[ Home ] [ ILCS ] [ Search ] [ Bottom ]
[ Other General Assemblies ]
Public Act 92-0483
HB2538 Enrolled LRB9201093JScs
AN ACT concerning certain financial institutions.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Office of Banks and Real Estate Act is
amended by changing Sections 5 and 6 as follows:
(20 ILCS 3205/5) (from Ch. 17, par. 455)
Sec. 5. Powers. In addition to all the other powers and
duties provided by law, the Commissioner shall have the
following powers:
(a) To exercise the rights, powers and duties formerly
vested by law in the Director of Financial Institutions under
the Illinois Banking Act.
(b) To exercise the rights, powers and duties formerly
vested by law in the Department of Financial Institutions
under "An act to provide for and regulate the administration
of trusts by trust companies", approved June 15, 1887, as
amended.
(c) To exercise the rights, powers and duties formerly
vested by law in the Director of Financial Institutions under
"An act authorizing foreign corporations, including banks and
national banking associations domiciled in other states, to
act in a fiduciary capacity in this state upon certain
conditions herein set forth", approved July 13, 1953, as
amended.
(d) Whenever the Commissioner is authorized or required
by law to consider or to make findings regarding the
character of incorporators, directors, management personnel,
or other relevant individuals under the Illinois Banking Act,
the Corporate Fiduciary Act, the Pawnbroker Regulation Act,
or at other times as the Commissioner deems necessary for the
purpose of carrying out the Commissioner's statutory powers
and responsibilities, the Commissioner shall consider
criminal history record information, including nonconviction
information, pursuant to the Criminal Identification Act.
The Commissioner shall, in the form and manner required by
the Department of State Police and the Federal Bureau of
Investigation, cause to be conducted a criminal history
record investigation to obtain information currently
contained in the files of the Department of State Police or
the Federal Bureau of Investigation, provided that the
Commissioner need not cause additional criminal history
record investigations to be conducted on individuals for whom
the Commissioner, a federal bank regulatory agency, or any
other government agency has caused such investigations to
have been conducted previously unless such additional
investigations are otherwise required by law or unless the
Commissioner deems such additional investigations to be
necessary for the purposes of carrying out the Commissioner's
statutory powers and responsibilities. The Department of
State Police shall provide, on the Commissioner's request,
information concerning criminal charges and their disposition
currently on file with respect to a relevant individual.
Information obtained as a result of an investigation under
this Section shall be used in determining eligibility to be
an incorporator, director, management personnel, or other
relevant individual in relation to a financial institution or
other entity supervised by the Commissioner. Upon request
and payment of fees in conformance with the requirements of
Section 2605-400 of the Department of State Police Law (20
ILCS 2605/2605-400), the Department of State Police is
authorized to furnish, pursuant to positive identification,
such information contained in State files as is necessary to
fulfill the request.
(e) When issuing charters, permits, licenses, or other
authorizations, the Commissioner may impose such terms and
conditions on the issuance as he deems necessary or
appropriate. Failure to abide by those terms and conditions
may result in the revocation of the issuance, the imposition
of corrective orders, or the imposition of civil money
penalties.
(f) If the Commissioner has reasonable cause to believe
that any entity that has not submitted an application for
authorization or licensure is conducting any activity that
would otherwise require authorization or licensure by the
Commissioner, the Commissioner shall have the power to
subpoena witnesses, to compel their attendance, and to
require the production of any relevant books, papers,
accounts, and documents in order to determine whether the
entity is subject to authorization or licensure by the
Commissioner or the Office of Banks and Real Estate.
(g) The Commissioner may, through the Attorney General,
request the circuit court of any county to issue an
injunction to restrain any person from violating the
provisions of any Act administered by the Commissioner.
(h) Whenever the Commissioner is authorized to take any
action or required by law to consider or make findings, the
Commissioner may delegate or appoint, in writing, an officer
or employee of the Office of Banks and Real Estate to take
that action or make that finding.
(Source: P.A. 90-301, eff. 8-1-97; 90-602, eff. 7-1-98;
91-239, eff. 1-1-00.)
(20 ILCS 3205/6) (from Ch. 17, par. 456)
Sec. 6. Duties. The Commissioner shall direct and
supervise all the administrative and technical activities of
the Office and shall:
(a) Apply and carry out this Act and the law and all
rules adopted in pursuance thereof.
(b) Appoint, subject to the provisions of the Personnel
Code, such employees, experts, and special assistants as may
be necessary to carry out effectively the provisions of this
Act and, if the rate of compensation is not otherwise fixed
by law, fix their compensation; but neither the Commissioner
nor any deputy commissioner shall be subject to the Personnel
Code.
(c) Serve as Chairman of the State Banking Board of
Illinois.
(d) Serve as Chairman of the Board of Trustees of the
Illinois Bank Examiners' Education Foundation.
(e) Issue guidelines in the form of rules or regulations
which will prohibit discrimination by any State chartered
bank against any individual, corporation, partnership,
association or other entity because it appears in a so-called
blacklist issued by any domestic or foreign corporate or
governmental entity.
(f) Make an annual report to the Governor regarding the
work of the Office as the Commissioner may consider desirable
or as the Governor may request.
(g) Perform such other acts as may be requested by the
State Banking Board of Illinois pursuant to its lawful powers
and perform any other lawful act that the Commissioner
considers to be necessary or desirable to carry out the
purposes and provisions of this Act.
(h) Adopt, in accordance with the Illinois
Administrative Procedure Act, reasonable rules that the
Commissioner deems necessary for the proper administration
and enforcement of any Act the administration of which is
vested in the Commissioner or the Office of Banks and Real
Estate.
(Source: P.A. 89-508, eff. 7-3-96.)
Section 10. The Illinois Banking Act is amended by
changing Sections 2, 5, 5b, 7, 8, 10, 12, 13, 13.5, 14, 15,
16.1, 17, 18, 22, 25, 30.5, 31, 33, 37, 47, 48, 48.1, 48.5,
49, 51, and 53 as follows:
(205 ILCS 5/2) (from Ch. 17, par. 302)
Sec. 2. General definitions. In this Act, unless the
context otherwise requires, the following words and phrases
shall have the following meanings:
"Accommodation party" shall have the meaning ascribed to
that term in Section 3-419 of the Uniform Commercial Code.
"Action" in the sense of a judicial proceeding includes
recoupments, counterclaims, set-off, and any other proceeding
in which rights are determined.
"Affiliate facility" of a bank means a main banking
premises or branch of another commonly owned bank. The main
banking premises or any branch of a bank may be an "affiliate
facility" with respect to one or more other commonly owned
banks.
"Appropriate federal banking agency" means the Federal
Deposit Insurance Corporation, the Federal Reserve Bank of
Chicago, or the Federal Reserve Bank of St. Louis, as
determined by federal law.
"Bank" means any person doing a banking business whether
subject to the laws of this or any other jurisdiction.
A "banking house", "branch", "branch bank" or "branch
office" shall mean any place of business of a bank at which
deposits are received, checks paid, or loans made, but shall
not include any place at which only records thereof are made,
posted, or kept. A place of business at which deposits are
received, checks paid, or loans made shall not be deemed to
be a branch, branch bank, or branch office if the place of
business is adjacent to and connected with the main banking
premises, or if it is separated from the main banking
premises by not more than an alley; provided always that (i)
if the place of business is separated by an alley from the
main banking premises there is a connection between the two
by public or private way or by subterranean or overhead
passage, and (ii) if the place of business is in a building
not wholly occupied by the bank, the place of business shall
not be within any office or room in which any other business
or service of any kind or nature other than the business of
the bank is conducted or carried on. A place of business at
which deposits are received, checks paid, or loans made shall
not be deemed to be a branch, branch bank, or branch office
(i) of any bank if the place is a terminal established and
maintained in accordance with paragraph (17) of Section 5 of
this Act, or (ii) of a commonly owned bank by virtue of
transactions conducted at that place on behalf of the other
commonly owned bank under paragraph (23) of Section 5 of this
Act if the place is an affiliate facility with respect to the
other bank.
"Branch of an out-of-state bank" means a branch
established or maintained in Illinois by an out-of-state bank
as a result of a merger between an Illinois bank and the
out-of-state bank that occurs on or after May 31, 1997, or
any branch established by the out-of-state bank following the
merger.
"Call report fee" means the fee to be paid to the
Commissioner by each State bank pursuant to paragraph (a) of
subsection (3) of Section 48 of this Act.
"Capital" includes the aggregate of outstanding capital
stock and preferred stock.
"Cash flow reserve account" means the account within the
books and records of the Commissioner of Banks and Real
Estate used to record funds designated to maintain a
reasonable Bank and Trust Company Fund operating balance to
meet agency obligations on a timely basis.
"Charter" includes the original charter and all
amendments thereto and articles of merger or consolidation.
"Commissioner" means the Commissioner of Banks and Real
Estate or a person authorized by the Commissioner, the Office
of Banks and Real Estate Act, or this Act to act in the
Commissioner's stead.
"Commonly owned banks" means 2 or more banks that each
qualify as a bank subsidiary of the same bank holding company
pursuant to Section 18 of the Federal Deposit Insurance Act;
"commonly owned bank" refers to one of a group of commonly
owned banks but only with respect to one or more of the other
banks in the same group.
"Community" means a city, village, or incorporated town
and also includes the area served by the banking offices of a
bank, but need not be limited or expanded to conform to the
geographic boundaries of units of local government in this
State.
"Company" means a corporation, limited liability company,
partnership, business trust, association, or similar
organization and, unless specifically excluded, includes a
"State bank" and a "bank".
"Consolidating bank" means a party to a consolidation.
"Consolidation" takes place when 2 or more banks, or a
trust company and a bank, are extinguished and by the same
process a new bank is created, taking over the assets and
assuming the liabilities of the banks or trust company
passing out of existence.
"Continuing bank" means a merging bank, the charter of
which becomes the charter of the resulting bank.
"Converting bank" means a State bank converting to become
a national bank, or a national bank converting to become a
State bank.
"Converting trust company" means a trust company
converting to become a State bank.
"Court" means a court of competent jurisdiction.
"Eligible depository institution" means an insured
savings association that is in default, an insured savings
association that is in danger of default, a State or national
bank that is in default or a State or national bank that is
in danger of default, as those terms are defined in this
Section, or a new bank as that term defined in Section 11(m)
of the Federal Deposit Insurance Act or a bridge bank as that
term is defined in Section 11(n) of the Federal Deposit
Insurance Act or a new federal savings association authorized
under Section 11(d)(2)(f) of the Federal Deposit Insurance
Act.
"Fiduciary" means trustee, agent, executor,
administrator, committee, guardian for a minor or for a
person under legal disability, receiver, trustee in
bankruptcy, assignee for creditors, or any holder of similar
position of trust.
"Financial institution" means a bank, savings and loan
association, credit union, or any licensee under the Consumer
Installment Loan Act or the Sales Finance Agency Act and, for
purposes of Section 48.3, any proprietary network, funds
transfer corporation, or other entity providing electronic
funds transfer services, or any corporate fiduciary, its
subsidiaries, affiliates, parent company, or contractual
service provider that is examined by the Commissioner.
"Foundation" means the Illinois Bank Examiners' Education
Foundation.
"General obligation" means a bond, note, debenture,
security, or other instrument evidencing an obligation of the
government entity that is the issuer that is supported by the
full available resources of the issuer, the principal and
interest of which is payable in whole or in part by taxation.
"Guarantee" means an undertaking or promise to answer for
payment of another's debt or performance of another's duty,
liability, or obligation whether "payment guaranteed" or
"collection guaranteed".
