Illinois Adopts CRA Regulations for Mortgage Lender Licensees and Other Financial Institutions

Illinois recently adopted regulations applicable to certain mortgage lender licensees to carry out the purposes of the Illinois Community Reinvestment Act (ILCRA).  The regulations apply to mortgage lenders licensed under the Illinois Residential Mortgage License Act that have originated 50 or more home mortgage loans in Illinois in the last calendar year reportable under HMDA and also are responsible for underwriting, making credit decisions for, or issuing of commitments for such loans. These regulations are now effective and require compliance for covered mortgage licensees by November 1, 2024.   

The regulations for covered mortgage licensees establish: (i) standards for assessing a mortgage licensee’s performance in meeting the financial service needs of the community, including low- and moderate-income neighborhoods and individuals; (2) record, reporting, and disclosure requirements; and (iii) specifics on examinations under the ILCRA, such as frequency and fees.  Details also are provided on what generally must be demonstrated by a covered mortgage licensee to receive a certain lending performance rating and service performance rating after an examination.  

Examinations under the new regulation will not begin for covered mortgage licensees that made 100 or more home mortgage loans in Illinois in the last calendar year until November 1, 2024.  For covered mortgage licensees that made fewer than 100 home mortgage loans in Illinois in the last calendar year, examinations will not begin until November 1, 2025, unless cause for an examination is found.

The regulation for covered mortgage licensees also provides a notice that must be posted at all main offices of covered mortgage licensees, and a notice that must be posted at any additional full-service office.

Note that at the same time, similar regulations applicable to state-chartered banks and credit unions also were adopted.