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90_HB1288enr
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Amends numerous Acts related to the regulation of the
banking and real estate industries. Permits banks to retain
certain real estate for 10, rather than 5, years. Provides
that the Commissioner of Banks and Real Estate may, after
receiving certain notices from banks, reduce the length of
the notice period. Authorizes banks to invest 10%, rather
than 5%, of capital and surplus in community development
projects. Provides for the formation and merger of interim
banks. Prohibits banks and corporate fiduciaries from
employing individuals convicted of certain offenses without
the approval of the Commissioner. Provides that banks must
be examined once every 18, rather than 12, months.
Authorizes savings banks to conduct transactions through
affiliate facilities. Allows a reduction in the frequency of
meetings of the directors of a savings bank. Changes the
method of calculating the mortgage default rate for licensees
under the Residential Mortgage License Act of 1987. Makes
other changes. Defines terms. Effective immediately.
LRB9000532JSsbB
HB1288 Enrolled LRB9000532JSsbB
1 AN ACT in relation to the powers and duties of the Office
2 of Banks and Real Estate.
3 Be it enacted by the People of the State of Illinois,
4 represented in the General Assembly:
5 Section 5. The Office of Banks and Real Estate Act is
6 amended by changing Section 5 as follows:
7 (20 ILCS 3205/5) (from Ch. 17, par. 455)
8 Sec. 5. Powers. In addition to all the other powers and
9 duties provided by law, the Commissioner shall have the
10 following powers:
11 (a) To exercise the rights, powers and duties formerly
12 vested by law in the Director of Financial Institutions under
13 the Illinois Banking Act.
14 (b) To exercise the rights, powers and duties formerly
15 vested by law in the Department of Financial Institutions
16 under "An act to provide for and regulate the administration
17 of trusts by trust companies", approved June 15, 1887, as
18 amended.
19 (c) To exercise the rights, powers and duties formerly
20 vested by law in the Director of Financial Institutions under
21 "An act authorizing foreign corporations, including banks and
22 national banking associations domiciled in other states, to
23 act in a fiduciary capacity in this state upon certain
24 conditions herein set forth", approved July 13, 1953, as
25 amended.
26 (d) Whenever the Commissioner is authorized or required
27 by law to consider or to make findings regarding the
28 character of incorporators, directors, management personnel,
29 or other relevant individuals under the Illinois Banking Act
30 or the Corporate Fiduciary Act or at other times as the
31 Commissioner deems necessary for the purpose of carrying out
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1 the Commissioner's statutory powers and responsibilities, the
2 Commissioner shall consider criminal history record
3 information, including nonconviction information, pursuant to
4 the Criminal Identification Act. The Commissioner shall, in
5 the form and manner required by the Department of State
6 Police and the Federal Bureau of Investigation, cause to be
7 conducted a criminal history record investigation to obtain
8 information currently contained in the files of the
9 Department of State Police or the Federal Bureau of
10 Investigation, provided that the Commissioner need not cause
11 additional criminal history record investigations to be
12 conducted on individuals for whom the Commissioner or a
13 federal bank regulatory agency has caused such investigations
14 to have been conducted previously unless such additional
15 investigations are otherwise required by law or unless the
16 Commissioner deems such additional investigations to be
17 necessary for the purposes of carrying out the Commissioner's
18 statutory powers and responsibilities. The Department of
19 State Police shall provide, on the Commissioner's request,
20 information concerning criminal charges and their disposition
21 currently on file with respect to a relevant individual.
22 Information obtained as a result of an investigation under
23 this Section shall be used in determining eligibility to be
24 an incorporator, director, management personnel, or other
25 relevant individual in relation to a financial institution
26 supervised by the Commissioner. Upon request and payment of
27 fees in conformance with the requirements of paragraph (22)
28 of subsection (A) of Section 55a of the Civil Administrative
29 Code of Illinois, the Department of State Police is
30 authorized to furnish, pursuant to positive identification,
31 such information contained in State files as is necessary to
32 fulfill the request.
33 (Source: P.A. 88-546; 89-508, eff. 7-3-96.)
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1 Section 10. The Illinois Banking Act is amended by
2 changing Sections 2, 5, 7, 8, 9, 13, 14, 16, 17, 32, 34, 35,
3 48, 48.3, and 79 and by adding Sections 13.5 and 16.5 as
4 follows:
5 (205 ILCS 5/2) (from Ch. 17, par. 302)
6 Sec. 2. General definitions. In this Act, unless the
7 context otherwise requires, the following words and phrases
8 shall have the following meanings:
9 "Accommodation party" shall have the meaning ascribed to
10 that term in Section 3-419 3-415 of the Uniform Commercial
11 Code.
12 "Action" in the sense of a judicial proceeding includes
13 recoupments, counterclaims, set-off, and any other proceeding
14 in which rights are determined.
15 "Affiliate facility" of a bank means a main banking
16 premises or branch of another commonly owned bank. The main
17 banking premises or any branch of a bank may be an "affiliate
18 facility" with respect to one or more other commonly owned
19 banks.
20 "Appropriate federal banking agency" means the Federal
21 Deposit Insurance Corporation, the Federal Reserve Bank of
22 Chicago, or the Federal Reserve Bank of St. Louis, as
23 determined by federal law.
24 "Bank" means any person doing a banking business whether
25 subject to the laws of this or any other jurisdiction.
26 A "banking house", "branch", "branch bank" or "branch
27 office" shall mean any place of business of a bank at which
28 deposits are received, checks paid, or loans made, but shall
29 not include any place at which only records thereof are made,
30 posted, or kept. A place of business at which deposits are
31 received, checks paid, or loans made shall not be deemed to
32 be a branch, branch bank, or branch office if the place of
33 business is adjacent to and connected with the main banking
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1 premises, or if it is separated from the main banking
2 premises by not more than an alley; provided always that (i)
3 if the place of business is separated by an alley from the
4 main banking premises there is a connection between the two
5 by public or private way or by subterranean or overhead
6 passage, and (ii) if the place of business is in a building
7 not wholly occupied by the bank, the place of business shall
8 not be within any office or room in which any other business
9 or service of any kind or nature other than the business of
10 the bank is conducted or carried on. A place of business at
11 which deposits are received, checks paid, or loans made shall
12 not be deemed to be a branch, branch bank, or branch office
13 (i) of any bank if the place is a an automatic teller machine
14 established and maintained in accordance with paragraph (16)
15 of Section 5 of this Act, or (ii) of any bank if the place is
16 a point of sale terminal established and maintained in
17 accordance with paragraph (17) of Section 5 of this Act, or
18 (ii) (iii) of a commonly owned bank by virtue of transactions
19 conducted at that place on behalf of the other commonly owned
20 bank under paragraph (23) of Section 5 of this Act if the
21 place is an affiliate facility with respect to the other
22 bank.
23 "Branch of an out-of-state bank" means a branch
24 established or maintained in Illinois by an out-of-state bank
25 as a result of a merger between an Illinois bank and the
26 out-of-state bank that occurs on or after May 31, 1997, or
27 any branch established by the out-of-state bank following the
28 merger.
29 "Call report fee" means the fee to be paid to the
30 Commissioner by each State bank pursuant to paragraph (a) of
31 subsection (3) of Section 48 of this Act.
32 "Capital" includes the aggregate of outstanding capital
33 stock and preferred stock.
34 "Cash flow reserve account" means the account within the
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1 books and records of the Commissioner of Banks and Real
2 Estate used to record funds designated to maintain a
3 reasonable Bank and Trust Company Fund operating balance to
4 meet agency obligations on a timely basis.
5 "Charter" includes the original charter and all
6 amendments thereto and articles of merger or consolidation.
7 "Commissioner" means the Commissioner of Banks and Real
8 Estate or a person authorized by the Commissioner, the Office
9 of Banks and Real Estate Act, or this Act to act in the
10 Commissioner's stead.
11 "Commonly owned banks" means 2 or more banks that each
12 qualify as a bank subsidiary of the same bank holding company
13 pursuant to Section 18 of the Federal Deposit Insurance Act;
14 "commonly owned bank" refers to one of a group of commonly
15 owned banks but only with respect to one or more of the other
16 banks in the same group.
17 "Community" means a city, village, or incorporated town
18 in this State.
19 "Company" means a corporation, partnership, business
20 trust, association, or similar organization and, unless
21 specifically excluded, includes a "State bank" and a "bank".
22 "Consolidating bank" means a party to a consolidation.
23 "Consolidation" takes place when 2 or more banks, or a
24 trust company and a bank, are extinguished and by the same
25 process a new bank is created, taking over the assets and
26 assuming the liabilities of the banks or trust company
27 passing out of existence.
28 "Continuing bank" means a merging bank, the charter of
29 which becomes the charter of the resulting bank.
30 "Converting bank" means a State bank converting to become
31 a national bank, or a national bank converting to become a
32 State bank.
33 "Converting trust company" means a trust company
34 converting to become a State bank.
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1 "Court" means a court of competent jurisdiction.
2 "Eligible depository institution" means an insured
3 savings association that is in default, an insured savings
4 association that is in danger of default, a State or national
5 bank that is in default or a State or national bank that is
6 in danger of default, as those terms are defined in this
7 Section, or a new bank as that term defined in Section 11(m)
8 of the Federal Deposit Insurance Act or a bridge bank as that
9 term is defined in Section 11(n) of the Federal Deposit
10 Insurance Act or a new federal savings association authorized
11 under Section 11(d)(2)(f) of the Federal Deposit Insurance
12 Act.
13 "Fiduciary" means trustee, agent, executor,
14 administrator, committee, guardian for a minor or for a
15 person under legal disability, receiver, trustee in
16 bankruptcy, assignee for creditors, or any holder of similar
17 position of trust.
18 "Financial institution" means a bank, savings and loan
19 association, credit union, or any licensee under the Consumer
20 Installment Loan Act or the Sales Finance Agency Act and, for
21 purposes of Section 48.3, any proprietary network, funds
22 transfer corporation, or other entity providing electronic
23 funds transfer services, or any corporate fiduciary, its
24 subsidiaries, affiliates, parent company, or contractual
25 service provider that is examined by the Commissioner.
26 "Foundation" means the Illinois Bank Examiners' Education
27 Foundation.
28 "General obligation" means a bond, note, debenture,
29 security, or other instrument evidencing an obligation of the
30 issuer that is supported by the full available resources of
31 the issuer, the principal and interest of which is payable in
32 whole or in part by taxation.
33 "Guarantee" means an undertaking or promise to answer for
34 payment of another's debt or performance of another's duty,
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1 liability, or obligation whether "payment guaranteed" or
2 "collection guaranteed".
3 "In danger of default" means a State or national bank, a
4 federally chartered insured savings association or an
5 Illinois state chartered insured savings association with
6 respect to which the Commissioner or the appropriate federal
7 banking agency has advised the Federal Deposit Insurance
8 Corporation that:
9 (1) in the opinion of the Commissioner or the
10 appropriate federal banking agency,
11 (A) the State or national bank or insured
12 savings association is not likely to be able to meet
13 the demands of the State or national bank's or
14 savings association's obligations in the normal
15 course of business; and
16 (B) there is no reasonable prospect that the
17 State or national bank or insured savings
18 association will be able to meet those demands or
19 pay those obligations without federal assistance; or
20 (2) in the opinion of the Commissioner or the
21 appropriate federal banking agency,
22 (A) the State or national bank or insured
23 savings association has incurred or is likely to
24 incur losses that will deplete all or substantially
25 all of its capital; and
26 (B) there is no reasonable prospect that the
27 capital of the State or national bank or insured
28 savings association will be replenished without
29 federal assistance.
