In May 2024, long-awaited regulations were formally adopted for the Illinois Community Reinvestment Act (ILCRA). According to the Illinois Department of Financial and Professional Regulation (IDFPR), the CRA requires covered financial institutions, including state banks, credit unions, and non-bank mortgage licensees, to meet the community’s financial services needs with a focus on low-to-moderate income neighborhoods.1
Furthermore, the CRA applies to a credit union incorporated under the Illinois Credit Union Act.2 Illinois credit unions should closely read the regulations, as they directly affect these entities. Taking action and understanding these regulations is also critical, as credit unions have not been subject to such rules.
Below is an overview of the program development and what credit unions can do to prepare for compliance with the new regulations. For more information, view the Illinois Community Reinvestment Act Compliance Part I outline.3
CRA Program Development
Based on the latest CRA rules, credit unions must develop adequate programs to comply with the elements and purpose of CRA rules. The following areas should be addressed in the program and assessed in the examination process:
- Assessment area
- Where are your offices and concentrations of lending?
- How does the credit union define these areas and the focal points within these areas?
- Lending test
- How is the credit union lending within the defined assessment area, particularly in mortgage lending?
- Does the credit union understand the purpose and risks of redlining?
- Service test (excludes small credit unions)
- How is the credit union finding opportunities to serve the community, and is it appropriately documented?
- Investment test (excludes small credit unions)
- How does the credit union identify investment opportunities within the assessment areas and create plans to document and set goals for investments in the community?
Program Deadlines to Consider
It is recommended that all credit unions in Illinois work to comply with these requirements by the ILCRA deadline of:
- February 1, 2025, if assets are equal to or more than $391 million, or
- August 1, 2025, if assets are less than $391 million.
Next Steps
The compliance and credit union teams at Forvis Mazars have more than 40 years of experience providing accounting, audit, and consulting services to credit unions ranging in assets from $50 million to more than $15 billion.
Our professionals are ready to help you navigate state-specific credit union regulations and prepare for compliance, with in-depth knowledge of timely trends, concerns, and opportunities affecting credit unions today.
According to the 2023 Supplier Market Share Guide: Credit Union Auditors, published by Callahan & Associates, Forvis Mazars ranks sixth in auditing credit unions with more than $100 million in assets. Forvis Mazars also ranks in the top 10 of total credit unions audited.
If you have additional questions or need assistance, please reach out to a professional at Forvis Mazars.