[ Back ] [ Bottom ]
91_HB2019enr
HB2019 Enrolled LRB9105228JSpc
1 AN ACT to amend the Illinois Banking Act by changing
2 Sections 13, 17, and 39.
3 Be it enacted by the People of the State of Illinois,
4 represented in the General Assembly:
5 Section 5. The Illinois Banking Act is amended by
6 changing Sections 13, 17, and 39 as follows:
7 (205 ILCS 5/13) (from Ch. 17, par. 320)
8 Sec. 13. Issuance of charter.
9 (a) When the directors have organized as provided in
10 Section 12 of this Act, and the capital stock and the
11 preferred stock, if any, together with a surplus of not less
12 than 50% of the capital, has been all fully paid in and a
13 record of the same filed with the Commissioner, the
14 Commissioner or some competent person of the Commissioner's
15 appointment shall make a thorough examination into the
16 affairs of the proposed bank, and if satisfied (i) that all
17 the requirements of this Act have been complied with, (ii)
18 that no intervening circumstance has occurred to change the
19 Commissioner's findings made pursuant to Section 10 of this
20 Act, and (iii) that the prior involvement by any stockholder
21 who will own a sufficient amount of stock to have control, as
22 defined in Section 18 of this Act, of the proposed bank with
23 any other financial institution, whether as stockholder,
24 director, officer, or customer, was conducted in a safe and
25 sound manner, upon payment into the Commissioner's office of
26 the reasonable expenses of the examination, as determined by
27 the Commissioner, the Commissioner shall issue a charter
28 authorizing the bank to commence business as authorized in
29 this Act. All charters issued by the Commissioner or any
30 predecessor agency which chartered State banks, including any
31 charter outstanding as of September 1, 1989, shall be
HB2019 Enrolled -2- LRB9105228JSpc
1 perpetual. For the 2 years after the Commissioner has issued
2 a charter to a bank, the bank shall request and obtain from
3 the Commissioner prior written approval before it may change
4 senior management personnel or directors.
5 The original charter, duly certified by the Commissioner,
6 or a certified copy shall be evidence in all courts and
7 places of the existence and authority of the bank to do
8 business. Upon the issuance of the charter by the
9 Commissioner, the bank shall be deemed fully organized and
10 may proceed to do business. The Commissioner may, in the
11 Commissioner's discretion, withhold the issuing of the
12 charter when the Commissioner has reason to believe that the
13 bank is organized for any purpose other than that
14 contemplated by this Act or that a commission or fee has been
15 paid in connection with the sale of the stock of the bank.
16 The Commissioner shall revoke the charter and order
17 liquidation in the event that the bank does not commence a
18 general banking business within one year from the date of the
19 issuance of the charter, unless a request has been submitted,
20 in writing, to the Commissioner for an extension and the
21 request has been approved. After commencing a general
22 banking business, a bank, upon written notice to the
23 Commissioner, may change its name by filing written notice
24 with the Commissioner at least 30 days prior to the effective
25 date of such change. A bank chartered under this Act may
26 change its main banking premises by filing written
27 application with the Commissioner, on forms prescribed by the
28 Commissioner, provided (i) the change shall not be a removal
29 to a new location without complying with the capital
30 requirements of Section 7 and of subsection (1) of Section 10
31 of this Act; (ii) the Commissioner approves the relocation or
32 change; and (iii) the bank complies with any applicable
33 federal law or regulation. The application shall be deemed
34 to be approved if the Commissioner has not acted on the
HB2019 Enrolled -3- LRB9105228JSpc
1 application within 30 days after receipt of the application,
2 unless within the 30-day time frame the Commissioner informs
3 the bank that an extension of time is necessary prior to the
4 Commissioner's action on the application.
5 (b) (1) The Commissioner may also issue a charter to a
6 bank that is owned exclusively by other depository
7 institutions or depository institution holding companies and
8 is organized to engage exclusively in providing services to
9 or for other depository institutions, their holding
10 companies, and the officers, directors, and employees of such
11 institutions and companies, and in providing correspondent
12 banking services at the request of other depository
13 institutions or their holding companies (also referred to as
14 a "bankers' bank").