30 "In default" means, with respect to a State or national
31 bank or an insured savings association, any adjudication or
32 other official determination by any court of competent
33 jurisdiction, the Commissioner, the appropriate federal
34 banking agency, or other public authority pursuant to which a
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1 conservator, receiver, or other legal custodian is appointed
2 for a State or national bank or an insured savings
3 association.
4 "Insured savings association" means any federal savings
5 association chartered under Section 5 of the federal Home
6 Owners' Loan Act and any State savings association chartered
7 under the Illinois Savings and Loan Act of 1985 or a
8 predecessor Illinois statute, the deposits of which are
9 insured by the Federal Deposit Insurance Corporation. The
10 term also includes a savings bank organized or operating
11 under the Savings Bank Act.
12 "Insured savings association in recovery" means an
13 insured savings association that is not an eligible
14 depository institution and that does not meet the minimum
15 capital requirements applicable with respect to the insured
16 savings association.
17 "Issuer" means for purposes of Section 33 every person
18 who shall have issued or proposed to issue any security;
19 except that (1) with respect to certificates of deposit,
20 voting trust certificates, collateral-trust certificates, and
21 certificates of interest or shares in an unincorporated
22 investment trust not having a board of directors (or persons
23 performing similar functions), "issuer" means the person or
24 persons performing the acts and assuming the duties of
25 depositor or manager pursuant to the provisions of the trust,
26 agreement, or instrument under which the securities are
27 issued; (2) with respect to trusts other than those specified
28 in clause (1) above, where the trustee is a corporation
29 authorized to accept and execute trusts, "issuer" means the
30 entrusters, depositors, or creators of the trust and any
31 manager or committee charged with the general direction of
32 the affairs of the trust pursuant to the provisions of the
33 agreement or instrument creating the trust; and (3) with
34 respect to equipment trust certificates or like securities,
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1 "issuer" means the person to whom the equipment or property
2 is or is to be leased or conditionally sold.
3 "Letter of credit" and "customer" shall have the meanings
4 ascribed to those terms in Section 5-102 of the Uniform
5 Commercial Code.
6 "Main banking premises" means the location that is
7 designated in a bank's charter as its main office.
8 "Maker or obligor" means for purposes of Section 33 the
9 issuer of a security, the promisor in a debenture or other
10 debt security, or the mortgagor or grantor of a trust deed or
11 similar conveyance of a security interest in real or personal
12 property.
13 "Merged bank" means a merging bank that is not the
14 continuing, resulting, or surviving bank in a consolidation
15 or merger.
16 "Merger" includes consolidation.
17 "Merging bank" means a party to a bank merger.
18 "Merging trust company" means a trust company party to a
19 merger with a State bank.
20 "Mid-tier bank holding company" means a corporation that
21 (a) owns 100% of the issued and outstanding shares of each
22 class of stock of a State bank, (b) has no other
23 subsidiaries, and (c) 100% of the issued and outstanding
24 shares of the corporation are owned by a parent bank holding
25 company.
26 "Municipality" means any municipality, political
27 subdivision, school district, taxing district, or agency.
28 "National bank" means a national banking association
29 located in this State and after May 31, 1997, means a
30 national banking association without regard to its location.
31 "Out-of-state bank" means a bank chartered under the laws
32 of a state other than Illinois, a territory of the United
33 States, or the District of Columbia.
34 "Parent bank holding company" means a corporation that is
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1 a bank holding company as that term is defined in the
2 Illinois Bank Holding Company Act of 1957 and owns 100% of
3 the issued and outstanding shares of a mid-tier bank holding
4 company.
5 "Person" means an individual, corporation, partnership,
6 joint venture, trust, estate, or unincorporated association.
7 "Public agency" means the State of Illinois, the various
8 counties, townships, cities, towns, villages, school
9 districts, educational service regions, special road
10 districts, public water supply districts, fire protection
11 districts, drainage districts, levee districts, sewer
12 districts, housing authorities, the Illinois Bank Examiners'
13 Education Foundation, the Chicago Park District, and all
14 other political corporations or subdivisions of the State of
15 Illinois, whether now or hereafter created, whether herein
16 specifically mentioned or not, and shall also include any
17 other state or any political corporation or subdivision of
18 another state.
19 "Public funds" or "public money" means current operating
20 funds, special funds, interest and sinking funds, and funds
21 of any kind or character belonging to, in the custody of, or
22 subject to the control or regulation of the United States or
23 a public agency. "Public funds" or "public money" shall
24 include funds held by any of the officers, agents, or
25 employees of the United States or of a public agency in the
26 course of their official duties and, with respect to public
27 money of the United States, shall include Postal Savings
28 funds.
29 "Published" means, unless the context requires otherwise,
30 the publishing of the notice or instrument referred to in
31 some newspaper of general circulation in the community in
32 which the bank is located at least once each week for 3
33 successive weeks. Publishing shall be accomplished by, and
34 at the expense of, the bank required to publish. Where
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1 publishing is required, the bank shall submit to the
2 Commissioner that evidence of the publication as the
3 Commissioner shall deem appropriate.
4 "Recorded" means the filing or recording of the notice or
5 instrument referred to in the office of the Recorder of the
6 county wherein the bank is located.
7 "Resulting bank" means the bank resulting from a merger
8 or conversion.
9 "Securities" means stocks, bonds, debentures, notes, or
10 other similar obligations.
11 "Stand-by letter of credit" means a letter of credit
12 under which drafts are payable upon the condition the
13 customer has defaulted in performance of a duty, liability,
14 or obligation.
15 "State bank" means any banking corporation that has a
16 banking charter issued by the Commissioner under this Act.
17 "State Banking Board" means the State Banking Board of
18 Illinois.
19 "Subsidiary" with respect to a specified company means a
20 company that is controlled by the specified company. For
21 purposes of paragraphs (8) and (12) of Section 5 of this Act,
22 "control" means the exercise of operational or managerial
23 control of a corporation by the bank, either alone or
24 together with other affiliates of the bank.
25 "Surplus" means the aggregate of (i) amounts paid in
26 excess of the par value of capital stock and preferred stock;
27 (ii) amounts contributed other than for capital stock and
28 preferred stock and allocated to the surplus account; and
29 (iii) amounts transferred from undivided profits.
30 "Tier 1 Capital" and "Tier 2 Capital" have the meanings
31 assigned to those terms in regulations promulgated for the
32 appropriate federal banking agency of a state bank, as those
33 regulations are now or hereafter amended.
34 "Trust company" means a corporation incorporated in this
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1 State for the purpose of accepting and executing trusts.
2 "Undivided profits" means undistributed earnings less
3 discretionary transfers to surplus.
4 "Unimpaired capital and unimpaired surplus", for the
5 purposes of paragraph (21) of Section 5 and Sections 32, 33,
6 34, 35.1, 35.2, and 47 of this Act means the sum of the state
7 bank's Tier 1 Capital and Tier 2 Capital plus such other
8 shareholder equity as may be included by regulation of the
9 Commissioner. Unimpaired capital and unimpaired surplus
10 shall be calculated on the basis of the date of the last
11 quarterly call report filed with the Commissioner preceding
12 the date of the transaction for which the calculation is
13 made, provided that: (i) when a material event occurs after
14 the date of the last quarterly call report filed with the
15 Commissioner that reduces or increases the bank's unimpaired
16 capital and unimpaired surplus by 10% or more, then the
17 unimpaired capital and unimpaired surplus shall be calculated
18 from the date of the material event for a transaction
19 conducted after the date of the material event; and (ii) if
20 the Commissioner determines for safety and soundness reasons
21 that a state bank should calculate unimpaired capital and
22 unimpaired surplus more frequently than provided by this
23 paragraph, the Commissioner may by written notice direct the
24 bank to calculate unimpaired capital and unimpaired surplus
25 at a more frequent interval. In the case of a state bank
26 newly chartered under Section 13 or a state bank resulting
27 from a merger, consolidation, or conversion under Sections 21
28 through 26 for which no preceding quarterly call report has
29 been filed with the Commissioner, unimpaired capital and
30 unimpaired surplus shall be calculated for the first calendar
31 quarter on the basis of the effective date of the charter,
32 merger, consolidation, or conversion.
33 (Source: P.A. 88-45; 88-271; 88-546; 89-208, eff. 9-29-95;
34 89-364, eff. 8-18-95; revised 9-18-95; 89-508, eff. 7-3-96;
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1 89-534, eff. 1-1-97; 89-567, eff. 7-26-96; 89-626, eff.
2 8-9-96; revised 8-27-96.)
3 (205 ILCS 5/5) (from Ch. 17, par. 311)
4 Sec. 5. General corporate powers. A bank organized
5 under this Act or subject hereto shall be a body corporate
6 and politic and shall, without specific mention thereof in
7 the charter, have all the powers conferred by this Act and
8 the following additional general corporate powers:
9 (1) To sue and be sued, complain, and defend in its
10 corporate name.
11 (2) To have a corporate seal, which may be altered at
12 pleasure, and to use the same by causing it or a facsimile
13 thereof to be impressed or affixed or in any manner
14 reproduced, provided that the affixing of a corporate seal to
15 an instrument shall not give the instrument additional force
16 or effect, or change the construction thereof, and the use of
17 a corporate seal is not mandatory.
18 (3) To make, alter, amend, and repeal bylaws, not
19 inconsistent with its charter or with law, for the
20 administration of the affairs of the bank.
21 (4) To elect or appoint and remove officers and agents
22 of the bank and define their duties and fix their
23 compensation.
24 (5) To adopt and operate reasonable bonus plans,
25 profit-sharing plans, stock-bonus plans, stock-option plans,
26 pension plans and similar incentive plans for its directors,
27 officers and employees.
28 (5.1) To manage, operate and administer a fund for the
29 investment of funds by a public agency or agencies, including
30 any unit of local government or school district, or any
31 person. The fund for a public agency shall invest in the
32 same type of investments and be subject to the same
33 limitations provided for the investment of public funds. The
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1 fund for public agencies shall maintain a separate ledger
2 showing the amount of investment for each public agency in
3 the fund. "Public funds" and "public agency" as used in this
4 Section shall have the meanings ascribed to them in Section 1
5 of the Public Funds Investment Act.
6 (6) To make reasonable donations for the public welfare
7 or for charitable, scientific, religious or educational
8 purposes.
9 (7) To borrow or incur an obligation; and to pledge its
10 assets:
11 (a) to secure its borrowings, its lease of personal
12 or real property or its other nondeposit obligations;
13 (b) to enable it to act as agent for the sale of
14 obligations of the United States;
15 (c) to secure deposits of public money of the
16 United States, whenever required by the laws of the
17 United States, including without being limited to,
18 revenues and funds the deposit of which is subject to the
19 control or regulation of the United States or any of its
20 officers, agents, or employees and Postal Savings funds;
21 (d) to secure deposits of public money of any state
22 or of any political corporation or subdivision thereof
23 including, without being limited to, revenues and funds
24 the deposit of which is subject to the control or
25 regulation of any state or of any political corporation
26 or subdivisions thereof or of any of their officers,
27 agents, or employees;
28 (e) to secure deposits of money whenever required
29 by the National Bankruptcy Act;
30 (f) (Blank) to qualify under Section 2-9 of the
31 Corporate Fiduciary Act; and
32 (g) to secure trust funds commingled with the
33 bank's funds, whether deposited by the bank or an
34 affiliate of the bank, pursuant to Section 2-8 of the
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1 Corporate Fiduciary Act.