"In danger of default" means a State or national bank, a
federally chartered insured savings association or an
Illinois state chartered insured savings association with
respect to which the Commissioner or the appropriate federal
banking agency has advised the Federal Deposit Insurance
Corporation that:
(1) in the opinion of the Commissioner or the
appropriate federal banking agency,
(A) the State or national bank or insured
savings association is not likely to be able to meet
the demands of the State or national bank's or
savings association's obligations in the normal
course of business; and
(B) there is no reasonable prospect that the
State or national bank or insured savings
association will be able to meet those demands or
pay those obligations without federal assistance; or
(2) in the opinion of the Commissioner or the
appropriate federal banking agency,
(A) the State or national bank or insured
savings association has incurred or is likely to
incur losses that will deplete all or substantially
all of its capital; and
(B) there is no reasonable prospect that the
capital of the State or national bank or insured
savings association will be replenished without
federal assistance.
"In default" means, with respect to a State or national
bank or an insured savings association, any adjudication or
other official determination by any court of competent
jurisdiction, the Commissioner, the appropriate federal
banking agency, or other public authority pursuant to which a
conservator, receiver, or other legal custodian is appointed
for a State or national bank or an insured savings
association.
"Insured savings association" means any federal savings
association chartered under Section 5 of the federal Home
Owners' Loan Act and any State savings association chartered
under the Illinois Savings and Loan Act of 1985 or a
predecessor Illinois statute, the deposits of which are
insured by the Federal Deposit Insurance Corporation. The
term also includes a savings bank organized or operating
under the Savings Bank Act.
"Insured savings association in recovery" means an
insured savings association that is not an eligible
depository institution and that does not meet the minimum
capital requirements applicable with respect to the insured
savings association.
"Issuer" means for purposes of Section 33 every person
who shall have issued or proposed to issue any security;
except that (1) with respect to certificates of deposit,
voting trust certificates, collateral-trust certificates, and
certificates of interest or shares in an unincorporated
investment trust not having a board of directors (or persons
performing similar functions), "issuer" means the person or
persons performing the acts and assuming the duties of
depositor or manager pursuant to the provisions of the trust,
agreement, or instrument under which the securities are
issued; (2) with respect to trusts other than those specified
in clause (1) above, where the trustee is a corporation
authorized to accept and execute trusts, "issuer" means the
entrusters, depositors, or creators of the trust and any
manager or committee charged with the general direction of
the affairs of the trust pursuant to the provisions of the
agreement or instrument creating the trust; and (3) with
respect to equipment trust certificates or like securities,
"issuer" means the person to whom the equipment or property
is or is to be leased or conditionally sold.
"Letter of credit" and "customer" shall have the meanings
ascribed to those terms in Section 5-102 of the Uniform
Commercial Code.
"Main banking premises" means the location that is
designated in a bank's charter as its main office.
"Maker or obligor" means for purposes of Section 33 the
issuer of a security, the promisor in a debenture or other
debt security, or the mortgagor or grantor of a trust deed or
similar conveyance of a security interest in real or personal
property.
"Merged bank" means a merging bank that is not the
continuing, resulting, or surviving bank in a consolidation
or merger.
"Merger" includes consolidation.
"Merging bank" means a party to a bank merger.
"Merging trust company" means a trust company party to a
merger with a State bank.
"Mid-tier bank holding company" means a corporation that
(a) owns 100% of the issued and outstanding shares of each
class of stock of a State bank, (b) has no other
subsidiaries, and (c) 100% of the issued and outstanding
shares of the corporation are owned by a parent bank holding
company.
"Municipality" means any municipality, political
subdivision, school district, taxing district, or agency.
"National bank" means a national banking association
located in this State and after May 31, 1997, means a
national banking association without regard to its location.
"Out-of-state bank" means a bank chartered under the laws
of a state other than Illinois, a territory of the United
States, or the District of Columbia.
"Parent bank holding company" means a corporation that is
a bank holding company as that term is defined in the
Illinois Bank Holding Company Act of 1957 and owns 100% of
the issued and outstanding shares of a mid-tier bank holding
company.
"Person" means an individual, corporation, limited
liability company, partnership, joint venture, trust, estate,
or unincorporated association.
"Public agency" means the State of Illinois, the various
counties, townships, cities, towns, villages, school
districts, educational service regions, special road
districts, public water supply districts, fire protection
districts, drainage districts, levee districts, sewer
districts, housing authorities, the Illinois Bank Examiners'
Education Foundation, the Chicago Park District, and all
other political corporations or subdivisions of the State of
Illinois, whether now or hereafter created, whether herein
specifically mentioned or not, and shall also include any
other state or any political corporation or subdivision of
another state.
"Public funds" or "public money" means current operating
funds, special funds, interest and sinking funds, and funds
of any kind or character belonging to, in the custody of, or
subject to the control or regulation of the United States or
a public agency. "Public funds" or "public money" shall
include funds held by any of the officers, agents, or
employees of the United States or of a public agency in the
course of their official duties and, with respect to public
money of the United States, shall include Postal Savings
funds.
"Published" means, unless the context requires otherwise,
the publishing of the notice or instrument referred to in
some newspaper of general circulation in the community in
which the bank is located at least once each week for 3
successive weeks. Publishing shall be accomplished by, and
at the expense of, the bank required to publish. Where
publishing is required, the bank shall submit to the
Commissioner that evidence of the publication as the
Commissioner shall deem appropriate.
"Qualified financial contract" means any security
contract, commodity contract, forward contract, including
spot and forward foreign exchange contracts, repurchase
agreement, swap agreement, and any similar agreement, any
option to enter into any such agreement, including any
combination of the foregoing, and any master agreement for
such agreements. A master agreement, together with all
supplements thereto, shall be treated as one qualified
financial contract. The contract, option, agreement, or
combination of contracts, options, or agreements shall be
reflected upon the books, accounts, or records of the bank,
or a party to the contract shall provide documentary evidence
of such agreement.
"Recorded" means the filing or recording of the notice or
instrument referred to in the office of the Recorder of the
county wherein the bank is located.
"Resulting bank" means the bank resulting from a merger
or conversion.
"Securities" means stocks, bonds, debentures, notes, or
other similar obligations.
"Stand-by letter of credit" means a letter of credit
under which drafts are payable upon the condition the
customer has defaulted in performance of a duty, liability,
or obligation.
"State bank" means any banking corporation that has a
banking charter issued by the Commissioner under this Act.
"State Banking Board" means the State Banking Board of
Illinois.
"Subsidiary" with respect to a specified company means a
company that is controlled by the specified company. For
purposes of paragraphs (8) and (12) of Section 5 of this Act,
"control" means the exercise of operational or managerial
control of a corporation by the bank, either alone or
together with other affiliates of the bank.
"Surplus" means the aggregate of (i) amounts paid in
excess of the par value of capital stock and preferred stock;
(ii) amounts contributed other than for capital stock and
preferred stock and allocated to the surplus account; and
(iii) amounts transferred from undivided profits.
"Tier 1 Capital" and "Tier 2 Capital" have the meanings
assigned to those terms in regulations promulgated for the
appropriate federal banking agency of a state bank, as those
regulations are now or hereafter amended.
"Trust company" means a limited liability company or
corporation incorporated in this State for the purpose of
accepting and executing trusts.
"Undivided profits" means undistributed earnings less
discretionary transfers to surplus.
"Unimpaired capital and unimpaired surplus", for the
purposes of paragraph (21) of Section 5 and Sections 32, 33,
34, 35.1, 35.2, and 47 of this Act means the sum of the state
bank's Tier 1 Capital and Tier 2 Capital plus such other
shareholder equity as may be included by regulation of the
Commissioner. Unimpaired capital and unimpaired surplus
shall be calculated on the basis of the date of the last
quarterly call report filed with the Commissioner preceding
the date of the transaction for which the calculation is
made, provided that: (i) when a material event occurs after
the date of the last quarterly call report filed with the
Commissioner that reduces or increases the bank's unimpaired
capital and unimpaired surplus by 10% or more, then the
unimpaired capital and unimpaired surplus shall be calculated
from the date of the material event for a transaction
conducted after the date of the material event; and (ii) if
the Commissioner determines for safety and soundness reasons
that a state bank should calculate unimpaired capital and
unimpaired surplus more frequently than provided by this
paragraph, the Commissioner may by written notice direct the
bank to calculate unimpaired capital and unimpaired surplus
at a more frequent interval. In the case of a state bank
newly chartered under Section 13 or a state bank resulting
from a merger, consolidation, or conversion under Sections 21
through 26 for which no preceding quarterly call report has
been filed with the Commissioner, unimpaired capital and
unimpaired surplus shall be calculated for the first calendar
quarter on the basis of the effective date of the charter,
merger, consolidation, or conversion.
(Source: P.A. 89-208, eff. 9-29-95; 89-364, eff. 8-18-95;
89-508, eff. 7-3-96; 89-534, eff. 1-1-97; 89-567, eff.
7-26-96; 89-626, eff. 8-9-96; 90-14, eff. 7-1-97; 90-301,
eff. 8-1-97.)
(205 ILCS 5/5) (from Ch. 17, par. 311)
Sec. 5. General corporate powers. A bank organized
under this Act or subject hereto shall be a body corporate
and politic and shall, without specific mention thereof in
the charter, have all the powers conferred by this Act and
the following additional general corporate powers:
(1) To sue and be sued, complain, and defend in its
corporate name.
(2) To have a corporate seal, which may be altered at
pleasure, and to use the same by causing it or a facsimile
thereof to be impressed or affixed or in any manner
reproduced, provided that the affixing of a corporate seal to
an instrument shall not give the instrument additional force
or effect, or change the construction thereof, and the use of
a corporate seal is not mandatory.
(3) To make, alter, amend, and repeal bylaws, not
inconsistent with its charter or with law, for the
administration of the affairs of the bank. If this Act does
not provide specific guidance in matters of corporate
governance, the provisions of the Business Corporation Act of
1983 may be used if so provided in the bylaws.
(4) To elect or appoint and remove officers and agents
of the bank and define their duties and fix their
compensation.
(5) To adopt and operate reasonable bonus plans,
profit-sharing plans, stock-bonus plans, stock-option plans,
pension plans and similar incentive plans for its directors,
officers and employees.
(5.1) To manage, operate and administer a fund for the
investment of funds by a public agency or agencies, including
any unit of local government or school district, or any
person. The fund for a public agency shall invest in the
same type of investments and be subject to the same
limitations provided for the investment of public funds. The
fund for public agencies shall maintain a separate ledger
showing the amount of investment for each public agency in
the fund. "Public funds" and "public agency" as used in this
Section shall have the meanings ascribed to them in Section 1
of the Public Funds Investment Act.
(6) To make reasonable donations for the public welfare
or for charitable, scientific, religious or educational
purposes.
(7) To borrow or incur an obligation; and to pledge its
assets:
(a) to secure its borrowings, its lease of personal
or real property or its other nondeposit obligations;
(b) to enable it to act as agent for the sale of
obligations of the United States;
(c) to secure deposits of public money of the
United States, whenever required by the laws of the
United States, including without being limited to,
revenues and funds the deposit of which is subject to the
control or regulation of the United States or any of its
officers, agents, or employees and Postal Savings funds;
(d) to secure deposits of public money of any state
or of any political corporation or subdivision thereof
including, without being limited to, revenues and funds
the deposit of which is subject to the control or
regulation of any state or of any political corporation
or subdivisions thereof or of any of their officers,
agents, or employees;
(e) to secure deposits of money whenever required
by the National Bankruptcy Act;
(f) (blank); and
(g) to secure trust funds commingled with the
bank's funds, whether deposited by the bank or an
affiliate of the bank, pursuant to Section 2-8 of the
Corporate Fiduciary Act.
