95TH GENERAL ASSEMBLY
State of Illinois
2007 and 2008
SB1673

 

Introduced 2/9/2007, by Sen. Jacqueline Y. Collins

 

SYNOPSIS AS INTRODUCED:
 
15 ILCS 520/7   from Ch. 130, par. 26

    Amends the Deposit of State Moneys Act. Provides that the Treasurer may accept a proposal from an eligible institution that provides a reduced rate of interest if the institution agrees to expend an amount equal to the reduction for financial literacy programs for persons who reside in investment areas, as defined by federal law, and identified by the U.S. Department of the Treasury, in counties having a population of 3,000,000 or more. Provides that the proposal and acceptance shall be contained in an agreement between the State Treasurer, the institution, and a third party, if applicable, and the agreement shall restrict the use of the funds to the prospective delivery of the foregoing products, services, and programs. Effective immediately.


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FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

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1     AN ACT concerning finance.
 
2     Be it enacted by the People of the State of Illinois,
3 represented in the General Assembly:
 
4     Section 5. The Deposit of State Moneys Act is amended by
5 changing Section 7 as follows:
 
6     (15 ILCS 520/7)  (from Ch. 130, par. 26)
7     Sec. 7. (a) Proposals made may either be approved or
8 rejected by the State Treasurer. A bank or savings and loan
9 association whose proposal is approved shall be eligible to
10 become a State depositary for the class or classes of funds
11 covered by its proposal. A bank or savings and loan association
12 whose proposal is rejected shall not be so eligible. The State
13 Treasurer shall seek to have at all times a total of not less
14 than 20 banks or savings and loan associations which are
15 approved as State depositaries for time deposits.
16     (b) The State Treasurer may, in his discretion, accept a
17 proposal from an eligible institution which provides for a
18 reduced rate of interest provided that such institution
19 documents the use of deposited funds for community development
20 projects.
21     (b-5) The State Treasurer may, in his or her discretion,
22 accept a proposal from an eligible institution that provides
23 for a reduced rate of interest, provided that such institution

 

 

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1 agrees to expend an amount of money equal to the amount of the
2 reduction for the preservation of Cahokia Mounds.
3     (b-10) The State Treasurer may, in his or her discretion,
4 accept a proposal from an eligible institution that provides
5 for a reduced rate of interest, provided that the institution
6 agrees to expend an amount of money equal to the amount of the
7 reduction for senior centers.
8     (b-15) The State Treasurer may, in his or her discretion,
9 accept a proposal from an eligible institution that provides
10 for a reduced rate of interest, provided that the institution
11 agrees to expend an amount of money equal to the amount of the
12 reduction for financial literacy programs for persons who
13 reside in investment areas, as defined in the Community
14 Development Banking and Financial Institutions Act of 1994 (12
15 U.S.C. 4702) and identified by the U.S. Department of the
16 Treasury, within counties having a population of 3,000,000 or
17 more. The proposal and acceptance shall be contained in an
18 agreement between the State Treasurer, the institution, and a
19 third party, if applicable, and the agreement shall restrict
20 the use of the funds to the prospective delivery of the
21 foregoing products, services, and programs.
22     (c) The State Treasurer may, in his or her discretion,
23 accept a proposal from an eligible institution that provides
24 for interest earnings on deposits of State moneys to be held by
25 the institution in a separate account that the State Treasurer
26 may use to secure up to 10% of any (i) home loans to Illinois

 

 

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1 citizens purchasing a home in Illinois in situations where the
2 participating financial institution would not offer the
3 borrower a home loan under the institution's prevailing credit
4 standards without the incentive of a reduced rate of interest
5 on deposits of State moneys, (ii) existing home loans of
6 Illinois citizens who have failed to make payments on a home
7 loan as a result of a financial hardship due to circumstances
8 beyond the control of the borrower where there is a reasonable
9 prospect that the borrower will be able to resume full mortgage
10 payments, and (iii) loans in amounts that do not exceed the
11 amount of arrearage on a mortgage and that are extended to
12 enable a borrower to become current on his or her mortgage
13 obligation.
14     The following factors shall be considered by the
15 participating financial institution to determine whether the
16 financial hardship is due to circumstances beyond the control
17 of the borrower: (i) loss, reduction, or delay in the receipt
18 of income because of the death or disability of a person who
19 contributed to the household income, (ii) expenses actually
20 incurred related to the uninsured damage or costly repairs to
21 the mortgaged premises affecting its habitability, (iii)
22 expenses related to the death or illness in the borrower's
23 household or of family members living outside the household
24 that reduce the amount of household income, (iv) loss of income
25 or a substantial increase in total housing expenses because of
26 divorce, abandonment, separation from a spouse, or failure to

 

 

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1 support a spouse or child, (v) unemployment or underemployment,
2 (vi) loss, reduction, or delay in the receipt of federal,
3 State, or other government benefits, and (vii) participation by
4 the homeowner in a recognized labor action such as a strike. In
5 determining whether there is a reasonable prospect that the
6 borrower will be able to resume full mortgage payments, the
7 participating financial institution shall consider factors
8 including, but not necessarily limited to the following: (i) a
9 favorable work and credit history, (ii) the borrower's ability
10 to and history of paying the mortgage when employed, (iii) the
11 lack of an impediment or disability that prevents reemployment,
12 (iv) new education and training opportunities, (v) non-cash
13 benefits that may reduce household expenses, and (vi) other
14 debts.
15     For the purposes of this Section, "home loan" means a loan,
16 other than an open-end credit plan or a reverse mortgage
17 transaction, for which (i) the principal amount of the loan
18 does not exceed 50% of the conforming loan size limit for a
19 single-family dwelling as established from time to time by the
20 Federal National Mortgage Association, (ii) the borrower is a
21 natural person, (iii) the debt is incurred by the borrower
22 primarily for personal, family, or household purposes, and (iv)
23 the loan is secured by a mortgage or deed of trust on real
24 estate upon which there is located or there is to be located a
25 structure designed principally for the occupancy of no more
26 than 4 families and that is or will be occupied by the borrower

 

 

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1 as the borrower's principal dwelling.
2     (d) If there is an agreement between the State Treasurer
3 and an eligible institution that details the use of deposited
4 funds, the agreement may not require the gift of money, goods,
5 or services to a third party; this provision does not restrict
6 the eligible institution from contracting with third parties in
7 order to carry out the intent of the agreement or restrict the
8 State Treasurer from placing requirements upon third-party
9 contracts entered into by the eligible institution.
10 (Source: P.A. 92-482, eff. 8-23-01; 92-531, eff. 2-8-02;
11 92-625, eff. 7-11-02; 93-246, eff. 7-22-03.)
 
12     Section 99. Effective date. This Act takes effect upon
13 becoming law.