093_SB0771enr

 
SB771 Enrolled                       LRB093 03108 JLS 03125 b

 1        AN ACT in relation to banking.

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

 4        Section 5.   The  Illinois  Banking  Act  is  amended  by
 5    changing Section 34 as follows:

 6        (205 ILCS 5/34) (from Ch. 17, par. 342)
 7        Sec.  34.  Exceptions to loans and investment limits. The
 8    limitations in Sections 32, 33, and 35.1 of this Act upon the
 9    liabilities of any one  person  and  upon  the  purchase  and
10    holding of marketable investment securities shall not apply:
11        (1)  To  the  extent of 50% of the unimpaired capital and
12    unimpaired surplus of any bank, to loans to or obligations of
13    any person to the extent that the loan shall be secured by  a
14    like  amount  of  obligations  of or guaranteed by the United
15    States or by the State of Illinois, or by a  like  amount  of
16    obligations  of  any  corporation  wholly  owned  directly or
17    indirectly  by  the  United  States  or  of  any  agency   or
18    instrumentality  of  the  United  States  or  of the State of
19    Illinois, including any unit of local  government  or  school
20    district,  provided that the total liabilities to any bank of
21    any one person  shall  not  exceed  50%  of  such  unimpaired
22    capital and unimpaired surplus.
23        (2)  To  the  extent of 30% of the unimpaired capital and
24    unimpaired surplus of any bank, to loans to or obligations of
25    any person to the extent that the same shall  be  secured  by
26    shipping  documents  or  instruments transferring or securing
27    title covering livestock or giving a lien on  livestock  when
28    the  market value of the livestock securing the obligation is
29    not at the time of the making of the loan less than  115%  of
30    the  principal  amount  of  the obligation, provided that the
31    total liabilities to any bank of any  one  person  shall  not
 
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 1    exceed 50% of the unimpaired capital and unimpaired surplus.
 2        (3)  To   the   extent  of  the  unimpaired  capital  and
 3    unimpaired surplus of any bank, to the purchase of or holding
 4    by any bank of the general obligations of  each  municipality
 5    located in the State of Illinois or in any other state of the
 6    United  States  or  to  the purchase of or holding of the tax
 7    anticipation warrants of each such municipality.
 8        (4)  To the obligations  as  endorser,  whether  with  or
 9    without  recourse,  or  as  guarantor, whether conditional or
10    unconditional, of  negotiable  or  nonnegotiable  installment
11    consumer  paper  of  the  person transferring the same if the
12    bank's  files  or  the  knowledge  of  its  officers  of  the
13    financial condition of each maker  of  those  obligations  is
14    reasonably adequate and if an officer of the bank, designated
15    for  that  purpose  by  the  board  of directors of the bank,
16    certifies that  the  responsibility  of  each  maker  of  the
17    obligations  has  been evaluated and that the bank is relying
18    primarily upon each maker for the payment of the obligations;
19    certification shall be in writing and shall  be  retained  as
20    part of the records of the bank.
21        (5)  To  the issuance, advice, or confirmation of letters
22    of credit; however, if the letter  of  credit  is  a  standby
23    letter of credit, it shall be included within the limit under
24    Section  32  for  the person who has procured the issuance of
25    the standby letter of credit unless the issuing bank has,  at
26    the  time  of  issuance, an irrevocable commitment by another
27    bank to purchase or participate  out  any  amounts  that  may
28    later be drawn under the letter of credit that would create a
29    loan  in excess of the limits under Section 32 for the person
30    or the  amounts  are  secured  by  pledge  of  United  States
31    government  securities,  a   segregated  deposit  account, or
32    other security  that  would  exempt  a  loan  so  secured  by
33    application  of  Section 34 or 35 of this Act; if, however, a
34    commitment to  purchase  or  participate  is  in  place,  the
 
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 1    amounts  are  not included in the limits under Section 32 for
 2    the person until drafts are presented upon the letter.
 3        (6)  To the acceptance of drafts  or  bills  of  exchange
 4    that  grow  out  of transactions involving the importation or
 5    exportation of  goods;  or  that  grow  out  of  transactions
 6    involving  the domestic shipment of goods, provided documents
 7    of title covering the goods secure  the  acceptances  at  the
 8    time  of  acceptance;  or  that  are  secured  at the time of
 9    acceptances by documents of title covering readily marketable
10    staples; but the aggregate amount of these acceptances by any
11    State bank on behalf of  any  one  person  at  any  one  time
12    outstanding  shall  not  exceed 20% of the unimpaired capital
13    and unimpaired surplus of the bank unless the part thereof in
14    excess of that percentum of unimpaired capital and unimpaired
15    surplus is and will remain secured by accompanying  documents
16    of  title  or  proceeds  thereof  growing  out  of  the  same
17    transaction  or by substituted security of similar character;
18    provided further, however, that the aggregate amount  of  the
19    acceptances  on  behalf  of any one person outstanding at any
20    one time shall not exceed 50% of  the  amount  of  unimpaired
21    capital and unimpaired surplus of the bank. The provisions of
22    this  paragraph  (6) apply to the acceptances by a State bank
23    on behalf of any one person and not  to  the  purchase  by  a
24    State  bank  of  other  banks' acceptances.  A State bank may
25    purchase acceptances from  other  banks  in  amounts  not  to
26    exceed  50%  of  the  State  bank's  unimpaired  capital  and
27    unimpaired surplus from any one bank.
28        (7)  To  the  extent of 20% of the unimpaired capital and
29    unimpaired surplus of any bank, to the purchase of or holding
30    by any  bank  of  obligations  of  the  State  of  Israel  or
31    obligations  fully  guaranteed  by  the State of Israel as to
32    payment of principal and interest.
33        (8)  To the purchase of stock  in  a  Federal  Home  Loan
34    Bank.
 
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 1    (Source: P.A. 90-301, eff. 8-1-97.)

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