103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
SB3235

 

Introduced 2/6/2024, by Sen. Christopher Belt

 

SYNOPSIS AS INTRODUCED:
 
205 ILCS 735/35-5
205 ILCS 735/35-15

    Amends the Illinois Community Reinvestment Act. Provides that the Secretary of Financial and Professional Regulation shall retain qualified persons to design and conduct one or more disparity studies to prepare and report findings and conclusions to the Secretary to: (1) identify and delineate geographies in Illinois exhibiting significant disparities by protected characteristics with respect to: access to financial products or services, including, but not limited to, physical branches of covered financial institutions; and lending and investments by covered financial institutions; and (2) identify policies, procedures, patterns, or practices that have or may have disparate impact or discriminatory effects. Provides that the Secretary shall implement the findings, conclusions, and other results from the study into the examination process as detailed in rule. Provides that the Secretary shall update the disparity studies at least every 4 years, but may require it to be updated more frequently at the Secretary's discretion. Provides that the Secretary may use specified fees to pay for the disparity studies, as necessary. Defines the term "protected characteristic". Effective immediately.


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A BILL FOR

 

SB3235LRB103 37444 RTM 67566 b

1    AN ACT concerning regulation.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Community Reinvestment Act is
5amended by changing Sections 35-5 and 35-15 as follows:
 
6    (205 ILCS 735/35-5)
7    Sec. 35-5. Definitions. As used in this Act:
8    "Covered financial institution" means a bank chartered
9under the Illinois Banking Act, a savings bank chartered under
10the Illinois Savings Bank Act, a credit union incorporated
11under the Illinois Credit Union Act, an entity licensed under
12the Illinois Residential Mortgage License Act of 1987 which
13lent or originated 50 or more residential mortgage loans in
14the previous calendar year, and any other financial
15institution under the jurisdiction of the Department as
16designated by rule by the Secretary.
17    "Department" means the Department of Financial and
18Professional Regulation.
19    "Division of Banking" means the Division of Banking within
20the Department.
21    "Division of Financial Institutions" means the Division of
22Financial Institutions within the Department.
23    "Protected characteristic" means any basis for which

 

 

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1discrimination is prohibited by law, including, but not
2limited to, under the Illinois Human Rights Act, for which a
3covered financial institution is examined for compliance under
4this Act. "Protected characteristic" includes race, color,
5religion, national origin, ancestry, age, sex, marital status,
6order of protection status, disability, military status,
7sexual orientation, pregnancy, or unfavorable discharge from
8military service.
9    "Secretary" means the Secretary of Financial and
10Professional Regulation, or his or her designee, including the
11Director of the Division of Banking or the Director of the
12Division of Financial Institutions.
13(Source: P.A. 101-657, eff. 3-23-21.)
 
14    (205 ILCS 735/35-15)
15    Sec. 35-15. Examinations.
16    (a) The Secretary shall have the authority to examine each
17covered financial institution for compliance with this Act, in
18consultation with State and federal regulators with an
19appropriate regulatory interest, for and in compliance with
20applicable State and federal fair lending laws, including, but
21not limited to, the Illinois Human Rights Act, the federal
22Equal Credit Opportunity Act, and the federal Home Mortgage
23Disclosure Act, as often as the Secretary deems necessary and
24proper. The Secretary may adopt rules with respect to the
25frequency and manner of examination including the imposition

 

 

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1of examination fees. The Secretary shall appoint a suitable
2person to perform such examination. The Secretary and his or
3her appointees may examine the entire books, records,
4documents, and operations of each covered financial
5institution, its parent company, and its subsidiaries,
6affiliates, or agents, and may examine any of the covered
7financial institution's, its parent company's or its
8subsidiaries', affiliates', or agents' officers, directors,
9employees, and agents under oath. Any document or record
10prepared or obtained in connection with or relating to any
11such examination, and any record prepared or obtained by the
12Secretary to the extent that the record summarizes or contains
13information derived from any document or record described in
14this subsection (a), shall not be disclosed to the public
15unless otherwise provided by this Act.
16    (b) Upon the completion of the examination of a covered
17financial institution under this Section, the Secretary shall
18prepare a written evaluation of the covered financial
19institution's record of performance relative to this Act. Each
20written evaluation required under this subsection (b) shall
21have a public section, which shall include no less information
22than would be disclosed in a written evaluation under the
23federal Community Reinvestment Act, and a confidential
24section. The Secretary shall give the covered financial
25institution an opportunity to comment on the evaluation, and
26then shall make the public section of the written evaluation

 

 

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1open to public inspection upon request. The written evaluation
2shall include, but is not limited to:
3        (1) the assessment factors utilized to determine the
4    covered financial institution's descriptive rating;
5        (2) the Secretary's conclusions with respect to each
6    such assessment factor;
7        (3) a discussion of the facts supporting such
8    conclusions;
9        (4) the covered financial institution's descriptive
10    rating and the basis therefor; and
11        (5) a summary of public comments.
12    (c) Based upon the examination, the covered financial
13institution shall be assigned one of the following ratings:
14        (1) outstanding record of performance in meeting its
15    community financial services needs;
16        (2) satisfactory record of performance in meeting its
17    community financial services needs;
18        (3) needs to improve record of performance in meeting
19    its community services needs; or
20        (4) substantial noncompliance in meeting its community
21    financial services needs.
22    (d) Notwithstanding the foregoing provisions of this
23Section, the Secretary may establish an alternative
24examination procedure for any covered financial institution,
25which, as of the most recent examination, has been assigned a
26rating of outstanding or satisfactory for its record of

 

 

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1performance in meeting its community financial services needs.
2    (e) The Secretary shall retain qualified persons to design
3and conduct one or more disparity studies to prepare and
4report findings and conclusions to the Secretary to:
5        (1) identify and delineate geographies in Illinois
6    exhibiting significant disparities by protected
7    characteristics with respect to:
8            (A) access to financial products or services,
9        including, but not limited to, physical branches of
10        covered financial institutions; and
11            (B) lending and investments by covered financial
12        institutions; and
13        (2) identify policies, procedures, patterns, or
14    practices that have or may have disparate impact or
15    discriminatory effects.
16    (f) The Secretary shall implement the findings,
17conclusions, and other results from the study into the
18examination process as detailed in rule.
19    (g) The Secretary shall update the disparity studies at
20least every 4 years, but may require it to be updated more
21frequently at the Secretary's discretion.
22    (h) The Secretary may use fees collected under this
23Section to pay for the disparity studies, as necessary.
24(Source: P.A. 101-657, eff. 3-23-21.)
 
25    Section 99. Effective date. This Act takes effect upon
26becoming law.