2 (8) To own, possess, and carry as assets all or part of
3 the real estate necessary in or with which to do its banking
4 business, either directly or indirectly through the ownership
5 of all or part of the capital stock, shares or interests in
6 any corporation, association, trust engaged in holding any
7 part or parts or all of the bank premises, engaged in such
8 business and in conducting a safe deposit business in the
9 premises or part of them, or engaged in any activity that the
10 bank is permitted to conduct in a subsidiary pursuant to
11 paragraph (12) of this Section 5.
12 (9) To own, possess, and carry as assets other real
13 estate to which it may obtain title in the collection of its
14 debts or that was formerly used as a part of the bank
15 premises, but title to any real estate except as herein
16 permitted shall not be retained by the bank, either directly
17 or by or through a subsidiary, as permitted by subsection
18 (12) of this Section for a total period of more than 10 5
19 years after acquiring title, either directly or indirectly,
20 unless a request for extension of time shall have been
21 submitted in writing to and approved by the Commissioner.
22 (10) To do any act, including the acquisition of stock,
23 necessary to obtain insurance of its deposits, or part
24 thereof, and any act necessary to obtain a guaranty, in whole
25 or in part, of any of its loans or investments by the United
26 States or any agency thereof, and any act necessary to sell
27 or otherwise dispose of any of its loans or investments to
28 the United States or any agency thereof, and to acquire and
29 hold membership in the Federal Reserve System.
30 (11) Notwithstanding any other provisions of this Act,
31 to do any act and to own, possess, and carry as assets
32 property of the character, including stock, that is at the
33 time authorized or permitted to national banks by an Act of
34 Congress, but subject always to the same limitations and
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1 restrictions as are applicable to national banks by the
2 pertinent federal law.
3 (12) To own, possess, and carry as assets stock of one
4 or more corporations that is, or are, engaged in one or more
5 of the following businesses:
6 (a) holding title to and administering assets
7 acquired as a result of the collection or liquidating of
8 loans, investments, or discounts; or
9 (b) holding title to and administering personal
10 property acquired by the bank, directly or indirectly
11 through a subsidiary, for the purpose of leasing to
12 others, provided the lease or leases and the investment
13 of the bank, directly or through a subsidiary, in that
14 personal property otherwise comply with Section 35.1 of
15 this Act; or
16 (c) carrying on or administering any of the
17 activities excepting the receipt of deposits or the
18 payment of checks or other orders for the payment of
19 money in which a bank may engage in carrying on its
20 general banking business; provided, however, that nothing
21 contained in this paragraph (c) shall be deemed to permit
22 a bank organized under this Act or subject hereto to do,
23 either directly or indirectly through any subsidiary, any
24 act, including the making of any loan or investment, or
25 to own, possess, or carry as assets any property that if
26 done by or owned, possessed, or carried by the State bank
27 would be in violation of or prohibited by any provision
28 of this Act.
29 The provisions of this subsection (12) shall not apply to
30 and shall not be deemed to limit the powers of a State bank
31 with respect to the ownership, possession, and carrying of
32 stock that a State bank is permitted to own, possess, or
33 carry under this Act.
34 Any bank intending to establish a subsidiary under this
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1 subsection (12) shall give written notice to the Commissioner
2 60 days prior to the subsidiary's commencing of business or,
3 as the case may be, prior to acquiring stock in a corporation
4 that has already commenced business. After receiving the
5 notice, the Commissioner may waive or reduce the balance of
6 the 60 day notice period. The Commissioner may specify the
7 form of the notice and may promulgate rules and regulations
8 to administer this subsection (12).
9 (13) To accept for payment at a future date not
10 exceeding one year from the date of acceptance, drafts drawn
11 upon it by its customers; and to issue, advise, or confirm
12 letters of credit authorizing the holders thereof to draw
13 drafts upon it or its correspondents.
14 (14) To own and lease personal property acquired by the
15 bank at the request of a prospective lessee and upon the
16 agreement of that person to lease the personal property
17 provided that the lease, the agreement with respect thereto,
18 and the amount of the investment of the bank in the property
19 comply with Section 35.1 of this Act.
20 (15) (a) To establish and maintain, in addition to the
21 main banking premises, branches offering any banking services
22 permitted at the main banking premises of a State bank.
23 (b) To establish and maintain, after May 31, 1997,
24 branches in another state that may conduct any activity in
25 that state that is authorized or permitted for any bank that
26 has a banking charter issued by that state, subject to the
27 same limitations and restrictions that are applicable to
28 banks chartered by that state.
29 (16) (Blank).
30 (17) To establish and maintain terminals, as authorized
31 by the Electronic Fund Transfer Act.
32 (18) To establish and maintain temporary service booths
33 at any International Fair held in this State which is
34 approved by the United States Department of Commerce, for the
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1 duration of the international fair for the sole purpose of
2 providing a convenient place for foreign trade customers at
3 the fair to exchange their home countries' currency into
4 United States currency or the converse. This power shall not
5 be construed as establishing a new place or change of
6 location for the bank providing the service booth.
7 (19) To indemnify its officers, directors, employees,
8 and agents, as authorized for corporations under Section 8.75
9 of the Business Corporation Act of 1983.
10 (20) To own, possess, and carry as assets stock of, or
11 be or become a member of, any corporation, mutual company,
12 association, trust, or other entity formed exclusively for
13 the purpose of providing directors' and officers' liability
14 and bankers' blanket bond insurance or reinsurance to and for
15 the benefit of the stockholders, members, or beneficiaries,
16 or their assets or businesses, or their officers, directors,
17 employees, or agents, and not to or for the benefit of any
18 other person or entity or the public generally.
19 (21) To make debt or equity investments in corporations
20 or projects, whether for profit or not for profit, designed
21 to promote the development of the community and its welfare,
22 provided that the aggregate investment in all of these
23 corporations and in all of these projects does not exceed 10%
24 5% of the unimpaired capital and unimpaired surplus of the
25 bank and provided that this limitation shall not apply to
26 creditworthy loans by the bank to those corporations or
27 projects. Upon written application to the Commissioner, a
28 bank may make an investment that would, when aggregated with
29 all other such investments, exceed 10% 5% of the unimpaired
30 capital and unimpaired surplus of the bank. The Commissioner
31 may approve the investment if he is of the opinion and finds
32 that the proposed investment will not have a material adverse
33 effect on the safety and soundness of the bank.
34 (22) To own, possess, and carry as assets the stock of a
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1 corporation engaged in the ownership or operation of a travel
2 agency or to operate a travel agency as a part of its
3 business, provided that the bank either owned, possessed, and
4 carried as assets the stock of such a corporation or operated
5 a travel agency as part of its business before July 1, 1991.
6 (23) With respect to affiliate facilities:
7 (a) to conduct at affiliate facilities any of the
8 following transactions for and on behalf of another
9 commonly owned bank, if so authorized by the other bank:
10 receiving deposits; cashing and issuing checks, drafts,
11 and money orders; changing money; and receiving payments
12 on existing indebtedness; and
13 (b) to authorize a commonly owned bank to conduct
14 for and on behalf of it any of the transactions listed in
15 this paragraph (23) at one or more affiliate facilities.
16 Any bank intending to conduct or to authorize a commonly
17 owned bank to conduct at an affiliate facility any of the
18 transactions specified in this paragraph (23) shall give
19 written notice to the Commissioner at least 30 days before
20 any such transaction is conducted at the affiliate facility.
21 (Source: P.A. 88-4; 89-208, eff. 9-29-95; 89-310, eff.
22 1-1-96; 89-364, eff. 8-18-95; 89-626, eff. 8-9-96.)
23 (205 ILCS 5/7) (from Ch. 17, par. 314)
24 Sec. 7. Organization capital requirements. A bank may be
25 organized to exercise the powers conferred by this Act with
26 minimum capital and, surplus and reserve for operating
27 expenses as determined by the Commissioner. The Commissioner
28 shall record such organization capital requirements in the
29 Office of the Secretary of State.
30 (Source: P.A. 84-1004.)
31 (205 ILCS 5/8) (from Ch. 17, par. 315)
32 Sec. 8. Incorporators. A State bank may be organized on
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1 application by 5 or more incorporators who shall be
2 individuals and residents of this State except that a bank
3 holding company may be the sole incorporator of a State bank.
4 Each incorporator shall undertake to subscribe and pay in
5 full in cash for stock having a value of not less than one
6 per cent of the minimum capital and, surplus and reserve for
7 operating expense requirements as set forth in Section 7,
8 except that incorporators of a State bank that will be owned
9 by a bank holding company may subscribe and pay in full in
10 cash for stock of the bank holding company, provided that the
11 incorporator's investment in the bank holding company must at
12 least equal the amount of money that would have been needed
13 for the incorporator to acquire shares of the bank's stock
14 pursuant to this Section.
15 (Source: P.A. 88-546.)
16 (205 ILCS 5/9) (from Ch. 17, par. 316)
17 Sec. 9. Contents of application. The application for a
18 permit to organize shall be in a form specified by the
19 Commissioner and shall be filed with the Commissioner signed
20 by each of the applicants and shall be acknowledged before
21 some officer authorized by law to acknowledge deeds. It shall
22 state:
23 (1) The name, residence, business or occupation and
24 address of each applicant, and a statement of the proposed
25 management;
26 (2) The name for the proposed bank;
27 (3) The location of the proposed bank;
28 (4) The amount of capital, surplus and reserve for
29 operating expenses for the proposed bank;
30 (5) The number of shares of capital stock, the number of
31 shares and classes of preferred stock, if any, the par value
32 of the capital stock and preferred stock, and the amount for
33 which each share of capital stock and preferred stock is to
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1 be sold;
2 (6) A statement of the financial worth of each of the
3 applicants;
4 (7) (Blank) Three references as to the personal
5 character of each of the applicants;
6 (8) Such other relevant information as the Commissioner
7 may require.
8 (Source: P.A. 86-754.)
9 (205 ILCS 5/13) (from Ch. 17, par. 320)
10 Sec. 13. Issuance of charter.
11 (a) When the directors have organized as provided in
12 Section 12 of this Act, and the capital stock and the
13 preferred stock, if any, together with a surplus of not less
14 than 50% of the capital, and a reserve for operating expenses
15 of at least 25% of the capital, has been all fully paid in
16 and a record of the same filed with the Commissioner, the
17 Commissioner or some competent person of the Commissioner's
18 appointment shall make a thorough examination into the
19 affairs of the proposed bank, and if satisfied that all the
20 requirements of this Act have been complied with, and that no
21 intervening circumstance has occurred to change the
22 Commissioner's findings made pursuant to Section 10 of this
23 Act, upon payment into the Commissioner's office of the
24 reasonable expenses of the examination, as determined by the
25 Commissioner, the Commissioner shall issue a charter
26 authorizing the bank to commence business as authorized in
27 this Act. All charters issued by the Commissioner or any
28 predecessor agency which chartered State banks, including any
29 charter outstanding as of September 1, 1989, shall be
30 perpetual. For the 2 years after the Commissioner has issued
31 a charter to a bank, the bank shall request and obtain from
32 the Commissioner prior written approval before it may change
33 senior management personnel or directors.
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1 The original charter, duly certified by the Commissioner,
2 shall be recorded, and the original or a certified copy shall
3 be evidence in all courts and places of the existence and
4 authority of the bank to do business. Upon the issuance
5 recording of the charter by the Commissioner, the bank shall
6 be deemed fully organized and may proceed to do business.