(8) To own, possess, and carry as assets all or part of
the real estate necessary in or with which to do its banking
business, either directly or indirectly through the ownership
of all or part of the capital stock, shares or interests in
any corporation, association, trust engaged in holding any
part or parts or all of the bank premises, engaged in such
business and in conducting a safe deposit business in the
premises or part of them, or engaged in any activity that the
bank is permitted to conduct in a subsidiary pursuant to
paragraph (12) of this Section 5.
(9) To own, possess, and carry as assets other real
estate to which it may obtain title in the collection of its
debts or that was formerly used as a part of the bank
premises, but title to any real estate except as herein
permitted shall not be retained by the bank, either directly
or by or through a subsidiary, as permitted by subsection
(12) of this Section for a total period of more than 10 years
after acquiring title, either directly or indirectly.
(10) To do any act, including the acquisition of stock,
necessary to obtain insurance of its deposits, or part
thereof, and any act necessary to obtain a guaranty, in whole
or in part, of any of its loans or investments by the United
States or any agency thereof, and any act necessary to sell
or otherwise dispose of any of its loans or investments to
the United States or any agency thereof, and to acquire and
hold membership in the Federal Reserve System.
(11) Notwithstanding any other provisions of this Act or
any other law, to do any act and to own, possess, and carry
as assets property of the character, including stock, that is
at the time authorized or permitted to national banks by an
Act of Congress, but subject always to the same limitations
and restrictions as are applicable to national banks by the
pertinent federal law and subject to applicable provisions of
the Financial Institutions Insurance Sales Law.
(12) To own, possess, and carry as assets stock of one
or more corporations that is, or are, engaged in one or more
of the following businesses:
(a) holding title to and administering assets
acquired as a result of the collection or liquidating of
loans, investments, or discounts; or
(b) holding title to and administering personal
property acquired by the bank, directly or indirectly
through a subsidiary, for the purpose of leasing to
others, provided the lease or leases and the investment
of the bank, directly or through a subsidiary, in that
personal property otherwise comply with Section 35.1 of
this Act; or
(c) carrying on or administering any of the
activities excepting the receipt of deposits or the
payment of checks or other orders for the payment of
money in which a bank may engage in carrying on its
general banking business; provided, however, that nothing
contained in this paragraph (c) shall be deemed to permit
a bank organized under this Act or subject hereto to do,
either directly or indirectly through any subsidiary, any
act, including the making of any loan or investment, or
to own, possess, or carry as assets any property that if
done by or owned, possessed, or carried by the State bank
would be in violation of or prohibited by any provision
of this Act.
The provisions of this subsection (12) shall not apply to
and shall not be deemed to limit the powers of a State bank
with respect to the ownership, possession, and carrying of
stock that a State bank is permitted to own, possess, or
carry under this Act.
Any bank intending to establish a subsidiary under this
subsection (12) shall give written notice to the Commissioner
60 days prior to the subsidiary's commencing of business or,
as the case may be, prior to acquiring stock in a corporation
that has already commenced business. After receiving the
notice, the Commissioner may waive or reduce the balance of
the 60 day notice period. The Commissioner may specify the
form of the notice and may promulgate rules and regulations
to administer this subsection (12).
(13) To accept for payment at a future date not
exceeding one year from the date of acceptance, drafts drawn
upon it by its customers; and to issue, advise, or confirm
letters of credit authorizing the holders thereof to draw
drafts upon it or its correspondents.
(14) To own and lease personal property acquired by the
bank at the request of a prospective lessee and upon the
agreement of that person to lease the personal property
provided that the lease, the agreement with respect thereto,
and the amount of the investment of the bank in the property
comply with Section 35.1 of this Act.
(15) (a) To establish and maintain, in addition to the
main banking premises, branches offering any banking
services permitted at the main banking premises of a
State bank.
(b) To establish and maintain, after May 31, 1997,
branches in another state that may conduct any activity
in that state that is authorized or permitted for any
bank that has a banking charter issued by that state,
subject to the same limitations and restrictions that are
applicable to banks chartered by that state.
(16) (Blank).
(17) To establish and maintain terminals, as authorized
by the Electronic Fund Transfer Act.
(18) To establish and maintain temporary service booths
at any International Fair held in this State which is
approved by the United States Department of Commerce, for the
duration of the international fair for the sole purpose of
providing a convenient place for foreign trade customers at
the fair to exchange their home countries' currency into
United States currency or the converse. This power shall not
be construed as establishing a new place or change of
location for the bank providing the service booth.
(19) To indemnify its officers, directors, employees,
and agents, as authorized for corporations under Section 8.75
of the Business Corporation Act of 1983.
(20) To own, possess, and carry as assets stock of, or
be or become a member of, any corporation, mutual company,
association, trust, or other entity formed exclusively for
the purpose of providing directors' and officers' liability
and bankers' blanket bond insurance or reinsurance to and for
the benefit of the stockholders, members, or beneficiaries,
or their assets or businesses, or their officers, directors,
employees, or agents, and not to or for the benefit of any
other person or entity or the public generally.
(21) To make debt or equity investments in corporations
or projects, whether for profit or not for profit, designed
to promote the development of the community and its welfare,
provided that the aggregate investment in all of these
corporations and in all of these projects does not exceed 10%
of the unimpaired capital and unimpaired surplus of the bank
and provided that this limitation shall not apply to
creditworthy loans by the bank to those corporations or
projects. Upon written application to the Commissioner, a
bank may make an investment that would, when aggregated with
all other such investments, exceed 10% of the unimpaired
capital and unimpaired surplus of the bank. The Commissioner
may approve the investment if he is of the opinion and finds
that the proposed investment will not have a material adverse
effect on the safety and soundness of the bank.
(22) To own, possess, and carry as assets the stock of a
corporation engaged in the ownership or operation of a travel
agency or to operate a travel agency as a part of its
business, provided that the bank either owned, possessed, and
carried as assets the stock of such a corporation or operated
a travel agency as part of its business before July 1, 1991.
(23) With respect to affiliate facilities:
(a) to conduct at affiliate facilities for and on
behalf of another commonly owned bank, if so authorized
by the other bank, all transactions that the other bank
is authorized or permitted to perform; and
(b) to authorize a commonly owned bank to conduct
for and on behalf of it any of the transactions it is
authorized or permitted to perform at one or more
affiliate facilities.
Any bank intending to conduct or to authorize a commonly
owned bank to conduct at an affiliate facility any of the
transactions specified in this paragraph (23) shall give
written notice to the Commissioner at least 30 days before
any such transaction is conducted at the affiliate facility.
(24) To act as the agent for any fire, life, or other
insurance company authorized by the State of Illinois, by
soliciting and selling insurance and collecting premiums on
policies issued by such company; and to receive for services
so rendered such fees or commissions as may be agreed upon
between the bank and the insurance company for which it may
act as agent; provided, however, that no such bank shall in
any case assume or guarantee the payment of any premium on
insurance policies issued through its agency by its
principal; and provided further, that the bank shall not
guarantee the truth of any statement made by an assured in
filing his application for insurance.
(25) Notwithstanding any other provisions of this Act or
any other law, to offer any product or service that is at the
time authorized or permitted to any insured savings
association or out-of-state bank by applicable law, provided
that powers conferred only by this subsection (25):
(a) shall always be subject to the same limitations
and restrictions that are applicable to the insured
savings association or out-of-state bank for the product
or service by such applicable law;
(b) shall be subject to applicable provisions of
the Financial Institutions Insurance Sales Law;
(c) shall not include the right to own or conduct a
real estate brokerage business for which a license would
be required under the laws of this State; and
(d) shall not be construed to include the
establishment or maintenance of a branch, nor shall they
be construed to limit the establishment or maintenance of
a branch pursuant to subsection (11).
(Source: P.A. 90-41, eff. 10-1-97; 90-301, eff. 8-1-97;
90-655, eff. 7-30-98; 90-665, eff. 7-30-98; 91-330, eff.
7-29-99; 91-849, eff. 6-22-00.)
(205 ILCS 5/5b) (from Ch. 17, par. 312.1)
Sec. 5b. Deposits in outside depository.
(a) Except as provided in subsection (b), every bank is
liable for deposits made in an outside depository from the
time the deposit is made.
(b) A bank may adopt a policy that its liability for
deposits made in outside depositories will be delayed until
the deposits are recorded, and, if such a policy is adopted
and depositors are notified in writing at least 21 days in
advance of the effective date of such policy, the bank's
liability will be delayed in accordance with the policy. In
case of deposit accounts opened after such a policy is
adopted, the policy shall be effective if the depositor is
given written notice of the policy at the time the deposit
account is opened.
(c) For the purposes of this Section "outside
depository" means any receptacle attached to a main banking
premise, or branch, as allowed in subsection (15) of Section
5 of this Act, or other location for the purpose of making
deposits either during or after regular banking hours, but
does not include an automatic teller machine or point of sale
terminal, as defined in the Electronic Fund Transfer Act.
(Source: P.A. 88-273; 89-310, eff. 1-1-96.)
(205 ILCS 5/7) (from Ch. 17, par. 314)
Sec. 7. Organization capital requirements. A bank may be
organized to exercise the powers conferred by this Act with
minimum capital and surplus as determined by the
Commissioner. The Commissioner shall record such
organization capital requirements in the Office of the
Secretary of State.
(Source: P.A. 90-301, eff. 8-1-97.)
(205 ILCS 5/8) (from Ch. 17, par. 315)
Sec. 8. Incorporators. A State bank may be organized on
application by 5 or more incorporators who shall be
individuals except that a bank holding company may be the
sole incorporator of a State bank. Each incorporator shall
undertake to subscribe and pay in full in cash for stock
having a value of not less than one per cent of the minimum
capital and surplus requirements as set forth in Section 7,
except that incorporators of a State bank that will be owned
by a bank holding company may subscribe and pay in full in
cash for stock of the bank holding company, provided that the
incorporator's investment in the bank holding company must at
least equal the amount of money that would have been needed
for the incorporator to acquire shares of the bank's stock
pursuant to this Section.
(Source: P.A. 90-301, eff. 8-1-97.)
(205 ILCS 5/10) (from Ch. 17, par. 317)
Sec. 10. Permit to organize.
(a) Upon the filing of an application for a permit to
organize, the Commissioner shall investigate the truth of the
statements therein and shall consider the proposed bank's
capital structure, its future earnings prospects, the general
character, experience, and qualifications of its proposed
management, its proposed plan of operation, and the
convenience and needs of the area sought to be served, and
notwithstanding the provisions of Section 7 of this Act, the
Commissioner shall not approve the application and issue a
permit to organize unless he shall be of the opinion and
finds:
(1) that the proposed capital at least meets the
minimum requirements of this Act determined by the
Commissioner pursuant to Section 7 of this Act including
additional capital necessitated by the circumstances of
the proposed bank including its size, scope of
operations and market in which it proposes to operate;
(2) that the future earnings prospects are
favorable;
(3) that the general character, experience, and
qualifications of its proposed management and its
proposed plan of operation are such as to assure
reasonable promise of successful, safe and sound
operation;
(4) that the name of the proposed bank is not the
same as or deceptively similar to a name reserved with
the Commissioner's office under Section 9.5 or to the
name of any other bank then operating in this State; and
(5) that the convenience and needs of the area
sought to be served by the proposed bank will be
promoted.
