Illinois Administrative Code Title 38 - FINANCIAL INSTITUTIONS
Overview of Illinois Administrative Code Title 38 — Financial Institutions
Title 38 of the Illinois Administrative Code contains the set of administrative rules and regulations governing the operation, supervision, and regulation of financial institutions within the State of Illinois. This includes banks, savings institutions, credit unions, trust companies, and other entities engaged in financial services.
The rules are designed to ensure that financial institutions operate safely, soundly, and in compliance with both state and federal laws, protecting consumers and the integrity of the financial system.
Purpose of Title 38
To establish licensing, regulatory, and operational requirements for financial institutions.
To protect the interests of depositors, investors, and consumers.
To ensure the safety and soundness of financial institutions.
To prevent fraud, mismanagement, and financial crimes.
To provide guidelines for examinations, reporting, and enforcement actions.
Key Components of Title 38 — Financial Institutions
1. Licensing and Registration
Rules for the application, approval, and renewal of licenses for banks, savings and loans, credit unions, and trust companies.
Requirements for initial capital, management qualifications, and business plans.
Procedures for branch office approvals and relocations.
2. Operational Standards
Guidelines on corporate governance including roles and responsibilities of boards and officers.
Requirements for risk management, internal controls, and compliance programs.
Rules regarding lending practices, investment activities, and fiduciary duties.
3. Consumer Protection
Regulations to safeguard consumers, such as:
Transparent disclosure of terms and conditions.
Fair lending practices.
Handling of complaints and dispute resolution.
Compliance with privacy laws and protection of customer data.
4. Examinations and Reporting
Authority for the state regulatory agency to conduct periodic examinations of institutions.
Requirements for financial reporting, audit submissions, and prompt notification of material events.
Procedures for on-site inspections and off-site monitoring.
5. Enforcement and Penalties
Grounds and procedures for disciplinary actions, including suspension or revocation of licenses.
Penalties for violations of laws or administrative rules.
Authority to impose fines, cease and desist orders, and corrective measures.
6. Mergers, Acquisitions, and Dissolutions
Rules governing the merger, consolidation, or acquisition of financial institutions.
Procedures for voluntary dissolution or receivership.
Requirements to protect stakeholders during structural changes.
7. Trust Services and Fiduciary Responsibilities
Specific provisions regulating trust companies’ duties.
Standards for asset management, fiduciary accounting, and reporting.
Importance of Title 38
Ensures a stable and trustworthy financial environment in Illinois.
Promotes sound banking practices that protect the public and the financial system.
Provides regulatory clarity and transparency for institutions and consumers.
Facilitates effective oversight and accountability through regular monitoring and enforcement.
Summary Table
| Section | Description |
|---|---|
| Licensing | Procedures and requirements for financial institution licenses |
| Operations | Governance, risk management, lending, and investment rules |
| Consumer Protection | Fair practices, disclosures, privacy, and complaint handling |
| Examinations | State authority for inspections and financial reporting |
| Enforcement | Penalties, disciplinary actions, and corrective measures |
| Mergers & Acquisitions | Rules for structural changes and dissolutions |
| Trust Services | Regulation of fiduciary responsibilities and trust management |
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