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91_HB2204enr
HB2204 Enrolled LRB9105133JSpcA
1 AN ACT concerning the regulation of financial
2 institutions, amending a named Act.
3 Be it enacted by the People of the State of Illinois,
4 represented in the General Assembly:
5 Section 1. Short title. This Act may be cited as the
6 Banking on Illinois Act.
7 Section 5. Findings and declarations of policy. The
8 General Assembly hereby finds and declares:
9 (1) that the economic strength and general welfare
10 of Illinois depends on a strong, profitable, and
11 competitive banking industry in this State that preserves
12 and creates employment, increases credit availability,
13 attracts capital, and expands the savings base for the
14 citizens of this State;
15 (2) that the removal of geographic restrictions in
16 the federal banking laws and in the laws of the 50 states
17 has given rise to a substantial number of newly created
18 community banks and interstate bank mergers requiring the
19 selection of main office locations and relocations;
20 (3) that by ensuring a favorable environment for
21 banks to commence and operate their businesses from this
22 State, more newly created community banks and merging
23 banks will choose to maintain or retain their
24 headquarters in and relocate their main banking offices
25 to Illinois; and
26 (4) that preserving and increasing the number of
27 bank headquarters and main banking offices within
28 Illinois will substantially increase employment
29 opportunities, credit availability, and capital
30 investment in this State, while strengthening the savings
31 base of this State, thereby providing significant
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1 benefits to all Illinois citizens, to commercial and
2 agricultural businesses of all sizes in this State, and
3 to all local governments and political subdivisions of
4 this State.
5 Section 10. Purpose. The purpose of this Act is to
6 encourage and provide a favorable environment in Illinois for
7 the chartering and operating of banks that locate and
8 maintain main banking offices in this State.
9 Section 15. Application of Illinois law.
10 (a) To further the purpose and policies of this Act, the
11 provisions of the following Acts shall be liberally
12 construed:
13 (1) the Illinois Banking Act; and
14 (2) the Foreign Banking Office Act.
15 (b) Subsection (a) of this Section shall not be applied
16 in a manner that will adversely affect the safety and
17 soundness of a bank.
18 Section 95. The Illinois Banking Act is amended by
19 changing Sections 5, 5e, and 48.1 as follows:
20 (205 ILCS 5/5) (from Ch. 17, par. 311)
21 Sec. 5. General corporate powers. A bank organized
22 under this Act or subject hereto shall be a body corporate
23 and politic and shall, without specific mention thereof in
24 the charter, have all the powers conferred by this Act and
25 the following additional general corporate powers:
26 (1) To sue and be sued, complain, and defend in its
27 corporate name.
28 (2) To have a corporate seal, which may be altered at
29 pleasure, and to use the same by causing it or a facsimile
30 thereof to be impressed or affixed or in any manner
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1 reproduced, provided that the affixing of a corporate seal to
2 an instrument shall not give the instrument additional force
3 or effect, or change the construction thereof, and the use of
4 a corporate seal is not mandatory.
5 (3) To make, alter, amend, and repeal bylaws, not
6 inconsistent with its charter or with law, for the
7 administration of the affairs of the bank. If this Act does
8 not provide specific guidance in matters of corporate
9 governance, the provisions of the Business Corporation Act of
10 1983 may be used if so provided in the bylaws.
11 (4) To elect or appoint and remove officers and agents
12 of the bank and define their duties and fix their
13 compensation.
14 (5) To adopt and operate reasonable bonus plans,
15 profit-sharing plans, stock-bonus plans, stock-option plans,
16 pension plans and similar incentive plans for its directors,
17 officers and employees.
18 (5.1) To manage, operate and administer a fund for the
19 investment of funds by a public agency or agencies, including
20 any unit of local government or school district, or any
21 person. The fund for a public agency shall invest in the
22 same type of investments and be subject to the same
23 limitations provided for the investment of public funds. The
24 fund for public agencies shall maintain a separate ledger
25 showing the amount of investment for each public agency in
26 the fund. "Public funds" and "public agency" as used in this
27 Section shall have the meanings ascribed to them in Section 1
28 of the Public Funds Investment Act.
29 (6) To make reasonable donations for the public welfare
30 or for charitable, scientific, religious or educational
31 purposes.