7 The Commissioner may, in the Commissioner's discretion,
8 withhold the issuing of the charter when the Commissioner has
9 reason to believe that the bank is organized for any purpose
10 other than that contemplated by this Act or that a commission
11 or fee has been paid in connection with the sale of the stock
12 of the bank. The Commissioner shall revoke the charter and
13 order liquidation in the event that the bank does not
14 commence a general banking business within one year from the
15 date of the issuance of the charter, unless a request has
16 been submitted, in writing, to the Commissioner for an
17 extension and the request has been approved. After
18 commencing a general banking business, a bank, upon written
19 notice to the Commissioner, may change its name.
20 (b) (1) The Commissioner may also issue a charter to a
21 bank that is owned exclusively by other depository
22 institutions or depository institution holding companies and
23 is organized to engage exclusively in providing services to
24 or for other depository institutions, their holding
25 companies, and the officers, directors, and employees of such
26 institutions and companies, and in providing correspondent
27 banking services at the request of other depository
28 institutions or their holding companies (also referred to as
29 a "bankers' bank").
30 (2) A bank chartered pursuant to paragraph (1) shall,
31 except as otherwise specifically determined by the
32 Commissioner, be vested with the same rights and privileges
33 and subject to the same duties, restrictions, penalties, and
34 liabilities now or hereafter imposed under this Act.
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1 (c) A bank chartered under this Act after November 1,
2 1985, and an out-of-state bank that merges with a State bank
3 and establishes or maintains a branch in this State after May
4 31, 1997, shall obtain from and, at all times while it
5 accepts or retains deposits, maintain with the Federal
6 Deposit Insurance Corporation, or such other instrumentality
7 of or corporation chartered by the United States, deposit
8 insurance as authorized under federal law.
9 (d) (i) A bank that has a banking charter issued by the
10 Commissioner under this Act may, pursuant to a written
11 purchase and assumption agreement, transfer substantially all
12 of its assets to another State bank or national bank in
13 consideration, in whole or in part, for the transferee banks'
14 assumption of any part or all of its liabilities. Such a
15 transfer shall in no way be deemed to impair the charter of
16 the transferor bank or cause the transferor bank to forfeit
17 any of its rights, powers, interests, franchises, or
18 privileges as a State bank, nor shall any voluntary reduction
19 in the transferor bank's activities resulting from the
20 transfer have any such effect; provided, however, that a
21 State bank that transfers substantially all of its assets
22 pursuant to this subsection (d) and following the transfer
23 does not accept deposits and make loans, shall not have any
24 rights, powers, interests, franchises, or privileges under
25 subsection (15) of Section 5 of this Act until the bank has
26 resumed accepting deposits and making loans.
27 (ii) The fact that a State bank does not resume
28 accepting deposits and making loans for a period of 24 months
29 commencing on September 11, 1989 or on a date of the transfer
30 of substantially all of a State bank's assets, whichever is
31 later, or such longer period as the Commissioner may allow in
32 writing, may be the basis for a finding by the Commissioner
33 under Section 51 of this Act that the bank is unable to
34 continue operations.
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1 (iii) The authority provided by subdivision (i) of this
2 subsection (d)(i) shall terminate on May 31, 1997, and no
3 bank that has transferred substantially all of its assets
4 pursuant to this subsection (d) shall continue in existence
5 after May 31, 1997.
6 (Source: P.A. 89-208, eff. 9-29-95; 89-567, eff. 7-26-96;
7 89-603, eff. 8-2-96; revised 9-9-96.)
8 (205 ILCS 5/13.5 new)
9 Sec. 13.5. Formation and merger of interim banks.
10 (a) An interim bank may be chartered as a State bank for
11 the exclusive purpose of accomplishing a corporate
12 restructuring through merger with an existing State bank. An
13 interim bank shall be chartered and merged pursuant to the
14 provisions of this Section. The interim bank shall not
15 accept deposits, make loans, pay checks, or engage in the
16 general banking business or any part thereof, and shall not
17 be subject to the provisions of this Act other than those set
18 forth in this Section; provided, however, that if the interim
19 bank becomes the resulting bank in a merger, such resulting
20 bank shall have all of the powers, rights, and duties of a
21 State bank and must comply with all applicable provisions of
22 this Act.
23 (b) An interim State bank may be organized upon
24 application by 5 or more incorporators or by a bank holding
25 company. The application shall be made on forms prescribed
26 by the Commissioner which shall request, at a minimum, the
27 following information:
28 (1) the names and addresses of the incorporators;
29 (2) the proposed name and address of the interim
30 bank;
31 (3) the name and address of all banks with which
32 the interim bank will be merging;
33 (4) a copy of the merger agreement by which the
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1 interim bank will be merged with the banks identified in
2 item (3) containing the same information required in
3 merger agreements pursuant to subsection (1) of Section
4 22 of this Act; and
5 (5) an acknowledgement that the interim bank shall
6 not engage in the general banking business or any part
7 thereof unless and until the interim bank becomes the
8 resulting bank in a merger.
9 (c) The merger agreement must be approved by all of the
10 incorporators of the interim bank and must be approved by the
11 existing State bank with which the interim bank will merge,
12 as required by Section 22 of this Act.
13 (d) Upon receipt of the application to organize the
14 interim bank and the merger agreement submitted pursuant to
15 this Section and Section 22 of this Act, the Commissioner may
16 issue a charter to the interim bank and approve the merger
17 agreement if the Commissioner makes the findings set forth in
18 subsection (3) of Section 22 of this Act. The interim bank's
19 charter shall not take effect until, and shall only be
20 effective for purposes of, the merger.
21 (e) Nothing in this Section affects the obligations of
22 an existing State bank with which the interim bank will
23 merge, or the rights of minority or dissenting shareholders
24 of the existing State bank, in connection with the approval,
25 execution, and accomplishment of a merger agreement as
26 provided elsewhere in this Act.
27 (205 ILCS 5/14) (from Ch. 17, par. 321)
28 Sec. 14. Stock. Unless otherwise provided for in this Act
29 provisions of general application to stock of a state bank
30 shall be as follows:
31 (1) All banks shall have their capital divided into
32 shares of a par value of not less than one dollar each and
33 not more than one hundred dollars each. No issue of capital
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1 stock or preferred stock shall be valid until not less than
2 the par value of all such stock so issued shall be paid in
3 and notice thereof by the president, a vice-president or
4 cashier of the bank has been transmitted to the Commissioner.
5 In the case of an increase in capital stock by the
6 declaration of a stock dividend, the capitalization of
7 retained earnings effected by such stock dividend shall
8 constitute the payment for such shares required by the
9 preceding sentence, provided that the surplus of said bank
10 after such stock dividend shall be at least equal to fifty
11 per cent of the capital as increased. The charter shall not
12 limit or deny the voting power of the shares of any class of
13 stock except as provided in Section 15(3) of this Act.
14 (2) Pursuant to action taken in accordance with the
15 requirements of Section 17, a bank may issue preferred stock
16 of one or more classes as shall be approved by the
17 Commissioner as hereinafter provided, and make such amendment
18 to its charter as may be necessary for this purpose; but in
19 the case of any newly organized bank which has not yet issued
20 capital stock the requirements of Section 17 shall not apply.
21 (3) Without limiting the authority herein contained a
22 bank, when so provided in its charter and when approved by
23 the Commissioner, may issue shares of preferred stock:
24 (a) Subject to the right of the bank to redeem any of
25 such shares at not exceeding the price fixed by the charter
26 for the redemption thereof;
27 (b) Subject to the provisions of subsection (8) of this
28 Section 14 entitling the holders thereof to cumulative or
29 noncumulative dividends;
30 (c) Having preference over any other class or classes of
31 shares as to the payment of dividends;
32 (d) Having preference as to the assets of the bank over
33 any other class or classes of shares upon the voluntary or
34 involuntary liquidation of the bank;
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1 (e) Convertible into shares of any other class of stock,
2 provided that preferred shares shall not be converted into
3 shares of a different par value unless that part of the
4 capital of the bank represented by such preferred shares is
5 at the time of the conversion equal to the aggregate par
6 value of the shares into which the preferred shares are to be
7 converted.
8 (4) If any part of the capital of a bank consists of
9 preferred stock, the determination of whether or not the
10 capital of such bank is impaired and the amount of such
11 impairment shall be based upon the par value of its stock
12 even though the amount which the holders of such preferred
13 stock shall be entitled to receive in the event of retirement
14 or liquidation shall be in excess of the par value of such
15 preferred stock.
16 (5) Pursuant to action taken in accordance with the
17 requirements of Section 17 of this Act, a state bank may
18 provide for a specified number of authorized but unissued
19 shares of capital stock for one or more of the following
20 purposes:
21 (a) Reserved for issuance under stock option plan or
22 plans to directors, officers or employees;
23 (b) Reserved for issuance upon conversion of convertible
24 preferred stock issued pursuant to and in compliance with the
25 provisions of subsections (2) and (3) of this Section 14.
26 (c) Reserved for issuance upon conversion of convertible
27 debentures or other convertible evidences of indebtedness
28 issued by a state bank, provided always that the terms of
29 such conversion have been approved by the Commissioner;
30 (d) Reserved for issuance by the declaration of a stock
31 dividend. If and when any shares of capital stock are
32 proposed to be authorized and reserved for any of the
33 purposes set forth in subparagraphs (a), (b) or (c) above,
34 the notice of the meeting, whether special or annual, of
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1 stockholders at which such proposition is to be considered
2 shall be accompanied by a statement setting forth or
3 summarizing the terms upon which the shares of capital stock
4 so reserved are to be issued, and the extent to which any
5 preemptive rights of stockholders are inapplicable to the
6 issuance of the shares so reserved or to the convertible
7 preferred stock or convertible debentures or other
8 convertible evidences of indebtedness, and the approving vote
9 of the holders of at least two-thirds of the outstanding
10 shares of stock entitled to vote at such meeting of the terms
11 of such issuance shall be requisite for the adoption of any
12 amendment providing for the reservation of authorized but
13 unissued shares for any of said purposes. Nothing in this
14 subsection (5) contained shall be deemed to authorize the
15 issuance of any capital stock for a consideration less than
16 the par value thereof.
17 (6) Upon written application to the Commissioner 60 days
18 prior to the proposed purchase and receipt of the written
19 approval of the Commissioner, a state bank may purchase and
20 hold as treasury stock such amounts of the total number of
21 issued and outstanding shares of its capital and preferred
22 stock outstanding as the Commissioner determines is
23 consistent with safety and soundness of the bank. The
24 Commissioner may specify the manner of accounting for the
25 treasury stock and the form of notice prior to ultimate
26 disposition of the shares. Except as authorized in this
27 subsection, it shall not be lawful for a state bank to
28 purchase or hold any additional such shares or securities
29 described in subsection (2) of Section 37 unless necessary to
30 prevent loss upon a debt previously contracted in good faith,
31 in which event such shares or securities so purchased or
32 acquired shall, within 6 months from the time of purchase or
33 acquisition, be sold or disposed of at public or private
34 sale. Any state bank which intends to purchase and hold
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1 treasury stock as authorized in this subsection (6) shall
2 file a written application with the Commissioner 60 days
3 prior to any such proposed purchase. The application shall
4 state the number of shares to be purchased, the consideration
5 for the shares, the name and address of the person from whom
6 the shares are to be purchased, if known, and the total
7 percentage of its issued and outstanding shares to be held by
8 the bank after the purchase. The total consideration paid by
9 a state bank for treasury stock shall reduce capital and
10 surplus of the bank for purposes of Sections of this Act
11 relating to lending and investment limits which require
12 computation of capital and surplus. After considering and
13 approving an application to purchase and hold treasury stock
14 under this subsection, the Commissioner may waive or reduce
15 the balance of the 60 day application period. The
16 Commissioner may specify the form of the application for
17 approval to acquire treasury stock and promulgate rules and
18 regulations for the administration of this subsection (6). A
19 state bank may, acquire or resell its owns shares as treasury
20 stock pursuant to this subsection (6) without a change in its
21 charter pursuant to Section 17. Such stock may be held for
22 any purpose permitted in subsection (5) of this Section 14 or
23 may be resold upon such reasonable terms as the board of
24 directors may determine provided notice is given to the
25 Commissioner prior to the resale of such stock.
26 (7) During the time that a state bank shall continue its
27 banking business, it shall not withdraw or permit to be
28 withdrawn, either in the form of dividends or otherwise, any
29 portion of its capital, but nothing in this subsection shall
30 prevent a reduction or change of the capital stock or the
31 preferred stock under the provisions of Sections 17 through
32 30 of this Act, a purchase of treasury stock under the
33 provisions of subsection (6) of this Section 14 or a
34 redemption of preferred stock pursuant to charter provisions
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1 therefor.
