HB4898 95TH GENERAL ASSEMBLY

LRB095 18640 MJR 44727 b

95TH GENERAL ASSEMBLY
State of Illinois
2007 and 2008
HB4898

Introduced , by Rep. Michael K. Smith

SYNOPSIS AS INTRODUCED:

See Index

Amends the Office of Banks and Real Estate Act to change the powers of the Secretary of Financial and Professional Regulation to issue certain authorizations. Amends the Illinois Bank Examiners' Education Foundation Act to provide that the Foundation shall be governed by a Board of Trustees that consists of the members of the Board of Banks and Trust Companies. Amends the Illinois Banking Act. Deletes the definition of "State Banking Board". Changes provisions concerning the issuance of bank charters. Makes changes concerning notification of meetings of the board of directors. Provides that the Secretary (i) may prescribe the requirements to file applications electronically and (ii) may impose civil penalties in an amount not to exceed that amount a federal regulatory agency is authorized to charge under federal law (rather than $10,000) for violations of the Act. Creates a new Board of Banks and Trust Companies and specifies the appointment and terms of its members. Repeals provisions concerning the current Board of Banks and Trust Companies. Amends the Pawnbroker Regulation Act to make changes to the powers and duties of the Secretary. Amends the Corporate Fiduciary Act. Removes a provision requiring the Secretary to record certain information in the Office of the Secretary of State. Makes changes in provisions concerning certificates of authority. Makes changes in provisions concerning the orders issued by the Secretary. Makes changes in provisions concerning the statement of condition by a corporate fiduciary. Amends the Foreign Bank Representative Office Act to make a change to the definition of "foreign bank". Repeals the Financial Institution Activity Reporting Act. Changes some references in various Acts from (1) the Commissioner of Banks and Real Estate to the Secretary of Financial and Professional Regulation and (2) the State Banking Board to the Board of Banks and Trust Companies. Makes other changes. Effective January 1, 2009.

A BILL FOR

AN ACT concerning regulation.

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

Section 5. The Office of Banks and Real Estate Act is amended by changing Sections 5 and 6 as follows:

(20 ILCS 3205/5) (from Ch. 17, par. 455)

Sec. 5. Powers. In addition to all the other powers and duties provided by law, the Secretary Commissioner shall have the following powers:

(a) To exercise the rights, powers and duties formerly vested by law in the Director of Financial Institutions under the Illinois Banking Act.

(b) To exercise the rights, powers and duties formerly vested by law in the Department of Financial Institutions under "An act to provide for and regulate the administration of trusts by trust companies", approved June 15, 1887, as amended.

(c) To exercise the rights, powers and duties formerly vested by law in the Director of Financial Institutions under "An act authorizing foreign corporations, including banks and national banking associations domiciled in other states, to act in a fiduciary capacity in this state upon certain conditions herein set forth", approved July 13, 1953, as amended.

(d) Whenever the Secretary Commissioner is authorized or required by law to consider or to make findings regarding the character of incorporators, directors, management personnel, or other relevant individuals under the Illinois Banking Act, the Corporate Fiduciary Act, the Pawnbroker Regulation Act, or at other times as the Secretary Commissioner deems necessary for the purpose of carrying out the Secretary's Commissioner's statutory powers and responsibilities, the Secretary Commissioner shall consider criminal history record information, including nonconviction information, pursuant to the Criminal Identification Act. The Secretary Commissioner shall, in the form and manner required by the Department of State Police and the Federal Bureau of Investigation, cause to be conducted a criminal history record investigation to obtain information currently contained in the files of the Department of State Police or the Federal Bureau of Investigation, provided that the Secretary Commissioner need not cause additional criminal history record investigations to be conducted on individuals for whom the Secretary Commissioner, a federal bank regulatory agency, or any other government agency has caused such investigations to have been conducted previously unless such additional investigations are otherwise required by law or unless the Secretary Commissioner deems such additional investigations to be necessary for the purposes of carrying out the Secretary's Commissioner's statutory powers and responsibilities. The Department of State Police shall provide, on the Secretary's Commissioner's request, information concerning criminal charges and their disposition currently on file with respect to a relevant individual. Information obtained as a result of an investigation under this Section shall be used in determining eligibility to be an incorporator, director, management personnel, or other relevant individual in relation to a financial institution or other entity supervised by the Secretary Commissioner. Upon request and payment of fees in conformance with the requirements of Section 2605-400 of the Department of State Police Law (20 ILCS 2605/2605-400), the Department of State Police is authorized to furnish, pursuant to positive identification, such information contained in State files as is necessary to fulfill the request.

(e) When issuing charters, permits, licenses, or other authorizations, the Secretary Commissioner may impose such terms and conditions on the issuance as he deems necessary or appropriate. Failure to abide by those terms and conditions may result in the revocation of the issuance, the imposition of corrective orders, or the imposition of civil money penalties.

(f) If the Secretary Commissioner has reasonable cause to believe that any entity that has not submitted an application for authorization or licensure is conducting any activity that would otherwise require authorization or licensure by the Secretary Commissioner, the Secretary Commissioner shall have the power to subpoena witnesses, to compel their attendance, and to require the production of any relevant books, papers, accounts, and documents, and to conduct an examination of the entity in order to determine whether the entity is subject to authorization or licensure by the Secretary or the Department of Financial and Professional Regulation Commissioner or the Office of Banks and Real Estate.

(g) The Secretary Commissioner may, through the Attorney General, request the circuit court of any county to issue an injunction to restrain any person from violating the provisions of any Act administered by the Secretary Commissioner.

(h) Whenever the Secretary Commissioner is authorized to take any action or required by law to consider or make findings, the Secretary Commissioner may delegate or appoint, in writing, an officer or employee of the Department of Financial and Professional Regulation Office of Banks and Real Estate to take that action or make that finding.

(i) To prescribe the form, filing, and processing requirements for applications submitted to the Department including, but not limited to, the requirement to file applications electronically.

(Source: P.A. 91-239, eff. 1-1-00; 92-483, eff. 8-23-01.)

(20 ILCS 3205/6) (from Ch. 17, par. 456)

Sec. 6. Duties. The Secretary Commissioner shall direct and supervise all the administrative and technical activities of the Office and shall:

(a) Apply and carry out this Act and the law and all rules adopted in pursuance thereof.

(b) Appoint, subject to the provisions of the Personnel Code, such employees, experts, and special assistants as may be necessary to carry out effectively the provisions of this Act and, if the rate of compensation is not otherwise fixed by law, fix their compensation; but neither the Secretary Commissioner nor any deputy commissioner shall be subject to the Personnel Code.

(c) (Blank). Serve as Chairman of the State Banking Board of Illinois.

(d) Serve as Chairman of the Board of Trustees of the Illinois Bank Examiners' Education Foundation.

(e) Issue guidelines in the form of rules or regulations which will prohibit discrimination by any State chartered bank against any individual, corporation, partnership, association or other entity because it appears in a so-called blacklist issued by any domestic or foreign corporate or governmental entity.

(f) Make an annual report to the Governor regarding the work of the Office as the Secretary Commissioner may consider desirable or as the Governor may request.

(g) Perform such other acts as may be requested by the State Banking Board of Illinois pursuant to its lawful powers and perform any other lawful act that the Secretary Commissioner considers to be necessary or desirable to carry out the purposes and provisions of this Act.

(h) Adopt, in accordance with the Illinois Administrative Procedure Act, reasonable rules that the Secretary Commissioner deems necessary for the proper administration and enforcement of any Act the administration of which is vested in the Secretary Commissioner or the Department of Financial and Professional Regulation Office of Banks and Real Estate.

(i) Work in cooperation with the Director of Aging to encourage all financial institutions regulated by the Department Office to participate fully in the Department on Aging's financial exploitation of the elderly intervention program.

(Source: P.A. 92-483, eff. 8-23-01; 93-786, eff. 7-21-04.)

Section 10. The Illinois Bank Examiners' Education Foundation Act is amended by changing Section 5 as follows:

(20 ILCS 3210/5) (from Ch. 17, par. 405)

Sec. 5. The Foundation shall be governed by a Board of Trustees. The Board shall consist of the members of the Board of Banks and Trust Companies following trustees: the Commissioner, who shall be its chairman; one Class A member and three Class B members from the State Banking Board of Illinois, appointed by the Governor.

The terms of the trustees of the Foundation who are members of the State Banking Board of Illinois are to be coextensive with their terms on the Board of Banks and Trust Companies State Banking Board of Illinois. An appointment to fill a vacancy shall be for the unexpired term of the trustee whose term is being filled. Trustees shall receive no compensation for service on the Board, but shall be reimbursed for all reasonable and necessary expenditures incurred in the performance of their official duties.

(Source: P.A. 84-1127.)

