SB3235 103RD GENERAL ASSEMBLY

LRB103 37444 RTM 67566 b

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.

A BILL FOR

AN ACT concerning regulation.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 5. The Illinois Community Reinvestment Act is amended by changing Sections 35-5 and 35-15 as follows:

(205 ILCS 735/35-5)

Sec. 35-5. Definitions. As used in this Act:

"Covered financial institution" means a bank chartered under the Illinois Banking Act, a savings bank chartered under the Illinois Savings Bank Act, a credit union incorporated under the Illinois Credit Union Act, an entity licensed under the Illinois Residential Mortgage License Act of 1987 which lent or originated 50 or more residential mortgage loans in the previous calendar year, and any other financial institution under the jurisdiction of the Department as designated by rule by the Secretary.

"Department" means the Department of Financial and Professional Regulation.

"Division of Banking" means the Division of Banking within the Department.

"Division of Financial Institutions" means the Division of Financial Institutions within the Department.

"Protected characteristic" means any basis for which discrimination is prohibited by law, including, but not limited to, under the Illinois Human Rights Act, for which a covered financial institution is examined for compliance under this Act. "Protected characteristic" includes race, color, religion, national origin, ancestry, age, sex, marital status, order of protection status, disability, military status, sexual orientation, pregnancy, or unfavorable discharge from military service.

"Secretary" means the Secretary of Financial and Professional Regulation, or his or her designee, including the Director of the Division of Banking or the Director of the Division of Financial Institutions.

(Source: P.A. 101-657, eff. 3-23-21.)

(205 ILCS 735/35-15)

Sec. 35-15. Examinations.

(a) The Secretary shall have the authority to examine each covered financial institution for compliance with this Act, in consultation with State and federal regulators with an appropriate regulatory interest, for and in compliance with applicable State and federal fair lending laws, including, but not limited to, the Illinois Human Rights Act, the federal Equal Credit Opportunity Act, and the federal Home Mortgage Disclosure Act, as often as the Secretary deems necessary and proper. The Secretary may adopt rules with respect to the frequency and manner of examination including the imposition of examination fees. The Secretary shall appoint a suitable person to perform such examination. The Secretary and his or her appointees may examine the entire books, records, documents, and operations of each covered financial institution, its parent company, and its subsidiaries, affiliates, or agents, and may examine any of the covered financial institution's, its parent company's or its subsidiaries', affiliates', or agents' officers, directors, employees, and agents under oath. Any document or record prepared or obtained in connection with or relating to any such examination, and any record prepared or obtained by the Secretary to the extent that the record summarizes or contains information derived from any document or record described in this subsection (a), shall not be disclosed to the public unless otherwise provided by this Act.

(b) Upon the completion of the examination of a covered financial institution under this Section, the Secretary shall prepare a written evaluation of the covered financial institution's record of performance relative to this Act. Each written evaluation required under this subsection (b) shall have a public section, which shall include no less information than would be disclosed in a written evaluation under the federal Community Reinvestment Act, and a confidential section. The Secretary shall give the covered financial institution an opportunity to comment on the evaluation, and then shall make the public section of the written evaluation open to public inspection upon request. The written evaluation shall include, but is not limited to:

(1) the assessment factors utilized to determine the covered financial institution's descriptive rating;

(2) the Secretary's conclusions with respect to each such assessment factor;

(3) a discussion of the facts supporting such conclusions;

(4) the covered financial institution's descriptive rating and the basis therefor; and

(5) a summary of public comments.

(c) Based upon the examination, the covered financial institution shall be assigned one of the following ratings:

(1) outstanding record of performance in meeting its community financial services needs;

(2) satisfactory record of performance in meeting its community financial services needs;

(3) needs to improve record of performance in meeting its community services needs; or

(4) substantial noncompliance in meeting its community financial services needs.

(d) Notwithstanding the foregoing provisions of this Section, the Secretary may establish an alternative examination procedure for any covered financial institution, which, as of the most recent examination, has been assigned a rating of outstanding or satisfactory for its record of performance in meeting its community financial services needs.

(e) The Secretary 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:

(A) access to financial products or services, including, but not limited to, physical branches of covered financial institutions; and

(B) 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.

(f) The Secretary shall implement the findings, conclusions, and other results from the study into the examination process as detailed in rule.

(g) 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.

(h) The Secretary may use fees collected under this Section to pay for the disparity studies, as necessary.

(Source: P.A. 101-657, eff. 3-23-21.)

Section 99. Effective date. This Act takes effect upon becoming law.