97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
HB1891

 

Introduced , by Rep. Daniel Biss

 

SYNOPSIS AS INTRODUCED:
 
205 ILCS 5/48.1  from Ch. 17, par. 360

    Amends the Illinois Banking Act. Provides that a bank shall utilize a form, statement, or writing to obtain a customer's consent to disclose any financial records or information obtained from financial records relating to that customer to non-affiliated third persons or parties. Provides criteria for banks to meet regarding the form, statement, or writing to obtain a customer's consent to disclose financial information relating to the customer's financial records. Provides that a bank shall not discriminate against or deny an otherwise qualified customer a financial product or financial service because the customer has not provided the consent to authorize the bank to disclose or share financial records or financial information obtained from financial records relating to that customer with any non-affiliated third person. Provides that a bank shall not be liable for failing to offer products and services to a customer solely because (i) that customer has failed to provide consent and the bank could not offer the product or service without consent and (ii) the customer has failed to provide consent.


LRB097 07104 CEL 47203 b

 

 

A BILL FOR

 

HB1891LRB097 07104 CEL 47203 b

1    AN ACT concerning regulation.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Banking Act is amended by changing
5Section 48.1 as follows:
 
6    (205 ILCS 5/48.1)  (from Ch. 17, par. 360)
7    Sec. 48.1. Customer financial records; confidentiality.
8    (a) For the purpose of this Section, the term "financial
9records" means any original, any copy, or any summary of:
10        (1) a document granting signature authority over a
11    deposit or account;
12        (2) a statement, ledger card or other record on any
13    deposit or account, which shows each transaction in or with
14    respect to that account;
15        (3) a check, draft or money order drawn on a bank or
16    issued and payable by a bank; or
17        (4) any other item containing information pertaining
18    to any relationship established in the ordinary course of a
19    bank's business between a bank and its customer, including
20    financial statements or other financial information
21    provided by the customer.
22    (b) This Section does not prohibit:
23        (1) The preparation, examination, handling or

 

 

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1    maintenance of any financial records by any officer,
2    employee or agent of a bank having custody of the records,
3    or the examination of the records by a certified public
4    accountant engaged by the bank to perform an independent
5    audit.
6        (2) The examination of any financial records by, or the
7    furnishing of financial records by a bank to, any officer,
8    employee or agent of (i) the Commissioner of Banks and Real
9    Estate, (ii) after May 31, 1997, a state regulatory
10    authority authorized to examine a branch of a State bank
11    located in another state, (iii) the Comptroller of the
12    Currency, (iv) the Federal Reserve Board, or (v) the
13    Federal Deposit Insurance Corporation for use solely in the
14    exercise of his duties as an officer, employee, or agent.
15        (3) The publication of data furnished from financial
16    records relating to customers where the data cannot be
17    identified to any particular customer or account.
18        (4) The making of reports or returns required under
19    Chapter 61 of the Internal Revenue Code of 1986.
20        (5) Furnishing information concerning the dishonor of
21    any negotiable instrument permitted to be disclosed under
22    the Uniform Commercial Code.
23        (6) The exchange in the regular course of business of
24    (i) credit information between a bank and other banks or
25    financial institutions or commercial enterprises, directly
26    or through a consumer reporting agency or (ii) financial

 

 

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1    records or information derived from financial records
2    between a bank and other banks or financial institutions or
3    commercial enterprises for the purpose of conducting due
4    diligence pursuant to a purchase or sale involving the bank
5    or assets or liabilities of the bank.
6        (7) The furnishing of information to the appropriate
7    law enforcement authorities where the bank reasonably
8    believes it has been the victim of a crime.
9        (8) The furnishing of information under the Uniform
10    Disposition of Unclaimed Property Act.
11        (9) The furnishing of information under the Illinois
12    Income Tax Act and the Illinois Estate and
13    Generation-Skipping Transfer Tax Act.
14        (10) The furnishing of information under the federal
15    Currency and Foreign Transactions Reporting Act Title 31,
16    United States Code, Section 1051 et seq.
17        (11) The furnishing of information under any other
18    statute that by its terms or by regulations promulgated
19    thereunder requires the disclosure of financial records
20    other than by subpoena, summons, warrant, or court order.
21        (12) The furnishing of information about the existence
22    of an account of a person to a judgment creditor of that
23    person who has made a written request for that information.
24        (13) The exchange in the regular course of business of
25    information between commonly owned banks in connection
26    with a transaction authorized under paragraph (23) of

