For an OCC-supervised savings bank, under the new Illinois Community Reinvestment Act (Illinois CRA), is the required public notice separate from the one required under the federal CRA? Are we now required to have two separate policies related to the CRA, one for Illinois and one for federal? Also, the Illinois CRA states that covered financial institutions must meet the financial services needs of deposit-based assessment areas if they provide “all or a majority of its products and services via mobile and other digital channels.” Is this the same as a “majority” under the federal CRA?

Apr 16, 2021

—

We do not recommend that your institution post an Illinois CRA public notice. The Illinois CRA does not apply to your bank — it applies only to Illinois-chartered banks (among other nonbank covered entities), and your institution is a federally-chartered savings bank. Additionally, the notice itself would contain misleading language because you are not a covered entity under the Illinois CRA. For example, the Illinois CRA public notice states that the IDFPR examines your bank and that the public can obtain a copy of your CRA evaluation from the IDFPR, which would not be the case for your bank.

Similarly, we believe it would be unnecessary for your bank to adopt an Illinois CRA policy, again because your bank is not a covered entity.

Finally, the Illinois CRA does not currently define what the phrase “a majority of its products and services via mobile and other digital channels” means. This likely will be the subject of future rulemaking by the IDFPR, which is authorized to adopt “rules that define the terms used in this Act and as may be necessary and appropriate to interpret and implement the provisions of this Act” (among many other rulemaking authorizations and mandates for the IDFPR found throughout the Illinois CRA).

Note that if your bank were a covered entity, we would recommend posting an Illinois CRA notice separate from the federal CRA notice, because the federal and Illinois CRA notices are not identical. Also, if your bank were a covered entity, we do not believe a separate Illinois CRA policy would be required, but we would recommend incorporating the Illinois CRA into an existing CRA policy — with the caveat that much of the Illinois CRA’s substance has yet to be defined in rulemaking by the Illinois Department of Financial and Professional Regulation (IDFPR).

For more information, read the IBA’s Featured Development summarizing the new Illinois CRA on GotoIBA.com.

For resources related to our guidance, please see:

Illinois CRA, 205 ILCS 735/5 (“‘Covered financial institution’ means a bank chartered under the Illinois Banking Act, a savings bank chartered under the Illinois Savings Bank Act, a credit union incorporated under the Illinois Credit Union Act, an entity licensed under the Illinois Residential Mortgage License Act of 1987 which lent or originated 50 or more residential mortgage loans in the previous calendar year, and any other financial institution under the jurisdiction of the Department as designated by rule by the Secretary.”)

Illinois CRA, 205 ILCS 735/20 (“Each covered financial institution shall provide, in the public lobby of each of its offices, if any, and on its website, a public notice that is substantially similar to the following:

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.”)

Illinois CRA, 205 ILCS 735/10(a) (“In addition, each covered financial institution that provides all or a majority of its products and services via mobile and other digital channels shall have a continuing and affirmative obligation to help meet the financial services needs of deposit-based assessment areas, including areas contiguous thereto, low-income and moderate-income neighborhoods, and areas where there is a lack of access to safe and affordable banking and lending services, consistent with the safe and sound operation of such financial institutions, and for credit unions, consistent with its common bond.”)

Illinois CRA, 205 ILCS 735/10(b) (“To assist in carrying out this Act, the Secretary shall adopt rules incorporating the regulations applicable to covered financial institutions under federal law, and the Secretary may make such adjustments and exceptions thereto as are deemed necessary. . . .”)

Illinois CRA, 205 ILCS 735/10(c) (“In addition, the Secretary shall adopt rules providing for an assessment of the following factors pertaining to whether covered financial institutions are meeting the financial services needs of local communities. . . .”)

Illinois CRA, 205 ILCS 735/15(a) (“The Secretary may adopt rules with respect to the frequency and manner of examination including the imposition of examination fees. . . .”)

Illinois CRA, 205 ILCS 735/35 (“In addition to such powers as may be prescribed by this Act, the Secretary is hereby authorized and empowered to adopt rules consistent with the purposes of this Act, including, but not limited to: (i) rules in connection with the lending, service, and investment activities of covered financial institutions as may be necessary and appropriate for promoting access to appropriate financial services for all communities in this State; (ii) rules as may be necessary and appropriate to define fair lending practices in connection with the activities of covered financial institutions in this State; (iii) rules that define the terms used in this Act and as may be necessary and appropriate to interpret and implement the provisions of this Act; (iv) rules that create a public comments process; and (v) rules as may be necessary for the enforcement of this Act.”)