2 (8)(a) Subject to the provisions of this Act, the board
3 of directors of a state bank from time to time may declare a
4 dividend of so much of the net profits of such bank as it
5 shall judge expedient, but each bank before the declaration
6 of a dividend shall carry at least one-tenth of its net
7 profits since the date of the declaration of the last
8 preceding dividend, or since the issuance of its charter in
9 the case of its first dividend, to its surplus until the same
10 shall be equal to its capital.
11 (b) No dividends shall be paid by a state bank while it
12 continues its banking business to an amount greater than its
13 net profits then on hand, deducting first therefrom its
14 losses and bad debts. All debts due to a state bank on which
15 interest is past due and unpaid for a period of 6 months or
16 more, unless the same are well secured and in the process of
17 collection, shall be considered bad debts.
18 (Source: P.A. 86-754.)
19 (205 ILCS 5/16) (from Ch. 17, par. 323)
20 Sec. 16. Directors. The business and affairs of a State
21 bank shall be managed by its board of directors that shall
22 exercise its powers as follows:
23 (1) Directors shall be elected as provided in this Act.
24 Any omission to elect a director or directors shall not
25 impair any of the rights and privileges of the bank or of any
26 person in any way interested. The existing directors shall
27 hold office until their successors are elected and qualify.
28 (2) (a) Notwithstanding the provisions of any charter
29 heretofore or hereafter issued, the number of directors,
30 not fewer than 5 nor more than 25, may be fixed from time
31 to time by the stockholders at any meeting of the
32 stockholders called for the purpose of electing directors
33 or changing the number thereof by the affirmative vote of
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1 at least two-thirds of the outstanding stock entitled to
2 vote at the meeting, and the number so fixed shall be the
3 board regardless of vacancies until the number of
4 directors is thereafter changed by similar action. At
5 least a majority of the directors must have resided in
6 the State of Illinois or within 100 miles of the main
7 banking premises for at least one year immediately
8 preceding their election and must be residents of the
9 State of Illinois or the territory within 100 miles of
10 the main banking premises during their continuance in
11 office. Any director who becomes disqualified shall
12 forthwith resign his office.
13 (b) Notwithstanding the minimum number of directors
14 specified in paragraph (a) of this subsection, a State
15 bank that has been in existence for 10 years or more and
16 has less than $20,000,000 in assets, as of the December
17 31 immediately preceding the annual meeting of
18 shareholders at which directors are elected, may, subject
19 to the approval of the Commissioner, have a minimum of 3
20 directors; provided that if a State bank has fewer than 5
21 directors, at least one director shall not be an officer
22 or employee of the bank. The Commissioner shall annually
23 review the appropriateness of the grant of authority to
24 have a reduced minimum number of directors pursuant to
25 this paragraph (b).
26 (3) Except as otherwise provided in this paragraph (3),
27 directors shall hold office until the next annual meeting of
28 the stockholders succeeding their election or until their
29 successors are elected and qualify. If the board of directors
30 consists of 6 or more members, in lieu of electing the
31 membership of the whole board of directors annually, the
32 charter or by-laws of a State bank may provide that the
33 directors shall be divided into either 2 or 3 classes, each
34 class to be as nearly equal in number as is possible. The
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1 term of office of directors of the first class shall expire
2 at the first annual meeting of the stockholders after their
3 election, that of the second class shall expire at the second
4 annual meeting after their election, and that of the third
5 class, if any, shall expire at the third annual meeting after
6 their election. At each annual meeting after classification,
7 the number of directors equal to the number of the class
8 whose terms expire at the time of the meeting shall be
9 elected to hold office until the second succeeding annual
10 meeting, if there be 2 classes, or until the third succeeding
11 annual meeting, if there be 3 classes. Vacancies may be
12 filled by stockholders at a special meeting called for the
13 purpose.
14 If authorized by the bank's by-laws or an amendment
15 thereto, the directors of a State bank may properly fill a
16 vacancy or vacancies arising between shareholders' meetings,
17 but at no time may the number of directors selected to fill a
18 vacancy in this manner during any interim period between
19 shareholders' meetings exceed 33 1/3% of the total membership
20 of the board of directors.
21 (4) The board of directors shall hold regular meetings
22 at least once each month, provided that, upon prior written
23 approval by the Commissioner, the board of directors may hold
24 regular meetings less frequently than once each month but at
25 least once each calendar quarter. A special meeting of the
26 board of directors may be held as provided by the by-laws. A
27 special meeting of the board of directors may also be held
28 upon call by the Commissioner or a bank examiner appointed
29 under the provisions of this Act upon not less than 12 hours
30 notice of the meeting by personal service of the notice or by
31 mailing the notice to each of the directors at his residence
32 as shown by the books of the bank. A majority of the board
33 of directors shall constitute a quorum for the transaction of
34 business unless a greater number is required by the charter
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1 or the by-laws. The act of the majority of the directors
2 present at a meeting at which a quorum is present shall be
3 the act of the board of directors unless the act of a greater
4 number is required by the charter or by the by-laws.
5 (5) A member of the board of directors shall be elected
6 president. The board of directors may appoint other officers,
7 as the by-laws may provide, and fix their salaries to carry
8 on the business of the bank. The board of directors may make
9 and amend by-laws (not inconsistent with this Act) for the
10 government of the bank and may, by the affirmative vote of a
11 majority of the board of directors, establish reasonable
12 compensation of all directors for services to the corporation
13 as directors, officers, or otherwise. An officer, whether
14 elected or appointed by the board of directors or appointed
15 pursuant to the by-laws, may be removed by the board of
16 directors at any time.
17 (6) The board of directors shall cause suitable books
18 and records of all the bank's transactions to be kept.
19 (7) In discharging the duties of their respective
20 positions, the board of directors, committees of the board,
21 and individual directors may, in considering the best long
22 term and short term interests of the bank, consider the
23 effects of any action (including, without limitation, action
24 that may involve or relate to a merger or potential merger or
25 to a change or potential change in control of the bank) upon
26 employees, depositors, suppliers, and customers of the
27 corporation or its subsidiaries, communities in which the
28 main banking premises, branches, offices, or other
29 establishments of the bank or its subsidiaries are located,
30 and all pertinent factors.
31 (Source: P.A. 88-532; 88-636, eff. 9-9-94; 89-364, eff.
32 8-18-95.)
33 (205 ILCS 5/16.5 new)
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1 Sec. 16.5. Employment of persons with convictions.
2 Except with the prior written consent of the Commissioner, no
3 State bank shall knowingly employ or otherwise permit an
4 individual to serve as an officer, director, employee, or
5 agent of the State bank if the individual has been convicted
6 of a felony or of any criminal offense relating to dishonesty
7 or breach of trust.
8 (205 ILCS 5/17) (from Ch. 17, par. 324)
9 Sec. 17. Changes in charter.
10 (a) By compliance with the provisions of this Act a
11 State bank may:
12 (1) Change its main banking premises provided that
13 there shall not be a removal to a new location without
14 complying with the capital requirements of Section 7 and
15 of subsection (1) of Section 10 hereof, nor unless the
16 Commissioner shall find that the convenience and needs of
17 the area sought to be served by the bank at its proposed
18 new location will be promoted.
19 (2) Increase, decrease or change its capital stock,
20 whether issued or unissued, provided that in no case
21 shall the capital be diminished to the prejudice of its
22 creditors;
23 (3) Provide for authorized but unissued capital
24 stock reserved for issuance for one or more of the
25 purposes provided for in subsection (5) of Section 14
26 hereof;
27 (4) Authorize preferred stock, or increase,
28 decrease or change the preferences, qualifications,
29 limitations, restrictions or special or relative rights
30 of its preferred stock, whether issued or unissued,
31 provided that in no case shall the capital be diminished
32 to the prejudice of its creditors;
33 (5) Increase, decrease or change the par value of
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1 its shares of its capital stock or preferred stock,
2 whether issued or unissued;
3 (6) Extend the duration of its charter;
4 (7) Eliminate cumulative voting rights under all or
5 specified circumstances, or eliminate voting rights
6 entirely, as to any class or classes or series of stock
7 of the bank pursuant to paragraph (3) of Section 15,
8 provided that one class of shares or series thereof shall
9 always have voting in respect to all matters in the bank,
10 and provided further that the proposal to eliminate such
11 voting rights receives the approval of the holders of 70%
12 of the outstanding shares of stock entitled to vote as
13 provided in paragraph (7) of subsection (b) of this
14 Section 17; or
15 (8) Make such other change in its charter as may be
16 authorized in this Act.
17 (b) To effect a change or changes in a State bank's
18 charter as provided for in this Section 17:
19 (1) The board of directors shall adopt a resolution
20 setting forth the proposed amendment and directing that
21 it be submitted to a vote at a meeting of stockholders,
22 which may be either an annual or special meeting.
23 (2) If the meeting is a special meeting, written or
24 printed notice setting forth the proposed amendment or
25 summary thereof shall be given to each stockholder of
26 record entitled to vote at such meeting at least 30 days
27 before such meeting and in the manner provided in this
28 Act for the giving of notice of meetings of stockholders.
29 (3) At such special meeting, a vote of the
30 stockholders entitled to vote shall be taken on the
31 proposed amendment. Except as provided in paragraph (7)
32 of this subsection (b), the proposed amendment shall be
33 adopted upon receiving the affirmative vote of the
34 holders of at least two-thirds of the outstanding shares
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1 of stock entitled to vote at such meeting, unless holders
2 of preferred stock are entitled to vote as a class in
3 respect thereof, in which event the proposed amendment
4 shall be adopted upon receiving the affirmative vote of
5 the holders of at least two-thirds of the outstanding
6 shares of each class of shares entitled to vote as a
7 class in respect thereof and of the total outstanding
8 shares entitled to vote at such meeting. Any number of
9 amendments may be submitted to the stockholders and voted
10 upon by them at one meeting. A certificate of the
11 amendment, or amendments, verified by the president, or a
12 vice-president, or the cashier, shall be filed
13 immediately in the office of the Commissioner.
14 (4) At any annual meeting without a resolution of
15 the board of directors and without a notice and prior
16 publication, as hereinabove provided, a proposition for a
17 change in the bank's charter as provided for in this
18 Section 17 may be submitted to a vote of the stockholders
19 entitled to vote at the annual meeting, except that no
20 proposition for authorized but unissued capital stock
21 reserved for issuance for one or more of the purposes
22 provided for in subsection (5) of Section 14 hereof shall
23 be submitted without complying with the provisions of
24 said subsection. The proposed amendment shall be adopted
25 upon receiving the affirmative vote of the holders of at
26 least two-thirds of the outstanding shares of stock
27 entitled to vote at such meeting, unless holders of
28 preferred stock are entitled to vote as a class in
29 respect thereof, in which event the proposed amendment
30 shall be adopted upon receiving the affirmative vote of
31 the holders of at least two-thirds of the outstanding
32 shares of each class of shares entitled to vote as a
33 class in respect thereof and the total outstanding shares
34 entitled to vote at such meeting. A certificate of the
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1 amendment, or amendments, verified by the president, or a
2 vice-president or cashier, shall be filed immediately in
3 the office of the Commissioner.