15 (2) A bank chartered pursuant to paragraph (1) shall,
16 except as otherwise specifically determined by the
17 Commissioner, be vested with the same rights and privileges
18 and subject to the same duties, restrictions, penalties, and
19 liabilities now or hereafter imposed under this Act.
20 (c) A bank chartered under this Act after November 1,
21 1985, and an out-of-state bank that merges with a State bank
22 and establishes or maintains a branch in this State after May
23 31, 1997, shall obtain from and, at all times while it
24 accepts or retains deposits, maintain with the Federal
25 Deposit Insurance Corporation, or such other instrumentality
26 of or corporation chartered by the United States, deposit
27 insurance as authorized under federal law.
28 (d) (i) A bank that has a banking charter issued by the
29 Commissioner under this Act may, pursuant to a written
30 purchase and assumption agreement, transfer substantially all
31 of its assets to another State bank or national bank in
32 consideration, in whole or in part, for the transferee banks'
33 assumption of any part or all of its liabilities. Such a
34 transfer shall in no way be deemed to impair the charter of
HB2019 Enrolled -4- LRB9105228JSpc
1 the transferor bank or cause the transferor bank to forfeit
2 any of its rights, powers, interests, franchises, or
3 privileges as a State bank, nor shall any voluntary reduction
4 in the transferor bank's activities resulting from the
5 transfer have any such effect; provided, however, that a
6 State bank that transfers substantially all of its assets
7 pursuant to this subsection (d) and following the transfer
8 does not accept deposits and make loans, shall not have any
9 rights, powers, interests, franchises, or privileges under
10 subsection (15) of Section 5 of this Act until the bank has
11 resumed accepting deposits and making loans.
12 (ii) The fact that a State bank does not resume
13 accepting deposits and making loans for a period of 24 months
14 commencing on September 11, 1989 or on a date of the transfer
15 of substantially all of a State bank's assets, whichever is
16 later, or such longer period as the Commissioner may allow in
17 writing, may be the basis for a finding by the Commissioner
18 under Section 51 of this Act that the bank is unable to
19 continue operations.
20 (iii) The authority provided by subdivision (i) of this
21 subsection (d) shall terminate on May 31, 1997, and no bank
22 that has transferred substantially all of its assets pursuant
23 to this subsection (d) shall continue in existence after May
24 31, 1997.
25 (Source: P.A. 89-208, eff. 9-29-95; 89-567, eff. 7-26-96;
26 89-603, eff. 8-2-96; 90-14, eff. 7-1-97; 90-301, eff. 8-1-97;
27 90-665, eff. 7-30-98.)
28 (205 ILCS 5/17) (from Ch. 17, par. 324)
29 Sec. 17. Changes in charter.
30 (a) By compliance with the provisions of this Act a
31 State bank may:
32 (1) (Blank) change its main banking premises
33 provided that there shall not be a removal to a new
HB2019 Enrolled -5- LRB9105228JSpc
1 location without complying with the capital requirements
2 of Section 7 and of subsection (1) of Section 10 hereof,
3 nor unless the Commissioner shall find that the
4 convenience and needs of the area sought to be served by
5 the bank at its proposed new location will be promoted;
6 (2) increase, decrease or change its capital stock,
7 whether issued or unissued, provided that in no case
8 shall the capital be diminished to the prejudice of its
9 creditors;
10 (3) provide for authorized but unissued capital
11 stock reserved for issuance for one or more of the
12 purposes provided for in subsection (5) of Section 14
13 hereof;
14 (4) authorize preferred stock, or increase,
15 decrease or change the preferences, qualifications,
16 limitations, restrictions or special or relative rights
17 of its preferred stock, whether issued or unissued,
18 provided that in no case shall the capital be diminished
19 to the prejudice of its creditors;
20 (5) increase, decrease or change the par value of
21 its shares of its capital stock or preferred stock,
22 whether issued or unissued;
23 (6) extend the duration of its charter;
24 (7) eliminate cumulative voting rights under all or
25 specified circumstances, or eliminate voting rights
26 entirely, as to any class or classes or series of stock
27 of the bank pursuant to paragraph (3) of Section 15,
28 provided that one class of shares or series thereof shall
29 always have voting in respect to all matters in the bank,
30 and provided further that the proposal to eliminate such
31 voting rights receives the approval of the holders of 70%
32 of the outstanding shares of stock entitled to vote as
33 provided in paragraph (7) of subsection (b) of this
34 Section 17;
HB2019 Enrolled -6- LRB9105228JSpc
1 (8) increase, decrease, or change its capital stock
2 or preferred stock, whether issued or unissued, for the
3 purpose of eliminating fractional shares or avoiding the
4 issuance of fractional shares, provided that in no case
5 shall the capital be diminished to the prejudice of its
6 creditors; or
7 (9) Make such other change in its charter as may be
8 authorized in this Act.