(b) The Commissioner shall revoke the permit to organize
and order liquidation of any funds collected in the event
that the organizers do not obtain a charter from the
Commissioner authorizing the bank to commence business within
6 months from the date of the issuance of the permit, unless
a request has been submitted, in writing, to the Commissioner
for an extension and the request has been approved.
(c) The Commissioner may impose such terms and
conditions, if any, on the issuance of the permit to organize
as the Commissioner deems appropriate and necessary for the
organization of the bank.
(Source: P.A. 90-665, eff. 7-30-98; 91-452, eff. 1-1-00.)
(205 ILCS 5/12) (from Ch. 17, par. 319)
Sec. 12. Organization.
(a) The directors so elected shall may proceed to
organize in conformity with this Act and as follows:
(1) To qualify themselves as directors.
(2) To elect one of their number as president.
(3) To make and adopt by-laws not inconsistent with
its charter or with law for the administration of the
affairs of the bank.
(4) To appoint such officers as the by-laws may
provide, and fix the salaries of all officers.
(5) To furnish to the Commissioner lists of the
stockholders and copies of any other records the
Commissioner may require.
(6) To collect the subscriptions to the capital
stock and to the preferred stock, if any, including the
surplus and the reserves for operating expenses.
(6.5) To notify the Commissioner of any significant
deviation or change from the original plan of operation
or proposed business activities submitted with the
application for a permit to organize.
(7) To report the organization to the Commissioner.
(b) Subscriptions to the capital stock and to the
preferred stock, if any, collected pursuant to item (6) of
subsection (a) of this Section must be placed in escrow.
(Source: P.A. 85-204.)
(205 ILCS 5/13) (from Ch. 17, par. 320)
Sec. 13. Issuance of charter.
(a) When the directors have organized as provided in
Section 12 of this Act, and the capital stock and the
preferred stock, if any, together with a surplus of not less
than 50% of the capital, has been all fully paid in and a
record of the same filed with the Commissioner, the
Commissioner or some competent person of the Commissioner's
appointment shall make a thorough examination into the
affairs of the proposed bank, and if satisfied (i) that all
the requirements of this Act have been complied with, (ii)
that no intervening circumstance has occurred to change the
Commissioner's findings made pursuant to Section 10 of this
Act, and (iii) that the prior involvement by any stockholder
who will own a sufficient amount of stock to have control, as
defined in Section 18 of this Act, of the proposed bank with
any other financial institution, whether as stockholder,
director, officer, or customer, was conducted in a safe and
sound manner, upon payment into the Commissioner's office of
the reasonable expenses of the examination, as determined by
the Commissioner, the Commissioner shall issue a charter
authorizing the bank to commence business as authorized in
this Act. All charters issued by the Commissioner or any
predecessor agency which chartered State banks, including any
charter outstanding as of September 1, 1989, shall be
perpetual. For the 2 years after the Commissioner has issued
a charter to a bank, the bank shall request and obtain from
the Commissioner prior written approval before it may change
senior management personnel or directors.
The original charter, duly certified by the Commissioner,
or a certified copy shall be evidence in all courts and
places of the existence and authority of the bank to do
business. Upon the issuance of the charter by the
Commissioner, the bank shall be deemed fully organized and
may proceed to do business. The Commissioner may, in the
Commissioner's discretion, withhold the issuing of the
charter when the Commissioner has reason to believe that the
bank is organized for any purpose other than that
contemplated by this Act or that a commission or fee has been
paid in connection with the sale of the stock of the bank.
The Commissioner shall revoke the charter and order
liquidation in the event that the bank does not commence a
general banking business within one year from the date of the
issuance of the charter, unless a request has been submitted,
in writing, to the Commissioner for an extension and the
request has been approved. After commencing a general
banking business, a bank may change its name by filing
written notice with the Commissioner at least 30 days prior
to the effective date of such change. A bank chartered under
this Act may change its main banking premises by filing
written application with the Commissioner, on forms
prescribed by the Commissioner, provided (i) the change shall
not be a removal to a new location without complying with the
capital requirements of Section 7 and of subsection (1) of
Section 10 of this Act; (ii) the Commissioner approves the
relocation or change; and (iii) the bank complies with any
applicable federal law or regulation. The application shall
be deemed to be approved if the Commissioner has not acted on
the application within 30 days after receipt of the
application, unless within the 30-day time frame the
Commissioner informs the bank that an extension of time is
necessary prior to the Commissioner's action on the
application.
(b) (1) The Commissioner may also issue a charter to a
bank that is owned exclusively by other depository
institutions or depository institution holding companies and
is organized to engage exclusively in providing services to
or for other depository institutions, their holding
companies, and the officers, directors, and employees of such
institutions and companies, and in providing correspondent
banking services at the request of other depository
institutions or their holding companies (also referred to as
a "bankers' bank").
(2) A bank chartered pursuant to paragraph (1) shall,
except as otherwise specifically determined or limited by the
Commissioner in an order or pursuant to a rule, be vested
with the same rights and privileges and subject to the same
duties, restrictions, penalties, and liabilities now or
hereafter imposed under this Act.
(c) A bank chartered under this Act after November 1,
1985, and an out-of-state bank that merges with a State bank
and establishes or maintains a branch in this State after May
31, 1997, shall obtain from and, at all times while it
accepts or retains deposits, maintain with the Federal
Deposit Insurance Corporation, or such other instrumentality
of or corporation chartered by the United States, deposit
insurance as authorized under federal law.
(d) (i) A bank that has a banking charter issued by the
Commissioner under this Act may, pursuant to a written
purchase and assumption agreement, transfer substantially all
of its assets to another State bank or national bank in
consideration, in whole or in part, for the transferee banks'
assumption of any part or all of its liabilities. Such a
transfer shall in no way be deemed to impair the charter of
the transferor bank or cause the transferor bank to forfeit
any of its rights, powers, interests, franchises, or
privileges as a State bank, nor shall any voluntary reduction
in the transferor bank's activities resulting from the
transfer have any such effect; provided, however, that a
State bank that transfers substantially all of its assets
pursuant to this subsection (d) and following the transfer
does not accept deposits and make loans, shall not have any
rights, powers, interests, franchises, or privileges under
subsection (15) of Section 5 of this Act until the bank has
resumed accepting deposits and making loans.
(ii) The fact that a State bank does not resume
accepting deposits and making loans for a period of 24 months
commencing on September 11, 1989 or on a date of the transfer
of substantially all of a State bank's assets, whichever is
later, or such longer period as the Commissioner may allow in
writing, may be the basis for a finding by the Commissioner
under Section 51 of this Act that the bank is unable to
continue operations.
(iii) The authority provided by subdivision (i) of this
subsection (d) shall terminate on May 31, 1997, and no bank
that has transferred substantially all of its assets pursuant
to this subsection (d) shall continue in existence after May
31, 1997.
(Source: P.A. 90-14, eff. 7-1-97; 90-301, eff. 8-1-97;
90-665, eff. 7-30-98; 91-322, eff. 1-1-00.)
(205 ILCS 5/13.5)
Sec. 13.5. Formation and merger of interim banks.
(a) An interim bank may be chartered as a State bank for
the exclusive purpose of accomplishing a corporate
restructuring through merger with an existing State bank,
national bank, trust company, or an insured savings
association. An interim bank shall be chartered and merged
pursuant to the provisions of this Section. The interim bank
shall not accept deposits, make loans, pay checks, or engage
in the general banking business or any part thereof, and
shall not be subject to the provisions of this Act other than
those set forth in this Section; provided, however, that if
the interim bank becomes the resulting bank in a merger, such
resulting bank shall have all of the powers, rights, and
duties of a State bank and must comply with all applicable
provisions of this Act.
(b) An interim State bank may be organized upon
application by 5 or more incorporators or by a bank holding
company. The application shall be made on forms prescribed
by the Commissioner which shall request, at a minimum, the
following information:
(1) the names and addresses of the incorporators;
(2) the proposed name and address of the interim
bank;
(3) the name and address of all banks with which
the interim bank will be merging;
(4) a copy of the merger agreement by which the
interim bank will be merged with the banks identified in
item (3) containing the same information required in
merger agreements pursuant to subsection (1) of Section
22 of this Act; and
(5) an acknowledgement that the interim bank shall
not engage in the general banking business or any part
thereof unless and until the interim bank becomes the
resulting bank in a merger.
(c) The merger agreement must be approved by all of the
incorporators of the interim bank and must be approved by the
existing State bank with which the interim bank will merge,
as required by Section 22 of this Act.
(d) Upon receipt of the application to organize the
interim bank and the merger agreement submitted pursuant to
this Section and Section 22 of this Act, the Commissioner may
issue a charter to the interim bank and approve the merger
agreement if the Commissioner makes the findings set forth in
subsection (3) of Section 22 of this Act. The interim bank's
charter shall not take effect until, and shall only be
effective for purposes of, the merger.
(e) Nothing in this Section affects the obligations of
an existing State bank with which the interim bank will
merge, or the rights of minority or dissenting shareholders
of the existing State bank, in connection with the approval,
execution, and accomplishment of a merger agreement as
provided elsewhere in this Act.
(Source: P.A. 90-301, eff. 8-1-97.)
(205 ILCS 5/14) (from Ch. 17, par. 321)
Sec. 14. Stock. Unless otherwise provided for in this
Act provisions of general application to stock of a state
bank shall be as follows:
(1) All banks shall have their capital divided into
shares of a par value of not less than $1 one dollar each and
not more than $100 one hundred dollars each, however, the par
value of shares of a bank effecting a reverse stock split
pursuant to item (8) of subsection (a) of Section 17 may
temporarily exceed this limit provided it conforms to the
limits immediately after the reverse stock split is
completed. No issue of capital stock or preferred stock shall
be valid until not less than the par value of all such stock
so issued shall be paid in and notice thereof by the
president, a vice-president or cashier of the bank has been
transmitted to the Commissioner. In the case of an increase
in capital stock by the declaration of a stock dividend, the
capitalization of retained earnings effected by such stock
dividend shall constitute the payment for such shares
required by the preceding sentence, provided that the surplus
of said bank after such stock dividend shall be at least
equal to fifty per cent of the capital as increased. The
charter shall not limit or deny the voting power of the
shares of any class of stock except as provided in Section
15(3) of this Act.
(2) Pursuant to action taken in accordance with the
requirements of Section 17, a bank may issue preferred stock
of one or more classes as shall be approved by the
Commissioner as hereinafter provided, and make such amendment
to its charter as may be necessary for this purpose; but in
the case of any newly organized bank which has not yet issued
capital stock the requirements of Section 17 shall not apply.
(3) Without limiting the authority herein contained a
bank, when so provided in its charter and when approved by
the Commissioner, may issue shares of preferred stock:
(a) Subject to the right of the bank to redeem any
of such shares at not exceeding the price fixed by the
charter for the redemption thereof;
(b) Subject to the provisions of subsection (8) of
this Section 14 entitling the holders thereof to
cumulative or noncumulative dividends;
(c) Having preference over any other class or
classes of shares as to the payment of dividends;
(d) Having preference as to the assets of the bank
over any other class or classes of shares upon the
voluntary or involuntary liquidation of the bank;
(e) Convertible into shares of any other class of
stock, provided that preferred shares shall not be
converted into shares of a different par value unless
that part of the capital of the bank represented by such
preferred shares is at the time of the conversion equal
to the aggregate par value of the shares into which the
preferred shares are to be converted.
(4) If any part of the capital of a bank consists of
preferred stock, the determination of whether or not the
capital of such bank is impaired and the amount of such
impairment shall be based upon the par value of its stock
even though the amount which the holders of such preferred
stock shall be entitled to receive in the event of retirement
or liquidation shall be in excess of the par value of such
preferred stock.