32 (7) To borrow or incur an obligation; and to pledge its
33 assets:
34 (a) to secure its borrowings, its lease of personal
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1 or real property or its other nondeposit obligations;
2 (b) to enable it to act as agent for the sale of
3 obligations of the United States;
4 (c) to secure deposits of public money of the
5 United States, whenever required by the laws of the
6 United States, including without being limited to,
7 revenues and funds the deposit of which is subject to the
8 control or regulation of the United States or any of its
9 officers, agents, or employees and Postal Savings funds;
10 (d) to secure deposits of public money of any state
11 or of any political corporation or subdivision thereof
12 including, without being limited to, revenues and funds
13 the deposit of which is subject to the control or
14 regulation of any state or of any political corporation
15 or subdivisions thereof or of any of their officers,
16 agents, or employees;
17 (e) to secure deposits of money whenever required
18 by the National Bankruptcy Act;
19 (f) (blank); and
20 (g) to secure trust funds commingled with the
21 bank's funds, whether deposited by the bank or an
22 affiliate of the bank, pursuant to Section 2-8 of the
23 Corporate Fiduciary Act.
24 (8) To own, possess, and carry as assets all or part of
25 the real estate necessary in or with which to do its banking
26 business, either directly or indirectly through the ownership
27 of all or part of the capital stock, shares or interests in
28 any corporation, association, trust engaged in holding any
29 part or parts or all of the bank premises, engaged in such
30 business and in conducting a safe deposit business in the
31 premises or part of them, or engaged in any activity that the
32 bank is permitted to conduct in a subsidiary pursuant to
33 paragraph (12) of this Section 5.
34 (9) To own, possess, and carry as assets other real
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1 estate to which it may obtain title in the collection of its
2 debts or that was formerly used as a part of the bank
3 premises, but title to any real estate except as herein
4 permitted shall not be retained by the bank, either directly
5 or by or through a subsidiary, as permitted by subsection
6 (12) of this Section for a total period of more than 10 years
7 after acquiring title, either directly or indirectly.
8 (10) To do any act, including the acquisition of stock,
9 necessary to obtain insurance of its deposits, or part
10 thereof, and any act necessary to obtain a guaranty, in whole
11 or in part, of any of its loans or investments by the United
12 States or any agency thereof, and any act necessary to sell
13 or otherwise dispose of any of its loans or investments to
14 the United States or any agency thereof, and to acquire and
15 hold membership in the Federal Reserve System.
16 (11) Notwithstanding any other provisions of this Act or
17 any other law, to do any act and to own, possess, and carry
18 as assets property of the character, including stock, that is
19 at the time authorized or permitted to national banks by an
20 Act of Congress, but subject always to the same limitations
21 and restrictions as are applicable to national banks by the
22 pertinent federal law and subject to applicable provisions of
23 the Financial Institutions Insurance Sales Law.
24 (12) To own, possess, and carry as assets stock of one
25 or more corporations that is, or are, engaged in one or more
26 of the following businesses:
27 (a) holding title to and administering assets
28 acquired as a result of the collection or liquidating of
29 loans, investments, or discounts; or
30 (b) holding title to and administering personal
31 property acquired by the bank, directly or indirectly
32 through a subsidiary, for the purpose of leasing to
33 others, provided the lease or leases and the investment
34 of the bank, directly or through a subsidiary, in that
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1 personal property otherwise comply with Section 35.1 of
2 this Act; or
3 (c) carrying on or administering any of the
4 activities excepting the receipt of deposits or the
5 payment of checks or other orders for the payment of
6 money in which a bank may engage in carrying on its
7 general banking business; provided, however, that nothing
8 contained in this paragraph (c) shall be deemed to permit
9 a bank organized under this Act or subject hereto to do,
10 either directly or indirectly through any subsidiary, any
11 act, including the making of any loan or investment, or
12 to own, possess, or carry as assets any property that if
13 done by or owned, possessed, or carried by the State bank
14 would be in violation of or prohibited by any provision
15 of this Act.
16 The provisions of this subsection (12) shall not apply to
17 and shall not be deemed to limit the powers of a State bank
18 with respect to the ownership, possession, and carrying of
19 stock that a State bank is permitted to own, possess, or
20 carry under this Act.
21 Any bank intending to establish a subsidiary under this
22 subsection (12) shall give written notice to the Commissioner
23 60 days prior to the subsidiary's commencing of business or,
24 as the case may be, prior to acquiring stock in a corporation
25 that has already commenced business. After receiving the
26 notice, the Commissioner may waive or reduce the balance of
27 the 60 day notice period. The Commissioner may specify the
28 form of the notice and may promulgate rules and regulations
29 to administer this subsection (12).