Section 15. The Illinois Banking Act is amended by changing Sections 2, 13, 16, 48, and 82 and by adding Sections 78.5 and 79.5 as follows:

(205 ILCS 5/2) (from Ch. 17, par. 302)

Sec. 2. General definitions. In this Act, unless the context otherwise requires, the following words and phrases shall have the following meanings:

"Accommodation party" shall have the meaning ascribed to that term in Section 3-419 of the Uniform Commercial Code.

"Action" in the sense of a judicial proceeding includes recoupments, counterclaims, set-off, and any other proceeding in which rights are determined.

"Affiliate facility" of a bank means a main banking premises or branch of another commonly owned bank. The main banking premises or any branch of a bank may be an "affiliate facility" with respect to one or more other commonly owned banks.

"Appropriate federal banking agency" means the Federal Deposit Insurance Corporation, the Federal Reserve Bank of Chicago, or the Federal Reserve Bank of St. Louis, as determined by federal law.

"Bank" means any person doing a banking business whether subject to the laws of this or any other jurisdiction.

A "banking house", "branch", "branch bank" or "branch office" shall mean any place of business of a bank at which deposits are received, checks paid, or loans made, but shall not include any place at which only records thereof are made, posted, or kept. A place of business at which deposits are received, checks paid, or loans made shall not be deemed to be a branch, branch bank, or branch office if the place of business is adjacent to and connected with the main banking premises, or if it is separated from the main banking premises by not more than an alley; provided always that (i) if the place of business is separated by an alley from the main banking premises there is a connection between the two by public or private way or by subterranean or overhead passage, and (ii) if the place of business is in a building not wholly occupied by the bank, the place of business shall not be within any office or room in which any other business or service of any kind or nature other than the business of the bank is conducted or carried on. A place of business at which deposits are received, checks paid, or loans made shall not be deemed to be a branch, branch bank, or branch office (i) of any bank if the place is a terminal established and maintained in accordance with paragraph (17) of Section 5 of this Act, or (ii) of a commonly owned bank by virtue of transactions conducted at that place on behalf of the other commonly owned bank under paragraph (23) of Section 5 of this Act if the place is an affiliate facility with respect to the other bank.

"Board" means the Board of Banks and Trust Companies.

"Branch of an out-of-state bank" means a branch established or maintained in Illinois by an out-of-state bank as a result of a merger between an Illinois bank and the out-of-state bank that occurs on or after May 31, 1997, or any branch established by the out-of-state bank following the merger.

"Bylaws" means the bylaws of a bank that are adopted by the bank's board of directors or shareholders for the regulation and management of the bank's affairs. If the bank operates as a limited liability company, however, "bylaws" means the operating agreement of the bank.

"Call report fee" means the fee to be paid to the Secretary Commissioner by each State bank pursuant to paragraph (a) of subsection (3) of Section 48 of this Act.

"Capital" includes the aggregate of outstanding capital stock and preferred stock.

"Cash flow reserve account" means the account within the books and records of the Secretary of Financial and Professional Regulation Commissioner of Banks and Real Estate used to record funds designated to maintain a reasonable Bank and Trust Company Fund operating balance to meet agency obligations on a timely basis.

"Charter" includes the original charter and all amendments thereto and articles of merger or consolidation.

"Commissioner" means the Commissioner of Banks and Real Estate or a person authorized by the Commissioner, the Office of Banks and Real Estate Act, or this Act to act in the Commissioner's stead.

"Commonly owned banks" means 2 or more banks that each qualify as a bank subsidiary of the same bank holding company pursuant to Section 18 of the Federal Deposit Insurance Act; "commonly owned bank" refers to one of a group of commonly owned banks but only with respect to one or more of the other banks in the same group.

"Community" means a city, village, or incorporated town and also includes the area served by the banking offices of a bank, but need not be limited or expanded to conform to the geographic boundaries of units of local government.

"Company" means a corporation, limited liability company, partnership, business trust, association, or similar organization and, unless specifically excluded, includes a "State bank" and a "bank".

"Consolidating bank" means a party to a consolidation.

"Consolidation" takes place when 2 or more banks, or a trust company and a bank, are extinguished and by the same process a new bank is created, taking over the assets and assuming the liabilities of the banks or trust company passing out of existence.

"Continuing bank" means a merging bank, the charter of which becomes the charter of the resulting bank.

"Converting bank" means a State bank converting to become a national bank, or a national bank converting to become a State bank.

"Converting trust company" means a trust company converting to become a State bank.

"Court" means a court of competent jurisdiction.

"Director" means a member of the board of directors of a bank. In the case of a manager-managed limited liability company, however, "director" means a manager of the bank and, in the case of a member-managed limited liability company, "director" means a member of the bank. The term "director" does not include an advisory director, honorary director, director emeritus, or similar person, unless the person is otherwise performing functions similar to those of a member of the board of directors.

"Director of the Division" means the Director of the Division of Banks of the Department of Financial and Professional Regulation.

"Eligible depository institution" means an insured savings association that is in default, an insured savings association that is in danger of default, a State or national bank that is in default or a State or national bank that is in danger of default, as those terms are defined in this Section, or a new bank as that term defined in Section 11(m) of the Federal Deposit Insurance Act or a bridge bank as that term is defined in Section 11(n) of the Federal Deposit Insurance Act or a new federal savings association authorized under Section 11(d)(2)(f) of the Federal Deposit Insurance Act.

"Fiduciary" means trustee, agent, executor, administrator, committee, guardian for a minor or for a person under legal disability, receiver, trustee in bankruptcy, assignee for creditors, or any holder of similar position of trust.

"Financial institution" means a bank, savings and loan association, credit union, or any licensee under the Consumer Installment Loan Act or the Sales Finance Agency Act and, for purposes of Section 48.3, any proprietary network, funds transfer corporation, or other entity providing electronic funds transfer services, or any corporate fiduciary, its subsidiaries, affiliates, parent company, or contractual service provider that is examined by the Secretary Commissioner.

"Foundation" means the Illinois Bank Examiners' Education Foundation.

"General obligation" means a bond, note, debenture, security, or other instrument evidencing an obligation of the government entity that is the issuer that is supported by the full available resources of the issuer, the principal and interest of which is payable in whole or in part by taxation.

"Guarantee" means an undertaking or promise to answer for payment of another's debt or performance of another's duty, liability, or obligation whether "payment guaranteed" or "collection guaranteed".

"In danger of default" means a State or national bank, a federally chartered insured savings association or an Illinois state chartered insured savings association with respect to which the Secretary Commissioner or the appropriate federal banking agency has advised the Federal Deposit Insurance Corporation that:

(1) in the opinion of the Secretary Commissioner or the appropriate federal banking agency,

(A) the State or national bank or insured savings association is not likely to be able to meet the demands of the State or national bank's or savings association's obligations in the normal course of business; and

(B) there is no reasonable prospect that the State or national bank or insured savings association will be able to meet those demands or pay those obligations without federal assistance; or

(2) in the opinion of the Secretary Commissioner or the appropriate federal banking agency,

(A) the State or national bank or insured savings association has incurred or is likely to incur losses that will deplete all or substantially all of its capital; and

(B) there is no reasonable prospect that the capital of the State or national bank or insured savings association will be replenished without federal assistance.

"In default" means, with respect to a State or national bank or an insured savings association, any adjudication or other official determination by any court of competent jurisdiction, the Secretary Commissioner, the appropriate federal banking agency, or other public authority pursuant to which a conservator, receiver, or other legal custodian is appointed for a State or national bank or an insured savings association.

"Insured savings association" means any federal savings association chartered under Section 5 of the federal Home Owners' Loan Act and any State savings association chartered under the Illinois Savings and Loan Act of 1985 or a predecessor Illinois statute, the deposits of which are insured by the Federal Deposit Insurance Corporation. The term also includes a savings bank organized or operating under the Savings Bank Act.

"Insured savings association in recovery" means an insured savings association that is not an eligible depository institution and that does not meet the minimum capital requirements applicable with respect to the insured savings association.

"Issuer" means for purposes of Section 33 every person who shall have issued or proposed to issue any security; except that (1) with respect to certificates of deposit, voting trust certificates, collateral-trust certificates, and certificates of interest or shares in an unincorporated investment trust not having a board of directors (or persons performing similar functions), "issuer" means the person or persons performing the acts and assuming the duties of depositor or manager pursuant to the provisions of the trust, agreement, or instrument under which the securities are issued; (2) with respect to trusts other than those specified in clause (1) above, where the trustee is a corporation authorized to accept and execute trusts, "issuer" means the entrusters, depositors, or creators of the trust and any manager or committee charged with the general direction of the affairs of the trust pursuant to the provisions of the agreement or instrument creating the trust; and (3) with respect to equipment trust certificates or like securities, "issuer" means the person to whom the equipment or property is or is to be leased or conditionally sold.

"Letter of credit" and "customer" shall have the meanings ascribed to those terms in Section 5-102 of the Uniform Commercial Code.

"Main banking premises" means the location that is designated in a bank's charter as its main office.

