We recently were advised by the Illinois Department of Financial and Professional Regulation (IDFPR) Division of Banking that banks are permitted to close their lobbies in response to the Coronavirus (COVID-19) pandemic without obtaining an official proclamation from the IDFPR — provided the branches remain open in some matter (for example, by providing drive-through teller services). But if you are closing a lobby while providing drive-through teller services, the IDFPR asks that banks notify the Division of Banking of these branch-access changes.

However, banks that intend to fully close a branch, reduce their hours, or allow customers to bank by appointment only will need to obtain an official proclamation from the IDFPR, as required under the Banking Emergencies Act. Consequently, we believe you would need to obtain a proclamation from the IDFPR to close the lobby of a branch that offered night drop and ATM services, but not drive-through teller services.

We also recommend notifying your federal regulator (in this case, the Federal Reserve Board) of any branch-access changes. The Federal Reserve recently issued guidance to financial institutions affected by the Coronavirus, referring them to its 2013 guidance on “Supervisory Practices Regarding Banking Organizations and their Borrowers and Other Customers Affected by a Major Disaster or Emergency.” The 2013 guidance acknowledges that “[a] major disaster or emergency may lead an affected state member bank . . . to temporarily curtail or cease the operations of a branch” and in such instances “banking organizations should advise the responsible Federal Reserve Bank of these temporary changes.”

Additionally, the Federal Financial Institutions Examination Council (FFIEC) has issued guidance on pandemic planning, which notes that “[c]ommunication with customers and the media is . . . critical to ensure that accurate information is disseminated about business operations.” Therefore, we recommend notifying your customers of any temporary closures, reduced hours or other service disruptions, and such notice may be posted at your branches, on your website and disseminated through other appropriate methods, such as social media. (We note that the FDIC and OCC have provided similar guidance, which is included in the resources below.)

For resources related to our guidance, please see:

• Illinois Bankers Association, Critical Coronavirus Update (March 16, 2020)

• Banking Emergencies Act, 205 ILCS 610/2(a) (“Whenever the Commissioner is notified by any officer of a bank or by any other means becomes aware that an emergency exists, or is impending, he may, by proclamation, authorize all banks in the State of Illinois to close or alter the hours at any or all of their offices, or if only a bank or banks, or offices thereof, in a particular area or areas of the State of Illinois are affected by the emergency or impending emergency, the Commissioner may authorize only the affected bank, banks, or offices thereof, to close. The office or offices so closed may remain closed until the Commissioner declares, by further proclamation, that the emergency or impending emergency has ended. . . .”)

• Banking Emergencies Act, 205 ILCS 610/1(1) (“‘Commissioner’ means the officer of this State designated by law to exercise supervision over banks and trust companies, and any other person lawfully exercising such powers, except that beginning on the effective date of this amendatory Act of the 96th General Assembly, all references in this Act to the Commissioner of Banks and Real Estate are deemed, in appropriate contexts, to be references to the Secretary of Financial and Professional Regulation.”)

• Federal Reserve Supervision and Regulation Letter SR 20-40 — Supervisory Practices Regarding Financial Institutions Affected by Coronavirus (March 13, 2020) (“Financial institutions are encouraged to review SR letter 13-6 / CA letter 13-3, ‘Supervisory Practices Regarding Banking Organizations and their Borrowers and Other Customers Affected by a Major Disaster or Emergency.’  This letter discusses the supervisory practices that the Federal Reserve System will employ when financial institutions and their customers are affected by Coronavirus. SR letter 13-6 / CA letter 13-3 also provides examples of efforts that financial institutions may want to consider in working with affected customers.”)

• Federal Reserve Supervision and Regulation Letter SR 13-6 — Supervisory Practices Regarding Banking Organizations and their Borrowers and Other Customers Affected by a Major Disaster or Emergency (March 29, 2013) (“A major disaster or emergency may lead an affected state member bank or U.S. branch of a foreign banking organization to temporarily curtail or cease the operations of a branch or temporarily move some or all of a branch’s operations to alternate locations. In such instances, banking organizations should advise the responsible Federal Reserve Bank of these temporary changes. The Federal Reserve will not require an application for such temporary closings or relocations.  However, once the bank or U.S. branch of a foreign banking organization determines its ultimate plans for the operations of a displaced branch it should consult further with the responsible Federal Reserve Bank concerning any application or notice requirements.”)

• Federal Reserve Supervision and Regulation Letter SR 13-6 — Supervisory Practices Regarding Banking Organizations and their Borrowers and Other Customers Affected by a Major Disaster or Emergency (March 29, 2013) (“Banking organizations supervised by the Federal Reserve are encouraged to work with responsible Federal Reserve Bank supervisory and operations staff to resolve any issues related to operating problems resulting from a major disaster or emergency.”)

• FFIEC, Interagency Statement on Pandemic Planning, page 3 (March 6, 2020) (“Consideration should be given toward visitor procedures and whether restrictions should be implemented for visitors accessing the facilities. The framework should consider the impact of customer reactions and the potential demand for, and increased reliance on, online banking, telephone banking, ATMs, and call support services. In addition, consideration should be given to possible actions by public health and other government authorities that may affect critical business functions of a financial institution.”)

• FDIC Statement on Financial Institutions Working with Customers Affected by the Coronavirus and Regulatory and Supervisory Assistance (March 13, 2020) (“The FDIC understands that financial institutions may need to temporarily close a facility due to staffing challenges or to take precautionary measures. For example, some institutions may wish to limit foot traffic within a branch and provide services only through the drive-through lanes. The FDIC encourages financial institutions to reduce disruptions to their customers, provide alternative service options when practical, and reopen affected facilities when it is safe to do so. Affected financial institutions are encouraged to notify their primary federal or state regulator and their customers of temporary closure of an institution’s facilities and the availability of any alternative service options as soon as practical.”)

• OCC Bulletin 2020-15, Pandemic Planning: Working With Customers Affected by Coronavirus and Regulatory Assistance (March 13, 2020) (“The OCC understands that banks may need to temporarily close or otherwise reduce access to a facility because of staffing challenges or to take precautionary measures. The OCC encourages banks to reduce disruptions to their customers, provide alternative service options when practical, and reopen affected facilities when it is safe to do so. Affected banks are encouraged to notify their OCC supervisory office and their customers of temporary closure of a bank’s facilities and the availability of any alternative service options as soon as practical.”)