If the Illinois CRA rules for banks are finalized as proposed, they would apply to your investment division and insurance company as “affiliates” if those entities are under your bank’s control or under common control with your bank.

The proposed Illinois CRA rules impose community reinvestment obligations on “banks,” defined as Illinois-chartered banks or savings banks, as well as certain foreign bank offices — “and, as applicable under this Part, any affiliates thereof.” Consequently, the proposed rules appear to impose community reinvestment obligations on any affiliate of your bank.

The proposed rules define “affiliate” as “any company that controls, is controlled by, or is under common control with another company,” and incorporate the federal Bank Holding Company Act’s definition of “control.” Under the Bank Holding Company Act, a company “controls” another company if the controlling company directly or indirectly owns, controls, or has power to vote at least 25% of another company’s voting securities, controls the election of a majority of the directors or trustees of the company, or directly or indirectly exercises a controlling influence over the management or policies of the company.

If your bank controls the investment division and insurance company or is under common control of a company that controls the investment division and insurance company, they will be considered affiliates of your bank under the Illinois CRA rules, if finalized as proposed.

The IBA plans to submit written comments and testimony on the Illinois Department of Financial and Professional Regulation (IDFPR)’s proposed Illinois CRA rules, and we plan to urge the IDFPR to limit the scope of the Illinois CRA rules to Illinois-chartered banks (as well as Illinois-chartered credit unions and covered residential mortgage lenders). If your bank has any comments or concerns about the proposed Illinois CRA rules, please email those to [email protected].

For resources related to our guidance, please see:

• IDFPR, Notice of Proposed Rules, Bank Community Reinvestment, 46 Ill. Reg. 19726, 19802 (December 16, 2022) (“‘Bank’ means a bank that has a charter issued under the Illinois Banking Act [205 ILCS 5], a savings bank that has a charter issued under the Savings Bank Act [205 ILCS 205], and a banking office of a foreign banking corporation issued a certificate of authority under the Foreign Banking Office Act [205 ILCS 645] and, as applicable under this Part, any affiliates thereof.”)

• IDFPR, Notice of Proposed Rules, Bank Community Reinvestment, 46 Ill. Reg. 19726, 19801 (December 16, 2022) (“‘Affiliate’ means any company that controls, is controlled by, or is under common control with another company. The term ‘control’ has the meaning given to that term in 12 U.S.C. 1841(a)(2), and a company is under common control with another company if both companies are directly or indirectly controlled by the same company.”)

• Bank Holding Company Act, 12 USC 1841(a)(2) (“Any company has control over a bank or over any company if—

(A) the company directly or indirectly or acting through one or more other persons owns, controls, or has power to vote 25 per centum or more of any class of voting securities of the bank or company;

(B) the company controls in any manner the election of a majority of the directors or trustees of the bank or company; or

(C) the Board determines, after notice and opportunity for hearing, that the company directly or indirectly exercises a controlling influence over the management or policies of the bank or company.”)