4 (5) If an amendment or amendments shall be approved
5 in writing by the Commissioner, a like certificate,
6 together with the Commissioner's written approval, shall
7 be recorded, a file marked copy delivered to the
8 Commissioner, and thereupon the amendment or amendments
9 so adopted and so approved shall be accomplished in
10 accordance with the vote of the stockholders. The
11 Commissioner shall revoke such approval in the event such
12 amendment or amendments are not effected within one year
13 from the date of the issuance of the Commissioner's
14 certificate and written approval except for transactions
15 permitted under subsection (5) of Section 14 of this Act.
16 (6) No amendment or amendments shall affect suits
17 in which the bank is a party, nor affect causes of
18 action, nor affect rights of persons in any particular,
19 nor shall actions brought against such bank by its former
20 name be abated by a change of name.
21 (7) A proposal to amend the charter to eliminate
22 cumulative voting rights under all or specified
23 circumstances, or to eliminate voting rights entirely, as
24 to any class or classes or series or stock of a bank,
25 pursuant to paragraph (3) of Section 15 and paragraph (7)
26 of subsection (a) of this Section 17, shall be adopted
27 only upon such proposal receiving the approval of the
28 holders of 70% of the outstanding shares of stock
29 entitled to vote at the meeting where the proposal is
30 presented for approval, unless holders of preferred stock
31 are entitled to vote as a class in respect thereof, in
32 which event the proposed amendment shall be adopted upon
33 receiving the approval of the holders of 70% of the
34 outstanding shares of each class of shares entitled to
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1 vote as a class in respect thereof and of the total
2 outstanding shares entitled to vote at the meeting where
3 the proposal is presented for approval. The proposal to
4 amend the charter pursuant to this paragraph (7) may be
5 voted upon at the annual meeting or a special meeting.
6 (c) The purchase and holding and later resale of
7 treasury stock of a state bank pursuant to the provisions of
8 subsection (6) of Section 14 may be accomplished without a
9 change in its charter reflecting any decrease or increase in
10 capital stock.
11 (Source: P.A. 88-546; 89-541, eff. 7-19-96.)
12 (205 ILCS 5/32) (from Ch. 17, par. 339)
13 Sec. 32. Basic loaning limits. The liabilities
14 outstanding at one time to a state bank of a person for money
15 borrowed, including the liabilities of a partnership or joint
16 venture in the liabilities of the several members thereof,
17 shall not exceed 20% of the amount of the unimpaired capital
18 and unimpaired surplus of the bank.
19 The liabilities to any state bank of a person may exceed
20 20% of the unimpaired capital and unimpaired surplus of the
21 bank, provided that (i) the excess amount from time to time
22 outstanding is fully secured by readily marketable collateral
23 having a market value, as determined by reliable and
24 continuously available quotations, at least equal to the
25 excess amount outstanding; and (ii) the total liabilities
26 shall not exceed 30% of the unimpaired capital and unimpaired
27 surplus of the bank.
28 The following shall not be considered as money borrowed
29 within the meaning of this Section:
30 (1) The purchase of discount of bills of exchange
31 drawn in good faith against actually existing values.
32 (2) The purchase or discount of commercial or
33 business paper actually owned by the person negotiating
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1 the same.
2 (3) The purchase of or loaning money in exchange
3 for evidences of indebtedness which shall be secured by
4 mortgage or trust deed upon productive real estate the
5 value of which, as ascertained by the oath of 2 qualified
6 appraisers, neither of whom shall be an officer,
7 director, or employee of the bank or of any subsidiary or
8 affiliate of the bank, is double the amount of the
9 principal debt secured at the time of the original
10 purchase of evidence of indebtedness or loan of money and
11 which is still double the amount of the principal debt
12 secured at the time of any renewal of the indebtedness or
13 loan, and which mortgage or trust deed is shown, either
14 by a guaranty policy of a title guaranty company approved
15 by the Commissioner or by a registrar's certificate of
16 title in any county having adopted the provisions of the
17 Registered Titles (Torrens) Act, or by the opinion of an
18 attorney-at-law, to be a first lien upon the real estate
19 therein described, and real estate shall not be deemed to
20 be encumbered within the meaning of this subsection (3)
21 by reason of the existence of instruments reserving
22 rights-of-way, sewer rights and rights in wells, building
23 restrictions or other restrictive covenants, nor by
24 reason of the fact it is subject to lease under which
25 rents or profits are reserved by the owners.
26 (4) The purchase of marketable investment
27 securities.
28 (5) The liability to a state bank of a person who
29 is an accommodation party to, or guarantor of payment
30 for, any evidence of indebtedness of another person who
31 obtains a loan from or discounts paper with or sells
32 paper to the state bank; but the total liability to a
33 state bank of a person as an accommodation party or
34 guarantor of payment in respect of such evidences of
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1 indebtedness shall not exceed 20% of the amount of the
2 unimpaired capital and unimpaired surplus of the bank;
3 provided however that the liability of an accommodation
4 party to paper excepted under subsection 2 of this
5 Section shall not be included in the computation of this
6 limitation.
7 (6) The liability to a state bank of a person, who
8 as a guarantor, guarantees collection of the obligation
9 or indebtedness of another person.
10 The total liabilities of any one person, for money
11 borrowed, or otherwise, shall not exceed 25% of the deposits
12 of the bank, and those total liabilities shall at no time
13 exceed 50% of the amount of the unimpaired capital and
14 unimpaired surplus of the bank. Absent an actual unremedied
15 breach, the obligation or responsibility for breach of
16 warranties or representations, express or implied, of a
17 person transferring negotiable or non-negotiable paper to a
18 bank without recourse and without guaranty of payment, shall
19 not be included in determining the amount of liabilities of
20 the person to the bank for borrowed money or otherwise; and
21 in the event of and to the extent of an unremedied breach,
22 the amount remaining unpaid for principal and interest on the
23 paper in respect of which the unremedied breach exists shall
24 thereafter for the purpose of determining whether subsequent
25 transactions giving rise to additional liability of the
26 person to the state bank for borrowed money or otherwise are
27 within the limitations of Sections 32 through 34 of this Act,
28 be included in computing the amount of liabilities of the
29 person for borrowed money or otherwise.
30 The liability of a person to a state bank on account of
31 acceptances made or issued by the state bank on behalf of the
32 person shall be included in the computation of the total
33 liabilities of the person for money borrowed except to the
34 extent the acceptances grow out of transactions of the
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1 character described in subsection (6) of Section 34 of this
2 Act and are otherwise within the limitations of that
3 subsection; provided nevertheless that any such excepted
4 acceptances acquired by the state bank which accepted the
5 same shall be included in the computation of the liabilities
6 of the person to the state bank for money borrowed.
7 (Source: P.A. 88-546; 89-364, eff. 8-18-95.)
8 (205 ILCS 5/34) (from Ch. 17, par. 342)
9 Sec. 34. Exceptions to loans and investment limits. The
10 limitations in Sections 32, and 33, and 35.1 of this Act upon
11 the liabilities of any one person and upon the purchase and
12 holding of marketable investment securities shall not apply:
13 (1) To the extent of 50% of the unimpaired capital and
14 unimpaired surplus of any bank, to loans to or obligations of
15 any person to the extent that the loan shall be secured by a
16 like amount of obligations of or guaranteed by the United
17 States or by the State of Illinois, or by a like amount of
18 obligations of any corporation wholly owned directly or
19 indirectly by the United States or of any agency or
20 instrumentality of the United States or of the State of
21 Illinois, including any unit of local government or school
22 district, provided that the total liabilities to any bank of
23 any one person shall not exceed 50% of such unimpaired
24 capital and unimpaired surplus.
25 (2) To the extent of 30% of the unimpaired capital and
26 unimpaired surplus of any bank, to loans to or obligations of
27 any person to the extent that the same shall be secured by
28 shipping documents or instruments transferring or securing
29 title covering livestock or giving a lien on livestock when
30 the market value of the livestock securing the obligation is
31 not at the time of the making of the loan less than 115% of
32 the principal amount of the obligation, provided that the
33 total liabilities to any bank of any one person shall not
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1 exceed 50% of the unimpaired capital and unimpaired surplus.
2 (3) To the extent of the unimpaired capital and
3 unimpaired surplus of any bank, to the purchase of or holding
4 by any bank of the general obligations of each municipality
5 located in the State of Illinois or in any other state of the
6 United States or to the purchase of or holding of the tax
7 anticipation warrants of each such municipality.
8 (4) To the obligations as endorser, whether with or
9 without recourse, or as guarantor, whether conditional or
10 unconditional, of negotiable or nonnegotiable installment
11 consumer paper of the person transferring the same if the
12 bank's files or the knowledge of its officers of the
13 financial condition of each maker of those obligations is
14 reasonably adequate and if an officer of the bank, designated
15 for that purpose by the board of directors of the bank,
16 certifies that the responsibility of each maker of the
17 obligations has been evaluated and that the bank is relying
18 primarily upon each maker for the payment of the obligations;
19 certification shall be in writing and shall be retained as
20 part of the records of the bank.
21 (5) To the issuance, advice, or confirmation of letters
22 of credit; however, if the letter of credit is a standby
23 letter of credit, it shall be included within the limit under
24 Section 32 for the person who has procured the issuance of
25 the standby letter of credit unless the issuing bank has, at
26 the time of issuance, an irrevocable commitment by another
27 bank to purchase or participate out any amounts that may
28 later be drawn under the letter of credit that would create a
29 loan in excess of the limits under Section 32 for the person
30 or the amounts are secured by pledge of United States
31 government securities, a segregated deposit account, or
32 other security that would exempt a loan so secured by
33 application of Section 34 or 35 of this Act; if, however, a
34 commitment to purchase or participate is in place, the
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1 amounts are not included in the limits under Section 32 for
2 the person until drafts are presented upon the letter.
3 (6) To the acceptance of drafts or bills of exchange
4 that grow out of transactions involving the importation or
5 exportation of goods; or that grow out of transactions
6 involving the domestic shipment of goods, provided documents
7 of title covering the goods secure the acceptances at the
8 time of acceptance; or that are secured at the time of
9 acceptances by documents of title covering readily marketable
10 staples; but the aggregate amount of these acceptances by any
11 State bank on behalf of any one person at any one time
12 outstanding shall not exceed 20% of the unimpaired capital
13 and unimpaired surplus of the bank unless the part thereof in
14 excess of that percentum of unimpaired capital and unimpaired
15 surplus is and will remain secured by accompanying documents
16 of title or proceeds thereof growing out of the same
17 transaction or by substituted security of similar character;
18 provided further, however, that the aggregate amount of the
19 acceptances on behalf of any one person outstanding at any
20 one time shall not exceed 50% of the amount of unimpaired
21 capital and unimpaired surplus of the bank. The provisions of
22 this paragraph (6) apply to the acceptances by a State bank
23 on behalf of any one person and not to the purchase by a
24 State bank of other banks' acceptances. A State bank may
25 purchase acceptances from other banks in amounts not to
26 exceed 50% of the State bank's unimpaired capital and
27 unimpaired surplus from any one bank.
