Governor Pritzker signs the Illinois Bank Development Districts Act


CHICAGO – Governor Pritzker signed HB 5194, the Illinois Banking Development Districts Act, was signed into law on Friday. Sponsored by State Sen. Doris Turner (D-Springfield) and State Rep. La Shawn Ford (D-Chicago), this legislation creates a new incentive program for establishing bank branches in underserved communities. The program uses public-linked deposits and Community Reinvestment Act (CRA) screening standards to attract bank branches to underserved communities, similar to a program in New York.

Like the New York program, Illinois banks and local governments will jointly create a plan for a new banking development district in an area of ​​need. The Illinois Department of Financial and Professional Regulation will evaluate these plans in consultation with the Illinois State Treasurer and will approve plans that create consumer-friendly banking options in underserved areas.

The number of bank branch closures has increased significantly since the start of the COVID-19 pandemic. In 2021, 2,927 bank branches closed nationwide, an increase of 38% from 2020. One hundred fifty-three of those branch closings occurred in Illinois, mostly from large commercial banks.

“There are millions of people across the country and in Illinois who, due to account balance barriers and minimum deposit requirements, don’t have a trusted bank.” said State Senator Doris Turner (D-Springfield). “This law will allow communities to take a stand and create the conditions that allow for a more equitable banking experience.”

“When residents don’t have adequate access to banking services, they often turn to payday loans, pawn shops and predatory lenders that can damage their financial stability.” said state Rep. La Shawn Ford (D-Chicago). “That is why this measure is an important step to encourage the establishment of bank branches and necessary financial services in areas that have a large unbanked population.”

“We’ve seen what happens when households don’t have access to basic secure banking products,” said Chasse Rehwinkel, Director of the Banking Division. “Unbanked people who don’t use a prepaid card that offers direct deposit pay about $180 a year just to access their own money, an unacceptable cost for people living paycheck to paycheck. The creation of Banking Development Districts in Illinois will give lawmakers another tool to improve financial equity in underserved communities across the state.”

The New York Bank Development Districts program has been active since 1997 and has spawned more than 30 new bank development districts, more than 60,000 new bank accounts, and generated more than $500 million in new credit for underserved households.


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