Section 346.10  Authority for Rulemaking

 

The authority for adoption of these rules is provided by Section 35 of the Illinois Banking Development District Act [205 ILCS 745].

 

Section 346.20  Definitions

 

For the purposes of this Part:

 

"Act" shall mean Public Act 102-0802, the Banking Development District Act.

 

"Banking branch" shall mean a full-service branch of a depository institution that provides most or all banking services at a physical location and maintains ordinary and routine business hours.

 

"Banking development district" shall mean a proposed or approved banking development district as provided for under the Act.

 

"Banking services" shall mean services provided by a depository institution and shall include, but not be limited to, deposit taking, check-cashing, sale of money orders, money transmittal, origination of residential or commercial mortgages, consumer loans, and commercial loans.

 

"Community Based Organization (CBO)" shall mean a not-for-profit organization with offices or significant membership within the boundaries of the proposed banking development district and whose statement of purpose includes development of services to the underbanked or unbanked populations with the proposed banking development district or other services sufficiently similar as determined by the Secretary.

 

"Department" shall mean the Department of Financial and Professional Regulation.

 

"Depository institution" shall mean a bank, savings bank, savings and loan association, or credit union organized or chartered under the laws of this State or any other state or under the laws of the United States.

 

"Division" shall mean the Department of Financial and Professional Regulation-Division of Banking, with the authority delegated by the Secretary.

 

"Local government" shall mean a municipality, county, township, or other unit of local government. [205 ILCS 745/5]

 

"Reasonable distance" means the travel distance to available full-service banking facilities to the unbanked or underbanked community that may be conveniently accessed by means of private transportation or safe, affordable and reliable public transportation.

 

"Remote Service Facility (RSF)" means an automated, unstaffed banking facility owned or operated by, or operated exclusively for, the bank, such as an automated teller machine, cash dispensing machine, point-of-sale terminal, or other remote electronic facility, at which deposits are received, cash dispersed, or money lent.

 

"State Treasurer" shall mean the State Treasurer or the State Treasurer's designee as identified by the State Treasurer.

 

"Unbanked person" means an individual that does not have a checking or savings account with an insured depository institution.

 

"Underbanked person" means an individual that has a checking or savings account with an insured depository institution but that used financial products or services other than those offered by an insured depository institution within the past 12 months.

 

Section 346.30  Application for Creation of a Banking Development District

 

The governing board of a local government, in conjunction with a depository institution, may submit an application to the Department for the designation of a banking development district.  Each application shall be submitted to the Secretary on a form, which is to be prescribed by the Secretary following consultation with the State Treasurer, and shall include all of the following information:

 

a)         identification of the depository institution and of any unit of local government or portion thereof submitting the application along with documentation of the approval of the application by the governing board of the unit of local government;

 

b)         a map, a legal description of the property, and description of geographic boundaries of the proposed banking development district which specifically identifies the location of the proposed banking branch within the proposed banking development district;

 

c)         documentation of all current zoning classifications within the proposed banking development district and the boundaries of each identified zoning area;

 

d)         the number of residents of the proposed banking development district along with detailed demographic information describing the members of the population, including persons that are unbanked or underbanked as identified in the application form to be provided;

 

e)         an identification of the specific needed banking services which are not being provided within the proposed banking development district at the time of the application;

 

f)         an identification of the number, location of existing sites of banking services within the proposed banking development district and within a reasonable distance of the proposed banking development district which identification shall include, but not be limited to:

 

1)         the identification and location of all full-service branches of all depository banking institutions;

 

2)         the identification and location of all sites which offer deposit-taking ATMs;

 

3)         the identification and location of all existing alternatives to providers of banking services including, but not limited to, currency exchanges, money transmitters, payday lenders or pawnbrokers;

 

4)         the identification and location of deposit-taking RSFs (other than those sited at full-service branches); and

 

5)         the identification and location of non-deposit-taking RSFs (other than those sited at full-service branches);