30 (13) To accept for payment at a future date not
31 exceeding one year from the date of acceptance, drafts drawn
32 upon it by its customers; and to issue, advise, or confirm
33 letters of credit authorizing the holders thereof to draw
34 drafts upon it or its correspondents.
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1 (14) To own and lease personal property acquired by the
2 bank at the request of a prospective lessee and upon the
3 agreement of that person to lease the personal property
4 provided that the lease, the agreement with respect thereto,
5 and the amount of the investment of the bank in the property
6 comply with Section 35.1 of this Act.
7 (15) (a) To establish and maintain, in addition to the
8 main banking premises, branches offering any banking services
9 permitted at the main banking premises of a State bank.
10 (b) To establish and maintain, after May 31, 1997,
11 branches in another state that may conduct any activity in
12 that state that is authorized or permitted for any bank that
13 has a banking charter issued by that state, subject to the
14 same limitations and restrictions that are applicable to
15 banks chartered by that state.
16 (16) (Blank).
17 (17) To establish and maintain terminals, as authorized
18 by the Electronic Fund Transfer Act.
19 (18) To establish and maintain temporary service booths
20 at any International Fair held in this State which is
21 approved by the United States Department of Commerce, for the
22 duration of the international fair for the sole purpose of
23 providing a convenient place for foreign trade customers at
24 the fair to exchange their home countries' currency into
25 United States currency or the converse. This power shall not
26 be construed as establishing a new place or change of
27 location for the bank providing the service booth.
28 (19) To indemnify its officers, directors, employees,
29 and agents, as authorized for corporations under Section 8.75
30 of the Business Corporation Act of 1983.
31 (20) To own, possess, and carry as assets stock of, or
32 be or become a member of, any corporation, mutual company,
33 association, trust, or other entity formed exclusively for
34 the purpose of providing directors' and officers' liability
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1 and bankers' blanket bond insurance or reinsurance to and for
2 the benefit of the stockholders, members, or beneficiaries,
3 or their assets or businesses, or their officers, directors,
4 employees, or agents, and not to or for the benefit of any
5 other person or entity or the public generally.
6 (21) To make debt or equity investments in corporations
7 or projects, whether for profit or not for profit, designed
8 to promote the development of the community and its welfare,
9 provided that the aggregate investment in all of these
10 corporations and in all of these projects does not exceed 10%
11 of the unimpaired capital and unimpaired surplus of the bank
12 and provided that this limitation shall not apply to
13 creditworthy loans by the bank to those corporations or
14 projects. Upon written application to the Commissioner, a
15 bank may make an investment that would, when aggregated with
16 all other such investments, exceed 10% of the unimpaired
17 capital and unimpaired surplus of the bank. The Commissioner
18 may approve the investment if he is of the opinion and finds
19 that the proposed investment will not have a material adverse
20 effect on the safety and soundness of the bank.
21 (22) To own, possess, and carry as assets the stock of a
22 corporation engaged in the ownership or operation of a travel
23 agency or to operate a travel agency as a part of its
24 business, provided that the bank either owned, possessed, and
25 carried as assets the stock of such a corporation or operated
26 a travel agency as part of its business before July 1, 1991.
27 (23) With respect to affiliate facilities:
28 (a) to conduct at affiliate facilities any of the
29 following transactions for and on behalf of another
30 commonly owned bank, if so authorized by the other bank:
31 receiving deposits; cashing and issuing checks, drafts,
32 and money orders; changing money; and receiving payments
33 on existing indebtedness; and
34 (b) to authorize a commonly owned bank to conduct
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1 for and on behalf of it any of the transactions listed in
2 this paragraph (23) at one or more affiliate facilities.
3 Any bank intending to conduct or to authorize a commonly
4 owned bank to conduct at an affiliate facility any of the
5 transactions specified in this paragraph (23) shall give
6 written notice to the Commissioner at least 30 days before
7 any such transaction is conducted at the affiliate facility.
8 (24) To act as the agent for any fire, life, or other
9 insurance company authorized by the State of Illinois, by
10 soliciting and selling insurance and collecting premiums on
11 policies issued by such company; and to receive for services
12 so rendered such fees or commissions as may be agreed upon
13 between the bank and the insurance company for which it may
14 act as agent; provided, however, that no such bank shall in
15 any case assume or guarantee the payment of any premium on
16 insurance policies issued through its agency by its
17 principal; and provided further, that the bank shall not
18 guarantee the truth of any statement made by an assured in
19 filing his application for insurance.