9 (b) To effect a change or changes in a State bank's
10 charter as provided for in this Section 17:
11 (1) The board of directors shall adopt a resolution
12 setting forth the proposed amendment and directing that
13 it be submitted to a vote at a meeting of stockholders,
14 which may be either an annual or special meeting.
15 (2) If the meeting is a special meeting, written or
16 printed notice setting forth the proposed amendment or
17 summary thereof shall be given to each stockholder of
18 record entitled to vote at such meeting at least 30 days
19 before such meeting and in the manner provided in this
20 Act for the giving of notice of meetings of stockholders.
21 (3) At such special meeting, a vote of the
22 stockholders entitled to vote shall be taken on the
23 proposed amendment. Except as provided in paragraph (7)
24 of this subsection (b), the proposed amendment shall be
25 adopted upon receiving the affirmative vote of the
26 holders of at least two-thirds of the outstanding shares
27 of stock entitled to vote at such meeting, unless holders
28 of preferred stock are entitled to vote as a class in
29 respect thereof, in which event the proposed amendment
30 shall be adopted upon receiving the affirmative vote of
31 the holders of at least two-thirds of the outstanding
32 shares of each class of shares entitled to vote as a
33 class in respect thereof and of the total outstanding
34 shares entitled to vote at such meeting. Any number of
HB2019 Enrolled -7- LRB9105228JSpc
1 amendments may be submitted to the stockholders and voted
2 upon by them at one meeting. A certificate of the
3 amendment, or amendments, verified by the president, or a
4 vice-president, or the cashier, shall be filed
5 immediately in the office of the Commissioner.
6 (4) At any annual meeting without a resolution of
7 the board of directors and without a notice and prior
8 publication, as hereinabove provided, a proposition for a
9 change in the bank's charter as provided for in this
10 Section 17 may be submitted to a vote of the stockholders
11 entitled to vote at the annual meeting, except that no
12 proposition for authorized but unissued capital stock
13 reserved for issuance for one or more of the purposes
14 provided for in subsection (5) of Section 14 hereof shall
15 be submitted without complying with the provisions of
16 said subsection. The proposed amendment shall be adopted
17 upon receiving the affirmative vote of the holders of at
18 least two-thirds of the outstanding shares of stock
19 entitled to vote at such meeting, unless holders of
20 preferred stock are entitled to vote as a class in
21 respect thereof, in which event the proposed amendment
22 shall be adopted upon receiving the affirmative vote of
23 the holders of at least two-thirds of the outstanding
24 shares of each class of shares entitled to vote as a
25 class in respect thereof and the total outstanding shares
26 entitled to vote at such meeting. A certificate of the
27 amendment, or amendments, verified by the president, or a
28 vice-president or cashier, shall be filed immediately in
29 the office of the Commissioner.
30 (5) If an amendment or amendments shall be approved
31 in writing by the Commissioner, the amendment or
32 amendments so adopted and so approved shall be
33 accomplished in accordance with the vote of the
34 stockholders. The Commissioner shall revoke such
HB2019 Enrolled -8- LRB9105228JSpc
1 approval in the event such amendment or amendments are
2 not effected within one year from the date of the
3 issuance of the Commissioner's certificate and written
4 approval except for transactions permitted under
5 subsection (5) of Section 14 of this Act.
6 (6) No amendment or amendments shall affect suits
7 in which the bank is a party, nor affect causes of
8 action, nor affect rights of persons in any particular,
9 nor shall actions brought against such bank by its former
10 name be abated by a change of name.