28 (7) To the extent of 20% of the unimpaired capital and
29 unimpaired surplus of any bank, to the purchase of or holding
30 by any bank of obligations of the State of Israel or
31 obligations fully guaranteed by the State of Israel as to
32 payment of principal and interest.
33 (Source: P.A. 87-132; 88-546.)
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1 (205 ILCS 5/35) (from Ch. 17, par. 343)
2 Sec. 35. Exemptions from loan and investment limits. The
3 limitations in Sections 32, 33, and 34, and 35.1 upon the
4 liabilities of any one person and upon the purchase or
5 holding of marketable investment securities shall not apply
6 to the following as to which there shall be no limitation:
7 (1) Obligations of, or guaranteed by the United States.
8 (2) Loans to or obligations of any person to the extent
9 that they are secured by not less than a like amount of bonds
10 or notes of the United States, or certificates of
11 indebtedness of the United States, or Treasury Bills of the
12 United States or obligations fully guaranteed as to both
13 principal and interest by the United States, or to the extent
14 that the same shall be secured or covered by guaranty or by
15 commitment or agreement to take over or purchase, made by any
16 Federal Reserve Bank or by the United States or any
17 department, bureau, board, commission or establishment of the
18 United States, including any corporation wholly owned,
19 directly or indirectly, by the United States.
20 (3) Obligations of any corporation wholly owned,
21 directly or indirectly, by the United States or of any agency
22 or instrumentality of the United States.
23 (4) General obligations and tax anticipation warrants of
24 each state of the United States and general obligations of
25 each municipality located in whole or in part in the county
26 in which the bank is located.
27 (5) Loans to or obligations of any person to the extent
28 that they are secured by not less than the same amount of
29 general obligations and tax anticipation warrants of each
30 state of the United States and of each municipality located
31 in whole or in part in the county in which the bank is
32 located.
33 (6) Loans to or obligations of or investments in those
34 subsidiaries, established or acquired pursuant to subsection
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1 (12) of Section 5 of this Act, all of the stock of which is
2 owned by the bank.
3 (7) Loans or extensions of credit secured by a
4 segregated deposit account in the lending bank.
5 (8) Obligations of the State of Illinois, and obligations
6 guaranteed by the State of Illinois to the extent of the
7 guarantee.
8 (9) To the ownership of certificates of participation in
9 open-end investment companies registered with the Securities
10 and Exchange Commission under the Investment Company Act of
11 1940 and Securities Act of 1933, provided the portfolios of
12 such investment companies consist wholly of investments in
13 which the bank could invest directly without limitation.
14 (Source: P.A. 86-368; 86-635; 86-754; 86-1028.)
15 (205 ILCS 5/48) (from Ch. 17, par. 359)
16 Sec. 48. Commissioner's powers; duties. The Commissioner
17 shall have the powers and authority, and is charged with the
18 duties and responsibilities designated in this Act, and a
19 State bank shall not be subject to any other visitorial power
20 other than as authorized by this Act, except those vested in
21 the courts, or upon prior consultation with the Commissioner,
22 a foreign bank regulator with an appropriate supervisory
23 interest in the parent or affiliate of a state bank. In the
24 performance of the Commissioner's duties:
25 (1) The Commissioner shall call for statements from all
26 State banks as provided in Section 47 at least one time
27 during each calendar quarter.
28 (2) (a) The Commissioner, as often as the Commissioner
29 shall deem necessary or proper, and no less frequently than
30 18 months following the preceding examination at least once
31 in each year, shall appoint a suitable person or persons to
32 make an examination of the affairs of every State bank,
33 except that for every eligible State bank, as defined by
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1 regulation, the Commissioner in lieu of the an annual
2 examination may every other year shall accept on an
3 alternating basis the examination made by the eligible State
4 bank's appropriate federal banking agency pursuant to Section
5 111 of the Federal Deposit Insurance Corporation Improvement
6 Act of 1991, provided the appropriate federal banking agency
7 has made such an examination. A person so appointed shall not
8 be a stockholder or officer or employee of any bank which
9 that person may be directed to examine, and shall have powers
10 to make a thorough examination into all the affairs of the
11 bank and in so doing to examine any of the officers or agents
12 or employees thereof on oath and shall make a full and
13 detailed report of the condition of the bank to the
14 Commissioner. In making the examination the examiners shall
15 include an examination of the affairs of all the affiliates
16 of the bank, as defined in subsection (b) of Section 35.2 of
17 this Act, as shall be necessary to disclose fully the
18 conditions of the affiliates, the relations between the bank
19 and the affiliates and the effect of those relations upon the
20 affairs of the bank, and in connection therewith shall have
21 power to examine any of the officers, directors, agents, or
22 employees of the affiliates on oath. After May 31, 1997, the
23 Commissioner may enter into cooperative agreements with state
24 regulatory authorities of other states to provide for
25 examination of State bank branches in those states, and the
26 Commissioner may accept reports of examinations of State bank
27 branches from those state regulatory authorities. These
28 cooperative agreements may set forth the manner in which the
29 other state regulatory authorities may be compensated for
30 examinations prepared for and submitted to the Commissioner.
31 (b) After May 31, 1997, the Commissioner is authorized
32 to examine, as often as the Commissioner shall deem necessary
33 or proper, branches of out-of-state banks. The Commissioner
34 may establish and may assess fees to be paid to the
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1 Commissioner for examinations under this subsection (b). The
2 fees shall be borne by the out-of-state bank, unless the fees
3 are borne by the state regulatory authority that chartered
4 the out-of-state bank, as determined by a cooperative
5 agreement between the Commissioner and the state regulatory
6 authority that chartered the out-of-state bank.
7 (2.5) Whenever any State bank, any subsidiary or
8 affiliate of a State bank, or after May 31, 1997, any branch
9 of an out-of-state bank causes to be performed, by contract
10 or otherwise, any bank services for itself, whether on or off
11 its premises:
12 (a) that performance shall be subject to
13 examination by the Commissioner to the same extent as if
14 services were being performed by the bank or, after May
15 31, 1997, branch of the out-of-state bank itself on its
16 own premises; and
17 (b) the bank or, after May 31, 1997, branch of the
18 out-of-state bank shall notify the Commissioner of the
19 existence of a service relationship. The notification
20 shall be submitted with the first statement of condition
21 (as required by Section 47 of this Act) due after the
22 making of the service contract or the performance of the
23 service, whichever occurs first. The Commissioner shall
24 be notified of each subsequent contract in the same
25 manner.
26 For purposes of this subsection (2.5), the term "bank
27 services" means services such as sorting and posting of
28 checks and deposits, computation and posting of interest and
29 other credits and charges, preparation and mailing of checks,
30 statements, notices, and similar items, or any other
31 clerical, bookkeeping, accounting, statistical, or similar
32 functions performed for a State bank, including but not
33 limited to electronic data processing related to those bank
34 services.
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1 (3) The expense of administering this Act, including the
2 expense of the examinations of State banks as provided in
3 this Act, shall to the extent of the amounts resulting from
4 the fees provided for in paragraphs (a), (a-2), and (b) of
5 this subsection (3) be assessed against and borne by the
6 State banks:
7 (a) Each bank shall pay to the Commissioner a Call
8 Report Fee which shall be paid in quarterly installments
9 equal to one-fourth of the sum of the annual fixed fee of
10 $800, plus a variable fee based on the assets shown on
11 the quarterly statement of condition delivered to the
12 Commissioner in accordance with Section 47 for the
13 preceding quarter according to the following schedule:
14 16¢ per $1,000 of the first $5,000,000 of total assets,
15 15¢ per $1,000 of the next $20,000,000 of total assets,
16 13¢ per $1,000 of the next $75,000,000 of total assets,
17 9¢ per $1,000 of the next $400,000,000 of total assets,
18 7¢ per $1,000 of the next $500,000,000 of total assets,
19 and 5¢ per $1,000 of all assets in excess of
20 $1,000,000,000, of the State bank. The Call Report Fee
21 shall be calculated by the Commissioner and billed to the
22 banks for remittance at the time of the quarterly
23 statements of condition provided for in Section 47. The
24 Commissioner may require payment of the fees provided in
25 this Section by an electronic transfer of funds or an
26 automatic debit of an account of each of the State banks.
27 In case more than one examination of any bank is deemed
28 by the Commissioner to be necessary in any examination
29 frequency cycle specified in subsection 2(a) of this
30 Section, fiscal year and is performed at his direction,
31 the Commissioner may assess a reasonable additional fee
32 to recover the cost of the additional examination, but
33 the additional fee shall not exceed the sum of the
34 remittances from the Call Report Fees applicable to the 4
HB1288 Enrolled -49- LRB9000532JSsbB
1 consecutive quarterly statements of condition immediately
2 preceding the date of the additional examination. In
3 lieu of the method and amounts set forth in this
4 paragraph (a) for the calculation of the Call Report Fee,
5 the Commissioner may specify by rule that the Call Report
6 Fees provided by this Section may be assessed
7 semiannually or some other period and may provide in the
8 rule the formula to be used for calculating and assessing
9 the periodic Call Report Fees to be paid by State banks.
10 (a-1) If in the opinion of the Commissioner an
11 emergency exists or appears likely, the Commissioner may
12 assign an examiner or examiners to monitor the affairs of
13 a State bank with whatever frequency he deems
14 appropriate, including but not limited to a daily basis.
15 The reasonable and necessary expenses of the Commissioner
16 during the period of the monitoring shall be borne by the
17 subject bank. The Commissioner shall furnish the State
18 bank a statement of time and expenses if requested to do
19 so within 30 days of the conclusion of the monitoring
20 period.
21 (a-2) On and after January 1, 1990, the reasonable
22 and necessary expenses of the Commissioner during
23 examination of the performance of electronic data
24 processing services under subsection (2.5) shall be borne
25 by the banks for which the services are provided. An
26 amount, based upon a fee structure prescribed by the
27 Commissioner, shall be paid by the banks or, after May
28 31, 1997, branches of out-of-state banks receiving the
29 electronic data processing services along with the Call
30 Report Fee assessed under paragraph (a) of this
31 subsection (3).
32 (a-3) After May 31, 1997, the reasonable and
33 necessary expenses of the Commissioner during examination
34 of the performance of electronic data processing services
HB1288 Enrolled -50- LRB9000532JSsbB
1 under subsection (2.5) at or on behalf of branches of
2 out-of-state banks shall be borne by the out-of-state
3 banks, unless those expenses are borne by the state
4 regulatory authorities that chartered the out-of-state
5 banks, as determined by cooperative agreements between
6 the Commissioner and the state regulatory authorities
7 that chartered the out-of-state banks.
8 (b) "Fiscal year" for purposes of this Section 48
9 is defined as a period beginning July 1 of any year and
10 ending June 30 of the next year. The Commissioner shall
11 receive for each fiscal year, commencing with the fiscal
12 year ending June 30, 1987, a contingent fee equal to the
13 lesser of the aggregate of the fees paid by all State
14 banks under paragraph (a) of subsection (3) for that
15 year, or the amount, if any, whereby the aggregate of the
16 administration expenses, as defined in paragraph (c), for
17 that fiscal year exceeds the sum of the aggregate of the
18 fees payable by all State banks for that year under
19 paragraph (a) of subsection (3), plus all other amounts
20 collected by the Commissioner for that year under any
21 other provision of this Act, plus the aggregate of all
22 fees collected for that year by the Commissioner under
23 the Corporate Fiduciary Act, excluding the receivership
24 fees provided for in Section 5-10 of the Corporate
25 Fiduciary Act, and the Foreign Banking Office Act. The
26 aggregate amount of the contingent fee thus arrived at
27 for any fiscal year shall be apportioned amongst,
28 assessed upon, and paid by the State banks and foreign
29 banking corporations, respectively, in the same
30 proportion that the fee of each under paragraph (a) of
31 subsection (3), respectively, for that year bears to the
32 aggregate for that year of the fees collected under
33 paragraph (a) of subsection (3). The aggregate amount of
34 the contingent fee, and the portion thereof to be
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1 assessed upon each State bank and foreign banking
2 corporation, respectively, shall be determined by the
3 Commissioner and shall be paid by each, respectively,
4 within 120 days of the close of the period for which the
5 contingent fee is computed and is payable, and the
6 Commissioner shall give 20 days advance notice of the
7 amount of the contingent fee payable by the State bank
8 and of the date fixed by the Commissioner for payment of
9 the fee.
