IBA Compliance Connection

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Our bank holds board meetings every other month. An IDFPR examiner is now asking us to provide a letter on file from the IDFPR showing that we have been approved to have board meetings every other month instead of monthly. The request is based on Section 5/16(4) of the Illinois Banking Act, which states, “The board of directors shall hold regular meetings at least once each month, provided that, upon prior written approval by the Commissioner, the board of directors may hold regular meetings less frequently than once each month but at least once each calendar quarter.” I haven’t seen this request in the last 15+ years that I have been with the bank. Are we required to keep this letter on file for examination purposes?

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admin

Yes, we believe that the prior written approval required under the Illinois Banking Act to hold board meetings less frequently than once each month is a relevant document that the IDFPR has authority to request during examinations. The Illinois Banking Act gives the IDFPR broad authority to require the production of any relevant books, papers, accounts, and documents in the course of its examinations.

The IDFPR Division of Banking publishes its approval for reduced board meeting schedules in its monthly regulatory reports, generally under the heading “APPROVAL TO MEET LESS THAN 12 BOARD MEETINGS PER YEAR.” You may be able to locate your bank’s approval by searching the regulatory reports available on idfpr.illinois.gov.

For resources related to our guidance, please see:

  • Illinois Banking Act, 205 ILCS 5/16(4) (“The board of directors shall hold regular meetings at least once each month, provided that, upon prior written approval by the Commissioner, the board of directors may hold regular meetings less frequently than once each month but at least once each calendar quarter. . . . “)
  • IDFPR Letter Applications (“Application to Reduce the Number of Authorized Board Meetings. Pursuant to Section 16(4) of the Illinois Banking Act, a bank seeking to hold less than monthly board meetings shall submit a letter to the Department indicating the number of board meetings they propose to have and a copy of the director’s resolution approving the reduced number of meetings. The non-refundable filing fee shall be submitted at the time of application.”)
  • Illinois Banking Act, 205 ILCS 5/48(6)(d) (“The Commissioner shall have the power. . . to require the production of any relevant books, papers, accounts, and documents in the course of and pursuant to any investigation being conducted, or any action being taken, by the Commissioner in respect of any matter relating to the duties imposed upon, or the powers vested in, the Commissioner under the provisions of this Act or any rule promulgated in accordance with this Act.”)
  • Illinois Banking Act, 205 ILCS 5/2 (“‘Commissioner’ means the Commissioner of Banks and Real Estate, except that beginning on April 6, 2009 (the effective date of Public Act 95-1047), 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.”)