[ Search ] [ Legislation ]
[ Home ] [ Back ] [ Bottom ]
| [ Engrossed ] | [ Enrolled ] | [ House Amendment 001 ] |
91_HB2019
LRB9105228JSpc
1 AN ACT to amend the Illinois Banking Act by changing
2 Sections 13 and 17.
3 Be it enacted by the People of the State of Illinois,
4 represented in the General Assembly:
5 Section 5. The Illinois Banking Act is amended by
6 changing Sections 13 and 17 as follows:
7 (205 ILCS 5/13) (from Ch. 17, par. 320)
8 Sec. 13. Issuance of charter.
9 (a) When the directors have organized as provided in
10 Section 12 of this Act, and the capital stock and the
11 preferred stock, if any, together with a surplus of not less
12 than 50% of the capital, has been all fully paid in and a
13 record of the same filed with the Commissioner, the
14 Commissioner or some competent person of the Commissioner's
15 appointment shall make a thorough examination into the
16 affairs of the proposed bank, and if satisfied (i) that all
17 the requirements of this Act have been complied with, (ii)
18 that no intervening circumstance has occurred to change the
19 Commissioner's findings made pursuant to Section 10 of this
20 Act, and (iii) that the prior involvement by any stockholder
21 who will own a sufficient amount of stock to have control, as
22 defined in Section 18 of this Act, of the proposed bank with
23 any other financial institution, whether as stockholder,
24 director, officer, or customer, was conducted in a safe and
25 sound manner, upon payment into the Commissioner's office of
26 the reasonable expenses of the examination, as determined by
27 the Commissioner, the Commissioner shall issue a charter
28 authorizing the bank to commence business as authorized in
29 this Act. All charters issued by the Commissioner or any
30 predecessor agency which chartered State banks, including any
31 charter outstanding as of September 1, 1989, shall be
-2- LRB9105228JSpc
1 perpetual. For the 2 years after the Commissioner has issued
2 a charter to a bank, the bank shall request and obtain from
3 the Commissioner prior written approval before it may change
4 senior management personnel or directors.
5 The original charter, duly certified by the Commissioner,
6 or a certified copy shall be evidence in all courts and
7 places of the existence and authority of the bank to do
8 business. Upon the issuance of the charter by the
9 Commissioner, the bank shall be deemed fully organized and
10 may proceed to do business. The Commissioner may, in the
11 Commissioner's discretion, withhold the issuing of the
12 charter when the Commissioner has reason to believe that the
13 bank is organized for any purpose other than that
14 contemplated by this Act or that a commission or fee has been
15 paid in connection with the sale of the stock of the bank.
16 The Commissioner shall revoke the charter and order
17 liquidation in the event that the bank does not commence a
18 general banking business within one year from the date of the
19 issuance of the charter, unless a request has been submitted,
20 in writing, to the Commissioner for an extension and the
21 request has been approved. After commencing a general
22 banking business, a bank, upon written notice to the
23 Commissioner, may change its name. A bank chartered under
24 this Act may change its main banking premises upon giving
25 written notice to the Commissioner at least 30 days prior to
26 the effective date of any such relocation or change of
27 address, provided (i) the change shall not be a removal to a
28 new location without complying with the capital requirements
29 of Section 7 and subsection (1) of Section 10 and (ii) the
30 bank shall comply with any applicable federal law or
31 regulation.
32 (b) (1) The Commissioner may also issue a charter to a
33 bank that is owned exclusively by other depository
34 institutions or depository institution holding companies and
-3- LRB9105228JSpc
1 is organized to engage exclusively in providing services to
2 or for other depository institutions, their holding
3 companies, and the officers, directors, and employees of such
4 institutions and companies, and in providing correspondent
5 banking services at the request of other depository
6 institutions or their holding companies (also referred to as
7 a "bankers' bank").
8 (2) A bank chartered pursuant to paragraph (1) shall,
9 except as otherwise specifically determined by the
10 Commissioner, be vested with the same rights and privileges
11 and subject to the same duties, restrictions, penalties, and
12 liabilities now or hereafter imposed under this Act.
13 (c) A bank chartered under this Act after November 1,
14 1985, and an out-of-state bank that merges with a State bank
15 and establishes or maintains a branch in this State after May
16 31, 1997, shall obtain from and, at all times while it
17 accepts or retains deposits, maintain with the Federal
18 Deposit Insurance Corporation, or such other instrumentality
19 of or corporation chartered by the United States, deposit
20 insurance as authorized under federal law.
