99TH GENERAL ASSEMBLY
State of Illinois
2015 and 2016
HB2636

 

Introduced , by Rep. Ron Sandack

 

SYNOPSIS AS INTRODUCED:
 
15 ILCS 520/5  from Ch. 130, par. 24
15 ILCS 520/16.3
15 ILCS 520/22.5  from Ch. 130, par. 41a
30 ILCS 235/8

    Amends the Deposit of State Moneys Act. Makes various changes throughout the Act providing that nothing shall be construed as requiring a financial institution to provide a product or service in this State that the financial institution does not otherwise provide in this State. Makes a similar change in the Public Funds Investment Act. Effective immediately.


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FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

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1    AN ACT concerning finance.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Deposit of State Moneys Act is amended by
5changing Sections 5, 16.3, and 22.5 as follows:
 
6    (15 ILCS 520/5)  (from Ch. 130, par. 24)
7    Sec. 5. Each proposal shall state the amount of deposits
8sought by such proposals and the rate of interest such bank or
9savings and loan association will pay on daily balances. Each
10proposal shall be enclosed in a sealed envelope bearing the
11name of the bank or savings and loan association and labeled,
12"proposal for deposit of State moneys".
13    Each proposal shall also include a commitment on the part
14of the bidding bank or savings and loan association, executed
15by its president, in the following form, provided that nothing
16in this form shall be construed as requiring a financial
17institution to provide a product or service in this State that
18the financial institution does not otherwise provide in this
19State:
20    The ............. (name of bank or savings and loan
21association) pledges not to reject arbitrarily mortgage loans
22for residential properties within any specific part of the
23community served by this depository because of the location of

 

 

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1the property. This depository also pledges to make loans
2available on low and moderate income residential property
3throughout the community within the limits of its legal
4restrictions and prudent financial practices.
5(Source: P.A. 83-541.)
 
6    (15 ILCS 520/16.3)
7    Sec. 16.3. Consideration of financial institution's
8commitment to its community.
9    (a) In addition to any other requirements of this Act, the
10State Treasurer is authorized to consider the financial
11institution's record and current level of financial commitment
12to its local community when deciding whether to deposit State
13funds in that financial institution. The State Treasurer may
14consider factors including, but not necessarily limited to:
15        (1) for financial institutions subject to the federal
16    Community Reinvestment Act of 1977, the current and
17    historical ratings that the financial institution has
18    received, to the extent that those ratings are publicly
19    available, under the federal Community Reinvestment Act of
20    1977;
21        (2) any changes in ownership, management, policies, or
22    practices of the financial institution that may affect the
23    level of the financial institution's commitment to its
24    community;
25        (3) the financial impact that the withdrawal or denial

 

 

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1    of deposits of State funds might have on the financial
2    institution; and
3        (4) the financial impact to the State as a result of
4    withdrawing State funds or refusing to deposit additional
5    State funds in the financial institution.
6    (b) Nothing in this Section shall be construed as
7authorizing the State Treasurer to conduct an examination or
8investigation of a financial institution or to receive
9information that is not publicly available and the disclosure
10of which is otherwise prohibited by law or to require a
11financial institution to provide a product or service in this
12State that the financial institution does not otherwise provide
13in this State.
14(Source: P.A. 93-251, eff. 7-1-04.)
 
15    (15 ILCS 520/22.5)  (from Ch. 130, par. 41a)
16    (For force and effect of certain provisions, see Section 90
17of P.A. 94-79)
18    Sec. 22.5. Permitted investments. The State Treasurer may,
19with the approval of the Governor, invest and reinvest any
20State money in the treasury which is not needed for current
21expenditures due or about to become due, in obligations of the
22United States government or its agencies or of National
23Mortgage Associations established by or under the National
24Housing Act, 1201 U.S.C. 1701 et seq., or in mortgage
25participation certificates representing undivided interests in

 

 

