Topic: Community Reinvestment Act (CRA)
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We are considering closing one of our branches every Thursday, but our other branches in the area would remain open during their regular business hours. Are we required to follow the Promissory Note and Bank Holiday Act’s requirements for regular bank closings if we are closing only one of our branches on Thursdays? Are there any other applicable state laws that we should consider?
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Yes, we believe your bank must follow the procedures in the Promissory Note and Bank Holiday Act for regular closings on a day other than Sunday, even when closing only one branch. Although the Act does not specifically mention branches, we have previously discussed this law with a representative of the Illinois Department of Financial…
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We are having trouble interpreting the OCC’s definition of the “Median Rent Standard.” Page 4 of the OCC’s Community Reinvestment Act (CRA) Illustrative List of Qualifying Activities states, “Median rents that do not and are not projected at the time of the transaction to exceed 30 percent of 80 percent of the area median income are referred to in the example as meeting the ‘median rent standard.’” How is this determined? Do we take 80% of the area median income and multiply that by 30%? Or does this mean no more than 30% of the renters may have income greater than 80% of the area median income?
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We believe that the median rent standard is determined by multiplying 80% of the area median income by 30%, rather than by determining that 30% or less renters have annual income greater than 80% of the area median income. The commentary to the OCC’s June 2020 CRA rule (which now has been mostly rescinded and…
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We are an FDIC-supervised savings bank and are considering closing one of our branch offices. What are our customer notification requirements, and is there any other regulatory information we should be aware of?
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We believe that before closing a branch, you must notify your customers and primary federal regulator (the FDIC). Additionally, we recommend reviewing your policies for branch closings and checking your account agreements for additional notification requirements. Under the Federal Deposit Insurance Act, an insured depository institution proposing to close a branch must submit notice to…
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We reviewed an answer you provided to an FDIC-supervised Illinois bank regarding Community Reinvestment Act (CRA) lobby notices. Should Illinois banks regulated by the Federal Reserve provide the same title and address information in the CRA lobby notice, specifically: “You may request from (title of responsible official), Federal Reserve Bank of ____ (address) an announcement of applications covered by the CRA filed by bank holding companies”?
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Yes, we believe Federal Reserve-supervised Illinois banks should provide the same information as FDIC-supervised Illinois banks in this section of the CRA lobby notice. The federal banking agencies have released Interagency Guidance regarding the CRA public lobby notice that directs FDIC, OCC, and Federal Reserve-supervised institutions to list the “Officer in Charge of Supervision” as…
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The FDIC’s lobby notice under the federal Community Reinvestment Act (CRA) states in part, “You may request from the (title of responsible official), Federal Reserve Bank of _______ (address) an announcement of applications covered by the CRA filed by bank holding companies.” What is the title of the responsible official from the Federal Reserve Bank of Chicago referred to here?
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For an FDIC-regulated Illinois bank, the responsible official’s title is “Officer in Charge of Supervision.” The federal banking agencies have released Interagency Guidance regarding the CRA public lobby notice. The Interagency Guidance directs FDIC-supervised institutions to list the “Officer in Charge of Supervision” as the responsible official for Federal Reserve Banks. We have reached out…
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During our last CRA exam, we had several loans recognized as community development (CD) loans. Since our last exam, we have modified several lines of credit that qualified as CD loans with change in terms agreements that extended the maturity dates for several months or a year. Will these modified lines of credit be considered new CD loans?
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We believe that the modifications to the lines of credit may be counted as new CD loan originations, provided they are not counted more than once per year. The Interagency Q&As Regarding Community Reinvestment state that institutions should collect and report data about CD loans that they refinance or renew as loan originations. The Q&As…
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Will banks subject to the Illinois Community Reinvestment Act (CRA) that are already going through an FDIC CRA exam every five years have to go through another Illinois CRA exam during the same period? Or will Illinois and the FDIC alternate CRA exams, like they currently do for safety and soundness exams?
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Your questions are not addressed in the text of the Illinois CRA law, which does not provide any details on the timing of Illinois CRA exams. Instead, the Illinois CRA examination process and many other details are left to an eventual rulemaking by the Illinois Department of Financial and Professional Regulation (IDFPR), under its broad…
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We are aware that the IDFPR issued a Supervisory Statement regarding the Illinois Community Reinvestment Act (CRA) that includes revised language for the public notice requirement. May we still use the public notice language in the Illinois CRA to avoid purchasing additional signage later?
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Yes, we believe you may post a public notice containing the language set forth in Section 35-20 of the Illinois CRA. While the IDFPR’s Supervisory Statement indicates that it will consider the revised language referenced in the statement to be “substantially similar” to the notice provided in the statute, it does not require covered financial…
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We are considering permanently changing the drive-up banking hours at our Illinois branches by thirty minutes, so that we open thirty minutes later than we do currently. Does Illinois law require that we provide notice of the reduction in hours to our customers?
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No, we are not aware of any Illinois law or regulation that requires notice of a reduction in your drive-up banking hours. However, we recommend checking your account agreements to ensure they do not include relevant notification requirements. We also recommend posting advance notice of the changed hours in your Illinois branch lobbies and on…
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Is there a requirement under the Illinois Community Reinvestment Act (Illinois CRA)’s that banks post CRA notices in their lobbies and on their websites, effective as of March 23, 2021?
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Yes, we recommend that Illinois-chartered banks post the required CRA notices in their offices and on their websites as soon as possible. The Illinois CRA became effective immediately upon becoming law on March 23, 2021, including its requirement that covered financial institutions post public CRA notices in their public lobbies and on their websites. For…