21 (d) (i) A bank that has a banking charter issued by the
22 Commissioner under this Act may, pursuant to a written
23 purchase and assumption agreement, transfer substantially all
24 of its assets to another State bank or national bank in
25 consideration, in whole or in part, for the transferee banks'
26 assumption of any part or all of its liabilities. Such a
27 transfer shall in no way be deemed to impair the charter of
28 the transferor bank or cause the transferor bank to forfeit
29 any of its rights, powers, interests, franchises, or
30 privileges as a State bank, nor shall any voluntary reduction
31 in the transferor bank's activities resulting from the
32 transfer have any such effect; provided, however, that a
33 State bank that transfers substantially all of its assets
34 pursuant to this subsection (d) and following the transfer
-4- LRB9105228JSpc
1 does not accept deposits and make loans, shall not have any
2 rights, powers, interests, franchises, or privileges under
3 subsection (15) of Section 5 of this Act until the bank has
4 resumed accepting deposits and making loans.
5 (ii) The fact that a State bank does not resume
6 accepting deposits and making loans for a period of 24 months
7 commencing on September 11, 1989 or on a date of the transfer
8 of substantially all of a State bank's assets, whichever is
9 later, or such longer period as the Commissioner may allow in
10 writing, may be the basis for a finding by the Commissioner
11 under Section 51 of this Act that the bank is unable to
12 continue operations.
13 (iii) The authority provided by subdivision (i) of this
14 subsection (d) shall terminate on May 31, 1997, and no bank
15 that has transferred substantially all of its assets pursuant
16 to this subsection (d) shall continue in existence after May
17 31, 1997.
18 (Source: P.A. 89-208, eff. 9-29-95; 89-567, eff. 7-26-96;
19 89-603, eff. 8-2-96; 90-14, eff. 7-1-97; 90-301, eff. 8-1-97;
20 90-665, eff. 7-30-98.)
21 (205 ILCS 5/17) (from Ch. 17, par. 324)
22 Sec. 17. Changes in charter.
23 (a) By compliance with the provisions of this Act a
24 State bank may:
25 (1) (Blank) change its main banking premises
26 provided that there shall not be a removal to a new
27 location without complying with the capital requirements
28 of Section 7 and of subsection (1) of Section 10 hereof,
29 nor unless the Commissioner shall find that the
30 convenience and needs of the area sought to be served by
31 the bank at its proposed new location will be promoted;
32 (2) increase, decrease or change its capital stock,
33 whether issued or unissued, provided that in no case
-5- LRB9105228JSpc
1 shall the capital be diminished to the prejudice of its
2 creditors;
3 (3) provide for authorized but unissued capital
4 stock reserved for issuance for one or more of the
5 purposes provided for in subsection (5) of Section 14
6 hereof;
7 (4) authorize preferred stock, or increase,
8 decrease or change the preferences, qualifications,
9 limitations, restrictions or special or relative rights
10 of its preferred stock, whether issued or unissued,
11 provided that in no case shall the capital be diminished
12 to the prejudice of its creditors;
13 (5) increase, decrease or change the par value of
14 its shares of its capital stock or preferred stock,
15 whether issued or unissued;
16 (6) extend the duration of its charter;
17 (7) eliminate cumulative voting rights under all or
18 specified circumstances, or eliminate voting rights
19 entirely, as to any class or classes or series of stock
20 of the bank pursuant to paragraph (3) of Section 15,
21 provided that one class of shares or series thereof shall
22 always have voting in respect to all matters in the bank,
23 and provided further that the proposal to eliminate such
24 voting rights receives the approval of the holders of 70%
25 of the outstanding shares of stock entitled to vote as
26 provided in paragraph (7) of subsection (b) of this
27 Section 17;
28 (8) increase, decrease, or change its capital stock
29 or preferred stock, whether issued or unissued, for the
30 purpose of eliminating fractional shares or avoiding the
31 issuance of fractional shares, provided that in no case
32 shall the capital be diminished to the prejudice of its
33 creditors; or
34 (9) Make such other change in its charter as may be
-6- LRB9105228JSpc
1 authorized in this Act.
2 (b) To effect a change or changes in a State bank's
3 charter as provided for in this Section 17:
4 (1) The board of directors shall adopt a resolution
5 setting forth the proposed amendment and directing that
6 it be submitted to a vote at a meeting of stockholders,
7 which may be either an annual or special meeting.
