The new Illinois Community Reinvestment Act (Illinois CRA) was signed into law and became effective immediately on March 23, 2021, as part of Public Act 101-657. Find the full text of the law linked to on our Community Reinvestment Act topic page under “Illinois Laws and Regulations.”
Coverage. The Illinois CRA is similar to the federal CRA, but it applies only to Illinois-chartered banks and expressly exempts national banks — while also expanding on the federal CRA’s coverage by including Illinois-chartered credit unions and licensed residential mortgage lenders that have lent or originated fifty or more residential mortgage loans in the previous calendar year. 205 ILCS 735/5, 40.
Immediate Effective Date. It is important to note that while much of the Illinois CRA’s substance will be defined in rulemaking by the Illinois Department of Financial and Professional Regulation (IDFPR), it is effective immediately — as of March 23, 2021.
Public Notice Requirements. Among the requirements that are effective immediately are new public notice requirements, which mandate that each financial institution post in the public lobby of each of its offices and on its website a public notice containing information substantially similar to a model included in the Act:
STATE OF ILLINOIS COMMUNITY REINVESTMENT NOTICE
The Department of Financial and Professional Regulation (Department) evaluates our performance in meeting the financial services needs of this community, including the needs of low-income to moderate-income households. The Department takes this evaluation into account when deciding on certain applications submitted by us for approval by the Department. Your involvement is encouraged. You may obtain a copy of our evaluation. You may also submit signed, written comments about our performance in meeting community financial services needs to the Department.
UPDATE 4/27/2021: The IBA recently contacted the IDFPR regarding the Illinois Community Reinvestment Act’s public notice requirements and received the following response:
“Thank you for your inquiry about the requirement to post community reinvestment notices in office lobbies and on websites under the recently enacted Illinois Community Reinvestment Act (Public Act 101-0657). The Act, including the notice requirement, became effective March 23, 2021 and is codified at 205 ILCS 735. You may read the Act on the website of the Illinois General Assembly at https://www.ilga.gov/legislation/ilcs/ilcs5.asp?DocName=&ActID=4086&ChapterID=20. Section 35-20 of the Act sets forth the notice requirement. During the initial stages of administering the Act, the Department will seek to facilitate compliance with the notice requirement and may consider financial institutions’ good faith efforts in that regard.”
UPDATE 5/5/2021: The IDFPR has issued the following supervisory statement on the Illinois CRA’s public notice requirement regarding language that may be added to the notice to reflect that a covered institution may not yet have received its first evaluation: Supervisory Statement — Public Community Reinvestment Notice Requirement For Banks, Savings Banks And Residential Mortgage Licensees (May 5, 2021). The supervisory statement also allows banks and savings banks to include language on their notices stating that federal CRA evaluations are not affected by Illinois CRA evaluations and instructing customers to look to federal CRA notices posted nearby.
Assessment Areas. The Illinois CRA’s similarities to the federal CRA include the affirmative obligation for covered financial institutions to meet the financial services needs of the communities in which their offices, branches, and other facilities are maintained. One difference is that the federal CRA refers to a community’s “credit needs,” while the Illinois CRA refers to “financial services needs.” 205 ILCS 735/10.
The Illinois CRA also differs from the federal CRA in directly addressing online and digital banking in defining an institution’s assessment areas: if a covered financial institution provides a majority of its products and services through mobile and other digital channels, it must meet the financial services needs of deposit-based assessment areas, low-income and moderate-income neighborhoods, and areas where there is a lack of access to safe and affordable banking and lending services. 205 ILCS 735/10(a).
Examinations, Ratings, and Public Reports. Similar to the federal CRA, the Illinois CRA authorizes the IDFPR to examine covered institutions and evaluate and rate their performance. 205 ILCS 735/15. The IDFPR has the authority to enter into cooperative agreements to conduct joint examinations with federal agencies — our hope is that IDFPR examiners will work with federal CRA examiners and add minimal burden to ongoing federal CRA examinations, but such details are left to the IDFPR’s rulemaking. 205 ILCS 735/25.
The IDFPR must prepare written evaluations based on the components of a written evaluation under the federal CRA and assign ratings in the familiar flavors of “Outstanding,” “Satisfactory,” “Needs to Improve,” or “Substantial Noncompliance.” 205 ILCS 735/15.
The IDFPR must consider, at a minimum, nine factors listed in the law, as well as “compliance with applicable State and federal fair lending laws, including, but not limited to, the Illinois Human Rights Act, the federal Equal Credit Opportunity Act, and the federal Home Mortgage Disclosure Act.” 205 ILCS 735/10, 15.
Impact on Applications. A covered institution’s record of performance under the Illinois CRA will then be considered and potentially used as a basis for denial by the IDFPR when covered institutions apply for establishing or relocating new branches, offices, or other facilities, license renewals, changes in control, and mergers or acquisitions. 205 ILCS 735/30.
Rulemaking. As noted above, much of the substance of the Illinois CRA will be crafted in the upcoming rulemaking process. The law grants the IDFPR broad authority to adopt rules necessary and appropriate for carrying out the Illinois CRA, from examination frequency and fees to defining lending, service, and investment activities and creating a public comments process. 205 ILCS 735/15(a), 35. Additionally, the Illinois CRA states that the IDFPR should incorporate federal CRA regulations with any adjustments and exceptions that may be deemed necessary. 205 ILCS 735/10(b).