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1specified, first-lien conventional residential Illinois
2mortgages that are underwritten, insured, guaranteed, or
3purchased by the Federal Home Loan Mortgage Corporation or in
4Affordable Housing Program Trust Fund Bonds or Notes as defined
5in and issued pursuant to the Illinois Housing Development Act.
6All such obligations shall be considered as cash and may be
7delivered over as cash by a State Treasurer to his successor.
8    The State Treasurer may, with the approval of the Governor,
9purchase any state bonds with any money in the State Treasury
10that has been set aside and held for the payment of the
11principal of and interest on the bonds. The bonds shall be
12considered as cash and may be delivered over as cash by the
13State Treasurer to his successor.
14    The State Treasurer may, with the approval of the Governor,
15invest or reinvest any State money in the treasury that is not
16needed for current expenditure due or about to become due, or
17any money in the State Treasury that has been set aside and
18held for the payment of the principal of and the interest on
19any State bonds, in shares, withdrawable accounts, and
20investment certificates of savings and building and loan
21associations, incorporated under the laws of this State or any
22other state or under the laws of the United States; provided,
23however, that investments may be made only in those savings and
24loan or building and loan associations the shares and
25withdrawable accounts or other forms of investment securities
26of which are insured by the Federal Deposit Insurance

 

 

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1Corporation.
2    The State Treasurer may not invest State money in any
3savings and loan or building and loan association unless a
4commitment by the savings and loan (or building and loan)
5association, executed by the president or chief executive
6officer of that association, is submitted in the following
7form, provided that nothing in this form shall be construed as
8requiring a financial institution to provide a product or
9service in this State that the financial institution does not
10otherwise provide in this State:
11        The .................. Savings and Loan (or Building
12    and Loan) Association pledges not to reject arbitrarily
13    mortgage loans for residential properties within any
14    specific part of the community served by the savings and
15    loan (or building and loan) association because of the
16    location of the property. The savings and loan (or building
17    and loan) association also pledges to make loans available
18    on low and moderate income residential property throughout
19    the community within the limits of its legal restrictions
20    and prudent financial practices.
21    The State Treasurer may, with the approval of the Governor,
22invest or reinvest, at a price not to exceed par, any State
23money in the treasury that is not needed for current
24expenditures due or about to become due, or any money in the
25State Treasury that has been set aside and held for the payment
26of the principal of and interest on any State bonds, in bonds

 

 

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1issued by counties or municipal corporations of the State of
2Illinois.
3    The State Treasurer may, with the approval of the Governor,
4invest or reinvest any State money in the Treasury which is not
5needed for current expenditure, due or about to become due, or
6any money in the State Treasury which has been set aside and
7held for the payment of the principal of and the interest on
8any State bonds, in participations in loans, the principal of
9which participation is fully guaranteed by an agency or
10instrumentality of the United States government; provided,
11however, that such loan participations are represented by
12certificates issued only by banks which are incorporated under
13the laws of this State or any other state or under the laws of
14the United States, and such banks, but not the loan
15participation certificates, are insured by the Federal Deposit
16Insurance Corporation.
17    The State Treasurer may, with the approval of the Governor,
18invest or reinvest any State money in the Treasury that is not
19needed for current expenditure, due or about to become due, or
20any money in the State Treasury that has been set aside and
21held for the payment of the principal of and the interest on
22any State bonds, in any of the following:
23        (1) Bonds, notes, certificates of indebtedness,
24    Treasury bills, or other securities now or hereafter issued
25    that are guaranteed by the full faith and credit of the
26    United States of America as to principal and interest.

 

 

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1        (2) Bonds, notes, debentures, or other similar
2    obligations of the United States of America, its agencies,
3    and instrumentalities.
4        (2.5) Bonds, notes, debentures, or other similar
5    obligations of a foreign government, other than the
6    Republic of the Sudan, that are guaranteed by the full
7    faith and credit of that government as to principal and
8    interest, but only if the foreign government has not
9    defaulted and has met its payment obligations in a timely
10    manner on all similar obligations for a period of at least
11    25 years immediately before the time of acquiring those
12    obligations.
13        (3) Interest-bearing savings accounts,
14    interest-bearing certificates of deposit, interest-bearing
15    time deposits, or any other investments constituting
16    direct obligations of any bank as defined by the Illinois
17    Banking Act.
18        (4) Interest-bearing accounts, certificates of
19    deposit, or any other investments constituting direct
20    obligations of any savings and loan associations
21    incorporated under the laws of this State or any other
22    state or under the laws of the United States.
23        (5) Dividend-bearing share accounts, share certificate
24    accounts, or class of share accounts of a credit union
25    chartered under the laws of this State or the laws of the
26    United States; provided, however, the principal office of

 

 