8 (2) If the meeting is a special meeting, written or
9 printed notice setting forth the proposed amendment or
10 summary thereof shall be given to each stockholder of
11 record entitled to vote at such meeting at least 30 days
12 before such meeting and in the manner provided in this
13 Act for the giving of notice of meetings of stockholders.
14 (3) At such special meeting, a vote of the
15 stockholders entitled to vote shall be taken on the
16 proposed amendment. Except as provided in paragraph (7)
17 of this subsection (b), the proposed amendment shall be
18 adopted upon receiving the affirmative vote of the
19 holders of at least two-thirds of the outstanding shares
20 of stock entitled to vote at such meeting, unless holders
21 of preferred stock are entitled to vote as a class in
22 respect thereof, in which event the proposed amendment
23 shall be adopted upon receiving the affirmative vote of
24 the holders of at least two-thirds of the outstanding
25 shares of each class of shares entitled to vote as a
26 class in respect thereof and of the total outstanding
27 shares entitled to vote at such meeting. Any number of
28 amendments may be submitted to the stockholders and voted
29 upon by them at one meeting. A certificate of the
30 amendment, or amendments, verified by the president, or a
31 vice-president, or the cashier, shall be filed
32 immediately in the office of the Commissioner.
33 (4) At any annual meeting without a resolution of
34 the board of directors and without a notice and prior
-7- LRB9105228JSpc
1 publication, as hereinabove provided, a proposition for a
2 change in the bank's charter as provided for in this
3 Section 17 may be submitted to a vote of the stockholders
4 entitled to vote at the annual meeting, except that no
5 proposition for authorized but unissued capital stock
6 reserved for issuance for one or more of the purposes
7 provided for in subsection (5) of Section 14 hereof shall
8 be submitted without complying with the provisions of
9 said subsection. The proposed amendment shall be adopted
10 upon receiving the affirmative vote of the holders of at
11 least two-thirds of the outstanding shares of stock
12 entitled to vote at such meeting, unless holders of
13 preferred stock are entitled to vote as a class in
14 respect thereof, in which event the proposed amendment
15 shall be adopted upon receiving the affirmative vote of
16 the holders of at least two-thirds of the outstanding
17 shares of each class of shares entitled to vote as a
18 class in respect thereof and the total outstanding shares
19 entitled to vote at such meeting. A certificate of the
20 amendment, or amendments, verified by the president, or a
21 vice-president or cashier, shall be filed immediately in
22 the office of the Commissioner.
23 (5) If an amendment or amendments shall be approved
24 in writing by the Commissioner, the amendment or
25 amendments so adopted and so approved shall be
26 accomplished in accordance with the vote of the
27 stockholders. The Commissioner shall revoke such
28 approval in the event such amendment or amendments are
29 not effected within one year from the date of the
30 issuance of the Commissioner's certificate and written
31 approval except for transactions permitted under
32 subsection (5) of Section 14 of this Act.
33 (6) No amendment or amendments shall affect suits
34 in which the bank is a party, nor affect causes of
-8- LRB9105228JSpc
1 action, nor affect rights of persons in any particular,
2 nor shall actions brought against such bank by its former
3 name be abated by a change of name.
4 (7) A proposal to amend the charter to eliminate
5 cumulative voting rights under all or specified
6 circumstances, or to eliminate voting rights entirely, as
7 to any class or classes or series or stock of a bank,
8 pursuant to paragraph (3) of Section 15 and paragraph (7)
9 of subsection (a) of this Section 17, shall be adopted
10 only upon such proposal receiving the approval of the
11 holders of 70% of the outstanding shares of stock
12 entitled to vote at the meeting where the proposal is
13 presented for approval, unless holders of preferred stock
14 are entitled to vote as a class in respect thereof, in
15 which event the proposed amendment shall be adopted upon
16 receiving the approval of the holders of 70% of the
17 outstanding shares of each class of shares entitled to
18 vote as a class in respect thereof and of the total
19 outstanding shares entitled to vote at the meeting where
20 the proposal is presented for approval. The proposal to
21 amend the charter pursuant to this paragraph (7) may be
22 voted upon at the annual meeting or a special meeting.
23 (8) Written or printed notice of a stockholders'
24 meeting to vote on a proposal to increase, decrease or
25 change the capital stock or preferred stock pursuant to
26 paragraph (8) of subsection (a) of this Section 17 and to
27 eliminate fractional shares or avoid the issuance of
28 fractional shares shall be given to each stockholder of
29 record entitled to vote at the meeting at least 30 days
30 before the meeting and in the manner provided in this Act
31 for the giving of notice of meetings of stockholders, and
32 shall include all of the following information:
33 (A) A statement of the purpose of the proposed
34 reverse stock split.