"Maker or obligor" means for purposes of Section 33 the issuer of a security, the promisor in a debenture or other debt security, or the mortgagor or grantor of a trust deed or similar conveyance of a security interest in real or personal property.

"Merged bank" means a merging bank that is not the continuing, resulting, or surviving bank in a consolidation or merger.

"Merger" includes consolidation.

"Merging bank" means a party to a bank merger.

"Merging trust company" means a trust company party to a merger with a State bank.

"Mid-tier bank holding company" means a corporation that (a) owns 100% of the issued and outstanding shares of each class of stock of a State bank, (b) has no other subsidiaries, and (c) 100% of the issued and outstanding shares of the corporation are owned by a parent bank holding company.

"Municipality" means any municipality, political subdivision, school district, taxing district, or agency.

"National bank" means a national banking association located in this State and after May 31, 1997, means a national banking association without regard to its location.

"Out-of-state bank" means a bank chartered under the laws of a state other than Illinois, a territory of the United States, or the District of Columbia.

"Parent bank holding company" means a corporation that is a bank holding company as that term is defined in the Illinois Bank Holding Company Act of 1957 and owns 100% of the issued and outstanding shares of a mid-tier bank holding company.

"Person" means an individual, corporation, limited liability company, partnership, joint venture, trust, estate, or unincorporated association.

"Public agency" means the State of Illinois, the various counties, townships, cities, towns, villages, school districts, educational service regions, special road districts, public water supply districts, fire protection districts, drainage districts, levee districts, sewer districts, housing authorities, the Illinois Bank Examiners' Education Foundation, the Chicago Park District, and all other political corporations or subdivisions of the State of Illinois, whether now or hereafter created, whether herein specifically mentioned or not, and shall also include any other state or any political corporation or subdivision of another state.

"Public funds" or "public money" means current operating funds, special funds, interest and sinking funds, and funds of any kind or character belonging to, in the custody of, or subject to the control or regulation of the United States or a public agency. "Public funds" or "public money" shall include funds held by any of the officers, agents, or employees of the United States or of a public agency in the course of their official duties and, with respect to public money of the United States, shall include Postal Savings funds.

"Published" means, unless the context requires otherwise, the publishing of the notice or instrument referred to in some newspaper of general circulation in the community in which the bank is located at least once each week for 3 successive weeks. Publishing shall be accomplished by, and at the expense of, the bank required to publish. Where publishing is required, the bank shall submit to the Secretary Commissioner that evidence of the publication as the Secretary Commissioner shall deem appropriate.

"Qualified financial contract" means any security contract, commodity contract, forward contract, including spot and forward foreign exchange contracts, repurchase agreement, swap agreement, and any similar agreement, any option to enter into any such agreement, including any combination of the foregoing, and any master agreement for such agreements. A master agreement, together with all supplements thereto, shall be treated as one qualified financial contract. The contract, option, agreement, or combination of contracts, options, or agreements shall be reflected upon the books, accounts, or records of the bank, or a party to the contract shall provide documentary evidence of such agreement.

"Recorded" means the filing or recording of the notice or instrument referred to in the office of the Recorder of the county wherein the bank is located.

"Resulting bank" means the bank resulting from a merger or conversion.

"Secretary" means the Secretary of Financial and Professional Regulation or a person authorized by the Secretary, the Office of Banks and Real Estate Act, or this Act to act in the Secretary's stead.

"Securities" means stocks, bonds, debentures, notes, or other similar obligations.

"Stand-by letter of credit" means a letter of credit under which drafts are payable upon the condition the customer has defaulted in performance of a duty, liability, or obligation.

"State bank" means any banking corporation that has a banking charter issued by the Secretary Commissioner under this Act.

"State Banking Board" means the State Banking Board of Illinois.

"Subsidiary" with respect to a specified company means a company that is controlled by the specified company. For purposes of paragraphs (8) and (12) of Section 5 of this Act, "control" means the exercise of operational or managerial control of a corporation by the bank, either alone or together with other affiliates of the bank.

"Surplus" means the aggregate of (i) amounts paid in excess of the par value of capital stock and preferred stock; (ii) amounts contributed other than for capital stock and preferred stock and allocated to the surplus account; and (iii) amounts transferred from undivided profits.

"Tier 1 Capital" and "Tier 2 Capital" have the meanings assigned to those terms in regulations promulgated for the appropriate federal banking agency of a state bank, as those regulations are now or hereafter amended.

"Trust company" means a limited liability company or corporation incorporated in this State for the purpose of accepting and executing trusts.

"Undivided profits" means undistributed earnings less discretionary transfers to surplus.

"Unimpaired capital and unimpaired surplus", for the purposes of paragraph (21) of Section 5 and Sections 32, 33, 34, 35.1, 35.2, and 47 of this Act means the sum of the state bank's Tier 1 Capital and Tier 2 Capital plus such other shareholder equity as may be included by regulation of the Secretary Commissioner. Unimpaired capital and unimpaired surplus shall be calculated on the basis of the date of the last quarterly call report filed with the Secretary Commissioner preceding the date of the transaction for which the calculation is made, provided that: (i) when a material event occurs after the date of the last quarterly call report filed with the Secretary Commissioner that reduces or increases the bank's unimpaired capital and unimpaired surplus by 10% or more, then the unimpaired capital and unimpaired surplus shall be calculated from the date of the material event for a transaction conducted after the date of the material event; and (ii) if the Secretary Commissioner determines for safety and soundness reasons that a state bank should calculate unimpaired capital and unimpaired surplus more frequently than provided by this paragraph, the Secretary Commissioner may by written notice direct the bank to calculate unimpaired capital and unimpaired surplus at a more frequent interval. In the case of a state bank newly chartered under Section 13 or a state bank resulting from a merger, consolidation, or conversion under Sections 21 through 26 for which no preceding quarterly call report has been filed with the Secretary Commissioner, unimpaired capital and unimpaired surplus shall be calculated for the first calendar quarter on the basis of the effective date of the charter, merger, consolidation, or conversion.

(Source: P.A. 92-483, eff. 8-23-01; 93-561, eff. 1-1-04.)

(205 ILCS 5/13) (from Ch. 17, par. 320)

Sec. 13. Issuance of charter.

(a) When the directors have organized as provided in Section 12 of this Act, and the capital stock and the preferred stock, if any, together with a surplus of not less than 50% of the capital, has been all fully paid in and a record of the same filed with the Secretary Commissioner, the Secretary Commissioner or some competent person of the Secretary's Commissioner's appointment shall make a thorough examination into the affairs of the proposed bank, and if satisfied (i) that all the requirements of this Act have been complied with, (ii) that no intervening circumstance has occurred to change the Secretary's Commissioner's findings made pursuant to Section 10 of this Act, and (iii) that the prior involvement by any stockholder who will own a sufficient amount of stock to have control, as defined in Section 18 of this Act, of the proposed bank with any other financial institution, whether as stockholder, director, officer, or customer, was conducted in a safe and sound manner, upon payment into the Secretary's Commissioner's office of the reasonable expenses of the examination, as determined by the Secretary Commissioner, the Secretary Commissioner shall issue a charter authorizing the bank to commence business as authorized in this Act. All charters issued by the Secretary Commissioner or any predecessor agency which chartered State banks, including any charter outstanding as of September 1, 1989, shall be perpetual. For the 2 years after the Secretary Commissioner has issued a charter to a bank, the bank shall request and obtain from the Secretary Commissioner prior written approval before it may change senior management personnel or directors.

The original charter, duly certified by the Secretary Commissioner, or a certified copy shall be evidence in all courts and places of the existence and authority of the bank to do business. Upon the issuance of the charter by the Secretary Commissioner, the bank shall be deemed fully organized and may proceed to do business. The Secretary Commissioner may, in the Secretary's Commissioner's discretion, withhold the issuing of the charter when the Secretary Commissioner has reason to believe that the bank is organized for any purpose other than that contemplated by this Act. The Secretary Commissioner shall revoke the charter and order liquidation in the event that the bank does not commence a general banking business within one year from the date of the issuance of the charter, unless a request has been submitted, in writing, to the Secretary Commissioner for an extension and the request has been approved. After commencing a general banking business, a bank may change its name by filing written notice with the Secretary Commissioner at least 30 days prior to the effective date of such change. A bank chartered under this Act may change its main banking premises by filing written application with the Secretary Commissioner, on forms prescribed by the Secretary Commissioner, provided (i) the change shall not be a removal to a new location without complying with the capital requirements of Section 7 and of subsection (1) of Section 10 of this Act; (ii) the Secretary Commissioner approves the relocation or change; and (iii) the bank complies with any applicable federal law or regulation. The application shall be deemed to be approved if the Secretary Commissioner has not acted on the application within 30 days after receipt of the application, unless within the 30-day time frame the Secretary Commissioner informs the bank that an extension of time is necessary prior to the Secretary's Commissioner's action on the application.

