093_SB1500

                                     LRB093 06427 JLS 06550 b

 1        AN ACT concerning certain financial institutions.

 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 37 as follows:

 6        (205 ILCS 5/37) (from Ch. 17, par. 347)
 7        Sec. 37. Loans to officers and loans on and purchases  of
 8    bank's own stock.
 9        (1)  No  state  bank  shall make any loan or extension of
10    credit  in  excess  of  the  limits,  as  determined  by  the
11    Commissioner,  at  any  one  time  outstanding  each  to  its
12    president, or to any of its vice presidents or  its  salaried
13    officers  or  employees  or  directors  or to corporations or
14    firms, controlled by them, or in the management of which  any
15    of  them  are actively engaged, unless such loan or extension
16    of credit shall have been first approved,  by  the  board  of
17    directors.   The  Commissioner shall prescribe such limits by
18    rules.
19        (2)  It shall not be lawful for a state bank to make  any
20    loan  or  discount  on  the security of the shares of its own
21    capital stock or preferred stock or on the  security  of  its
22    own   debentures  or  evidences  of  debt  which  are  either
23    convertible into capital stock or are junior  or  subordinate
24    in  right  of  payment to deposit or other liabilities of the
25    bank; provided, however, that a state  bank  may  acquire  or
26    hold such shares or securities as authorized by Section 14 of
27    this Act.
28        (3)(a)  For purposes of this Section, "control" means (i)
29    ownership,  control,  or  power  to  vote  25% or more of the
30    outstanding shares of any class of  voting  security  of  the
31    corporation  or  firm,  directly  or  indirectly,  or  acting
 
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 1    through  or  in  concert with one or more other persons; (ii)
 2    control in any manner over the election of a majority of  the
 3    directors  of  the corporation or firm; or (iii) the power to
 4    exercise a  controlling  influence  over  the  management  or
 5    policies  of the corporation or firm, directly or indirectly,
 6    or acting through or in concert with one or more persons.
 7        (3)(b)  A person does not have the power  to  exercise  a
 8    controlling  influence  over  the management or policies of a
 9    corporation or firm solely by virtue of the person's position
10    as an officer or director of the corporation or firm.
11        (3)(c)  A person is presumed to have  control,  including
12    the  power  to  exercise  a  controlling  influence  over the
13    management or policies, of a corporation or firm if:
14             (i)  the person:
15                  (A)  is  an  executive  officer,  director,  or
16             individual  exercising  similar  functions  of   the
17             corporation or firm; and
18                  (B)  directly  or indirectly owns, controls, or
19             has the power to vote more than 10% of any class  of
20             voting securities of the corporation or firm; or
21             (ii) (A)  the  person  directly  or indirectly owns,
22             controls, or has the power to vote more than 10%  of
23             any class of voting securities of the corporation or
24             firm; and
25                  (B)  no  other  person  directly  or indirectly
26             owns, controls, or has the power to vote  a  greater
27             percentage of that class of voting securities.
28        (3)(d)  A  person  may  rebut  a  presumption established
29    under  subdivision  (3)(c)  of  this  Section  by  submitting
30    written  materials  that,  in  the  Commissioner's  judgment,
31    demonstrate an absence of control.
32    (Source: P.A. 92-483, eff. 8-23-01.)

33        Section 99.  Effective date.  This Act takes effect  upon
 
                            -3-      LRB093 06427 JLS 06550 b
 1    becoming law.