(5) Pursuant to action taken in accordance with the
requirements of Section 17 of this Act, a state bank may
provide for a specified number of authorized but unissued
shares of capital stock for one or more of the following
purposes:
(a) Reserved for issuance under stock option plan
or plans to directors, officers or employees;
(b) Reserved for issuance upon conversion of
convertible preferred stock issued pursuant to and in
compliance with the provisions of subsections (2) and (3)
of this Section 14.
(c) Reserved for issuance upon conversion of
convertible debentures or other convertible evidences of
indebtedness issued by a state bank, provided always that
the terms of such conversion have been approved by the
Commissioner;
(d) Reserved for issuance by the declaration of a
stock dividend. If and when any shares of capital stock
are proposed to be authorized and reserved for any of the
purposes set forth in subparagraphs (a), (b) or (c)
above, the notice of the meeting, whether special or
annual, of stockholders at which such proposition is to
be considered shall be accompanied by a statement setting
forth or summarizing the terms upon which the shares of
capital stock so reserved are to be issued, and the
extent to which any preemptive rights of stockholders are
inapplicable to the issuance of the shares so reserved or
to the convertible preferred stock or convertible
debentures or other convertible evidences of
indebtedness, and the approving vote of the holders of at
least two-thirds of the outstanding shares of stock
entitled to vote at such meeting of the terms of such
issuance shall be requisite for the adoption of any
amendment providing for the reservation of authorized but
unissued shares for any of said purposes. Nothing in this
subsection (5) contained shall be deemed to authorize the
issuance of any capital stock for a consideration less
than the par value thereof.
(6) Upon written application to the Commissioner 60 days
prior to the proposed purchase and receipt of the written
approval of the Commissioner, a state bank may purchase and
hold as treasury stock such amounts of the total number of
issued and outstanding shares of its capital and preferred
stock outstanding as the Commissioner determines is
consistent with safety and soundness of the bank. The
Commissioner may specify the manner of accounting for the
treasury stock and the form of notice prior to ultimate
disposition of the shares. Except as authorized in this
subsection, it shall not be lawful for a state bank to
purchase or hold any additional such shares or securities
described in subsection (2) of Section 37 unless necessary to
prevent loss upon a debt previously contracted in good faith,
in which event such shares or securities so purchased or
acquired shall, within 6 months from the time of purchase or
acquisition, be sold or disposed of at public or private
sale. Any state bank which intends to purchase and hold
treasury stock as authorized in this subsection (6) shall
file a written application with the Commissioner 60 days
prior to any such proposed purchase. The application shall
state the number of shares to be purchased, the consideration
for the shares, the name and address of the person from whom
the shares are to be purchased, if known, and the total
percentage of its issued and outstanding shares to be held by
the bank after the purchase. The total consideration paid by
a state bank for treasury stock shall reduce capital and
surplus of the bank for purposes of Sections of this Act
relating to lending and investment limits which require
computation of capital and surplus. After considering and
approving an application to purchase and hold treasury stock
under this subsection, the Commissioner may waive or reduce
the balance of the 60 day application period. The
Commissioner may specify the form of the application for
approval to acquire treasury stock and promulgate rules and
regulations for the administration of this subsection (6). A
state bank may, acquire or resell its owns shares as treasury
stock pursuant to this subsection (6) without a change in its
charter pursuant to Section 17. Such stock may be held for
any purpose permitted in subsection (5) of this Section 14 or
may be resold upon such reasonable terms as the board of
directors may determine provided notice is given to the
Commissioner prior to the resale of such stock.
(7) During the time that a state bank shall continue its
banking business, it shall not withdraw or permit to be
withdrawn, either in the form of dividends or otherwise, any
portion of its capital, but nothing in this subsection shall
prevent a reduction or change of the capital stock or the
preferred stock under the provisions of Sections 17 through
30 of this Act, a purchase of treasury stock under the
provisions of subsection (6) of this Section 14 or a
redemption of preferred stock pursuant to charter provisions
therefor.
(8) (a) Subject to the provisions of this Act, the
board of directors of a state bank from time to time may
declare a dividend of so much of the net profits of such
bank as it shall judge expedient, but each bank before
the declaration of a dividend shall carry at least
one-tenth of its net profits since the date of the
declaration of the last preceding dividend, or since the
issuance of its charter in the case of its first
dividend, to its surplus until the same shall be equal to
its capital.
(b) No dividends shall be paid by a state bank
while it continues its banking business to an amount
greater than its net profits then on hand, deducting
first therefrom its losses and bad debts. All debts due
to a state bank on which interest is past due and unpaid
for a period of 6 months or more, unless the same are
well secured and in the process of collection, shall be
considered bad debts.
(9) A State bank may, but shall not be obliged to, issue
a certificate for a fractional share, and, by action of its
board of directors, may in lieu thereof, pay cash equal to
the value of the fractional share. A certificate for a
fractional share shall entitle the holder to exercise
fractional voting rights, to receive dividends, and to
participate in any of the assets of the bank in the event of
liquidation.
(Source: P.A. 90-160, eff. 7-23-97; 90-301, eff. 8-1-97;
90-655, eff. 7-30-98.)
(205 ILCS 5/15) (from Ch. 17, par. 322)
Sec. 15. Stock and stockholders. Unless otherwise
provided for in this Act, provisions of general application
to capital stock, preferred stock, and stockholders of a
State bank shall be as follows:
(1) There shall be an annual meeting of the stockholders
for the election of directors each year on the first business
day in January, unless some other date shall be fixed by the
by-laws. A special meeting of the stockholders may be called
at any time by the board of directors, and otherwise as may
be provided in the bylaws.
(2) Written or printed notice stating the place, day,
and hour of the meeting, and in case of a special meeting,
the purpose or purposes for which the meeting is called,
shall be delivered not less than 10 nor more than 40 days
before the date of the meeting either personally or by mail,
by or at the direction of the president, or the secretary, or
the officer or persons calling the meeting, to each
stockholder of record entitled to vote at the meeting. If
mailed, the notice shall be deemed to be delivered when
deposited in the United States mail with postage thereon
prepaid addressed to the stockholder at his address as it
appears on the records of the bank.
(3) Except as provided below in this paragraph (3), each
outstanding share shall be entitled to one vote on each
matter submitted to a vote at a meeting of stockholders.
Shares of its own stock belonging to a bank shall not be
voted, directly or indirectly, at any meeting and shall not
be counted in determining the total number of outstanding
shares at any given time, but shares of its own stock held by
it in a fiduciary capacity may be voted and shall be counted
in determining the total number of outstanding shares at any
given time. A stockholder may vote either in person or by
proxy executed in writing by the stockholder or by his duly
authorized attorney-in-fact. No proxy shall be valid after
11 months from the date of its execution, unless otherwise
provided in the proxy. Except as provided below in this
paragraph (3), in all elections for directors every
stockholder (or subscriber to the stock prior to the issuance
of a charter) shall have the right to vote, in person or by
proxy, for the number of shares of stock owned by him, for as
many persons as there are directors to be elected, or to
cumulate the shares and give one candidate as many votes as
the number of directors multiplied by the number of his or
her shares of stock shall equal, or to distribute them on the
same principle among as many candidates as he or she shall
think fit. The bank charter of any bank organized on or
after January 1, 1984 may limit or eliminate cumulative
voting rights in all or specified circumstances, or may
eliminate voting rights entirely, as to any class or classes
or series of stock of the bank; provided that one class of
shares or series thereof shall always have voting rights in
respect of all matters in the bank. A bank organized prior to
January 1, 1984 may amend its charter to eliminate cumulative
voting rights under all or specified circumstances, or to
eliminate voting rights entirely, as to any class or classes
or series of stock of the bank; provided that one class of
shares or series thereof shall always have voting rights in
respect of all matters in the bank, and provided further that
the proposal to eliminate the voting rights receives the
approval of the holders of 70% of the outstanding shares of
stock entitled to vote as provided in paragraph (b) (7) of
Section 17. A majority of the outstanding shares represented
in person or by proxy shall constitute a quorum at a meeting
of stockholders. In the absence of a quorum a meeting may be
adjourned from time to time without notice to the
stockholders.
(4) Whenever additional stock of a class is offered for
sale, stockholders of record of the same class on the date of
the offer shall have the right to subscribe to the proportion
of the shares as the stock of the class held by them bears to
the total of the outstanding stock of the class, and the
price thereof may be in excess of par value. This right
shall be transferable but shall terminate if not exercised
within 60 days of the offer, unless the Commissioner shall
authorize a shorter time. If the right is not exercised, the
stock shall not be re-offered for sale to others at a lower
price without the stockholders of the same class again being
accorded a preemptive right to subscribe at the lower price.
Notwithstanding any of the provisions of this paragraph (4)
or any other provision of law, stockholders shall not have
any preemptive or other right to subscribe for or to purchase
or acquire shares of capital stock issued or to be issued
under a stock-option plan or upon conversion of preferred
stock or convertible debentures or other convertible
indebtedness that has been approved by stockholders in the
manner required by the provisions of subsection (5) of
Section 14 hereof or to treasury stock acquired pursuant to
subsection (6) of Section 14.
(5) For the purpose of determining stockholders entitled
to notice of or to vote at any meeting of stockholders, or
stockholders entitled to receive payment of any dividend, or
in order to make a determination of stockholders for any
other proper purpose, the board of directors of a bank may
provide that the stock transfer books shall be closed for a
stated period not to exceed, in any case, 40 days. In lieu
of closing the stock transfer books, the board of directors
may fix in advance a date as the record date for any
determination of stockholders, the date in any case to be not
more than 40 days, and in case of a meeting of stockholders,
not less than 10 days prior to the date on which the
particular action, requiring the determination of
stockholders, is to be taken. If the stock transfer books
are not closed and no record date is fixed for the
determination of stockholders entitled to notice of or to
vote at a meeting of stockholders, or stockholders entitled
to receive payment of a dividend, the date on which notice of
a meeting is mailed or the date on which the resolution of
the board of directors declaring the dividend is adopted, as
the case may be, shall be the record date for the
determination of stockholders.
(6) Stock standing in the name of another corporation,
domestic or foreign, may be voted by the officer, agent, or
proxy as the by-laws of the corporation may prescribe, or, in
the absence of such provision, as the board of directors of
the corporation may determine. Stock standing in the name of
a deceased person may be voted by his or her administrator or
executor, either in person or by proxy. Stock standing in
the name of a guardian or trustee may be voted by that
fiduciary either in person or by proxy. Shares standing in
the name of a receiver may be voted by the receiver, and
shares held by or under control of a receiver may be voted by
the receiver without the transfer thereof into his or her
name if authority so to do be contained in an appropriate
order of the court by which the receiver was appointed. A
stockholder whose shares of stock are pledged shall be
entitled to vote those shares until the shares have been
transferred into the name of the pledgee, and thereafter the
pledgee shall be entitled to vote the shares so transferred.
(7) Shares of stock shall be transferable in accordance
with the general laws of this State governing the transfer of
corporate shares.
(8) The president and cashier of every State bank shall
cause to be kept at all times a full and correct list of the
names and residences of all the shareholders in the State
bank and the number of shares held by each in the office
where its business is transacted. The list shall be subject
to the inspection of all the shareholders of the State bank
and the officers authorized to assess taxes under State
authority during business hours of each day in which business
may be legally transacted. A copy of the list, verified by
the oath of the president or cashier, shall be transmitted to
the Commissioner of Banks and Real Estate within 10 days of
any demand therefor made by the Commissioner.
