Week 1 (August 24): Introduction to the U.S. Banking SystemQuestions & ThemesWeek 2 (August 31): History & Theory of RedliningReadingsQuestions & ThemesWeek 3 (September 7): Is More Financial Openness a Remedy to Redlining? The Federal Reserve Bank Thinks So…Questions & ThemesWeek 4 (September 14): From Redlining to Hyper-Segmentation: Subprime & Predatory LendingQuestions & ThemesWeek 5 (September 21): The Mortgage Meltdown & Foreclosure CrisisQuestions & ThemesWeek 6 (September 28): Measuring Credit Flows (LAB SESSION – meet in SEL 2249F)Questions & ThemesWeek 7 (October 5): Techniques of Lending Research (LAB SESSION – meet in SEL 2249F)Questions & ThemesWeek 8 (October 12): Fair LendingQuestions & ThemesWeek 9 (October 19): The Community Reinvestment Act & Its BrethrenQuestions & ThemesWeek 10 (October 26): Development FinanceQuestions & ThemesWeek 11 (November 2): Mortgage Modification & Alternatives to ForeclosureQuestions & ThemesWeek 12 (November 9): Topics TBAWeek 13 (November 16): Topics TBAWeek 14 (November 23): No Class - ThanksgivingWeek 15 (November 30): Topics TBAUPP 594 | Community Reinvestment Urban Planning and Policy Program Fall 2011 University of Illinois at Chicago Page 1 UPP 594 Topics in Urban Planning and Policy Community Reinvestment: Building Access to Capital Wednesday 3:00pm– 5:50pm ADH 2234 33665 Instructor: Phil Ashton Office: 231 CUPPA Hal Phone: 312-413-7599 Fax: 312-413-2314 E-mail: [email protected] Course Information This course will introduce students to the variety of issues involved in expanding access to credit in inner city neighborhoods and other historically underserved markets. This topic has been of crucial interest for over four decades as planners, policymakers and advocates have sought to remedy disinvestment and build individual and community wealth through an increased pace of financial investment. It has also taken on critical importance in light of the mortgage and foreclosure crisis that has taken shape since 2007, as policymakers and practitioners now face the question of what the future of the US housing and retail finance system will be. The core of the course will focus on the strategies being employed to expand access to fair credit among low-income/minority borrowers and neighborhoods. As Chicago has historically been a center for the community reinvestment movement, we will use the city as a laboratory to learn about different sectoral emphases (mortgage lending, financial services for households, small business lending), as well as different organizational strategies (community reinvestment agreements, community development financial institutions). Throughout, we will pay close attention to the public policy environment that supports these initiatives. The course will also equip students to analyze different developments in the financial sector for their effects on inner city markets. This will include in-depth discussion and analysis of the following topic areas: □□ The history and theory of redlining and lending discrimination. Why would banks refuse to make loans to low income or minority borrowers and the neighborhoods where they are concentrated? When economists say that a more efficient market will remedy these behaviors, should we believe them? □□ The globalization of the financial system and the sources of the current mortgage and foreclosure crisis. Does the integration of financial capital into global markets result in greater financial exclusion? Why have issues such as the rise of the subprime market, predatory lending and fringe/payday lenders become so prevalent in such a short period of time, and how did they come to produce such widespread carnage? □□ The history of organizing around fair access to credit. Since the late 1960s, community organizations and civil rights groups have succeeded in passing a patchwork quilt of federal, state and local laws that aim to remedy credit inequities. How do these laws work? How have they evolved as the financial system has been transformed over the last twenty years? □□ Finally, the course will introduce students to methods of assessing credit inequities. How do we measure inequities or gaps in the availability of fairly priced credit using publicly-available data?UPP 594 | Community Reinvestment Urban Planning and Policy Program Fall 2011 University of Illinois at Chicago Page 2 By the end of the semester, students in this course should have accomplished the following: □□ Developed a literacy in the concepts that explain how banks behave in US inner cities, and expanded that literacy by examining in detail the debates over how best to meet the credit needs of low-income and minority households and neighborhoods; □□ Practiced core methods for analyzing lending disparities using publicly available data; and □□ Gained both a broad overview of the history and practice of community reinvestment in the U.S., as well as a more in-depth understanding of current issues faced by public and private actors as they seek to influence the pace and scale of financial investment in low-income and minority neighborhoods. Course Requirements The requirements for this course include the following: □□ Weekly Readings & Class Participation: A maximum level of participation is required as a part of this course. I expect you to do the required readings listed in the syllabus prior to attending class; they constitute approximately 2-3 hours of reading for each class – a normal load for a graduate seminar. Please read the assigned material and come prepared to contribute to the class discussion. Additionally, there will be periodic preparatory assignments prior to some classes – for instance, writing out questions for guest speakers or conducting background research on issue. Together, these activities account for 20 percent of your overall grade. □□ Short Analytical Assignments: o Merger Analysis: You will write a short policy brief assessing a bank merger (15 percent). o Lending Disparities: You will prepare an analysis of bank lending behavior and write a CRA policy memo (25 percent). □□ Final Paper & Presentation: I will ask you to write an original research paper on a policy or practice issue directly related to banking, community reinvestment, or financial investment issues in inner city markets. Each of you will