 

g)         income measures of the proposed banking development district, including, but not limited to, per capita annual income and median household annual income utilizing either the most recent United States Census Bureau data or the most recent Department of Housing and Urban Development ("HUD") annual income estimates;

 

h)         other economic indicators, where readily available, including, but not limited to, unemployment data, percentage of the population at or below the poverty level, percentage of the population at or below 200% of the poverty level, and percentage of the population receiving public assistance within the proposed banking development district.  Unemployment data may be submitted for a political subdivision in which the proposed banking development district is located;

 

i)          description of the public transportation systems and major roadways, if any, in the proposed banking development district maps and/or diagrams may be included in the description;

 

j)          narrative establishing that a branch would be economically viable within the banking development district if a deposit of public funds as identified by Section 25 of the Act is provided, along with a statement of any limitations on the types of public funds the branch would be willing to accept;

 

k)         specification of whether the proposed banking development district, or any portion thereof, lies within an area which has been designated an enterprise or empowerment zone or has received similar designation from any federal, State, or local government entity;

 

l)          a narrative description of the natural and man-made geographic barriers, if any, that may impede physical access to existing banking services;

 

m)        a narrative description of the distances and travel times from the applicant's proposed site to banking institutions and alternative providers of banking services both within the proposed banking development district and within the reasonable distance specified in subsection (f);

 

n)         affirmation by the applicant depository institution that it will not establish the proposed banking development district branch with the intention of closing or relocating any existing nearby branch or branches;

 

o)         an identification of all CBOs that are in favor of the establishment of the proposed District along with all written statements of support, if any, from all supporting CBOs;

 

p)         a description of all banking and financial educational programs that will be provided by the branch directly or in cooperation with a CBO;

 

q)         documentation of the most recent rating given to the depository institution under the Illinois Community Reinvestment Act [205 ILCS 735/35-1], if any;

 

r)          a description of the criteria generally employed to determine whether to continue maintaining a branch in operation and whether the branch proposed in the application would be evaluated under any different criteria; if any different criteria would apply, state them;

 

s)         a statement describing any preliminary or final understanding or agreement between the municipality and the applicant depository institution as to the anticipated duration of the proposed branch; and

 

t)          such other documents or information as the Secretary may deem necessary to determine the applicants' fitness for a banking development district.

 

Section 346.35  Mandatory Pre-Application Conference

 

An application for approval and creation of a banking development district shall be preceded by a pre-application conference to be attended by representatives of the municipal corporation and the depository institution applicants, the Division and any other parties as agreed to by the parties.  The purpose of the pre-application conference is to promote open communication between prospective applicants and the Division regarding the specifics of the application, regulatory expectations, and the application review process.  Prior to the pre-application, the representatives of the municipal corporation and the depository institution applicants shall submit an outline of their proposed discussion regarding the topics listed below.  The Secretary will consult with the State Treasurer as needed.  The topics to be discussed at the pre-application conference shall include, but are not limited to:

 

a)         availability and sources of demographic, geographic, financial and other relevant information necessary for completion of the application;

 

b)         the means of measurement of the anticipated economic development benefits of the banking development district should the application be approved;

 

c)         the support for the proposed banking development district being offered by CBOs;

 

d)         the process the Division will employ in its review of the application; and

 

e)         such other topics as agreed to in advance of the pre-application conference.