10 (c) The "administration expenses" for any fiscal
11 year shall mean the ordinary and contingent expenses for
12 that year incident to making the examinations provided
13 for by, and for otherwise administering, this Act, the
14 Corporate Fiduciary Act, excluding the expenses paid from
15 the Corporate Fiduciary Receivership account in the Bank
16 and Trust Company Fund, the Foreign Banking Office Act,
17 the Electronic Fund Transfer Act, and the Illinois Bank
18 Examiners' Education Foundation Act, including all
19 salaries and other compensation paid for personal
20 services rendered for the State by officers or employees
21 of the State, including the Commissioner and the Deputy
22 Commissioners, all expenditures for telephone and
23 telegraph charges, postage and postal charges, office
24 stationery, supplies and services, and office furniture
25 and equipment, including typewriters and copying and
26 duplicating machines and filing equipment, surety bond
27 premiums, and travel expenses of those officers and
28 employees, employees, expenditures or charges for the
29 acquisition, enlargement or improvement of, or for the
30 use of, any office space, building, or structure, or
31 expenditures for the maintenance thereof or for
32 furnishing heat, light, or power with respect thereto,
33 all to the extent that those expenditures are directly
34 incidental to such examinations or administration. The
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1 Commissioner shall not be required by paragraphs (c) or
2 (d-1) of this subsection (3) to maintain in any fiscal
3 year's budget appropriated reserves for accrued vacation
4 and accrued sick leave that is required to be paid to
5 employees of the Commissioner upon termination of their
6 service with the Commissioner in an amount that is more
7 than is reasonably anticipated to be necessary for any
8 anticipated turnover in employees, whether due to normal
9 attrition or due to layoffs, terminations, or
10 resignations.
11 (d) The aggregate of all fees collected by the
12 Commissioner under this Act, the Corporate Fiduciary Act,
13 or the Foreign Banking Office Act on and after July 1,
14 1979, shall be paid promptly after receipt of the same,
15 accompanied by a detailed statement thereof, into the
16 State treasury and shall be set apart in a special fund
17 to be known as the "Bank and Trust Company Fund", except
18 as provided in paragraph (c) of subsection (11) of this
19 Section. The amount from time to time deposited into the
20 Bank and Trust Company Fund shall be used to offset the
21 ordinary administrative expenses of the Commissioner of
22 Banks and Real Estate as defined in this Section. Nothing
23 in this amendatory Act of 1979 shall prevent continuing
24 the practice of paying expenses involving salaries,
25 retirement, social security, and State-paid insurance
26 premiums of State officers by appropriations from the
27 General Revenue Fund. However, the General Revenue Fund
28 shall be reimbursed for those payments made on and after
29 July 1, 1979, by an annual transfer of funds from the
30 Bank and Trust Company Fund.
31 (d-1) Adequate funds shall be available in the Bank
32 and Trust Company Fund to permit the timely payment of
33 administration expenses. In each fiscal year the total
34 administration expenses shall be deducted from the total
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1 fees collected by the Commissioner and the remainder
2 transferred into the Cash Flow Reserve Account, unless
3 the balance of the Cash Flow Reserve Account prior to the
4 transfer equals or exceeds one-fourth of the total
5 initial appropriations from the Bank and Trust Company
6 Fund for the subsequent year, in which case the remainder
7 shall be credited to State banks and foreign banking
8 corporations and applied against their fees for the
9 subsequent year. The amount credited to each State bank
10 and foreign banking corporation shall be in the same
11 proportion as the Call Report Fees paid by each for the
12 year bear to the total Call Report Fees collected for the
13 year. If, after a transfer to the Cash Flow Reserve
14 Account is made or if no remainder is available for
15 transfer, the balance of the Cash Flow Reserve Account is
16 less than one-fourth of the total initial appropriations
17 for the subsequent year and the amount transferred is
18 less than 5% of the total Call Report Fees for the year,
19 additional amounts needed to make the transfer equal to
20 5% of the total Call Report Fees for the year shall be
21 apportioned amongst, assessed upon, and paid by the State
22 banks and foreign banking corporations in the same
23 proportion that the Call Report Fees of each,
24 respectively, for the year bear to the total Call Report
25 Fees collected for the year. The additional amounts
26 assessed shall be transferred into the Cash Flow Reserve
27 Account. For purposes of this paragraph (d-1), the
28 calculation of the fees collected by the Commissioner
29 shall exclude the receivership fees provided for in
30 Section 5-10 of the Corporate Fiduciary Act.
31 (e) The Commissioner may upon request certify to
32 any public record in his keeping and shall have authority
33 to levy a reasonable charge for issuing certifications of
34 any public record in his keeping.
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1 (f) In addition to fees authorized elsewhere in
2 this Act, the Commissioner may, in connection with a
3 review, approval, or provision of a service, levy a
4 reasonable charge to recover the cost of the review,
5 approval, or service.
6 (4) Nothing contained in this Act shall be construed to
7 limit the obligation relative to examinations and reports of
8 any State bank, deposits in which are to any extent insured
9 by the United States or any agency thereof, nor to limit in
10 any way the powers of the Commissioner with reference to
11 examinations and reports of that bank.
12 (5) The nature and condition of the assets in or
13 investment of any bonus, pension, or profit sharing plan for
14 officers or employees of every State bank or, after May 31,
15 1997, branch of an out-of-state bank shall be deemed to be
16 included in the affairs of that State bank or branch of an
17 out-of-state bank subject to examination by the Commissioner
18 under the provisions of subsection (2) of this Section, and
19 if the Commissioner shall find from an examination that the
20 condition of or operation of the investments or assets of the
21 plan is unlawful, fraudulent, or unsafe, or that any trustee
22 has abused his trust, the Commissioner shall, if the
23 situation so found by the Commissioner shall not be corrected
24 to his satisfaction within 60 days after the Commissioner has
25 given notice to the board of directors of the State bank or
26 out-of-state bank of his findings, report the facts to the
27 Attorney General who shall thereupon institute proceedings
28 against the State bank or out-of-state bank, the board of
29 directors thereof, or the trustees under such plan as the
30 nature of the case may require.
31 (6) The Commissioner shall have the power:
32 (a) To promulgate reasonable rules for the purpose
33 of administering the provisions of this Act.
34 (b) To issue orders for the purpose of
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1 administering the provisions of this Act and any rule
2 promulgated in accordance with this Act.
3 (c) To appoint hearing officers to execute any of
4 the powers granted to the Commissioner under this Section
5 for the purpose of administering this Act and any rule
6 promulgated in accordance with this Act.
7 (d) To subpoena witnesses, to compel their
8 attendance, to administer an oath, to examine any person
9 under oath, and to require the production of any relevant
10 books, papers, accounts, and documents in the course of
11 and pursuant to any investigation being conducted, or any
12 action being taken, by the Commissioner in respect of any
13 matter relating to the duties imposed upon, or the powers
14 vested in, the Commissioner under the provisions of this
15 Act or any rule promulgated in accordance with this Act.
16 (e) To conduct hearings.
17 (7) Whenever, in the opinion of the Commissioner, any
18 director, officer, employee, or agent of a State bank or,
19 after May 31, 1997, of any branch of an out-of-state bank
20 shall have violated any law, rule, or order relating to that
21 bank or shall have engaged in an unsafe or unsound practice
22 in conducting the business of that bank, the Commissioner may
23 issue an order of removal. If in the opinion of the
24 Commissioner any former director, officer, employee, or agent
25 of a State bank violated any law, rule, or order relating to
26 that State bank or engaged in an unsafe or unsound practice
27 in conducting the business of that bank prior to the
28 termination of his or her service with that bank, the
29 Commissioner may issue an order prohibiting that person from
30 further service with a bank as a director, officer, employee,
31 or agent. An The order issued pursuant to this subsection
32 shall be served upon the director, officer, employee, or
33 agent. A copy of the order shall be sent to each director of
34 the bank affected by registered mail. The person affected by
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1 the action may request a hearing before the State Banking
2 Board within 10 days after receipt of the order of removal.
3 The hearing shall be held by the Board within 30 days after
4 the request has been received by the Board. The Board shall
5 make a determination approving, modifying, or disapproving
6 the order of the Commissioner as its final administrative
7 decision. If a hearing is held by the Board, the Board shall
8 make its determination within 60 days from the conclusion of
9 the hearing. Any person affected by a decision of the Board
10 under this subsection (7) of Section 48 of this Act may have
11 the decision reviewed only under and in accordance with the
12 Administrative Review Law and the rules adopted pursuant
13 thereto. A copy of the order shall also be served upon the
14 bank of which he is a director, officer, employee, or agent,
15 whereupon he shall cease to be a director, officer, employee,
16 or agent of that bank. The order and the findings of fact
17 upon which it is based shall not be made public or disclosed
18 to anyone except the director, officer, employee, or agent
19 involved and the directors of the bank involved, otherwise
20 than in connection with proceedings for a violation of or
21 failure to comply with this Section. The Commissioner may
22 institute a civil action against the director, officer, or
23 agent of the State bank or, after May 31, 1997, of the branch
24 of the out-of-state bank against whom any order provided for
25 by this subsection (7) of this Section 48 has been issued,
26 and against the State bank or, after May 31, 1997,
27 out-of-state bank, to enforce compliance with or to enjoin
28 any violation of the terms of the order. Any person who has
29 been the subject of removed by an order of removal or an
30 order of prohibition issued by the Commissioner under this
31 subsection or Section 5-6 of the Corporate Fiduciary Act may
32 not thereafter serve as director, officer, employee, or agent
33 of any State bank or of any branch of any out-of-state bank,
34 or of any corporate fiduciary, as defined in Section 1-5.05
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1 of the Corporate Fiduciary Act, or of any other entity that
2 is subject to licensure or regulation by the Commissioner or
3 the Office of Banks and Real Estate unless the Commissioner
4 has granted prior approval in writing.
5 (8) The Commissioner may impose civil penalties of up to
6 $10,000 against any person for each violation of any
7 provision of this Act, any rule promulgated in accordance
8 with this Act, any order of the Commissioner, or any other
9 action which in the Commissioner's discretion is an unsafe or
10 unsound banking practice.
11 (9) The Commissioner may impose civil penalties of up to
12 $100 against any person for the first failure to comply with
13 reporting requirements set forth in the report of examination
14 of the bank and up to $200 for the second and subsequent
15 failures to comply with those reporting requirements.
16 (10) All final administrative decisions of the
17 Commissioner hereunder shall be subject to judicial review
18 pursuant to the provisions of the Administrative Review Law.
19 For matters involving administrative review, venue shall be
20 in either Sangamon County or Cook County.
21 (11) The endowment fund for the Illinois Bank Examiners'
22 Education Foundati