(b) (1) The Secretary Commissioner may also issue a charter to a bank that is owned exclusively by other depository institutions or depository institution holding companies and is organized to engage exclusively in providing services to or for other depository institutions, their holding companies, and the officers, directors, and employees of such institutions and companies, and in providing correspondent banking services at the request of other depository institutions or their holding companies (also referred to as a "bankers' bank").

(2) A bank chartered pursuant to paragraph (1) shall, except as otherwise specifically determined or limited by the Secretary Commissioner in an order or pursuant to a rule, be vested with the same rights and privileges and subject to the same duties, restrictions, penalties, and liabilities now or hereafter imposed under this Act.

(c) A bank chartered under this Act shall after November 1, 1985, and an out-of-state bank that merges with a State bank and establishes or maintains a branch in this State after May 31, 1997, shall obtain from and, at all times while it accepts or retains deposits, maintain with the Federal Deposit Insurance Corporation, or such other instrumentality of or corporation chartered by the United States, deposit insurance as authorized under federal law.

(d) (i) A bank that has a banking charter issued by the Secretary Commissioner under this Act may, pursuant to a written purchase and assumption agreement, transfer substantially all of its assets to another State bank or national bank in consideration, in whole or in part, for the transferee banks' assumption of any part or all of its liabilities. Such a transfer shall in no way be deemed to impair the charter of the transferor bank or cause the transferor bank to forfeit any of its rights, powers, interests, franchises, or privileges as a State bank, nor shall any voluntary reduction in the transferor bank's activities resulting from the transfer have any such effect; provided, however, that a State bank that transfers substantially all of its assets pursuant to this subsection (d) and following the transfer does not accept deposits and make loans, shall not have any rights, powers, interests, franchises, or privileges under subsection (15) of Section 5 of this Act until the bank has resumed accepting deposits and making loans.

(ii) The fact that a State bank does not resume accepting deposits and making loans for a period of 24 months commencing on September 11, 1989 or on a date of the transfer of substantially all of a State bank's assets, whichever is later, or such longer period as the Secretary Commissioner may allow in writing, may be the basis for a finding by the Secretary Commissioner under Section 51 of this Act that the bank is unable to continue operations.

(iii) The authority provided by subdivision (i) of this subsection (d) shall terminate on May 31, 1997, and no bank that has transferred substantially all of its assets pursuant to this subsection (d) shall continue in existence after May 31, 1997.

(Source: P.A. 91-322, eff. 1-1-00; 92-483, eff. 8-23-01.)

(205 ILCS 5/16) (from Ch. 17, par. 323)

Sec. 16. Directors. The business and affairs of a State bank shall be managed by its board of directors that shall exercise its powers as follows:

(1) Directors shall be elected as provided in this Act. Any omission to elect a director or directors shall not impair any of the rights and privileges of the bank or of any person in any way interested. The existing directors shall hold office until their successors are elected and qualify.

(2) (a) Notwithstanding the provisions of any charter heretofore or hereafter issued, the number of directors, not fewer than 5 nor more than 25, may be fixed from time to time by the stockholders at any meeting of the stockholders called for the purpose of electing directors or changing the number thereof by the affirmative vote of at least two-thirds of the outstanding stock entitled to vote at the meeting, and the number so fixed shall be the board regardless of vacancies until the number of directors is thereafter changed by similar action.

(b) Notwithstanding the minimum number of directors specified in paragraph (a) of this subsection, a State bank that has been in existence for 10 years or more and has less than $20,000,000 in assets, as of the December 31 immediately preceding the annual meeting of shareholders at which directors are elected, may, subject to the approval of the Secretary Commissioner, have a minimum of 3 directors; provided that if a State bank has fewer than 5 directors, at least one director shall not be an officer or employee of the bank. The Secretary Commissioner shall annually review the appropriateness of the grant of authority to have a reduced minimum number of directors pursuant to this paragraph (b).

(3) Except as otherwise provided in this paragraph (3), directors shall hold office until the next annual meeting of the stockholders succeeding their election or until their successors are elected and qualify. If the board of directors consists of 6 or more members, in lieu of electing the membership of the whole board of directors annually, the charter or by-laws of a State bank may provide that the directors shall be divided into either 2 or 3 classes, each class to be as nearly equal in number as is possible. The term of office of directors of the first class shall expire at the first annual meeting of the stockholders after their election, that of the second class shall expire at the second annual meeting after their election, and that of the third class, if any, shall expire at the third annual meeting after their election. At each annual meeting after classification, the number of directors equal to the number of the class whose terms expire at the time of the meeting shall be elected to hold office until the second succeeding annual meeting, if there be 2 classes, or until the third succeeding annual meeting, if there be 3 classes. Vacancies may be filled by stockholders at a special meeting called for the purpose.

If authorized by the bank's by-laws or an amendment thereto, the directors of a State bank may properly fill a vacancy or vacancies arising between shareholders' meetings, but at no time may the number of directors selected to fill a vacancy in this manner during any interim period between shareholders' meetings exceed 33 1/3% of the total membership of the board of directors.

(4) The board of directors shall hold regular meetings at least once each month, provided that, upon prior written approval by the Secretary Commissioner, the board of directors may hold regular meetings less frequently than once each month but at least once each calendar quarter. A special meeting of the board of directors may be held as provided by the by-laws. A special meeting of the board of directors may also be held upon call by the Secretary Commissioner or a bank examiner appointed under the provisions of this Act upon not less than 12 hours notice of the meeting by personal service of the notice, or by mailing the notice to each of the directors at his residence as shown by the books of the bank, or by any other method of delivery, provided such method provides proof of service and receipt. A majority of the board of directors shall constitute a quorum for the transaction of business unless a greater number is required by the charter or the by-laws. The act of the majority of the directors present at a meeting at which a quorum is present shall be the act of the board of directors unless the act of a greater number is required by the charter or by the by-laws.

(5) A member of the board of directors shall be elected president. The board of directors may appoint other officers, as the by-laws may provide, and fix their salaries to carry on the business of the bank. The board of directors may make and amend by-laws (not inconsistent with this Act) for the government of the bank and may, by the affirmative vote of a majority of the board of directors, establish reasonable compensation of all directors for services to the corporation as directors, officers, or otherwise. An officer, whether elected or appointed by the board of directors or appointed pursuant to the by-laws, may be removed by the board of directors at any time.

(6) The board of directors shall cause suitable books and records of all the bank's transactions to be kept.

(7) (a) In discharging the duties of their respective positions, the board of directors, committees of the board, and individual directors may, in considering the best long term and short term interests of the bank, consider the effects of any action (including, without limitation, action that may involve or relate to a merger or potential merger or to a change or potential change in control of the bank) upon employees, depositors, suppliers, and customers of the corporation or its subsidiaries, communities in which the main banking premises, branches, offices, or other establishments of the bank or its subsidiaries are located, and all pertinent factors.

(b) In discharging the duties of their respective positions, the board of directors, committees of the board, and individual directors shall be entitled to rely on advice, information, opinions, reports or statements, including financial statements and financial data, prepared or presented by: (i) one or more officers or employees of the bank whom the director believes to be reliable and competent in the matter presented; (ii) one or more counsels, accountants, or other consultants as to matters that the director believes to be within that person's professional or expert competence; or (iii) a committee of the board upon which the director does not serve, as to matters within that committee's designated authority; provided that the director's reliance under this paragraph (b) is placed in good faith, after reasonable inquiry if the need for such inquiry is apparent under the circumstances and without knowledge that would cause such reliance to be unreasonable.

(Source: P.A. 91-452, eff. 1-1-00; 92-476, eff. 8-23-01.)

(205 ILCS 5/48) (from Ch. 17, par. 359)

Sec. 48. Secretary's Commissioner's powers; duties. The Secretary Commissioner shall have the powers and authority, and is charged with the duties and responsibilities designated in this Act, and a State bank shall not be subject to any other visitorial power other than as authorized by this Act, except those vested in the courts, or upon prior consultation with the Secretary Commissioner, a foreign bank regulator with an appropriate supervisory interest in the parent or affiliate of a state bank. In the performance of the Secretary's Commissioner's duties:

(1) The Secretary Commissioner shall call for statements from all State banks as provided in Section 47 at least one time during each calendar quarter.

