security is located in a specific geographical area.
- Deny or vary the terms of a loan without having considered all of the regular and dependable income of each person who would be liable for repayment of the loan.
- Deny or vary the terms of a loan on the sole basis of the childbearing capacity of an applicant or an applicant's spouse.
- Utilize lending standards that have no economic basis and which are discriminatory in effect.
The High Risk Home Loan Act
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Illinois Association of REALTORS®
