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History of Licensing in Illinois
An IDFPR contribution to the IL250 commemoration.
A 250-Year Story of Public Protection
As Illinois reflects on 250 years of contributions to our nation’s story, the history of professional and financial licensing stands out as one of the ways our state has protected the public, supported economic growth, and elevated the standards of critical professions.
From early local business licenses to a modern, digital-first licensing system serving more than a million professionals, Illinois has often been at the forefront of using licensing to promote safety, fairness, and trust.
Key Milestones at a Glance
1800s: Local (municipal) licensing of taverns, peddlers, and other businesses under basic “police powers” to protect health and safety.
1877: Illinois Medical Practice Act one of the nation’s first modern medical licensing laws, widely viewed as a national model.
1917: Creation of the Department of Registration and Education, consolidating many professional boards and examinations under one state agency.
Mid-1900s: Steady expansion of state licensing across health, technical, and trade professions; Illinois becomes known for a strong centralized licensing authority.
Late 1900s: Evolution into the Department of Professional Regulation and parallel financial regulators for banks and non-bank financial institutions.
2004: Executive Order 2004-6 consolidates financial and professional regulators into the Illinois Department of Financial and Professional Regulation (IDFPR).
2009–2020: Refinement of IDFPR’s divisions and expansion into new sectors such as cannabis, digital assets, and other emerging industries.
2021–present: Modern era of digital licensing, transparency, and data-driven regulation through CORE and other modernization initiatives.
Today: IDFPR oversees more than a million licenses across health care, real estate, and financial services, and is modernizing licensing systems for the next generation.
Early Roots: Local Licensing, Initial Financial Regulation, and Public Safety (1800s)
In Illinois’ early statehood, most “licensing” was local. Cities, towns, and villages used licenses to regulate:
- Taverns and saloons
- Street peddlers and merchants
- Certain trades and public-facing businesses
These local licenses were grounded in the community’s responsibility to protect health, safety, and public order. While they were not “professional licenses” in the modern sense, they introduced an enduring idea: the State and its local governments have both the authority and the responsibility to set basic standards for those who serve the public.
At the state level, however, there were few requirements for professional practice. In medicine, for example, there was no statewide requirement to hold a license before the late 1870s.
From Illinois’ initial statehood in December of 1818 until June of 1958, a 140-year period, state-chartered banks and trust companies were regulated by the executive branch’s Auditor of Public Accounts.
1877: Illinois Pioneers Modern Medical Licensing
A turning point came with the Illinois Medical Practice Act of 1877.
Before this law, anyone could present themselves as a physician. The 1877 Act changed that by:
- Requiring anyone practicing medicine in Illinois to hold a certificate issued under state authority.
- Tying that certificate to recognized medical education or long-standing practice.
- Empowering a state-level body (then the State Board of Health) to enforce the law and act against fraud and unsafe practice.
Illinois medical licensing framework quickly became a national model. Other states drew from Illinois' approach, particularly the idea that licensing should be grounded in public health and competence, not merely economic protection.
This moment marked the beginning of modern statewide professional licensing in Illinois.
1917: Creating a Home for Professional Licensing
By the early 20th century, many professions—pharmacists, dentists, nurses, engineers, architects, and others were coming under state licensing laws. To manage this growing responsibility, Illinois reorganized its state government through the Civil Administrative Code of 1917.
That law created the Department of Registration and Education, which:
- Took on the responsibilities of several existing boards and commissions.
- Centralized examinations and licenses for a wide range of professions and trades.
- Formalized the State’s role in setting minimum qualifications and enforcing standards.
From that point forward, the Department of Registration and Education became the primary home for professional licensing in Illinois.
Info Box: Athletics and Boxing Regulation in Illinois
In 1925 the Illinois General Assembly passed a bill that legalized boxing in the State making Illinois the 23rd state to allow the sport. IDFPR still regulates boxing and full contact martial arts today and has licensed several famous fighters over the years including wrestlers like:
Cactus Jack
Stone Cold Steve Austin
Mid-Century Growth: More Professions, Higher Standards
During the mid-1900s, Illinois continued to expand and refine its licensing laws.
- New professions were brought under state oversight, especially those affecting health, safety, and financial well-being.
- Educational and examination standards rose, reflecting advances in professional training.
- Illinois courts repeatedly affirmed that licensing, when reasonably related to public protection, is a valid exercise of the State’s authority.
At the same time, municipal licensing remained important for local businesses and establishments, operating side-by-side with state-issued professional licenses.
By 1958 the Auditor of Public Accounts still retained its original authority to regulate state-chartered banks, but the regulation of trust companies was transferred in that year to the newly created Department of Financial Institutions. Illinois voters then approved a referendum on the 1958 statewide ballot to eventually transfer the supervision of both state-chartered banks and trust companies away from the Auditor of Public Accounts and Department of Financial Institutions and back toward one regulatory entity. This process wasn’t completed until 1967 with the creation of the Office of the Commissioner of Banks and Trust Companies. Thirty years later in 1996, the Office of the Commissioner of Banks and Trust Companies merged with the Office of the Commissioner of Savings and Residential Finance to create the more encompassing Office of Banks and Real Estate.
From Registration & Education to Professional Regulation
As the number and complexity of licensed professions grew, Illinois modernized its regulatory structure.
The Department of Registration and Education evolved into the Department of Professional Regulation, reflecting its primary focus: licensing and regulating professions for the protection of the public.
Key characteristics of this era included:
- A broad portfolio of health and non-health related professions.
- Strong emphasis on examinations, continuing education, and discipline.
- A growing awareness of how licensing affects workforce mobility and economic opportunity.
