IBA Compliance Connection

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A condo association in Florida would like to open a deposit account at our bank, which is chartered in Illinois. The association’s condo declaration states that it may deposit funds only with financial institutions authorized to do business in Florida. The Florida Division of Financial Institutions has advised us that we would need to meet all Florida law requirements for providing banking services in the state to be considered authorized to do business in Florida. We are not interested in pursuing any Florida approvals related to banking. Are you aware of any type of reciprocity agreement or any other law or regulation that would allow us to open this deposit account?

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No, we are not aware of any laws or regulations that would override a condo declaration and provide reciprocity for your bank. Unless the condominium association amends its declaration, it appears that you have to comply with its requirements before opening the deposit account.

While the Illinois Banking Act’s “super wild card” provision generally provides parity between Illinois state-chartered banks and out-of-state banks as to the products and services Illinois-chartered banks may offer in Illinois, we do not believe this provision would override the condo declaration’s requirement that association funds be deposited with financial institutions authorized to do business in Florida.

Given that the Florida Division of Financial Institutions interpreted the condo declaration’s language as requiring your bank to meet all requirements under Florida law related to providing banking services in Florida, we do not recommend opening a deposit account for the condo association without first receiving the necessary Florida approvals.

For resources related to our guidance, please see:

  • Illinois Banking Act, 205 ILCS 5/5(25) (“Notwithstanding any other provisions of this Act or any other law, to offer any product or service that is at the time authorized or permitted to any insured savings association or out-of-state bank by applicable law, provided that powers conferred only by this subsection (25):

(a) shall always be subject to the same limitations and restrictions that are applicable to the insured savings association or out-of-state bank for the product or service by such applicable law;

(b) shall be subject to applicable provisions of the Financial Institutions Insurance Sales Law;

(c) shall not include the right to own or conduct a real estate brokerage business for which a license would be required under the laws of this State; and

(d) shall not be construed to include the establishment or maintenance of a branch, nor shall they be construed to limit the establishment or maintenance of a branch pursuant to subsection (11).”)