 

Section 346.40  Review and Disposition of Applications

 

a)         In determining whether to approve an application for the designation of a proposed banking development district, the Secretary, in consultation with the State Treasurer, which consultation may include sending a copy of the application to the State Treasurer and seeking comment from the State Treasurer, shall take into consideration the following criteria:

 

1)         the location, number, and proximity to applicant's proposed site or sites where banking services are available within the proposed banking development district;

 

2)         the location, number, and proximity to applicant's proposed site or sites where banking services are available within a reasonable distance of the proposed banking development district;

 

3)         the identification of consumer needs for banking services within the proposed banking development district;

 

4)         the economic viability and local credit need of the community within the proposed banking development district;

 

5)         the existing commercial development within the proposed banking development district;

 

6)         the impact additional banking services would have on potential economic development in the proposed banking development district;

 

7)         the physical size of the proposed banking development district;

 

8)         the nature of the community to be served, including, but not limited to, the demographic and economic characteristics of the proposed banking development district;

 

9)         the financial condition and managerial ability of the applicant depository institution as determined by the appropriate bank regulator or other reliable sources;

 

10)       compliance with all other applicable branching statutes and regulations;

 

11)       history of prolonged lack of service to the proposed banking development district;

 

12)       the likelihood that an existing branch will remain open if the application is not approved, if applicable;

 

13)       the importance and benefits of preserving the banking services offered by the existing branch, if applicable; and

 

14)       such other criteria which the Secretary, in consultation with the State Treasurer, identifies as appropriate.

 

b)         The Secretary, in consultation with the State Treasurer, shall issue a determination on the application within 60 days after receiving the application. [205 ILCS 745/15]

 

Section 346.45  Availability of Illinois Community Reinvestment Act Credit

 

An approved and operational banking development district shall be considered by the Department under any assessment of the depository institution's performance in meeting its obligations under the Illinois Community Reinvestment Act [205 ILCS 735].

 

Section 346.60  Reporting Requirements

 

The local government applicant and the depository institution shall submit a report of the operations of the banking development district to the Secretary and the Treasurer each year on the anniversary of the banking development district being approved by the Secretary.  Each report shall provide the following information:

 

a)         an identification of each new product or service specifically designed for the banking development district community to address the needs for banking services identified in the application to create the banking development district;

 

b)         the number of customers residing in the banking development district who are first-time consumers of the new banking services;

 

c)         the number of customers for each specific type of banking services including, but not limited to, check cashing services, low-cost checking accounts, money transfer services or any other such program created or designed to address the needs for banking services as identified herein;

 

d)         a description of each educational program or service provided, including, but not limited to, an identification of the local government employee, depository institution employee, CBO employee or consultant who provided the educational program, the frequency of the program being held and the number of persons attending each program;

 

e)         a description of the mechanisms employed by the local government and the depository institution to evaluate the success of the banking development district in meeting the identified unmet needs for banking services along with a description of intended changes to more thoroughly meet the unmet needs for banking services in the banking development district; and

 

f)         copies of all reports, memoranda, correspondence or analyses prepared by or received by the banking development district which evaluate, comment upon or otherwise discuss the banking development district's activities to address the unmet banking needs within the banking development district.

 

Section 346.70  Fees for Applications and Other Services

 

a)         The fee for an Application for Approval of a Banking Development District is $2,000.

 

b)         Application fees shall be submitted to the Division at the time of submission of any application.  All fees filed in connection with an application are nonrefundable, regardless of whether the application is ultimately approved, denied, withdrawn, or abandoned.

 

c)         Pursuant to Section 35(2) of the Act, the Secretary, in consultation with the State Treasurer, may from time to time review the amount of the above fees.

 

Section 346.80  Enforcement

 

a)         If the Secretary determines after an examination of the activities of a banking development district that some or all of the banking services identified in the approved application for the banking development district have not been performed, the Secretary may take the following actions after notice to the approved applicant and an opportunity to be heard at an administrative hearing:

 

1)         require the approved applicant to make such modifications to the banking development district's banking services to achieve the goals identified in the application for approval of a banking development district; or

 

2)         suspend the approved applicant's participation in the banking development district program for a stated period of time; or

 

3)         terminate the approved applicant's participation in the banking development program.

 

b)         All administrative hearings shall be conducted in accordance with 38 Ill. Adm. Code 100.  The Secretary shall notify the State Treasurer of any actions taken pursuant to subsections (a)(1) through (3), and the outcome of any related administrative hearing.