11 (7) A proposal to amend the charter to eliminate
12 cumulative voting rights under all or specified
13 circumstances, or to eliminate voting rights entirely, as
14 to any class or classes or series or stock of a bank,
15 pursuant to paragraph (3) of Section 15 and paragraph (7)
16 of subsection (a) of this Section 17, shall be adopted
17 only upon such proposal receiving the approval of the
18 holders of 70% of the outstanding shares of stock
19 entitled to vote at the meeting where the proposal is
20 presented for approval, unless holders of preferred stock
21 are entitled to vote as a class in respect thereof, in
22 which event the proposed amendment shall be adopted upon
23 receiving the approval of the holders of 70% of the
24 outstanding shares of each class of shares entitled to
25 vote as a class in respect thereof and of the total
26 outstanding shares entitled to vote at the meeting where
27 the proposal is presented for approval. The proposal to
28 amend the charter pursuant to this paragraph (7) may be
29 voted upon at the annual meeting or a special meeting.
30 (8) Written or printed notice of a stockholders'
31 meeting to vote on a proposal to increase, decrease or
32 change the capital stock or preferred stock pursuant to
33 paragraph (8) of subsection (a) of this Section 17 and to
34 eliminate fractional shares or avoid the issuance of
HB2019 Enrolled -9- LRB9105228JSpc
1 fractional shares shall be given to each stockholder of
2 record entitled to vote at the meeting at least 30 days
3 before the meeting and in the manner provided in this Act
4 for the giving of notice of meetings of stockholders, and
5 shall include all of the following information:
6 (A) A statement of the purpose of the proposed
7 reverse stock split.
8 (B) A statement of the amount of consideration
9 being offered for the bank's stock.
10 (C) A statement that the bank considers the
11 transaction fair to the stockholders, and a
12 statement of the material facts upon which this
13 belief is based.
14 (D) A statement that the bank has secured an
15 opinion from a third party with respect to the
16 fairness, from a financial point of view, of the
17 consideration to be paid, the identity and
18 qualifications of the third party, how the third
19 party was selected, and any material relationship
20 between the third party and the bank.
21 (E) A summary of the opinion including the
22 basis for and the methods of arriving at the
23 findings and any limitation imposed by the bank in
24 arriving at fair value and a statement making the
25 opinion available for reviewing or copying by any
26 stockholder.
27 (F) A statement that objecting stockholders
28 will be entitled to the fair value of those shares
29 that are voted against the charter amendment, if a
30 proper demand is made on the bank and the
31 requirements are satisfied as specified in this
32 Section.
33 If a stockholder shall file with the bank, prior to or at the
34 meeting of stockholders at which the proposed charter
HB2019 Enrolled -10- LRB9105228JSpc
1 amendment is submitted to a vote, a written objection to the
2 proposed charter amendment and shall not vote in favor
3 thereof, and if the stockholder, within 20 days after
4 receiving written notice of the date the charter amendment
5 was accomplished pursuant to paragraph (5) of subsection (a)
6 of this Section 17, shall make written demand on the bank for
7 payment of the fair value of the stockholder's shares as of
8 the day prior to the date on which the vote was taken
9 approving the charter amendment, the bank shall pay to the
10 stockholder, upon surrender of the certificate or
11 certificates representing the stock, the fair value thereof.
12 The demand shall state the number of shares owned by the
13 objecting stockholder. The bank shall provide written notice
14 of the date on which the charter amendment was accomplished
15 to all stockholders who have filed written objections in
16 order that the objecting stockholders may know when they must
17 file written demand if they choose to do so. Any stockholder
18 failing to make demand within the 20-day period shall be
19 conclusively presumed to have consented to the charter
20 amendment and shall be bound by the terms thereof. If within
21 30 days after the date on which a charter amendment was
22 accomplished the value of the shares is agreed upon between
23 the objecting stockholders and the bank, payment therefor
24 shall be made within 90 days after the date on which the
25 charter amendment was accomplished, upon the surrender of the
26 stockholder's certificate or certificates representing the
27 shares. Upon payment of the agreed value the objecting
28 stockholder shall cease to have any interest in the shares or
29 in the bank. If within such period of 30 days the
30 stockholder and the bank do not so agree, then the objecting
31 stockholder may, within 60 days after the expiration of the
32 30-day period, file a complaint in the circuit court asking
33 for a finding and determination of the fair value of the
34 shares, and shall be entitled to judgment against the bank
HB2019 Enrolled -11- LRB9105228JSpc
1 for the amount of the fair value as of the day prior to the
2 date on which the vote was taken approving the charter
3 amendment with interest thereon to the date of the judgment.
