Dropping the exam would bolster minority hiring and avert legal battles, according to one source, while others confirm that the exam could be scrapped to open the process to as many people as possible.
The CPD has tried in recent years to boost minority hiring by offering the police exam online and turning to minority clergy to help in the recruitment effort.
But those efforts have met with frustration. Despite seeing an increase in the number of minority applicants in 2006, the last year the exam was offered, the online component was never launched.
And as of last year, one in four patrol officers was African-American, but just one in 12 Lieutenants was of color.
Fraternal Order of Police President Mark Donahue said the plan "sounds ridiculous."
"With this, you're taking away one of the steps that attempts to legitimize the (hiring) process," he said.
Asked about the plan Wednesday morning, Mayor Daley said he was unaware of any plans to do away with the exam.
"I never heard anything about that," he said.
But the city's Department of Human Resources didn't deny it. In a statement, the department said the city is "reviewing all options right now on how to handle the application process."
The CPD is currently operating at 2,000 officers-a-day short of its authorized strength. Police hired only 46 officers this year, with plans to hire fewer than 100 next year -- and those hirings rely on federal funds.
What's more, City Hall has floated the idea of imposing cop furloughs to meet a tight budget.