The third quarter of 2023 has brought about noteworthy legislative and regulatory changes in Illinois financial services law, reflecting the state's commitment to enhancing access to financial institutions' services and resources. Let's delve into the key updates:

Opening Up Credit Union Membership

On July 27, Governor J.B. Pritzker signed H.B. 2043, Public Act 103-0289, amending the Illinois Credit Union Act. This revision extends credit union membership eligibility to societies, associations, clubs, partnerships, corporations, and limited liability companies with at least one eligible member, partner, or shareholder. This expansion allows these entities to join a credit union, a privilege previously reserved for groups where a majority of members met the eligibility criteria.

New Data Collection Requirements

August 11 saw the enactment of H.B.1612, Public Act 103-0522. This law tasks the Illinois Department of Financial and Professional Regulation (IDFPR) with collecting and annually publishing data on the demographics of individuals applying for licensure with the IDFPR. This data will include information on sex, ethnicity, race, and disability. The IDFPR will subsequently release an annual report detailing the number of licensure applications received and the number of applicants denied licensure.

Appointment of a New Director

Governor Pritzker nominated Susana Soriano as the new director of banking for the IDFPR. Soriano, formerly the IDFPR's deputy director of banking, played a crucial role in implementing initiatives such as the Illinois Community Reinvestment Act and the Banking Development District Act. These initiatives aim to increase lending in underserved communities and establish banking branches in historically underbanked areas of Illinois. Soriano's appointment is now pending confirmation by the Illinois Senate.

Revised Community Reinvestment Act Rules

On September 26, 2023, the IDFPR released a revised second draft of the proposed rules for the Illinois Community Reinvestment Act (CRA). The Illinois CRA aims to encourage financial institutions to address the credit needs of their communities, particularly in low- and moderate-income areas. Notable changes in the revised rules include:

• Reporting of community development loans, investments, and services on an individual activity and census tract-level.
• Inclusion of small-business lending data collection in line with the Consumer Financial Protection Bureau's (CFPB) rules on small-business data reporting.
• Incorporation of examples of lawful investments, deposits, membership shares, and grants for community development.
• A requirement for the IDFPR to conduct a study to identify and address disparities in access to financial products or services.

The finalization date for these proposed rules is yet to be determined, with potential further revisions in collaboration with the Joint Committee on Administrative Rules of the Illinois General Assembly.

The third quarter of 2023 has ushered in a series of positive changes in Illinois financial services law, aimed at enhancing inclusivity and transparency in the state's financial sector.