In parallel, spearate agencies developed to regulate banks, savings institutions, credit unions, and other financial entities, recognizing that financial health is also a form of consumer protection.
Agencies responsible for financial regulation in Illinois over the years have include the Auditor of Public Accounts, the Office of the Commissioner of Banks and Trust Companies, the Office of the Commissioner of Savings and Residential Finance, the Office of Banks and Real Estate, and the Department of Financial Institutions.
2004: The Birth of IDFPR
On July 1, 2004, Illinois took another major step by consolidating its licensing and regulatory functions into a single department.
An Executive Order merged:
- The Department of Professional Regulation
- The Department of Financial Institutions
- The Office of the Commissioner of Banks and Real Estate
- The Department of Insurance
This new entity became the Illinois Department of Financial and Professional Regulation (IDFPR).
Within IDFPR, former agencies became specialized divisions, each focused on a major sector of the economy:
- Division of Banking: State-chartered banks, trust companies, savings institutions, residential mortgage entities, and related activities.
- Division of Financial Institutions: Credit unions, currency exchanges, title insurers, installment lenders, and other non-bank financial services.
- Division of Professional Regulation: Health care and occupational professions.
- Division of Real Estate: Real estate brokers, appraisers, home inspectors, community association managers, and related professions.
In 2009, the Division of Insurance became a standalone Department of Insurance, while IDFPR continued to serve as Illinois’ central licensing and regulatory agency for financial, real estate, and professional practice.
New Frontiers: Cannabis, Technology, and Emerging Professions
In the 21st century, licensing has expanded into new sectors that reflect changing societal needs and economic innovation.
Examples include:
- Medical and Adult-Use Cannabis: Illinois charged IDFPR with licensing and regulating cannabis dispensaries and key personnel as the State legalized medical cannabis and later adult-use cannabis
- Evolving Financial Products: New laws and rules have extended licensing and supervision to emerging financial services, digital assets, and consumer-credit products.
- Modern Health Professions: Licensing continues to adapt to new health-related roles, technologies, and practice models, while maintaining strong standards for patient safety.
Across these areas, IDFPR’s core mission remains the same: protecting the public by ensuring that those who hold themselves out as professionals meet and maintain minimum standards of competence and integrity.
2021 - Present: A Modern Era of Transparency, Technology, and Transformation
Beginning in 2021, Illinois entered a new era of professional and financial regulation defined by modernization, expanded consumer protection, and a renewed commitment to transparent, data-driven oversight. This period reflects one of the most significant evolutions in licensing since the department’s creation in 2004.
During this time, IDFPR launched major initiatives that strengthened public trust, improved customer experience, and aligned regulation with the needs of a rapidly changing workforce and economy. These efforts have positioned Illinois as a national leader in regulatory innovation.
Modernizing Licensing Systems and Customer Experience
IDFPR began a multi-year transformation of its licensing infrastructure, replacing outdated systems with a digital-first licensing environment designed to improve mobility, accessibility, and processing timeliness.
New technology platforms expand online services, simplify workflows for applicants and licensees, and create new opportunities for public transparency and accountability.
Expanding Consumer Protections in Emerging Markets
From digital assets to health technology and new financial products, IDFPR has proactively engaged with emerging industries to evaluate risks, close regulatory gaps, and ensure that Illinoisans are protected as innovation accelerates.
This era includes nation-leading measures in areas such as digital asset consumer protections and guidance on the use of artificial intelligence in therapeutic or advisory settings.
Advancing Equity and Workforce Opportunity
Recognizing the role licensing plays in shaping economic mobility, IDFPR has strengthened pathways for workers by:
- Improving licensure portability
- Reducing unnecessary barriers where appropriate
- Issuing clearer guidance on requirements
- Supporting legislative initiatives that promote fair access to professions
Record Growth in Professional Licensing
Illinois has experienced significant increases in license issuance, reflecting both economic growth and improvements in licensing operations.
Record-setting licensing years demonstrate how modernization and customer-focused practices have increased the department’s capacity to serve Illinois’ workforce.
Preparing for the Next Generation of Regulation
Through long-term planning, technology implementation, and cross-agency collaboration, IDFPR has established a foundation for the next several decades of regulation: one that is digital, accessible, anticipatory, and responsive to the needs of Illinois residents and the licensed community.
Together, these innovations mark a pivotal chapter in the history of licensing in Illinois, one defined by transformation, resilience, and a deep commitment to public protection.
Today: One of the Nation’s Most Comprehensive Licensing Systems
Today, IDFPR:
- Oversees more than a million licenses across hundreds of professions and business entities
- Touches nearly every Illinois community through health care, housing, financial services, and consumer-facing industries
- Balances public protection with access to opportunity, recognizing that licensing decisions shape careers, communities, and the broader economy
Modern efforts include:
- Streamlining licensing processes and modernizing technology
- Enhancing transparency and data-sharing with the public
- Reviewing and updating licensing requirements to ensure they are evidence-based, equitable, and focused on real risks to the public
Looking Ahead: Licensing for the Next 250 Years
As Illinois participates in the IL250 commemoration, the story of licensing is ultimately a story about trust:
- Trust that the professional caring for a loved one is properly trained.
- Trust that the financial institution holding a family’s savings is sound.
- Trust that the person guiding a home purchase is qualified and accountable.
From the first local business licenses to today’s comprehensive, statewide systems, Illinois has used licensing as a dynamic tool to protect the public while enabling innovation and growth.
IDFPR is proud to be part of that 250-year story and committed to ensuring that licensing in Illinois remains fair, modern, and firmly rooted in the public interest for generations to come.
