Topic: Branching Rules
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We opened a new corporate headquarters that is just an office building, with no banking facilities — we do not accept deposits, make loans, provide teller services, etc. Since this is our main office location, do we need to post the CRA public notice there?
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We do not believe that a CRA public notice is required to be posted at your new corporate headquarters, per the discussion below. The CRA regulations require each institution to post CRA public notices “in the public lobby of its main office and each of its branches.” 12 CFR 228.44. Based on the facts in…
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Are banks in Illinois required to get state approval before opening a “freestanding” ATM? We’re thinking about placing an ATM somewhere that would not be attached to a branch location. A third party vendor would service the ATM.
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We do not believe that you need to get any prior approval from the state before opening an ATM that is not attached to any branches or other premises of your institution. The IDFPR’s application and notice requirements apply only when you are opening new premises that fall under the Illinois Banking Act’s definition of…
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What activities can we conduct at a loan production office (LPO) to ensure that it is not considered a branch? Can we accept locked deposit bags at an LPO?
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For general guidance on branches in Illinois, we would refer you to the Illinois Banking Act’s definition of a “branch” and the interpretive letters issued by the IDFPR on loan production offices (LPOs) and deposit production offices (DPOs). The Illinois Banking Act defines a “branch” as a place where “deposits are received, checks paid, or…
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What types of bank offices are not included in the definition of a bank “branch”?
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The National Banking Act defines a “branch” as a place where “deposits are received, or checks paid, or money lent.” 12 USC 36(j). The regulations for this definition also include “a mobile facility, temporary facility, intermittent facility, drop box or a seasonal agency” as branches. 12 CFR 5.30(d). An office will be exempted from any…
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If we use a branch name for some branches (in conjunction with our bank’s legal name), should loan documents use the branch name or just the bank’s legal name?
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We would recommend using the bank’s legal name for all legal documents, including loan agreements, as required by the FFIEC’s Interagency Statement: Branch Names. The legal name is a bank’s “full name as reflected in its charter.” We also note that nothing in Illinois or federal law requires you to register a divisional or trade…
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Is a night deposit box allowable? What if a courier picked up deposits after hours?
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A night deposit box is certainly allowable, but it would be considered a branch (unless it is connected to an ATM). Interpretive Letter 94-10 (June 15, 1994)
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For purposes of the restrictions on loan production offices (LPOs), what constitutes “accepting” a deposit? Could customers bring deposits to an LPO that would be picked up by a courier for deposit at the bank?
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We believe that if a bank employee picks up deposits, that would constitute “accepting” a deposit; but if a third party service picked up deposits, that would not constitute accepting a deposit. The 1994 letter your referenced draws a line between (1) a bank using its own employees to pick up deposits from customers to…
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What activities are permitted in a loan production office (LPO)?
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The Illinois Banking Act defines a “branch” as a place where “deposits are received, checks paid, or loans made, but shall not include any place at which only records thereof are made, posted, or kept.” 205 ILCS 5/2. The IDFPR interpretive letter you referenced states that a loan production office (LPO) that does not fall…
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What lobby disclosures are required for a state bank for an LPO (loan production office) if we do no retail or deposit business at the LPO?
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Unfortunately, there is no clear guidance on the public notices required at loan production offices (though there is some guidance on the notices required at branches). With that in mind, here are our thoughts: 1. Illinois Employment Notices: Your LPO, as with all of your organization’s Illinois offices, may need to post the following employment…