(9) Any number of shareholders of a bank may create a
voting trust for the purpose of conferring upon a trustee or
trustees the right to vote or otherwise represent their
shares for a period of not to exceed 10 years by entering
into a written voting trust agreement specifying the terms
and conditions of the voting trust and by transferring their
shares to the trustee or trustees for the purposes of the
agreement. The trust agreement shall not become effective
until a counterpart of the agreement is deposited with the
bank at its main banking premises registered office. The
counterpart of the voting trust agreement so deposited with
the bank shall be subject to the same right of examination by
a shareholder of the bank, in person or by agent or attorney,
as is the record of shareholders of the bank and shall be
subject to examination by any holder of a beneficial interest
in the voting trust, either in person or by agent or
attorney, at any reasonable time for any proper purpose.
(10) Voting agreements. Shareholders may provide for
the voting of their shares by signing an agreement for that
purpose. A voting agreement created under this paragraph is
not subject to the provisions of paragraph (9).
A voting agreement created under this paragraph is
specifically enforceable in accordance with the principles of
equity.
(Source: P.A. 89-508, eff. 7-3-96.)
(205 ILCS 5/16.1) (from Ch. 17, par. 323.1)
Sec. 16.1. One or more of the directors may be removed,
with or without cause, at a meeting of shareholders by the
affirmative vote of the holders of a majority of the
outstanding shares then entitled to vote at an election of
directors, except as follows:
(1) No director shall be removed at a meeting of
shareholders unless the notice of the meeting shall state
that a purpose of the meeting is to vote upon the removal of
one or more directors named in the notice. Only the named
director or directors may be removed at that meeting.
(2) In the case of a bank having cumulative voting, if
less than the entire board is to be removed, no director may
be removed if the votes cast against his or her removal would
be sufficient to elect him or her if then cumulatively voted
at an election of the entire board of directors.
(3) If a director is elected by a class or series of
shares, he or she may be removed only by the shareholders of
that class or series.
(4) In the case of a State bank whose board is
classified as provided in paragraph (3) (5) of Section 16 of
this Act, the charter or the by-laws may provide that
directors may be removed only for cause.
(Source: P.A. 86-368; 87-269.)
(205 ILCS 5/17) (from Ch. 17, par. 324)
Sec. 17. Changes in charter.
(a) By compliance with the provisions of this Act a
State bank may:
(1) (blank);
(2) increase, decrease or change its capital stock,
whether issued or unissued, provided that in no case
shall the capital be diminished to the prejudice of its
creditors;
(3) provide for authorized but unissued capital
stock reserved for issuance for one or more of the
purposes provided for in subsection (5) of Section 14
hereof;
(4) authorize preferred stock, or increase,
decrease or change the preferences, qualifications,
limitations, restrictions or special or relative rights
of its preferred stock, whether issued or unissued,
provided that in no case shall the capital be diminished
to the prejudice of its creditors;
(5) increase, decrease or change the par value of
its shares of its capital stock or preferred stock,
whether issued or unissued;
(6) (blank) extend the duration of its charter;
(7) eliminate cumulative voting rights under all or
specified circumstances, or eliminate voting rights
entirely, as to any class or classes or series of stock
of the bank pursuant to paragraph (3) of Section 15,
provided that one class of shares or series thereof shall
always have voting in respect to all matters in the bank,
and provided further that the proposal to eliminate such
voting rights receives the approval of the holders of 70%
of the outstanding shares of stock entitled to vote as
provided in paragraph (7) of subsection (b) of this
Section 17;
(8) increase, decrease, or change its capital stock
or preferred stock, whether issued or unissued, for the
purpose of eliminating fractional shares or avoiding the
issuance of fractional shares, provided that in no case
shall the capital be diminished to the prejudice of its
creditors; or
(9) make such other change in its charter as may be
authorized in this Act.
(b) To effect a change or changes in a State bank's
charter as provided for in this Section 17:
(1) The board of directors shall adopt a resolution
setting forth the proposed amendment and directing that
it be submitted to a vote at a meeting of stockholders,
which may be either an annual or special meeting.
(2) If the meeting is a special meeting, written or
printed notice setting forth the proposed amendment or
summary thereof shall be given to each stockholder of
record entitled to vote at such meeting at least 30 days
before such meeting and in the manner provided in this
Act for the giving of notice of meetings of stockholders.
(3) At such special meeting, a vote of the
stockholders entitled to vote shall be taken on the
proposed amendment. Except as provided in paragraph (7)
of this subsection (b), the proposed amendment shall be
adopted upon receiving the affirmative vote of the
holders of at least two-thirds of the outstanding shares
of stock entitled to vote at such meeting, unless holders
of preferred stock are entitled to vote as a class in
respect thereof, in which event the proposed amendment
shall be adopted upon receiving the affirmative vote of
the holders of at least two-thirds of the outstanding
shares of each class of shares entitled to vote as a
class in respect thereof and of the total outstanding
shares entitled to vote at such meeting. Any number of
amendments may be submitted to the stockholders and voted
upon by them at one meeting. A certificate of the
amendment, or amendments, verified by the president, or a
vice-president, or the cashier, shall be filed
immediately in the office of the Commissioner.
(4) At any annual meeting without a resolution of
the board of directors and without a notice and prior
publication, as hereinabove provided, a proposition for a
change in the bank's charter as provided for in this
Section 17 may be submitted to a vote of the stockholders
entitled to vote at the annual meeting, except that no
proposition for authorized but unissued capital stock
reserved for issuance for one or more of the purposes
provided for in subsection (5) of Section 14 hereof shall
be submitted without complying with the provisions of
said subsection. The proposed amendment shall be adopted
upon receiving the affirmative vote of the holders of at
least two-thirds of the outstanding shares of stock
entitled to vote at such meeting, unless holders of
preferred stock are entitled to vote as a class in
respect thereof, in which event the proposed amendment
shall be adopted upon receiving the affirmative vote of
the holders of at least two-thirds of the outstanding
shares of each class of shares entitled to vote as a
class in respect thereof and the total outstanding shares
entitled to vote at such meeting. A certificate of the
amendment, or amendments, verified by the president, or a
vice-president or cashier, shall be filed immediately in
the office of the Commissioner.
(5) If an amendment or amendments shall be approved
in writing by the Commissioner, the amendment or
amendments so adopted and so approved shall be
accomplished in accordance with the vote of the
stockholders. The Commissioner may impose such terms and
conditions on the approval of the amendment or amendments
as he deems necessary or appropriate. The Commissioner
shall revoke such approval in the event such amendment or
amendments are not effected within one year from the date
of the issuance of the Commissioner's certificate and
written approval except for transactions permitted under
subsection (5) of Section 14 of this Act.
(6) No amendment or amendments shall affect suits
in which the bank is a party, nor affect causes of
action, nor affect rights of persons in any particular,
nor shall actions brought against such bank by its former
name be abated by a change of name.
(7) A proposal to amend the charter to eliminate
cumulative voting rights under all or specified
circumstances, or to eliminate voting rights entirely, as
to any class or classes or series or stock of a bank,
pursuant to paragraph (3) of Section 15 and paragraph (7)
of subsection (a) of this Section 17, shall be adopted
only upon such proposal receiving the approval of the
holders of 70% of the outstanding shares of stock
entitled to vote at the meeting where the proposal is
presented for approval, unless holders of preferred stock
are entitled to vote as a class in respect thereof, in
which event the proposed amendment shall be adopted upon
receiving the approval of the holders of 70% of the
outstanding shares of each class of shares entitled to
vote as a class in respect thereof and of the total
outstanding shares entitled to vote at the meeting where
the proposal is presented for approval. The proposal to
amend the charter pursuant to this paragraph (7) may be
voted upon at the annual meeting or a special meeting.
(8) Written or printed notice of a stockholders'
meeting to vote on a proposal to increase, decrease or
change the capital stock or preferred stock pursuant to
paragraph (8) of subsection (a) of this Section 17 and to
eliminate fractional shares or avoid the issuance of
fractional shares shall be given to each stockholder of
record entitled to vote at the meeting at least 30 days
before the meeting and in the manner provided in this Act
for the giving of notice of meetings of stockholders, and
shall include all of the following information:
(A) A statement of the purpose of the proposed
reverse stock split.
(B) A statement of the amount of consideration
being offered for the bank's stock.
(C) A statement that the bank considers the
transaction fair to the stockholders, and a
statement of the material facts upon which this
belief is based.
(D) A statement that the bank has secured an
opinion from a third party with respect to the
fairness, from a financial point of view, of the
consideration to be paid, the identity and
qualifications of the third party, how the third
party was selected, and any material relationship
between the third party and the bank.
(E) A summary of the opinion including the
basis for and the methods of arriving at the
findings and any limitation imposed by the bank in
arriving at fair value and a statement making the
opinion available for reviewing or copying by any
stockholder.
(F) A statement that objecting stockholders
will be entitled to the fair value of those shares
that are voted against the charter amendment, if a
proper demand is made on the bank and the
requirements are satisfied as specified in this
Section.
If a stockholder shall file with the bank, prior to or at the
meeting of stockholders at which the proposed charter
amendment is submitted to a vote, a written objection to the
proposed charter amendment and shall not vote in favor
thereof, and if the stockholder, within 20 days after
receiving written notice of the date the charter amendment
was accomplished pursuant to paragraph (5) of subsection (a)
of this Section 17, shall make written demand on the bank for
payment of the fair value of the stockholder's shares as of
the day prior to the date on which the vote was taken
approving the charter amendment, the bank shall pay to the
stockholder, upon surrender of the certificate or
certificates representing the stock, the fair value thereof.
The demand shall state the number of shares owned by the
objecting stockholder. The bank shall provide written notice
of the date on which the charter amendment was accomplished
to all stockholders who have filed written objections in
order that the objecting stockholders may know when they must
file written demand if they choose to do so. Any stockholder
failing to make demand within the 20-day period shall be
conclusively presumed to have consented to the charter
amendment and shall be bound by the terms thereof. If within
30 days after the date on which a charter amendment was
accomplished the value of the shares is agreed upon between
the objecting stockholders and the bank, payment therefor
shall be made within 90 days after the date on which the
charter amendment was accomplished, upon the surrender of the
stockholder's certificate or certificates representing the
shares. Upon payment of the agreed value the objecting
stockholder shall cease to have any interest in the shares or
in the bank. If within such period of 30 days the
stockholder and the bank do not so agree, then the objecting
stockholder may, within 60 days after the expiration of the
30-day period, file a complaint in the circuit court asking
for a finding and determination of the fair value of the
shares, and shall be entitled to judgment against the bank
for the amount of the fair value as of the day prior to the
date on which the vote was taken approving the charter
amendment with interest thereon to the date of the judgment.
The practice, procedure and judgment shall be governed by the
Civil Practice Law. The judgment shall be payable only upon
and simultaneously with the surrender to the bank of the
certificate or certificates representing the shares. Upon
payment of the judgment, the objecting stockholder shall
cease to have any interest in the shares or the bank. The
shares may be held and disposed of by the bank. Unless the
objecting stockholder shall file such complaint within the
time herein limited, the stockholder and all persons claiming
under the stockholder shall be conclusively presumed to have
approved and ratified the charter amendment, and shall be
bound by the terms thereof. The right of an objecting
stockholder to be paid the fair value of the stockholder's
shares of stock as herein provided shall cease if and when
the bank shall abandon the charter amendment.
(c) The purchase and holding and later resale of
treasury stock of a state bank pursuant to the provisions of
subsection (6) of Section 14 may be accomplished without a
change in its charter reflecting any decrease or increase in
capital stock.