(2) (a) The Secretary Commissioner, as often as the Secretary Commissioner shall deem necessary or proper, and no less frequently than 18 months following the preceding examination, shall appoint a suitable person or persons to make an examination of the affairs of every State bank, except that for every eligible State bank, as defined by regulation, the Secretary Commissioner in lieu of the examination may accept on an alternating basis the examination made by the eligible State bank's appropriate federal banking agency pursuant to Section 111 of the Federal Deposit Insurance Corporation Improvement Act of 1991, provided the appropriate federal banking agency has made such an examination. A person so appointed shall not be a stockholder or officer or employee of any bank which that person may be directed to examine, and shall have powers to make a thorough examination into all the affairs of the bank and in so doing to examine any of the officers or agents or employees thereof on oath and shall make a full and detailed report of the condition of the bank to the Secretary Commissioner. In making the examination the examiners shall include an examination of the affairs of all the affiliates of the bank, as defined in subsection (b) of Section 35.2 of this Act, or subsidiaries of the bank as shall be necessary to disclose fully the conditions of the subsidiaries or affiliates, the relations between the bank and the subsidiaries or affiliates and the effect of those relations upon the affairs of the bank, and in connection therewith shall have power to examine any of the officers, directors, agents, or employees of the subsidiaries or affiliates on oath. After May 31, 1997, the Secretary Commissioner may enter into cooperative agreements with state regulatory authorities of other states to provide for examination of State bank branches in those states, and the Secretary Commissioner may accept reports of examinations of State bank branches from those state regulatory authorities. These cooperative agreements may set forth the manner in which the other state regulatory authorities may be compensated for examinations prepared for and submitted to the Secretary Commissioner.

(b) After May 31, 1997, the Secretary Commissioner is authorized to examine, as often as the Secretary Commissioner shall deem necessary or proper, branches of out-of-state banks. The Secretary Commissioner may establish and may assess fees to be paid to the Secretary Commissioner for examinations under this subsection (b). The fees shall be borne by the out-of-state bank, unless the fees are borne by the state regulatory authority that chartered the out-of-state bank, as determined by a cooperative agreement between the Secretary Commissioner and the state regulatory authority that chartered the out-of-state bank.

(2.5) Whenever any State bank, any subsidiary or affiliate of a State bank, or after May 31, 1997, any branch of an out-of-state bank causes to be performed, by contract or otherwise, any bank services for itself, whether on or off its premises:

(a) that performance shall be subject to examination by the Secretary Commissioner to the same extent as if services were being performed by the bank or, after May 31, 1997, branch of the out-of-state bank itself on its own premises; and

(b) the bank or, after May 31, 1997, branch of the out-of-state bank shall notify the Secretary Commissioner of the existence of a service relationship. The notification shall be submitted with the first statement of condition (as required by Section 47 of this Act) due after the making of the service contract or the performance of the service, whichever occurs first. The Secretary Commissioner shall be notified of each subsequent contract in the same manner.

For purposes of this subsection (2.5), the term "bank services" means services such as sorting and posting of checks and deposits, computation and posting of interest and other credits and charges, preparation and mailing of checks, statements, notices, and similar items, or any other clerical, bookkeeping, accounting, statistical, or similar functions performed for a State bank, including but not limited to electronic data processing related to those bank services.

(3) The expense of administering this Act, including the expense of the examinations of State banks as provided in this Act, shall to the extent of the amounts resulting from the fees provided for in paragraphs (a), (a-2), and (b) of this subsection (3) be assessed against and borne by the State banks:

(a) Each bank shall pay to the Secretary Commissioner a Call Report Fee which shall be paid in quarterly installments equal to one-fourth of the sum of the annual fixed fee of $800, plus a variable fee based on the assets shown on the quarterly statement of condition delivered to the Secretary Commissioner in accordance with Section 47 for the preceding quarter according to the following schedule: 16˘ per $1,000 of the first $5,000,000 of total assets, 15˘ per $1,000 of the next $20,000,000 of total assets, 13˘ per $1,000 of the next $75,000,000 of total assets, 9˘ per $1,000 of the next $400,000,000 of total assets, 7˘ per $1,000 of the next $500,000,000 of total assets, and 5˘ per $1,000 of all assets in excess of $1,000,000,000, of the State bank. The Call Report Fee shall be calculated by the Secretary Commissioner and billed to the banks for remittance at the time of the quarterly statements of condition provided for in Section 47. The Secretary Commissioner may require payment of the fees provided in this Section by an electronic transfer of funds or an automatic debit of an account of each of the State banks. In case more than one examination of any bank is deemed by the Secretary Commissioner to be necessary in any examination frequency cycle specified in subsection 2(a) of this Section, and is performed at his direction, the Secretary Commissioner may assess a reasonable additional fee to recover the cost of the additional examination; provided, however, that an examination conducted at the request of the State Treasurer pursuant to the Uniform Disposition of Unclaimed Property Act shall not be deemed to be an additional examination under this Section. In lieu of the method and amounts set forth in this paragraph (a) for the calculation of the Call Report Fee, the Secretary Commissioner may specify by rule that the Call Report Fees provided by this Section may be assessed semiannually or some other period and may provide in the rule the formula to be used for calculating and assessing the periodic Call Report Fees to be paid by State banks.

(a-1) If in the opinion of the Secretary Commissioner an emergency exists or appears likely, the Secretary Commissioner may assign an examiner or examiners to monitor the affairs of a State bank with whatever frequency he deems appropriate, including but not limited to a daily basis. The reasonable and necessary expenses of the Secretary Commissioner during the period of the monitoring shall be borne by the subject bank. The Secretary Commissioner shall furnish the State bank a statement of time and expenses if requested to do so within 30 days of the conclusion of the monitoring period.

(a-2) On and after January 1, 1990, the reasonable and necessary expenses of the Secretary Commissioner during examination of the performance of electronic data processing services under subsection (2.5) shall be borne by the banks for which the services are provided. An amount, based upon a fee structure prescribed by the Secretary Commissioner, shall be paid by the banks or, after May 31, 1997, branches of out-of-state banks receiving the electronic data processing services along with the Call Report Fee assessed under paragraph (a) of this subsection (3).

(a-3) After May 31, 1997, the reasonable and necessary expenses of the Secretary Commissioner during examination of the performance of electronic data processing services under subsection (2.5) at or on behalf of branches of out-of-state banks shall be borne by the out-of-state banks, unless those expenses are borne by the state regulatory authorities that chartered the out-of-state banks, as determined by cooperative agreements between the Secretary Commissioner and the state regulatory authorities that chartered the out-of-state banks.

(b) "Fiscal year" for purposes of this Section 48 is defined as a period beginning July 1 of any year and ending June 30 of the next year. The Secretary Commissioner shall receive for each fiscal year, commencing with the fiscal year ending June 30, 1987, a contingent fee equal to the lesser of the aggregate of the fees paid by all State banks under paragraph (a) of subsection (3) for that year, or the amount, if any, whereby the aggregate of the administration expenses, as defined in paragraph (c), for that fiscal year exceeds the sum of the aggregate of the fees payable by all State banks for that year under paragraph (a) of subsection (3), plus any amounts transferred into the Bank and Trust Company Fund from the State Pensions Fund for that year, plus all other amounts collected by the Secretary Commissioner for that year under any other provision of this Act, plus the aggregate of all fees collected for that year by the Secretary Commissioner under the Corporate Fiduciary Act, excluding the receivership fees provided for in Section 5-10 of the Corporate Fiduciary Act, and the Foreign Banking Office Act. The aggregate amount of the contingent fee thus arrived at for any fiscal year shall be apportioned amongst, assessed upon, and paid by the State banks and foreign banking corporations, respectively, in the same proportion that the fee of each under paragraph (a) of subsection (3), respectively, for that year bears to the aggregate for that year of the fees collected under paragraph (a) of subsection (3). The aggregate amount of the contingent fee, and the portion thereof to be assessed upon each State bank and foreign banking corporation, respectively, shall be determined by the Secretary Commissioner and shall be paid by each, respectively, within 120 days of the close of the period for which the contingent fee is computed and is payable, and the Secretary Commissioner shall give 20 days advance notice of the amount of the contingent fee payable by the State bank and of the date fixed by the Secretary Commissioner for payment of the fee.

(c) The "administration expenses" for any fiscal year shall mean the ordinary and contingent expenses for that year incident to making the examinations provided for by, and for otherwise administering, this Act, the Corporate Fiduciary Act, excluding the expenses paid from the Corporate Fiduciary Receivership account in the Bank and Trust Company Fund, the Foreign Banking Office Act, the Electronic Fund Transfer Act, and the Illinois Bank Examiners' Education Foundation Act, including all salaries and other compensation paid for personal services rendered for the State by officers or employees of the State, including the Secretary and his or her deputies Commissioner and the Deputy Commissioners, all expenditures for telephone and telegraph charges, postage and postal charges, office stationery, supplies and services, and office furniture and equipment, including typewriters and copying and duplicating machines and filing equipment, surety bond premiums, and travel expenses of those officers and employees, employees, expenditures or charges for the acquisition, enlargement or improvement of, or for the use of, any office space, building, or structure, or expenditures for the maintenance thereof or for furnishing heat, light, or power with respect thereto, all to the extent that those expenditures are directly incidental to such examinations or administration. The Secretary Commissioner shall not be required by paragraphs (c) or (d-1) of this subsection (3) to maintain in any fiscal year's budget appropriated reserves for accrued vacation and accrued sick leave that is required to be paid to employees of the Secretary Commissioner upon termination of their service with the Secretary Commissioner in an amount that is more than is reasonably anticipated to be necessary for any anticipated turnover in employees, whether due to normal attrition or due to layoffs, terminations, or resignations.

