Our industry has welcomed positive developments in Washington, including deregulatory efforts by the federal banking agencies and passage of the IBA-supported, bipartisan 21st Century ROAD to Housing Act. The new law creates opportunities to expand housing access and financing, provides banks with greater flexibility regarding brokered deposits, and encourages de novo bank chartering.
As we’ve noted before, however, regulatory changes in Washington have prompted state and local policymakers to "fill the gap" with new regulations. State-chartered banks and thrifts have been particularly affected.
The value of the state charter has undoubtedly eroded in recent years. The OCC now offers lower regulatory fees, while Illinois lawmakers have enacted a state Community Reinvestment Act and the notorious interchange law, which—if it ever takes effect—could place state-chartered institutions at a distinct disadvantage. We hear from our state-chartered members that inconsistent examinations, combined with growing competition from credit unions and other financial providers, are making it increasingly difficult to compete.
On the legislative front, Springfield saw a relentless wave of proposals to impose new burdens on banks. In some cases, we stopped those efforts entirely. In others, we negotiated meaningful improvements to ensure banks received fair treatment. And in numerous instances, the IBA stood as the only advocate representing the banking industry.
Among this year's accomplishments:
- The IBA led a broad coalition to secure another one-year delay of the Interchange Fee Prohibition Act.
- The IBA opposed and testified against legislation that would have imposed a $150 mortgage recording fee and required a confusing new consumer disclosure filing with every mortgage recording. Failure to include the new filing would have invalidated a mortgagee's lien rights. We defeated it in both House and Senate committees and kept it out of the state budget.
- After raising concerns about fund sweeps last year, the IBA successfully ensured that this year's state budget did not sweep dedicated bank and thrift regulatory funds.
- "Junk fees" has become a major issue in Springfield and Washington. Illinois lawmakers passed legislation imposing penalties on businesses that fail to disclose all fees for services. The IBA negotiated banking-specific compliance carveouts tied directly to existing consumer disclosure laws, substantially reducing banks’ compliance burdens and enforcement risks.
- New legislation will require bank employees to report suspected financial exploitation to the Illinois Department on Aging. The IBA remained at the negotiating table until the bill’s passage, successfully removing criminal liability on bank employees and failed to provide adequate legal protections for financial institutions. The IBA successfully secured these critical protections before the legislation was sent to the governor.
- A Trump administration executive order scaling back fair lending regulations renewed momentum for Illinois legislation authorizing the Illinois Department of Human Rights to investigate disparate impact complaints against banks and other businesses. The IBA was the only banking trade association to oppose the legislation, as we have for several years, and we secured important concessions limiting judicial scrutiny and ensuring coordination between the department and banking regulators during investigations.
- The IBA was also the only banking trade association to testify against legislation proposed by the State Treasurer expanding access to the Treasurer's investment pool and electronic payment processing program for nonprofits. We argued that the proposal would reduce community bank deposits and shift funds out of Illinois. Although the bill passed, the IBA negotiated changes narrowing its scope and obtained commitments from key lawmakers to monitor its impact on community bank deposits.
- A joint initiative led by the IBA, Illinois credit unions, and law firms representing financial institutions passed the General Assembly. The legislation clarifies the rights of secured mortgage lenders following a recent appellate court decision that adversely affected properly perfected mortgage liens. It confirms that the Code of Civil Procedure's 10-year statute of limitations applies to all loans secured by real estate.
- And, of course, we remain the lead banking trade association challenging Illinois' interchange law in court. We continue to make significant progress.
As expected, this spring brought difficult legislative battles in Springfield, even as our industry continued to achieve victories in Washington.
While supporting federal successes, the IBA led every major fight to protect Illinois banks in Springfield. We often did so as the sole voice for the banking industry while continually building coalitions wherever possible.
Even so, we are never truly alone. We have the unwavering support of our members across Illinois. Your participation in Springfield Economic Investment Day, your advocacy with lawmakers on interchange, and your record support of the Illinois Bankers PAC in 2025 demonstrate that we are fighting alongside an industry that enhances our efforts.
The work, however, is far from over. We must continue strengthening our PAC, expanding our grassroots advocacy, and preparing for the next major objective: repealing the interchange law altogether.
Stay engaged – we'll need your voice in the months ahead.