HB1700 amends the Deposit of State Moneys Act and the Public Funds Investment Act to require the State Treasurer and other public agencies to consider a financial institution’s record of community investment when deciding where to deposit state or public funds. The bill directs decision-makers to review publicly available Community Reinvestment Act (CRA) ratings, including both federal CRA ratings and ratings under the Illinois Community Reinvestment Act, along with changes in ownership, management, policies, or practices that may affect community commitment.
The bill also establishes stricter deposit standards tied to CRA performance. Beginning January 1, 2022, no state or public funds may be deposited in a financial institution subject to the federal CRA unless it has a current rating of satisfactory or outstanding. Beginning January 1, 2026, the same rule applies to institutions subject to the Illinois CRA, with an exception for institutions that have not yet completed their initial Illinois CRA examination. The bill further allows preference for institutions with outstanding CRA ratings and prohibits withdrawing already-deposited funds before maturity solely because of a less-than-satisfactory Illinois CRA rating.
Impact
HB1700 would affect how Illinois state and local public entities choose depositories for public money by making CRA performance a formal factor and, in some cases, a threshold requirement. It amends two statutes governing public deposits, expanding the role of community reinvestment ratings in the placement of state and public funds while preserving limits on what information the Treasurer or public agencies may obtain. Financial institutions with weaker CRA records could become ineligible for new public deposits, while institutions with strong ratings could receive preference.
Sentiment
The available voting history suggests the bill had substantial support in the House, passing third reading 84-30. No committee transcript is available, so there is no recorded debate to indicate detailed arguments for or against the measure. Based on the bill’s structure and vote margin, the general sentiment appears favorable toward using public deposits to encourage stronger community reinvestment by financial institutions.
Contention
The main point of contention is likely the bill’s use of CRA ratings as a gatekeeping tool for public deposits, which could be viewed as promoting community investment but also as limiting flexibility for public treasurers and agencies. Another possible concern is the practical effect on banks and credit unions that receive less-than-satisfactory ratings, especially because the bill bars new deposits and gives preference to top-rated institutions. The bill also carefully avoids authorizing nonpublic examinations or access to confidential information, reflecting a balance between oversight and privacy.