(d) The aggregate of all fees collected by the Secretary Commissioner under this Act, the Corporate Fiduciary Act, or the Foreign Banking Office Act on and after July 1, 1979, shall be paid promptly after receipt of the same, accompanied by a detailed statement thereof, into the State treasury and shall be set apart in a special fund to be known as the "Bank and Trust Company Fund", except as provided in paragraph (c) of subsection (11) of this Section. All earnings received from investments of funds in the Bank and Trust Company Fund shall be deposited in the Bank and Trust Company Fund and may be used for the same purposes as fees deposited in that Fund. The amount from time to time deposited into the Bank and Trust Company Fund shall be used to offset the ordinary administrative expenses of the Secretary of Financial and Professional Regulation Commissioner of Banks and Real Estate as defined in this Section. Nothing in this amendatory Act of 1979 shall prevent continuing the practice of paying expenses involving salaries, retirement, social security, and State-paid insurance premiums of State officers by appropriations from the General Revenue Fund. However, the General Revenue Fund shall be reimbursed for those payments made on and after July 1, 1979, by an annual transfer of funds from the Bank and Trust Company Fund. Moneys in the Bank and Trust Company Fund may be transferred to the Professions Indirect Cost Fund, as authorized under Section 2105-300 of the Department of Professional Regulation Law of the Civil Administrative Code of Illinois.

(d-1) Adequate funds shall be available in the Bank and Trust Company Fund to permit the timely payment of administration expenses. In each fiscal year the total administration expenses shall be deducted from the total fees collected by the Secretary Commissioner and the remainder transferred into the Cash Flow Reserve Account, unless the balance of the Cash Flow Reserve Account prior to the transfer equals or exceeds one-fourth of the total initial appropriations from the Bank and Trust Company Fund for the subsequent year, in which case the remainder shall be credited to State banks and foreign banking corporations and applied against their fees for the subsequent year. The amount credited to each State bank and foreign banking corporation shall be in the same proportion as the Call Report Fees paid by each for the year bear to the total Call Report Fees collected for the year. If, after a transfer to the Cash Flow Reserve Account is made or if no remainder is available for transfer, the balance of the Cash Flow Reserve Account is less than one-fourth of the total initial appropriations for the subsequent year and the amount transferred is less than 5% of the total Call Report Fees for the year, additional amounts needed to make the transfer equal to 5% of the total Call Report Fees for the year shall be apportioned amongst, assessed upon, and paid by the State banks and foreign banking corporations in the same proportion that the Call Report Fees of each, respectively, for the year bear to the total Call Report Fees collected for the year. The additional amounts assessed shall be transferred into the Cash Flow Reserve Account. For purposes of this paragraph (d-1), the calculation of the fees collected by the Secretary Commissioner shall exclude the receivership fees provided for in Section 5-10 of the Corporate Fiduciary Act.

(e) The Secretary Commissioner may upon request certify to any public record in his keeping and shall have authority to levy a reasonable charge for issuing certifications of any public record in his keeping.

(f) In addition to fees authorized elsewhere in this Act, the Secretary Commissioner may, in connection with a review, approval, or provision of a service, levy a reasonable charge to recover the cost of the review, approval, or service.

(4) Nothing contained in this Act shall be construed to limit the obligation relative to examinations and reports of any State bank, deposits in which are to any extent insured by the United States or any agency thereof, nor to limit in any way the powers of the Secretary Commissioner with reference to examinations and reports of that bank.

(5) The nature and condition of the assets in or investment of any bonus, pension, or profit sharing plan for officers or employees of every State bank or, after May 31, 1997, branch of an out-of-state bank shall be deemed to be included in the affairs of that State bank or branch of an out-of-state bank subject to examination by the Secretary Commissioner under the provisions of subsection (2) of this Section, and if the Secretary Commissioner shall find from an examination that the condition of or operation of the investments or assets of the plan is unlawful, fraudulent, or unsafe, or that any trustee has abused his trust, the Secretary Commissioner shall, if the situation so found by the Secretary Commissioner shall not be corrected to his satisfaction within 60 days after the Secretary Commissioner has given notice to the board of directors of the State bank or out-of-state bank of his findings, report the facts to the Attorney General who shall thereupon institute proceedings against the State bank or out-of-state bank, the board of directors thereof, or the trustees under such plan as the nature of the case may require.

(6) The Secretary Commissioner shall have the power:

(a) To promulgate reasonable rules for the purpose of administering the provisions of this Act.

(a-5) To impose conditions on any approval issued by the Secretary Commissioner if he determines that the conditions are necessary or appropriate. These conditions shall be imposed in writing and shall continue in effect for the period prescribed by the Secretary Commissioner.

(b) To issue orders against any person, if the Secretary Commissioner has reasonable cause to believe that an unsafe or unsound banking practice has occurred, is occurring, or is about to occur, if any person has violated, is violating, or is about to violate any law, rule, or written agreement with the Secretary Commissioner, or for the purpose of administering the provisions of this Act and any rule promulgated in accordance with this Act.

(b-1) To enter into agreements with a bank establishing a program to correct the condition of the bank or its practices.

(c) To appoint hearing officers to execute any of the powers granted to the Secretary Commissioner under this Section for the purpose of administering this Act and any rule promulgated in accordance with this Act and otherwise to authorize, in writing, an officer or employee of the Department of Financial and Professional Regulation Office of Banks and Real Estate to exercise his powers under this Act.

(d) To subpoena witnesses, to compel their attendance, to administer an oath, to examine any person under oath, and to require the production of any relevant books, papers, accounts, and documents in the course of and pursuant to any investigation being conducted, or any action being taken, by the Secretary Commissioner in respect of any matter relating to the duties imposed upon, or the powers vested in, the Secretary Commissioner under the provisions of this Act or any rule promulgated in accordance with this Act.

(e) To conduct hearings.

(7) Whenever, in the opinion of the Secretary Commissioner, any director, officer, employee, or agent of a State bank or any subsidiary or bank holding company of the bank or, after May 31, 1997, of any branch of an out-of-state bank or any subsidiary or bank holding company of the bank shall have violated any law, rule, or order relating to that bank or any subsidiary or bank holding company of the bank, shall have obstructed or impeded any examination or investigation by the Secretary Commissioner, shall have engaged in an unsafe or unsound practice in conducting the business of that bank or any subsidiary or bank holding company of the bank, or shall have violated any law or engaged or participated in any unsafe or unsound practice in connection with any financial institution or other business entity such that the character and fitness of the director, officer, employee, or agent does not assure reasonable promise of safe and sound operation of the State bank, the Secretary Commissioner may issue an order of removal. If, in the opinion of the Secretary Commissioner, any former director, officer, employee, or agent of a State bank or any subsidiary or bank holding company of the bank, prior to the termination of his or her service with that bank or any subsidiary or bank holding company of the bank, violated any law, rule, or order relating to that State bank or any subsidiary or bank holding company of the bank, obstructed or impeded any examination or investigation by the Secretary Commissioner, engaged in an unsafe or unsound practice in conducting the business of that bank or any subsidiary or bank holding company of the bank, or violated any law or engaged or participated in any unsafe or unsound practice in connection with any financial institution or other business entity such that the character and fitness of the director, officer, employee, or agent would not have assured reasonable promise of safe and sound operation of the State bank, the Secretary Commissioner may issue an order prohibiting that person from further service with a bank or any subsidiary or bank holding company of the bank as a director, officer, employee, or agent. An order issued pursuant to this subsection shall be served upon the director, officer, employee, or agent. A copy of the order shall be sent to each director of the bank affected by personal service, certified mail return receipt requested, or any other method that provides proof of service and receipt registered mail. The person affected by the action may request a hearing before the Board of Banks and Trust Companies State Banking Board within 10 days after receipt of the order. The hearing shall be held by the Board within 30 days after the request has been received by the Board. The Board shall make a determination approving, modifying, or disapproving the order of the Secretary Commissioner as its final administrative decision. If a hearing is held by the Board, the Board shall make its determination within 60 days from the conclusion of the hearing. Any person affected by a decision of the Board under this subsection (7) of Section 48 of this Act may have the decision reviewed only under and in accordance with the Administrative Review Law and the rules adopted pursuant thereto. A copy of the order shall also be served upon the bank of which he is a director, officer, employee, or agent, whereupon he shall cease to be a director, officer, employee, or agent of that bank. The Secretary Commissioner may institute a civil action against the director, officer, or agent of the State bank or, after May 31, 1997, of the branch of the out-of-state bank against whom any order provided for by this subsection (7) of this Section 48 has been issued, and against the State bank or, after May 31, 1997, out-of-state bank, to enforce compliance with or to enjoin any violation of the terms of the order. Any person who has been the subject of an order of removal or an order of prohibition issued by the Secretary Commissioner under this subsection or Section 5-6 of the Corporate Fiduciary Act may not thereafter serve as director, officer, employee, or agent of any State bank or of any branch of any out-of-state bank, or of any corporate fiduciary, as defined in Section 1-5.05 of the Corporate Fiduciary Act, or of any other entity that is subject to licensure or regulation by the Secretary Commissioner or the Department of Financial and Professional Regulation Office of Banks and Real Estate unless the Secretary Commissioner has granted prior approval in writing.