(Source: P.A. 90-160, eff. 7-23-97; 90-301, eff. 8-1-97;
90-655, eff. 7-30-98; 91-322, eff. 1-1-00.)
(205 ILCS 5/18) (from Ch. 17, par. 325)
Sec. 18. Change in control.
(a) Before a change may occur in the ownership of
outstanding stock of any State bank, whether by sale and
purchase, gift, bequest or inheritance, or any other means,
including the acquisition of stock of the State bank by any
bank holding company, which will result in control or a
change in the control of the bank or before a change in the
control of a holding company having control of the
outstanding stock of a State bank whether by sale and
purchase, gift, bequest or inheritance, or any other means,
including the acquisition of stock of such holding company by
any other bank holding company, which will result in control
or a change in control of the bank or holding company, or
before a transfer of substantially all the assets or
liabilities of the State bank, the Commissioner shall be of
the opinion and find:
(1) that the general character of its proposed
management or of the person desiring to purchase
substantially all the assets or to assume substantially
all the liabilities of the State bank, after the change
in control, is such as to assure reasonable promise of
successful, safe and sound operation;
(1.1) that depositors' interests will not be
jeopardized by the purchase or assumption and that
adequate provision has been made for all liabilities as
required for a voluntary liquidation under Section 68 of
this Act;
(2) that the future earnings prospects of the
person desiring to purchase substantially all assets or
to assume substantially all the liabilities of the State
bank, after the proposed change in control, are
favorable;
(3) that any prior involvement by the persons
proposing to obtain control, to purchase substantially
all the assets, or to assume substantially all the
liabilities of the State bank or by the proposed
management personnel with any other financial
institution, whether as stockholder, director, officer or
customer, was conducted in a safe and sound manner; and
(4) that if the acquisition is being made by a bank
holding company, the acquisition is authorized under the
Illinois Bank Holding Company Act of 1957.
(b) Persons desiring to purchase control of an existing
state bank, to purchase substantially all the assets, or to
assume substantially all the liabilities of the State bank
shall, prior to that purchase, submit to the Commissioner:
(1) a statement of financial worth;
(2) satisfactory evidence that any prior
involvement by the persons and the proposed management
personnel with any other financial institution, whether
as stockholder, director, officer or customer, was
conducted in a safe and sound manner; and
(3) such other relevant information as the
Commissioner may request to substantiate the findings
under subsection (a) of this Section.
A person who has submitted information to the
Commissioner pursuant to this subsection (b) is under a
continuing obligation until the Commissioner takes action on
the application to immediately supplement that information if
there are any material changes in the information previously
furnished or if there are any material changes in any
circumstances that may affect the Commissioner's opinion and
findings. In addition, a person submitting information under
this subsection shall notify the Commissioner of the date
when the change in control is finally effected.
The Commissioner may impose such terms and conditions on
the approval of the change in control application as he deems
necessary or appropriate.
If an applicant, whose application for a change in
control has been approved pursuant to subsection (a) of this
Section, fails to effect the change in control within 180
days after the date of the Commissioner's approval, the
Commissioner shall revoke that approval unless a request has
been submitted, in writing, to the Commissioner for an
extension and the request has been approved.
As used in this Section, the term "control" means the
ownership of such amount of stock or ability to direct the
voting of such stock as to give power to, directly or
indirectly, direct or cause the direction of the management
or policies of the bank. A change in ownership of stock
which would result in direct or indirect ownership by a
stockholder, an affiliated group of stockholders or a holding
company of less than 10 percent of the outstanding stock
shall not be considered a change of control. A change in
ownership of stock which would result in direct or indirect
ownership by a stockholder, an affiliated group of
stockholders or a holding company of 20 percent or such
lesser amount which would entitle the holder by applying
cumulative voting to elect one director shall be presumed to
constitute a change of control for purposes of this Section
18. If there is any doubt as to whether a change in the
ownership or control of the outstanding stock is sufficient
to result in obtaining control thereof or to effect a change
in the control thereof, such doubt shall be resolved in favor
of reporting the facts to the Commissioner.
As used in this Section, "substantially all" the assets
or liabilities of a State bank means that portion of the
assets or liabilities of a State bank such that their
purchase or transfer will materially impair the ability of
the State bank to continue successful, safe, and sound
operations or to continue as a going concern or would cause
the bank to lose its federal deposit insurance.
(b-1) Any person who obtains ownership of stock of an
existing State bank or stock of a holding company that
controls the State bank by gift, bequest, or inheritance such
that ownership of the stock would constitute control of the
State bank or holding company may obtain title and ownership
of the stock, but may not exercise management or control of
the business and affairs of the bank or vote his or her
shares so as to exercise management or control unless and
until the Commissioner approves an application for the change
of control as provided in subsection (b) of this Section.
(c) Whenever a state bank makes a loan or loans,
secured, or to be secured, by 25% or more of the outstanding
stock of a state bank, the president or other chief executive
officer of the lending bank shall promptly report such fact
to the Commissioner upon obtaining knowledge of such loan or
loans, except that no report need be made in those cases
where the borrower has been the owner of record of the stock
for a period of one year or more, or the stock is that of a
newly organized bank prior to its opening.
(d) The reports required by subsections (b) and (c) of
this Section 18, other than those relating to a transfer of
assets or assumption of liabilities, shall contain the
following information to the extent that it is known by the
person making the report: (1) the number of shares involved;
(2) the names of the sellers (or transferors); (3) the names
of the purchasers (or transferees); (4) the names of the
beneficial owners if the shares are registered in another
name: (5) the purchase price, if applicable; (6) the total
number of shares owned by the sellers (or transferors), the
purchasers (or transferees) and the beneficial owners both
immediately before and after the transaction; and, (7) in the
case of a loan, the name of the borrower, the amount of the
loan, the name of the bank issuing the stock securing the
loan and the number of shares securing the loan. In addition
to the foregoing, such reports shall contain such other
information which is requested by the Commissioner to inform
the Commissioner of the effect of the transaction upon
control of the bank whose stock is involved.
(d-1) The reports required by subsection (b) of this
Section 18 that relate to purchase of assets and assumption
of liabilities shall contain the following information to the
extent that it is known by the person making the report: (1)
the value, amount, and description of the assets transferred;
(2) the amount, type, and to whom each type of liabilities
are owed; (3) the names of the purchasers (or transferees);
(4) the names of the beneficial owners if the shares of a
purchaser or transferee are registered in another name; (5)
the purchase price, if applicable; and, (6) in the case of a
loan obtained to effect a purchase, the name of the borrower,
the amount and terms of the loan, and the description of the
assets securing the loan. In addition to the foregoing,
these reports shall contain any other information that is
requested by the Commissioner to inform the Commissioner of
the effect of the transaction upon the bank from which assets
are purchased or liabilities are transferred.
(e) Whenever such a change as described in subsection
(a) of this Section 18 occurs, each state bank shall report
promptly to the Commissioner any changes or replacement of
its chief executive officer or of any director occurring in
the next 12 month period, including in its report a statement
of the past and current business and professional
affiliations of the new chief executive officer or directors.
(f) (Blank).
(g) (1) Except as otherwise expressly provided in this
subsection (g), the Commissioners shall not approve an
application for a change in control if upon consummation
of the change in control the persons applying for the
change in control, including any affiliates of the
persons applying, would control 30% or more of the total
amount of deposits which are located in this State at
insured depository institutions. For purposes of this
subsection (g), the words "insured depository
institution" shall mean State banks, national banks, and
insured savings associations. For purposes of this
subsection (g), the word "deposits" shall have the
meaning ascribed to that word in Section 3(1) of the
Federal Deposit Insurance Act. For purposes of this
subsection (g), the total amount of deposits which are
considered to be located in this State at insured
depository institutions shall equal the sum of all
deposits held at the main banking premises and branches
in the State of Illinois of State banks, national banks,
or insured savings associations. For purposes of this
subsection (g), the word "affiliates" shall have the
meaning ascribed to that word in Section 35.2 of this
Act.
(2) Notwithstanding the provisions of subsection
(g)(1) of this Section, the Commissioner may approve an
application for a change in control for a bank that is in
default or in danger of default. Except in those
instances in which an application for a change in control
is for a bank that is in default or in danger of default,
the Commissioner may not approve a change in control
which does not meet the requirements of subsection (g)(1)
of this Section. The Commissioner may not waive the
provisions of subsection (g)(1) of this Section, whether
pursuant to Section 3(d) of the federal Bank Holding
Company Act of 1956 or Section 44(d) of the Federal
Deposit Insurance Act, except as expressly provided in
this subsection (g)(2).
(h) As used in this Section, the term "control" means
the ownership of such amount of stock or ability to direct
the voting of such stock as to, directly or indirectly, give
power to direct or cause the direction of the management or
policies of the bank. A change in ownership of stock that
would result in direct or indirect ownership by a
stockholder, an affiliated group of stockholders, or a
holding company of less than 10% of the outstanding stock
shall not be considered a change in control. A change in
ownership of stock that would result in direct or indirect
ownership by a stockholder, an affiliated group of
stockholders, or a holding company of 20% or such lesser
amount that would entitle the holder by applying cumulative
voting to elect one director shall be presumed to constitute
a change of control for purposes of this Section 18. If
there is any question as to whether a change in the ownership
or control of the outstanding stock is sufficient to result
in obtaining control thereof or to effect a change in the
control thereof, the question shall be resolved in favor of
reporting the facts to the Commissioner.
As used in this Section, "substantially all" the assets
or liabilities of a State bank means that portion of the
assets or liabilities of a State bank such that their
purchase or transfer will materially impair the ability of
the State bank to continue successful, safe, and sound
operations or to continue as a going concern or would cause
the bank to lose its federal deposit insurance.
As used in this Section, "purchase" includes a transfer
by gift, bequest, inheritance, or any other means.
(Source: P.A. 89-567, eff. 7-26-96; 90-226, eff. 7-25-97.)
(205 ILCS 5/22) (from Ch. 17, par. 329)
Sec. 22. Merger procedure; resulting State bank. The
merger procedure required of a State bank where there is to
be a resulting State bank by consolidation or merger shall
be:
(1) The board of directors of each merging bank or
insured savings association shall, by a majority of the
entire board, approve a merger agreement that shall contain:
(a) The name of each merging bank or insured
savings association and its location and a list of each
merging bank's or insured savings association's
stockholders as of the date of the merger agreement;
(b) With respect to the resulting bank (i) its name
and place of business; (ii) the amount of Tier 1 capital,
surplus and reserve for operating expenses; (iii) the
classes and the number of shares of stock and the par
value of each share; (iv) the designation of the
continuing bank and the charter which is to be the
charter of the resulting bank, together with the
amendments to the continuing charter and to the
continuing by-laws; and (v) a detailed financial
Statement showing the assets and liabilities after the
proposed merger or consolidation;
(c) Provisions stating the method, terms and
conditions of carrying the merger into effect, including
the manner of converting the shares of the merging banks
or insured savings association into the cash, shares of
stock or other securities of any corporation or other
property, or any combination of the foregoing, Stated in
the merger agreement as to be received by the
stockholders of each merging bank or insured savings
association;
(d) A Statement that the agreement is subject to
approval by the Commissioner and by the stockholders of
each merging bank or insured savings association and that
whether approved or disapproved the merging banks or
insured savings association will pay the Commissioner's
expenses of examination;
(e) Provisions governing the manner of disposing of
the shares of the resulting bank not taken by the
dissenting stockholders of the merging banks or insured
savings association; and
(f) Such other provisions as the Commissioner may
reasonably require to enable him to discharge his duties
with respect to the merger.
