93RD GENERAL ASSEMBLY
State of Illinois
2003 and 2004
SB2553


 
Introduced 2/3/2004, by Terry Link
 
SYNOPSIS AS INTRODUCED:
 		














205 ILCS 5/37
  from Ch. 17, par. 347







    Amends the Illinois Banking Act. Provides that a state bank may acquire or hold shares of its own securities as authorized by the Act. Effective immediately.



















LRB093 19593 SAS 45334 b




















 


 


A BILL FOR









 














SB2553

LRB093 19593 SAS 45334 b









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    AN ACT concerning financial regulation.

 
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    Be it enacted by the People of the State of Illinois,
 
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represented in the General Assembly:


 
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    Section 5. The Illinois Banking Act is amended  by changing 
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Section 37 as follows:
 



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    (205 ILCS 5/37)  (from Ch. 17, par. 347)



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    Sec. 37. Loans to officers and loans on and purchases of 
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bank's own
stock.

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    (1) No state bank shall make any loan or
extension of 
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credit in excess of the limits, as determined by the

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Commissioner, at any one time outstanding each to its 
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president, or to any
of its vice presidents or its salaried 
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officers or employees or directors
or to corporations or firms, 
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controlled by them, or in the management of
which any of them 
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are actively engaged, unless such loan or extension of
credit 
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shall have been first
approved, by the board of directors.  The 
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Commissioner shall prescribe such
limits by rules.

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    (2) It shall not be lawful for a state bank to make any 
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loan or
discount on the security of the shares of its own 
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capital stock or
preferred stock or on the security of its own 
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debentures or evidences of
debt which are either convertible 
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into capital stock or are junior or
subordinate in right of 
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payment to deposit or other liabilities of the
bank; however, a 
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state bank may acquire or hold such shares or securities as 
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authorized by Section 14 of this Act.

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    (3)(a) For purposes of this Section, "control" means (i) 
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ownership,
control, or power to vote 25% or more of the 
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outstanding shares of
any class of voting security of the 
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corporation or firm, directly or
indirectly, or acting through 
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or in concert with one or more other
persons; (ii) control in 
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any manner over the election of a majority
of the directors of 
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the corporation or firm; or (iii) the power to exercise
a 
 


 









SB2553
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LRB093 19593 SAS 45334 b







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controlling influence over the management or policies of the

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corporation or firm, directly or indirectly, or acting through 
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or in
concert with one or more persons.

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    (3)(b) A person does not have the power to exercise a 
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controlling
influence over the management or policies of a 
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corporation or firm
solely by virtue of the person's position 
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as an officer or director of
the corporation or firm.

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    (3)(c) A person is presumed to have control, including the 
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power to
exercise a controlling influence over the management 
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or policies, of
a corporation or firm if:


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        (i) the person:


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            (A) is an executive officer, director, or 
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        individual
exercising similar functions of the 
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        corporation or firm; and


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            (B) directly or indirectly owns, controls, or has 
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        the
power to vote more than 10% of any class of voting

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        securities of the corporation or firm; or


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        (ii) (A) the person directly or indirectly owns, 
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        controls,
or has the power to vote more than 10% of any 
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        class of
voting securities of the corporation or firm; 
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        and


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            (B) no other person directly or indirectly owns,

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        controls, or has the power to vote a greater percentage 
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        of that
class of voting securities.

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    (3)(d) A person may rebut a presumption established under 
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subdivision (3)(c)
of this Section by submitting written 
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materials that, in the Commissioner's
judgment, demonstrate an 
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absence of control.

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(Source: P.A. 92-483, eff. 8-23-01.)

 

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    Section 99. Effective date. This Act takes effect upon 
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becoming law.