20 (25) Notwithstanding any other provisions of this Act or
21 any other law, to offer any product or service that is at the
22 time authorized or permitted to any insured savings
23 association or out-of-state bank by applicable law, provided
24 that powers conferred only by this subsection (25):
25 (a) shall always be subject to the same limitations
26 and restrictions that are applicable to the insured
27 savings association or out-of-state bank for the product
28 or service by such applicable law;
29 (b) shall be subject to applicable provisions of
30 the Financial Institutions Insurance Sales Law;
31 (c) shall not include the right to own or conduct a
32 real estate brokerage business for which a license would
33 be required under the laws of this State; and
34 (d) shall not be construed to include the
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1 establishment or maintenance of a branch, nor shall they
2 be construed to limit the establishment or maintenance of
3 a branch pursuant to subsection (11).
4 (Source: P.A. 89-208, eff. 9-29-95; 89-310, eff. 1-1-96;
5 89-364, eff. 8-18-95; 89-626, eff. 8-9-96; 90-41, eff.
6 10-1-97; 90-301, eff. 8-1-97; 90-655, eff. 7-30-98; 90-665,
7 eff. 7-30-98.)
8 (205 ILCS 5/5e)
9 Sec. 5e. Lending and account authority.
10 (a) Notwithstanding the provisions of any other law in
11 connection with extensions of credit, a State bank may elect
12 to contract for and receive interest, fees, and other charges
13 for extensions of credit subject only to the provisions of
14 subsection (1) of Section 4 of the Interest Act, except for
15 extensions of credit secured by residential real estate,
16 which shall be subject to the laws applicable thereto.
17 (b) The establishment of account service charges and the
18 amounts of the charges not otherwise limited or prescribed by
19 law is a business decision to be made by a bank according to
20 prudent business judgment and safe and sound operating
21 standards. In establishing account service charges, the bank
22 may consider, but is not limited to considering, the costs
23 incurred by the bank, plus a profit margin, for providing the
24 service, the deterrence of misuse of the bank's services, the
25 establishment of the competitive position of the bank in
26 accordance with the bank's marketing strategy, and the
27 maintenance of the safety and soundness of the bank.
28 (Source: P.A. 89-603, eff. 8-2-96.)
29 (205 ILCS 5/48.1) (from Ch. 17, par. 360)
30 Sec. 48.1. Customer financial records; confidentiality.
31 (a) For the purpose of this Section, the term "financial
32 records" means any original, any copy, or any summary of:
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1 (1) a document granting signature authority over a
2 deposit or account;,
3 (2) a statement, ledger card or other record on any
4 deposit or account, which shows each transaction in or
5 with respect to that account;,
6 (3) a check, draft or money order drawn on a bank
7 or issued and payable by a bank;, or
8 (4) any other item containing information
9 pertaining to any relationship established in the
10 ordinary course of a bank's business between a bank and
11 its customer, including financial statements or other
12 financial information provided by the customer.
13 (b) This Section does not prohibit:
14 (1) The preparation, examination, handling or
15 maintenance of any financial records by any officer,
16 employee or agent of a bank having custody of the
17 records, or the examination of the records by a certified
18 public accountant engaged by the bank to perform an
19 independent audit.
20 (2) The examination of any financial records by, or
21 the furnishing of financial records by a bank to, any
22 officer, employee or agent of (i) the Commissioner of
23 Banks and Real Estate, (ii) after May 31, 1997, a state
24 regulatory authority authorized to examine a branch of a
25 State bank located in another state, (iii) the
26 Comptroller of the Currency, (iv) the Federal Reserve
27 Board, or (v) the Federal Deposit Insurance Corporation
28 for use solely in the exercise of his duties as an
29 officer, employee, or agent.
30 (3) The publication of data furnished from
31 financial records relating to customers where the data
32 cannot be identified to any particular customer or
33 account.
34 (4) The making of reports or returns required under
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1 Chapter 61 of the Internal Revenue Code of 1986.
2 (5) Furnishing information concerning the dishonor
3 of any negotiable instrument permitted to be disclosed
4 under the Uniform Commercial Code.
5 (6) The exchange in the regular course of business
6 of (i) credit information between a bank and other banks
7 or financial institutions or commercial enterprises,
8 directly or through a consumer reporting agency or (ii)
9 financial records or information derived from financial
10 records between a bank and other banks or financial
11 institutions or commercial enterprises for the purpose of
12 conducting due diligence pursuant to a purchase or sale
13 involving the bank or assets or liabilities of the bank.