(2) After approval by the board of directors of each
bank or insured savings association, the merger agreement
shall be submitted to the Commissioner for approval, together
with certified copies of the authorizing resolutions of each
board of directors showing approval by a majority of the
entire board of each bank or insured savings association.
(3) After receipt by the Commissioner of the papers
specified in paragraph (2), he shall approve or disapprove
the merger agreement. The Commissioner shall not approve the
merger agreement unless he shall be of the opinion and shall
find:
(a) That the resulting bank meets the requirements
of this Act for the formation of a new bank at the
proposed main banking premises of the resulting bank;
(b) That the same matters exist with respect to the
resulting bank which would have been required under
Section 10 of this Act for the organization of a new
bank;
(c) That the merger agreement is fair to all
persons affected; and
(d) That the resulting bank will be operated in a
safe and sound manner.
If the Commissioner disapproves an agreement he shall
State his objections and give an opportunity to the merging
banks to amend the merger agreement to obviate such
objections.
(4) The Commissioner may impose such terms and
conditions on the approval of the merger agreement as he
deems necessary or appropriate.
(5) If the Commissioner approves a merger agreement, he
may revoke that approval if the merger has not been approved
by the shareholders in accordance with Section 23 within 180
days after the date of the Commissioner's approval, unless a
request has been submitted, in writing, to the Commissioner
for an extension and the request has been approved.
(6) The board of directors of a bank or insured savings
association is under a continuing obligation until the
Commissioner takes action on the application to furnish
additional information if there are any material changes in
circumstances after the merger agreement has been submitted
which may affect the Commissioner's opinions and findings.
(Source: P.A. 87-1226.)
(205 ILCS 5/25) (from Ch. 17, par. 332)
Sec. 25. Conversion of national bank or insured savings
association into State bank. A national bank or insured
savings association located in this State which follows the
procedure prescribed by the laws of the United States or of
the State of Illinois to convert into a State bank may be
granted a charter by the Commissioner. The national bank or
insured savings association may apply for such charter by
filing with the Commissioner:
(1) A certificate signed by its president, or a
vice-president, or the cashier, and by a majority of the
entire board of directors setting forth the corporate action
taken in compliance with the provisions of the laws of the
United States or of the State of Illinois governing the
conversion of a national bank or insured savings association
to a State bank;
(2) The plan of conversion and the proposed charter
approved by the stockholders for the operation of the bank or
insured savings association as a State bank;
(3) The name proposed for the converting bank or insured
savings association, its location and a list of its
stockholders as of the date of the stockholders' approval of
the plan of conversion;
(4) The amount of its Tier 1 capital, surplus and
reserve for operation expenses, the classes and the number of
the shares of stock and the par value of each share, and a
detailed statement showing the assets and liabilities of the
converting bank or insured savings association; and
(5) A statement that the plan of conversion is subject
to the approval of the Commissioner and that whether approved
or disapproved the converting bank or insured savings
association will pay the Commissioner's expenses of
examination.
For purposes of this Section, a national bank or insured
savings association is located in the State where its main
banking premises or main office is located.
(Source: P.A. 89-567, eff. 7-26-96.)
(205 ILCS 5/30.5)
Sec. 30.5. Mid-tier bank holding company merger with
State bank. Upon approval by the Commissioner, a mid-tier
bank holding company having power so to do under the law
under which it is organized may merge into its subsidiary
State bank as prescribed by this Act; except that the action
by the mid-tier bank holding company shall be taken in the
manner prescribed by and shall be subject to limitations and
requirements imposed by the law under which it is organized.
The merger procedure shall be as follows:
(1) The board of directors of the parent bank holding
company shall, by resolution, approve a merger agreement
which shall contain:
(a) the name and location of the merging bank and
of the mid-tier bank holding company;
(b) with respect to the merging bank (i) the amount
of Tier 1 capital, surplus, and reserve for operating
expenses; (ii) the classes and the number of shares of
stock and the par value of each share; (iii) a detailed
financial statement showing the assets and liabilities
after the proposed merger; and (iv) any amendments to the
charter or by-laws;
(c) provisions governing the manner of converting
the shares of the merging bank and the mid-tier bank
holding company into shares of the merging bank and the
manner of transferring the converted shares to the parent
bank holding company;
(d) a statement that the merger agreement is
subject to approval by the Commissioner and that whether
approved or disapproved, the parties thereto will pay the
Commissioner's expenses of examination; and
(e) such other provisions as the Commissioner may
reasonably require to enable him to discharge his duties
with respect to the merger.
(2) After approval by the board of directors of the
parent bank holding company, the merger agreement shall be
submitted to the Commissioner for approval.
(3) After receipt by the Commissioner of the papers
specified in item (2), he shall approve or disapprove the
merger agreement. The Commissioner shall not approve the
agreement unless he shall be of the opinion and finds that
the same matters exist in respect of the continuing bank
which would have been required under Section 10 of this Act
for the organization of a new bank, that the mid-tier bank
holding company has no known liabilities that will become
liabilities of the continuing bank, and that the parent bank
holding company will indemnify the continuing bank for any
known and unknown contingent liabilities for which the
continuing bank may become liable as a result of the merger.
Nothing in this Section shall authorize a resulting State
bank to acquire, hold, or invest any asset or to assume or
incur any liability that does not conform to the legal
requirements for assets acquired, held, or invested or
liabilities assumed or incurred by State banks, or to engage
in any activity in which a State bank is not authorized to
engage as part of a general banking business. If the
Commissioner disapproves the merger agreement, he shall state
his objections in writing and give an opportunity to the
merging bank and mid-tier bank holding company to obviate the
objections.
(4) To be effective, if approved by the Commissioner, a
copy of the merger agreement executed by the duly authorized
president of the mid-tier bank holding company and president
of the merging State bank, together with copies of the
resolution of the board of directors of the parent bank
holding company, approving the merger agreement, certified by
the parent bank holding company's president or vice-president
and attested by the secretary, must be filed with the
Commissioner. The merger shall, unless a later date is
specified in the agreement, become effective when the
Commissioner has approved the agreement and issued a
certificate of merger to the continuing bank, which shall
specify the name of the mid-tier bank holding company, the
name of the continuing bank, and the amendments to the
charter of the continuing bank provided for by the merger
agreement. The charter of the mid-tier bank holding company
shall thereupon automatically terminate. Such certificate
shall be conclusive evidence of the merger and of the
correctness of all proceedings therefor in all courts and
places including the office of the Secretary of State, and
the certificate shall be recorded.
(Source: P.A. 89-364, eff. 8-18-95.)
(205 ILCS 5/31) (from Ch. 17, par. 338)
Sec. 31. Emergency sale of assets, change in control, or
merger.
(a) With the prior written approval of the Commissioner,
any State bank in danger of default may, by vote of a
majority of its board of directors, and without a vote of its
shareholders, and any State bank in default may, by
appropriate action of its receiver or conservator, and
without a vote of its shareholders, sell all or any part of
its assets to another State bank that is not an eligible
depository institution, to a national bank that is not an
eligible depository institution, to an insured savings
association that is not an eligible depository institution,
to the Federal Deposit Insurance Corporation, or to any one
or more of them, provided that a State bank that is not an
eligible depository institution, a national bank that is not
an eligible depository institution, an insured savings
association that is not an eligible depository institution,
the Federal Deposit Insurance Corporation, or any one or more
of them assumes in writing all of the liabilities of the
selling bank as shown by its records, other than the
liabilities of the selling bank to its shareholders as such.
(b) If the Commissioner has made one or more of the
findings provided in Section 51, and the finding that an
emergency exists as provided in Section 52, and if, in
addition, the Commissioner gives his approval in writing, any
State bank may, by vote of a majority of its board of
directors and without a vote of its shareholders, merge with
another State bank that is not an eligible depository
institution, a national bank that is not an eligible
depository institution, or an insured savings association
located in Illinois that is not an eligible depository
institution, and after May 31, 1997, an out-of-state bank
that is not an eligible depository institution, with such
other State bank, out-of-state bank, national bank, or
insured savings association being the resulting or continuing
bank or resulting insured savings association in such a
merger.
(c) With the prior written approval of the Commissioner,
any State bank may either purchase, assume, or both purchase
and assume all or any part of the assets or liabilities, or
act as paying agent for the payment of deposit insurance to
the depositors of an eligible depository institution.
(d) With the prior written approval of the Commissioner,
a State bank may, by vote of a majority of its board of
directors and without a vote of its shareholders, merge with
an insured savings association, national bank, or after May
31, 1997, out-of-state bank, in default or in danger of
default, provided such State bank results from such merger,
and provided further that such resulting bank shall conform
all assets acquired or liabilities incurred as a result of
such merger to the legal requirements for such assets
acquired, held or invested or liabilities assumed or incurred
by State banks, and that such resulting or continuing bank
shall conform all of its activities to those activities in
which a State bank is authorized to engage as part of a
general banking business.
(d-5) If the Commissioner has made one or more of the
findings provided in Section 51 or the finding that an
emergency exists as provided in Section 52, and if, in
addition, the Commissioner gives his approval in writing, a
change in the ownership of outstanding stock of any State
bank, including the acquisition of stock of the State bank by
any bank holding company, may occur that will result in
control or a change in the control of the State bank or a
change in the control of a holding company having control of
the outstanding stock of a State bank, including the
acquisition of stock of such holding company by any other
bank holding company, which will result in control or a
change in control of the bank or holding company.
(e) Nothing in this Section shall authorize a State bank
to acquire, hold, or invest any asset or to assume or incur
any liability that does not conform to the legal requirements
for assets acquired, held, or invested or liabilities assumed
or incurred by State banks, or to engage in any activity in
which a State bank is not authorized to engage as part of a
general banking business.
(f) Nothing in this Section shall authorize a bank
holding company to own or control, directly or indirectly, a
State bank or a national bank having its main banking
premises in Illinois unless such ownership or control is
expressly authorized under the provisions of the Illinois
Bank Holding Company Act of 1957.
(Source: P.A. 88-4; 89-208, eff. 9-29-95.)
(205 ILCS 5/33) (from Ch. 17, par. 341)
Sec. 33. Marketable investment securities limit. Any
State bank may purchase for its own account marketable
investment securities without regard to any other liability
to the bank of the issuer, maker, obligor, or guarantor of
any marketable investment securities, but the total amount of
the marketable investment securities of any one issuer, maker
or obligor held by the bank or for its account at any one
time shall not exceed 20% of its unimpaired capital and
unimpaired surplus. As used in this Section the term
"marketable investment securities" means marketable
obligations evidencing indebtedness of any person in the form
of bonds, notes, or debentures commonly known as investment
securities; obligations identified by certificates of
participation in investments the bank could have invested in
directly; and includes certificates of participation in open
end investment companies registered with the Securities and
Exchange Commission pursuant to the Investment Company Act of
1940 and Securities Act of 1933 commonly referred to as
mutual or money market funds, provided the portfolios of
those investment companies consist of investments that a bank
could invest in directly. Marketable investment securities
shall be rated in the top 4 rating categories by national
rating services and designated as "investment grade" or "bank
quality investments" securities. The rating restriction on
marketable investment securities does not apply to securities
that are issued by a public agency as defined in Section 1 of
the Public Funds Investment Act.
(Source: P.A. 88-546; 89-364, eff. 8-18-95.)
(205 ILCS 5/37) (from Ch. 17, par. 347)
Sec. 37. Loans to officers and loans on and purchases of
bank's own stock.
(1) No state bank shall make any loan or extension of
credit in excess of the limits, as determined by the
Commissioner, at any one time outstanding each to its
pr