IBA Compliance Connection

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We would like to close a few branches at noon one day a week. We plan to notify our customers of the change, but want to confirm if there are any timing requirements for the notice. Also, we are considering other changes to accommodate staffing shortages, such as closing a branch lobby one extra day a week, but keeping the drive-thru open. Or locking the lobby one day a week, but permitting customers to come in if they walk up to the door. Does either action require us to notify the IDFPR?

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No, there are no specific notice or timing requirements regarding a reduction in branch hours. However, we agree that it would be prudent to notify customers in advance and to review your account agreements to see if they include any relevant customer notification requirements. You also may consider updating relevant advertising, listings and other information to reflect the new hours (as well as any disclosures and account agreements that reflect the previous hours).

We also confirmed with the IDFPR that neither of your proposed scenarios to address staffing shortages would trigger the requirement in Illinois law to notify the IDFPR of branch closings. The IDFPR views a drive-thru service as equivalent to a walk-in service. In addition, according to the IDFPR, locking your lobby and requiring customers to be let in would not constitute “closing” your branch (although it cautioned that locking and unlocking the front door must not be done in a discriminatory fashion).

Note, though, that if your bank is subject to the Community Reinvestment Act’s (CRA) service performance test, a change in hours can raise issues in some instances. One factor in a bank’s CRA service performance rating is whether its services, “including, where appropriate, business hours,” vary in a way that inconveniences customers in its assessment area. Consequently, if this test applies to your bank, you may wish to document your reasons for making the contemplated changes, although you are not required to do so.

For resources related to our guidance, please see:

  • Illinois Promissory Note and Bank Holiday Act, 205 ILCS 630/17(b) (Requires all banks doing business in Illinois that wish to select any one day of the week to remain closed on a regular basis to adopt a board resolution, publish notice in a newspaper for three weeks, and notify the Commissioner of Banks and Real Estate) 
  • Community Reinvestment Act, Appendix A to Part 345 – Ratings, Part (b)(3) (“The FDIC rates a bank’s service performance ‘outstanding’ if, in general, the bank demonstrates: . . . Its services (including, where appropriate, business hours) do not vary in a way that inconveniences its assessment area(s), particularly low- and moderate-income geographies and low- and moderate-income individuals . . .”)