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1    the credit union must be located within the State of
2    Illinois.
3        (6) Bankers' acceptances of banks whose senior
4    obligations are rated in the top 2 rating categories by 2
5    national rating agencies and maintain that rating during
6    the term of the investment.
7        (7) Short-term obligations of either corporations or
8    limited liability companies organized in the United States
9    with assets exceeding $500,000,000 if (i) the obligations
10    are rated at the time of purchase at one of the 3 highest
11    classifications established by at least 2 standard rating
12    services and mature not later than 270 days from the date
13    of purchase, (ii) the purchases do not exceed 10% of the
14    corporation's or the limited liability company's
15    outstanding obligations, (iii) no more than one-third of
16    the public agency's funds are invested in short-term
17    obligations of either corporations or limited liability
18    companies, and (iv) the corporation or the limited
19    liability company has not been identified as a forbidden
20    entity, as that term is defined in Section 1-110.6 of the
21    Illinois Pension Code, by an independent researching firm
22    that specializes in global security risk that has been
23    engaged by the State Treasurer.
24        (8) Money market mutual funds registered under the
25    Investment Company Act of 1940, provided that the portfolio
26    of the money market mutual fund is limited to obligations

 

 

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1    described in this Section and to agreements to repurchase
2    such obligations.
3        (9) The Public Treasurers' Investment Pool created
4    under Section 17 of the State Treasurer Act or in a fund
5    managed, operated, and administered by a bank.
6        (10) Repurchase agreements of government securities
7    having the meaning set out in the Government Securities Act
8    of 1986, as now or hereafter amended or succeeded, subject
9    to the provisions of that Act and the regulations issued
10    thereunder.
11        (11) Investments made in accordance with the
12    Technology Development Act.
13    For purposes of this Section, "agencies" of the United
14States Government includes:
15        (i) the federal land banks, federal intermediate
16    credit banks, banks for cooperatives, federal farm credit
17    banks, or any other entity authorized to issue debt
18    obligations under the Farm Credit Act of 1971 (12 U.S.C.
19    2001 et seq.) and Acts amendatory thereto;
20        (ii) the federal home loan banks and the federal home
21    loan mortgage corporation;
22        (iii) the Commodity Credit Corporation; and
23        (iv) any other agency created by Act of Congress.
24    The Treasurer may, with the approval of the Governor, lend
25any securities acquired under this Act. However, securities may
26be lent under this Section only in accordance with Federal

 

 

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1Financial Institution Examination Council guidelines and only
2if the securities are collateralized at a level sufficient to
3assure the safety of the securities, taking into account market
4value fluctuation. The securities may be collateralized by cash
5or collateral acceptable under Sections 11 and 11.1.
6(Source: P.A. 96-469, eff. 8-14-09; 96-795, eff. 7-1-10 (see
7Section 5 of P.A. 96-793 for the effective date of changes made
8by P.A. 96-795); 96-870, eff. 1-21-10; 97-277, eff. 8-8-11.)
 
9    Section 10. The Public Funds Investment Act is amended by
10changing Section 8 as follows:
 
11    (30 ILCS 235/8)
12    Sec. 8. Consideration of financial institution's
13commitment to its community.
14    (a) In addition to any other requirements of this Act, a
15public agency is authorized to consider the financial
16institution's record and current level of financial commitment
17to its local community when deciding whether to deposit public
18funds in that financial institution. The public agency may
19consider factors including, but not necessarily limited to:
20        (1) for financial institutions subject to the federal
21    Community Reinvestment Act of 1977, the current and
22    historical ratings that the financial institution has
23    received, to the extent that those ratings are publicly
24    available, under the federal Community Reinvestment Act of

 

 

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1    1977;
2        (2) any changes in ownership, management, policies, or
3    practices of the financial institution that may affect the
4    level of the financial institution's commitment to its
5    community;
6        (3) the financial impact that the withdrawal or denial
7    of deposits of public funds might have on the financial
8    institution;
9        (4) the financial impact to the public agency as a
10    result of withdrawing public funds or refusing to deposit
11    additional public funds in the financial institution; and
12        (5) any additional burden on the resources of the
13    public agency that might result from ceasing to maintain
14    deposits of public funds at the financial institution under
15    consideration.
16    (b) Nothing in this Section shall be construed as
17authorizing the public agency to conduct an examination or
18investigation of a financial institution or to receive
19information that is not publicly available and the disclosure
20of which is otherwise prohibited by law or to require a
21financial institution to provide a product or service in this
22State that the financial institution does not otherwise provide
23in this State.
24(Source: P.A. 93-251, eff. 7-1-04.)
 
25    Section 99. Effective date. This Act takes effect upon
26becoming law.