For purposes of this paragraph (7), "bank holding company" has the meaning prescribed in Section 2 of the Illinois Bank Holding Company Act of 1957.

(8) The Secretary Commissioner may impose civil penalties in an amount not to exceed the amount a federal regulatory agency is authorized to charge under federal law of up to $10,000 against any person for each violation of any provision of this Act, any rule promulgated in accordance with this Act, any order of the Director of the Division or Secretary Commissioner, or any other action which in the Director's or Secretary's Commissioner's discretion is an unsafe or unsound banking practice.

(9) The Secretary Commissioner may impose civil penalties of up to $100 against any person for the first failure to comply with reporting requirements set forth in the report of examination of the bank and up to $200 for the second and subsequent failures to comply with those reporting requirements.

(10) All final administrative decisions of the Secretary Commissioner hereunder shall be subject to judicial review pursuant to the provisions of the Administrative Review Law. For matters involving administrative review, venue shall be in either Sangamon County or Cook County.

(11) The endowment fund for the Illinois Bank Examiners' Education Foundation shall be administered as follows:

(a) (Blank).

(b) The Foundation is empowered to receive voluntary contributions, gifts, grants, bequests, and donations on behalf of the Illinois Bank Examiners' Education Foundation from national banks and other persons for the purpose of funding the endowment of the Illinois Bank Examiners' Education Foundation.

(c) The aggregate of all special educational fees collected by the Secretary Commissioner and property received by the Secretary Commissioner on behalf of the Illinois Bank Examiners' Education Foundation under this subsection (11) on or after June 30, 1986, shall be either (i) promptly paid after receipt of the same, accompanied by a detailed statement thereof, into the State Treasury and shall be set apart in a special fund to be known as "The Illinois Bank Examiners' Education Fund" to be invested by either the Treasurer of the State of Illinois in the Public Treasurers' Investment Pool or in any other investment he is authorized to make or by the Illinois State Board of Investment as the board of trustees of the Illinois Bank Examiners' Education Foundation may direct or (ii) deposited into an account maintained in a commercial bank or corporate fiduciary in the name of the Illinois Bank Examiners' Education Foundation pursuant to the order and direction of the Board of Trustees of the Illinois Bank Examiners' Education Foundation.

(12) (Blank).

(Source: P.A. 94-91, eff. 7-1-05.)

(205 ILCS 5/78.5 new)

Sec. 78.5. Board of Banks and Trust Companies; creation, members, appointment.

(a) There is created the Board of Banks and Trust Companies, which shall consist of the Director, who shall be its chairperson, and 6 additional members divided into 2 classes designated Class A members and Class B members, to be appointed by the Governor by and with the advice and consent of the Senate, as follows:

(1) Class A shall consist of 2 persons, neither of whom is an officer or director of or owner, whether directly or indirectly, of more than 5% of the outstanding capital stock of any bank.

(2) Class B shall consist of 4 persons, each of whom at the time of the appointment is an officer, director, or employee of a State bank or trust company and has at least 10 years of banking experience.

(b) The Board of Banks and Trust Companies formerly created by Section 78 of this Act is abolished on January 1, 2009, and the terms of all members of that Board then serving are terminated on that date.

(c) For purposes of the Successor Agency Act, the Board of Banks and Trust Companies created under this Section shall be the sucessor agency of the State Banking Board of Illinois and the Board of Banks and Trust Companies Created under Section 78 of this Act.

(205 ILCS 5/79.5 new)

Sec. 79.5. Board, terms of office. The terms of office of the Class A and Class B members of the Board of Banks and Trust Companies shall begin on January 1, 2009.

(a) The persons first appointed as the Class A members of the Board of Banks and Trust Companies shall have the following terms as designated by the Governor: (i) one person for a term of 2 years and (ii) one person for a term of 4 years. Thereafter, the term of office of each of the Class A members shall be 4 years, except that an appointment to fill a vacancy shall be for the unexpired term of the member whose term is being filled.

(b) The persons first appointed as Class B members of the Board of Banks and Trust Companies shall have the following terms as designated by the Governor: (i) one member for a term of one year, (ii) one member for a term of 2 years, (iii) one member for a term of 3 years, and (iv) one member for a term of 4 years. Thereafter, the term of office of each Class B member shall be 4 years, except that an appointment to fill a vacancy shall be for the unexpired term of the member whose term is being filled.

(c) No Class A or Class B member of the Board of Banks and Trust Companies shall serve more than 2 full 4-year terms of office.

(d) Each member of the Board of Banks and Trust Companies shall continue serving until his or her successor is appointed.

(205 ILCS 5/82) (from Ch. 17, par. 394)

Sec. 82. Secretary Commissioner, board; civil liability. Neither the Secretary Commissioner, any deputy commissioner, any member of the Board of Banks and Trust Companies, any member of the State Banking Board of Illinois, nor any examiner, assistant examiner or other employee of the Secretary's Commissioner's office shall be subject to any civil liability or penalty, whether for damages or otherwise, on account of or for any action taken or omitted to be taken in their respective official capacities, except when such acts or omissions to act are corrupt or malicious or unless such action is taken or omitted to be taken not in good faith and without reasonable grounds.

(Source: P.A. 85-204.)

(205 ILCS 5/78 rep.)

(205 ILCS 5/79 rep.)

Section 20. The Illinois Banking Act is amended by repealing Sections 78 and 79.

Section 25. The Illinois Bank Holding Company Act of 1957 is amended by changing Sections 2 and 3.074 as follows:

(205 ILCS 10/2) (from Ch. 17, par. 2502)

Sec. 2. Unless the context requires otherwise:

(a) "Bank" means any national banking association or any bank, banking association or savings bank, whether organized under the laws of Illinois, another state, the United States, the District of Columbia, any territory of the United States, Puerto Rico, Guam, American Samoa or the Virgin Islands, which (1) accepts deposits that the depositor has a legal right to withdraw on demand by check or other negotiable order and (2) engages in the business of making commercial loans. "Bank" does not include any organization operating under Sections 25 or 25 (a) of the Federal Reserve Act, or any organization which does not do business within the United States except as an incident to its activities outside the United States or any foreign bank.

(b) "Bank holding company" means any company that controls or has control over any bank or over any company that is or becomes a bank holding company by virtue of this Act.

(c) "Banking office" means the principal office of a bank, any branch of a bank, or any other office at which a bank accepts deposits, provided, however, that "banking office" shall not mean:

(1) unmanned automatic teller machines, point of sale terminals or other similar unmanned electronic banking facilities at which deposits may be accepted; or

(2) offices located outside the United States.

(d) "Cause to be chartered", with respect to a specified bank, means the acquisition of control of such bank prior to the time it commences to engage in the banking business.

(e) "Commissioner" means the Commissioner of Banks and Real Estate or a person authorized by the Commissioner, the Office of Banks and Real Estate Act, or this Act to act in the Commissioner's stead.

(f) "Community" means the contiguous area served by the banking offices of a bank, but need not be limited or expanded to conform to the geographic boundaries of units of local government.

(g) "Company" means any corporation, business trust, voting trust, association, partnership, joint venture, similar organization or any other trust unless by its terms it must terminate within 25 years or not later than 21 years and 10 months after the death of individuals living on the effective date of the trust, but shall not include (1) an individual or (2) any corporation the majority of the shares of which are owned by the United States or by any state or any corporation or community chest fund, organized and operated exclusively for religious, charitable, scientific, literary or educational purposes, no part of the net earnings of which inure to the benefit of any private shareholder or individual and no substantial part of the activities of which is carrying on propaganda or otherwise attempting to influence legislation.