-9- LRB9105228JSpc
1 (B) A statement of the amount of consideration
2 being offered for the bank's stock.
3 (C) A statement that the bank considers the
4 transaction fair to the stockholders, and a
5 statement of the material facts upon which this
6 belief is based.
7 (D) A statement that the bank has secured an
8 opinion from a third party with respect to the
9 fairness, from a financial point of view, of the
10 consideration to be paid, the identity and
11 qualifications of the third party, how the third
12 party was selected, and any material relationship
13 between the third party and the bank.
14 (E) A summary of the opinion including the
15 basis for and the methods of arriving at the
16 findings and any limitation imposed by the bank in
17 arriving at fair value and a statement making the
18 opinion available for reviewing or copying by any
19 stockholder.
20 (F) A statement that objecting stockholders
21 will be entitled to the fair value of those shares
22 that are voted against the charter amendment, if a
23 proper demand is made on the bank and the
24 requirements are satisfied as specified in this
25 Section.
26 If a stockholder shall file with the bank, prior to or at the
27 meeting of stockholders at which the proposed charter
28 amendment is submitted to a vote, a written objection to the
29 proposed charter amendment and shall not vote in favor
30 thereof, and if the stockholder, within 20 days after
31 receiving written notice of the date the charter amendment
32 was accomplished pursuant to paragraph (5) of subsection (a)
33 of this Section 17, shall make written demand on the bank for
34 payment of the fair value of the stockholder's shares as of
-10- LRB9105228JSpc
1 the day prior to the date on which the vote was taken
2 approving the charter amendment, the bank shall pay to the
3 stockholder, upon surrender of the certificate or
4 certificates representing the stock, the fair value thereof.
5 The demand shall state the number of shares owned by the
6 objecting stockholder. The bank shall provide written notice
7 of the date on which the charter amendment was accomplished
8 to all stockholders who have filed written objections in
9 order that the objecting stockholders may know when they must
10 file written demand if they choose to do so. Any stockholder
11 failing to make demand within the 20-day period shall be
12 conclusively presumed to have consented to the charter
13 amendment and shall be bound by the terms thereof. If within
14 30 days after the date on which a charter amendment was
15 accomplished the value of the shares is agreed upon between
16 the objecting stockholders and the bank, payment therefor
17 shall be made within 90 days after the date on which the
18 charter amendment was accomplished, upon the surrender of the
19 stockholder's certificate or certificates representing the
20 shares. Upon payment of the agreed value the objecting
21 stockholder shall cease to have any interest in the shares or
22 in the bank. If within such period of 30 days the
23 stockholder and the bank do not so agree, then the objecting
24 stockholder may, within 60 days after the expiration of the
25 30-day period, file a complaint in the circuit court asking
26 for a finding and determination of the fair value of the
27 shares, and shall be entitled to judgment against the bank
28 for the amount of the fair value as of the day prior to the
29 date on which the vote was taken approving the charter
30 amendment with interest thereon to the date of the judgment.
31 The practice, procedure and judgment shall be governed by the
32 Civil Practice Law. The judgment shall be payable only upon
33 and simultaneously with the surrender to the bank of the
34 certificate or certificates representing the shares. Upon
-11- LRB9105228JSpc
1 payment of the judgment, the objecting stockholder shall
2 cease to have any interest in the shares or the bank. The
3 shares may be held and disposed of by the bank. Unless the
4 objecting stockholder shall file such complaint within the
5 time herein limited, the stockholder and all persons claiming
6 under the stockholder shall be conclusively presumed to have
7 approved and ratified the charter amendment, and shall be
8 bound by the terms thereof. The right of an objecting
9 stockholder to be paid the fair value of the stockholder's
10 shares of stock as herein provided shall cease if and when
11 the bank shall abandon the charter amendment.
12 (c) The purchase and holding and later resale of
13 treasury stock of a state bank pursuant to the provisions of
14 subsection (6) of Section 14 may be accomplished without a
15 change in its charter reflecting any decrease or increase in
16 capital stock.
17 (Source: P.A. 89-541, eff. 7-19-96; 90-160, eff. 7-23-97;
18 90-301, eff. 8-1-97; 90-655, eff. 7-30-98.)