14 (7) The furnishing of information to the
15 appropriate law enforcement authorities where the bank
16 reasonably believes it has been the victim of a crime.
17 (8) The furnishing of information under the Uniform
18 Disposition of Unclaimed Property Act.
19 (9) The furnishing of information under the
20 Illinois Income Tax Act and the Illinois Estate and
21 Generation-Skipping Transfer Tax Act.
22 (10) The furnishing of information under the
23 federal Currency and Foreign Transactions Reporting Act
24 Title 31, United States Code, Section 1051 et seq.
25 (11) The furnishing of information under any other
26 statute that by its terms or by regulations promulgated
27 thereunder requires the disclosure of financial records
28 other than by subpoena, summons, warrant, or court order.
29 (12) The furnishing of information about the
30 existence of an account of a person to a judgment
31 creditor of that person who has made a written request
32 for that information.
33 (13) The exchange in the regular course of business
34 of information between commonly owned banks in connection
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1 with a transaction authorized under paragraph (23) of
2 Section 5 and conducted at an affiliate facility.
3 (14) The furnishing of information in accordance
4 with the federal Personal Responsibility and Work
5 Opportunity Reconciliation Act of 1996. Any bank governed
6 by this Act shall enter into an agreement for data
7 exchanges with a State agency provided the State agency
8 pays to the bank a reasonable fee not to exceed its
9 actual cost incurred. A bank providing information in
10 accordance with this item shall not be liable to any
11 account holder or other person for any disclosure of
12 information to a State agency, for encumbering or
13 surrendering any assets held by the bank in response to a
14 lien or order to withhold and deliver issued by a State
15 agency, or for any other action taken pursuant to this
16 item, including individual or mechanical errors, provided
17 the action does not constitute gross negligence or
18 willful misconduct. A bank shall have no obligation to
19 hold, encumber, or surrender assets until it has been
20 served with a subpoena, summons, warrant, court or
21 administrative order, lien, or levy.
22 (15) The exchange in the regular course of business
23 of information between a bank and any commonly owned
24 affiliate of the bank, subject to the provisions of the
25 Financial Institutions Insurance Sales Law.
26 (c) Except as otherwise provided by this Act, a bank may
27 not disclose to any person, except to the customer or his
28 duly authorized agent, any financial records or financial
29 information obtained from financial records relating to that
30 customer of that bank unless:
31 (1) the customer has authorized disclosure to the
32 person;
33 (2) the financial records are disclosed in response
34 to a lawful subpoena, summons, warrant or court order
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1 which meets the requirements of subsection (d) of this
2 Section; or
3 (3) the bank is attempting to collect an obligation
4 owed to the bank and the bank complies with the
5 provisions of Section 2I of the Consumer Fraud and
6 Deceptive Business Practices Act.
7 (d) A bank shall disclose financial records under
8 paragraph (2) of subsection (c) of this Section under a
9 lawful subpoena, summons, warrant, or court order only after
10 the bank mails a copy of the subpoena, summons, warrant, or
11 court order to the person establishing the relationship with
12 the bank, if living, and, otherwise his personal
13 representative, if known, at his last known address by first
14 class mail, postage prepaid, unless the bank is specifically
15 prohibited from notifying the person by order of court or by
16 applicable State or federal law. A bank shall not mail a
17 copy of a subpoena to any person pursuant to this subsection
18 if the subpoena was issued by a grand jury under the
19 Statewide Grand Jury Act.
20 (e) Any officer or employee of a bank who knowingly and
21 willfully furnishes financial records in violation of this
22 Section is guilty of a business offense and, upon conviction,
23 shall be fined not more than $1,000.
24 (f) Any person who knowingly and willfully induces or
25 attempts to induce any officer or employee of a bank to
26 disclose financial records in violation of this Section is
27 guilty of a business offense and, upon conviction, shall be
28 fined not more than $1,000.
29 (g) A bank shall be reimbursed for costs that are
30 reasonably necessary and that have been directly incurred in
31 searching for, reproducing, or transporting books, papers,
32 records, or other data of a customer required or requested to
33 be produced pursuant to a lawful subpoena, summons, warrant,
34 or court order. The Commissioner shall determine the rates
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1 and conditions under which payment may be made.
2 (Source: P.A. 89-208, eff. 9-29-95; 89-364, eff. 8-18-95;
3 89-508, eff. 7-3-96; 89-626, eff. 8-9-96; 90-18, eff. 7-1-97;
4 90-665, eff. 7-30-98.)
5 Section 99. Effective date. This Act takes effect upon
6 becoming law.
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