 

 

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1    Section 5 and conducted at an affiliate facility.
2        (14) The furnishing of information in accordance with
3    the federal Personal Responsibility and Work Opportunity
4    Reconciliation Act of 1996. Any bank governed by this Act
5    shall enter into an agreement for data exchanges with a
6    State agency provided the State agency pays to the bank a
7    reasonable fee not to exceed its actual cost incurred. A
8    bank providing information in accordance with this item
9    shall not be liable to any account holder or other person
10    for any disclosure of information to a State agency, for
11    encumbering or surrendering any assets held by the bank in
12    response to a lien or order to withhold and deliver issued
13    by a State agency, or for any other action taken pursuant
14    to this item, including individual or mechanical errors,
15    provided the action does not constitute gross negligence or
16    willful misconduct. A bank shall have no obligation to
17    hold, encumber, or surrender assets until it has been
18    served with a subpoena, summons, warrant, court or
19    administrative order, lien, or levy.
20        (15) The exchange in the regular course of business of
21    information between a bank and any commonly owned affiliate
22    of the bank, subject to the provisions of the Financial
23    Institutions Insurance Sales Law.
24        (16) The furnishing of information to law enforcement
25    authorities, the Illinois Department on Aging and its
26    regional administrative and provider agencies, the

 

 

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1    Department of Human Services Office of Inspector General,
2    or public guardians: (i) upon subpoena by the investigatory
3    entity or the guardian, or (ii) if there is suspicion by
4    the bank that a customer who is an elderly or disabled
5    person has been or may become the victim of financial
6    exploitation. For the purposes of this item (16), the term:
7    (i) "elderly person" means a person who is 60 or more years
8    of age, (ii) "disabled person" means a person who has or
9    reasonably appears to the bank to have a physical or mental
10    disability that impairs his or her ability to seek or
11    obtain protection from or prevent financial exploitation,
12    and (iii) "financial exploitation" means tortious or
13    illegal use of the assets or resources of an elderly or
14    disabled person, and includes, without limitation,
15    misappropriation of the elderly or disabled person's
16    assets or resources by undue influence, breach of fiduciary
17    relationship, intimidation, fraud, deception, extortion,
18    or the use of assets or resources in any manner contrary to
19    law. A bank or person furnishing information pursuant to
20    this item (16) shall be entitled to the same rights and
21    protections as a person furnishing information under the
22    Elder Abuse and Neglect Act, the Illinois Domestic Violence
23    Act of 1986, and the Abuse of Adults with Disabilities
24    Intervention Act.
25        (17) The disclosure of financial records or
26    information as necessary to effect, administer, or enforce

 

 

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1    a transaction requested or authorized by the customer, or
2    in connection with:
3            (A) servicing or processing a financial product or
4        service requested or authorized by the customer;
5            (B) maintaining or servicing a customer's account
6        with the bank; or
7            (C) a proposed or actual securitization or
8        secondary market sale (including sales of servicing
9        rights) related to a transaction of a customer.
10        Nothing in this item (17), however, authorizes the sale
11    of the financial records or information of a customer
12    without the consent of the customer.
13        (18) The disclosure of financial records or
14    information as necessary to protect against actual or
15    potential fraud, unauthorized transactions, claims, or
16    other liability.
17        (19)(a) The disclosure of financial records or
18    information related to a private label credit program
19    between a financial institution and a private label party
20    in connection with that private label credit program. Such
21    information is limited to outstanding balance, available
22    credit, payment and performance and account history,
23    product references, purchase information, and information
24    related to the identity of the customer.
25        (b)(l) For purposes of this paragraph (19) of
26    subsection (b) of Section 48.1, a "private label credit

 

 

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1    program" means a credit program involving a financial
2    institution and a private label party that is used by a
3    customer of the financial institution and the private label
4    party primarily for payment for goods or services sold,
5    manufactured, or distributed by a private label party.
6        (2) For purposes of this paragraph (19) of subsection
7    (b) of Section 48.l, a "private label party" means, with
8    respect to a private label credit program, any of the
9    following: a retailer, a merchant, a manufacturer, a trade
10    group, or any such person's affiliate, subsidiary, member,
11    agent, or service provider.
12    (c) Except as otherwise provided by this Act, a bank may
13not disclose to any person, except to the customer or his duly
14authorized agent, any financial records or financial
15information obtained from financial records relating to that
16customer of that bank unless:
17        (1) the customer has authorized disclosure to the
18    person;
19            (A) A bank shall utilize a form, statement, or
20        writing to obtain consent to disclose any financial
21        records or financial information obtained from
22        financial records relating to that customer to
23        non-affiliated third persons as required. The form,
24        statement, or writing shall meet all of the following
25        criteria:
26                (i) the form, statement, or writing is a