4 The practice, procedure and judgment shall be governed by the
5 Civil Practice Law. The judgment shall be payable only upon
6 and simultaneously with the surrender to the bank of the
7 certificate or certificates representing the shares. Upon
8 payment of the judgment, the objecting stockholder shall
9 cease to have any interest in the shares or the bank. The
10 shares may be held and disposed of by the bank. Unless the
11 objecting stockholder shall file such complaint within the
12 time herein limited, the stockholder and all persons claiming
13 under the stockholder shall be conclusively presumed to have
14 approved and ratified the charter amendment, and shall be
15 bound by the terms thereof. The right of an objecting
16 stockholder to be paid the fair value of the stockholder's
17 shares of stock as herein provided shall cease if and when
18 the bank shall abandon the charter amendment.
19 (c) The purchase and holding and later resale of
20 treasury stock of a state bank pursuant to the provisions of
21 subsection (6) of Section 14 may be accomplished without a
22 change in its charter reflecting any decrease or increase in
23 capital stock.
24 (Source: P.A. 89-541, eff. 7-19-96; 90-160, eff. 7-23-97;
25 90-301, eff. 8-1-97; 90-655, eff. 7-30-98.)
26 (205 ILCS 5/39) (from Ch. 17, par. 349)
27 Sec. 39. Directors' and officers' liability.
28 (a) Every director or officer of a State bank, who
29 shall violate, or participate in, or assent to a violation of
30 Section 32, 33, 34, 35.1, or 35.2 of this Act, or who shall
31 permit any of the officers, agents, or servants of the state
32 bank to violate the provisions of Section 32, 33, 34, 35.1,
33 or 35.2 of this Act shall be held liable in his or her
HB2019 Enrolled -12- LRB9105228JSpc
1 personal or individual capacity for all damages which the
2 State bank, its stockholders, or any other person shall have
3 sustained in consequence of the violation. No director or
4 officer of a State bank shall be held liable in his or her
5 personal or individual capacity under this Section, however,
6 for a loan, investment, lease, or other transaction that
7 complied in good faith with the applicable provisions of
8 Section 32, 33, 34, 35.1, or 35.2, when made or acquired by
9 the State bank, but later violated the provisions of Section
10 32, 33, 34, 35.1, or 35.2 solely because of a subsequent
11 reduction in the amount of the unimpaired capital or
12 unimpaired surplus of the State bank. Nothing contained in
13 this Section shall be construed to limit in any way the
14 Commissioner's powers and authority including, but not
15 limited to, the powers and authority vested in the
16 Commissioner by Section 48 of this Act.
17 (b) By the affirmative vote of the holders of at least
18 two-thirds of the outstanding shares of stock of a State
19 bank, such vote occurring at any annual or special meeting of
20 shareholders held pursuant to this Act or occurring pursuant
21 to the waiver provisions of Section 43 of this Act, The
22 charter of a State bank may establish contain a provision
23 providing that a director is not personally liable to the
24 bank or its shareholders for monetary damages for a breach of
25 the director's fiduciary duty; provided, however, that such
26 provision may not eliminate or limit the liability of a
27 director for any of the following:
28 (1) An act or omission that is grossly negligent.
29 (2) A breach of the director's duty of loyalty to
30 the bank or its shareholders.
31 (3) Acts or omissions not in good faith or that
32 involve intentional misconduct or a knowing violation of
33 law.
34 (4) A transaction from which the director derived
HB2019 Enrolled -13- LRB9105228JSpc
1 an improper personal benefit.
2 (5) An act or omission occurring before the
3 effective date of the provision in the charter authorized
4 by this subsection.
5 (Source: P.A. 88-636, eff. 9-9-94.)
[ Top ]