Section 381.10  Authority and Purpose

 

Section 48(2.1) of the Illinois Banking Act [205 ILCS 5] and Section 9004(f) of the Illinois Savings Bank Act [205 ILCS 205] require the Secretary of the Department of Financial and Professional Regulation to adopt rules that ensure consistency and due process in the examination process for banks.  The statutes also permit the Secretary to establish guidelines that define the scope of the examination process and clarify examination items to be resolved. The statutes provide that the rules, formal guidance, interpretive letters, or opinions furnished to banks by the Secretary may be relied upon by the banks.  Guidance or a letter based on specific circumstances affecting one particular bank that is furnished only to that bank may not be relied upon by banks generally unless that guidance or letter states otherwise.

 

Section 381.20  Definitions

 

Unless specified otherwise in this Part, the following terms shall have the following meanings:

 

"Bank" means, for purposes of this Part only, a State bank chartered under the Illinois Banking Act or a savings bank chartered under the Illinois Savings Bank Act.

 

"Division" means the Illinois Department of Financial and Professional Regulation, Division of Banking.

 

"Examination" means, except as otherwise stated in this Part, an examination conducted pursuant to Section 48(2) of the Illinois Banking Act or an examination conducted pursuant to Section 9004 of the Illinois Savings Bank Act. 

 

"Examination" does not include any action the Division is authorized to take on an emergency basis.

 

"Examination report meeting" means the meeting, at which the Division provides any draft examination findings, with the bank's board of directors and/or the bank's management.  The examination report meeting customarily takes place after the exit meeting.

 

"Exit meeting" means the meeting at which the Division shares the preliminary results of the examination with the bank's board of directors and/or the bank's management.  The exit meeting customarily occurs upon completion of an examination's field work.

 

"Federal financial institution regulators" means the Federal Deposit Insurance Corporation, the Board of Governors of the Federal Reserve (including Federal Reserve Banks of Chicago and Saint Louis), and the United States Office of the Comptroller of the Currency.

 

"Final examination report" means the report of the examination issued by the Division upon completion of the Division examination review process and that is delivered to the bank's board of directors and/or the bank's management after the examination report meeting.

 

Section 381.30  Examination Consistency and Due Process

 

To ensure consistency and due process, the Division will make every reasonable effort to adhere to the following standards of performance in conducting its examinations of banks.

 

a)         Guidelines 

 

1)         To supplement this Part, the Division may establish, and publish on the Division's website, guidelines that define the scope of the examination process and clarify the manner in which examination items shall be resolved.  These guidelines may include:

 

A)        protocol in identifying and addressing examination findings;

 

B)        preparation of examination reports;

 

C)        delivery of examination reports; and

 

D)        other relevant subjects in accordance with Section 48(2.1) of the Illinois Banking Act. 

 

2)         Banks may rely upon the guidelines furnished by the Division.  Whenever the Division establishes guidelines, the Division shall give due consideration to maintaining consistency with the existing guidelines (and any interpretations of those guidelines) established by federal financial institution regulators.  The Division may change or withdraw established guidelines upon reasonable prior notice.

 

b)         Reasonable Notification and Requests for Information

 

1)         Prior to commencement of the examination, the Division will mail or email a pre-examination memorandum to the bank's management and the board of directors of the bank giving notification of the commencement date of the examination and the information the Division deems necessary to conduct the examination.  Prior notification is not required if the Division suspects criminal activity or unsafe and unsound activity for which advance notice may compromise or otherwise interfere with the examination.

 

2)         Prior to and during the exam, the bank shall provide timely information in response to requests by the Division for information.

 

3)         During each stage of the examination, the Division will make a reasonable effort to provide prior notification to management of the bank of all joint conferences and the exit meeting.  It shall be the responsibility of the bank's management to contact the board of directors of the bank and applicable committees inform them of all joint conferences and the exit meeting.

 

c)         Communication Protocol in Identifying and Addressing Examination Findings.  The Division will take reasonable steps to work with the banks it supervises to proactively identify problems and solutions during the examination process.

 

d)         Delivery of Examination Reports

 

1)         Examiners shall provide the bank's management and the bank's board of directors with the examiner's draft findings and any draft board resolution for corrective action, with sufficient time to review these items before the examination report meeting with the bank's management and/or the bank's board of directors.

 

2)         The Division will submit its final examination report to the bank after the examination report meeting.