 

 

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1            separate document, not attached to any other
2            documents;
3                (ii) the form, statement, or writing is dated
4            and signed by the customer;
5                (iii) the form, statement, or writing clearly
6            and conspicuously discloses that by signing, the
7            customer is consenting to the disclosure to
8            non-affiliated third persons of financial records
9            or financial information obtained from financial
10            records relating to that customer;
11                (iv) the form, statement, or writing clearly
12            and conspicuously discloses (a) that the consent
13            will remain in effect until revoked or modified by
14            the customer; (b) that the customer may revoke the
15            consent at any time; and (c) the procedure for the
16            customer to revoke consent; and
17                (v) the form, statement, or writing clearly
18            and conspicuously informs the customer that (a)
19            the financial institution will maintain the
20            document or a true and correct copy; (b) the
21            customer is entitled to a copy of the document upon
22            request; and (c) the customer may want to make a
23            copy of the document for the customer's records.
24            (B) A bank shall not discriminate against or deny
25        an otherwise qualified customer a financial product or
26        financial service because the customer has not

 

 

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1        provided the consent under this subsection (c) to
2        authorize the bank to disclose or share financial
3        records or financial information obtained from
4        financial records relating to that customer with any
5        non-affiliated third person. Nothing in this
6        subsection (c) shall prohibit a bank from denying a
7        customer a financial product or service if (i) the
8        financial institution could not provide the product or
9        service to a customer without the consent to disclose
10        financial records or financial information obtained
11        from financial records relating to that customer
12        required by this subsection (c) and (ii) the customer
13        has failed to provide consent.
14            (C) A bank shall not be liable for failing to offer
15        products and services to a customer solely because (i)
16        that customer has failed to provide consent under this
17        subsection (c) and the bank could not offer the product
18        or service without consent to disclose the customer's
19        financial records or financial information obtained
20        from financial records relating to that customer
21        required by this subsection (c) and (ii) the customer
22        has failed to provide consent. Nothing in this Section
23        is intended to prohibit a financial institution from
24        offering incentives or discounts to elicit a specific
25        response to the notice.
26        (2) the financial records are disclosed in response to

 

 

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1    a lawful subpoena, summons, warrant, citation to discover
2    assets, or court order which meets the requirements of
3    subsection (d) of this Section; or
4        (3) the bank is attempting to collect an obligation
5    owed to the bank and the bank complies with the provisions
6    of Section 2I of the Consumer Fraud and Deceptive Business
7    Practices Act.
8    (d) A bank shall disclose financial records under paragraph
9(2) of subsection (c) of this Section under a lawful subpoena,
10summons, warrant, citation to discover assets, or court order
11only after the bank mails a copy of the subpoena, summons,
12warrant, citation to discover assets, or court order to the
13person establishing the relationship with the bank, if living,
14and, otherwise his personal representative, if known, at his
15last known address by first class mail, postage prepaid, unless
16the bank is specifically prohibited from notifying the person
17by order of court or by applicable State or federal law. A bank
18shall not mail a copy of a subpoena to any person pursuant to
19this subsection if the subpoena was issued by a grand jury
20under the Statewide Grand Jury Act.
21    (e) Any officer or employee of a bank who knowingly and
22willfully furnishes financial records in violation of this
23Section is guilty of a business offense and, upon conviction,
24shall be fined not more than $1,000.
25    (f) Any person who knowingly and willfully induces or
26attempts to induce any officer or employee of a bank to

 

 

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1disclose financial records in violation of this Section is
2guilty of a business offense and, upon conviction, shall be
3fined not more than $1,000.
4    (g) A bank shall be reimbursed for costs that are
5reasonably necessary and that have been directly incurred in
6searching for, reproducing, or transporting books, papers,
7records, or other data of a customer required or requested to
8be produced pursuant to a lawful subpoena, summons, warrant,
9citation to discover assets, or court order. The Commissioner
10shall determine the rates and conditions under which payment
11may be made.
12(Source: P.A. 94-495, eff. 8-8-05; 94-851, eff. 6-13-06;
1395-661, eff. 1-1-08.)