(h) A company "controls or has control over" a bank or company if (1) it directly or indirectly owns or controls or has the power to vote, 25% or more of the voting shares of any class of voting securities of such bank or company or (2) it controls in any manner the election of a majority of the directors or trustees of such bank or company or (3) a trustee holds for the benefit of its shareholders, members or employees, 25% or more of the voting shares of such bank or company or (4) it directly or indirectly exercises a controlling influence over the management or policies of such bank or company that is a bank holding company and the Board of Governors of the Federal Reserve System has so determined under the federal Bank Holding Company Act. In determining whether any company controls or has control over a bank or company: (i) shares owned or controlled by any subsidiary of a company shall be deemed to be indirectly owned or controlled by such company; (ii) shares held or controlled, directly or indirectly, by a trustee or trustees for the benefit of a company, the shareholders or members of a company or the employees (whether exclusively or not) of a company, shall be deemed to be controlled by such company; and (iii) shares transferred, directly or indirectly, by any bank holding company (or by any company which, but for such transfer, would be a bank holding company) to any transferee that is indebted to the transferor or that has one or more officers, directors, trustees or beneficiaries in common with or subject to control by the transferor, shall be deemed to be indirectly owned or controlled by the transferor unless the Board of Governors of the Federal Reserve System has determined, under the federal Bank Holding Company Act, that the transferor is not in fact capable of controlling the transferee. Notwithstanding the foregoing, no company shall be deemed to have control of or over a bank or bank holding company (A) by virtue of its ownership or control of shares in a fiduciary capacity arising in the ordinary course of its business; (B) by virtue of its ownership or control of shares acquired by it in connection with its underwriting of securities which are held only for such period of time as will permit the sale thereof upon a reasonable basis; (C) by virtue of its holding any shares as collateral taken in the ordinary course of securing a debt or other obligation; (D) by virtue of its ownership or control of shares acquired in the ordinary course of collecting a debt or other obligation previously contracted in good faith, until 5 years after the date acquired; or (E) by virtue of its voting rights with respect to shares of any bank or bank holding company acquired in the course of a proxy solicitation in the case of a company formed and operated for the sole purpose of participating in a proxy solicitation.

(i) "Federal Bank Holding Company Act" means the federal Bank Holding Company Act of 1956, as now or hereafter amended.

(j) "Foreign bank" means any company organized under the laws of a foreign country which engages in the business of banking or any subsidiary or affiliate of any such company, organized under such laws. "Foreign bank" includes, without limitation, foreign merchant banks and other foreign institutions that engage in banking activities usual in connection with the business of banking in the countries where such foreign institutions are organized or operating.

(k) "Home state" means the home state of a foreign bank as determined pursuant to the federal International Banking Act of 1978.

(l) "Illinois bank" means a bank:

(1) that is organized under the laws of this State or of the United States; and

(2) whose main banking premises is located in Illinois.

(m) "Illinois bank holding company" means a bank holding company:

(1) whose principal place of business is Illinois; and

(2) that is not directly or indirectly controlled by another bank holding company whose principal place of business is a state other than Illinois or by a foreign bank whose Home State is a state other than Illinois.

An out of state bank holding company that acquires control of one or more Illinois banks or Illinois bank holding companies pursuant to Sections 3.061 or 3.071 shall not be deemed an Illinois bank holding company.

(n) "Main banking premises" means the location that is designated in a bank's charter as its main office and that is within the state in which the total deposits held by all of the banking offices of such bank are the largest, as shown in the most recent reports of condition or similar reports filed by such bank with state or federal regulatory authorities.

(o) "Out of state bank" means a bank:

(1) that is not an Illinois bank; and

(2) whose main banking premises is located in a state other than Illinois.

(p) "Out of state bank holding company" means a bank holding company:

(1) that is not an Illinois bank holding company;

(2) whose principal place of business is a state other than Illinois the laws of which expressly authorize the acquisition by an Illinois bank holding company of a bank or bank holding company in that state under qualifications and conditions which are not unduly restrictive, as determined by the Secretary Commissioner, when compared to those imposed by the laws of Illinois.

(q) "Principal place of business" means, with respect to a bank holding company, the state in which the total deposits held by all of the banking offices of all of the bank subsidiaries of such bank holding company are the largest, as shown in the most recent reports of condition or similar reports filed by the bank holding company's bank subsidiaries with state or federal regulatory authorities.

(q-5) "Secretary" means the Secretary of Financial and Professional Regulation or a person authorized by the Secretary, the Office of Banks and Real Estate Act, or this Act to act in the Secretary's stead.

(r) "State" or "states" when used in this Act means any State of the United States, the District of Columbia, any territory of the United States, Puerto Rico, Guam, American Samoa or the Virgin Islands.

(s) "Subsidiary", with respect to a specified bank holding company, means any bank or company controlled by such bank holding company.

(Source: P.A. 89-508, eff. 7-3-96.)

(205 ILCS 10/3.074) (from Ch. 17, par. 2510.04)

Sec. 3.074. Powers; administrative review.

(a) The Secretary Commissioner shall have the power and authority:

(1) to promulgate reasonable procedural rules for the purposes of administering the provisions of this Act. The Secretary Commissioner shall specify the form of any application, report or document that is required to be filed with the Secretary Commissioner pursuant to this Act;

(2) to issue orders for the purpose of administering the provisions of this Act and any rule promulgated in accordance with this Act;

(3) to appoint hearing officers to execute any of the powers granted to the Secretary Commissioner under this Section for the purpose of administering this Act or any rule promulgated in accordance with this Act; and

(4) to subpoena witnesses, to compel their attendance, to administer an oath, to examine any person under oath and to require the production of any relevant books, papers, accounts and documents in the course of and pursuant to any investigation or hearing being conducted or any action being taken by the Secretary Commissioner in respect to any matter relating to the duties imposed upon or the powers vested in the Secretary Commissioner under the provisions of this Act or any rule promulgated in accordance with this Act.

(b) Whenever, in the opinion of the Secretary Commissioner, any director, officer, employee, or agent of any bank holding company or subsidiary or affiliate of that company shall have violated any law, rule, or order relating to that bank holding company or subsidiary or affiliate of that company, shall have obstructed or impeded any examination or investigation by the Secretary Commissioner, shall have engaged in an unsafe or unsound practice in conducting the business of that bank holding company or subsidiary or affiliate of that company, or shall have violated any law or engaged or participated in any unsafe or unsound practice in connection with any financial institution or other business entity such that the character and fitness of the director, officer, employee, or agent does not assure reasonable promise of safe and sound operation of the bank holding company, the Secretary Commissioner may issue an order of removal. If, in the opinion of the Secretary Commissioner, any former director, officer, employee, or agent of a bank holding company or subsidiary or affiliate of that company, prior to the termination of his or her service with that holding company or subsidiary or affiliate of that company, violated any law, rule, or order relating to that bank holding company or subsidiary or affiliate of that company, obstructed or impeded any examination or investigation by the Secretary Commissioner, engaged in an unsafe or unsound practice in conducting the business of that bank holding company or subsidiary or affiliate of that company, or violated any law or engaged or participated in any unsafe or unsound practice in connection with any financial institution or other business entity such that the character and fitness of the director, officer, employee, or agent would not have assured reasonable promise of safe and sound operation of the bank holding company, the Secretary Commissioner may issue an order prohibiting that person from further service with a bank holding company or subsidiary or affiliate of that company as a director, officer, employee, or agent.

An order issued pursuant to this subsection shall be served upon the director, officer, employee, or agent. A copy of the order shall be sent to each director of the bank holding company affected by registered mail. The person affected by the action may request a hearing before the Board of Banks and Trust Companies State Banking Board within 10 days after receipt of the order. The hearing shall be held by the Board of Banks and Trust Companies State Banking Board within 30 days after the request has been received by the Board of Banks and Trust Companies State Banking Board. The Board of Banks and Trust Companies State Banking Board shall make a determination approving, modifying, or disapproving the order of the Secretary Commissioner as its final administrative decision. If a hearing is held by the Board of Banks and Trust Companies State Banking Board, the Board of Banks and Trust Companies State Banking Board shall make its determination within 60 days from the conclusion of the hearing. Any person affected by a decision of the Board of Banks and Trust Companies State Banking Board under this subsection may have the decision reviewed only under and in accordance with the Administrative Review Law and the rules adopted pursuant thereto. A copy of the order shall also be served upon the bank holding company of which he is a director, officer, employee, or agent, whereupon he shall cease to be a director, officer, employee, or agent of that bank holding company.

The Secretary Commissioner may institute a civil action against the director, officer, employee, or agent of the bank holding company, against whom any order provided for by this subsection has been issued, to enforce compliance with or to enjoin any violation of the terms of the order.

Any person who has been the subject of an order of removal or an order of prohibition issued by the Secretary Commissioner under this subsection, subdivision (7) of Section 48 of the Illinois Banking Act, or Section 5-6 of the Corporate Fiduciary Act may not thereafter serve as director, officer, employee, or agent of any holding company, State bank, or branch of any out-of-state bank, of any corporate fiduciary, as defined in Section 1-5.05 of the Corporate Fiduciary Act, or of any other entity that is subject to licensure or regulation by the Secretary Commissioner or the Department of Financial and Professional Regulation Office of Banks and Real Estate unless the Secretary Commissioner has granted prior approval in writing.

(c) All final administrative decisions of the Secretary Commissioner under this Act shall be subject to judicial review pursuant to provisions of the Administrative Review Law. For matters involving administrative review, venue shall be in either Sangamon County or Cook County.

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

Section 30. The Pawnbroker Regulation Act is amended by changing Section 0.05 as follows:

(205 ILCS 510/0.05)

Sec. 0.05. Administration of Act.

(a) This Act shall be administered by the Secretary Commissioner of Banks and Real Estate who shall have all of the following powers and duties in administering this Act:

(1) To promulgate reasonable rules for the purpose of administering the provisions of this Act.

(2) To issue orders for the purpose of administering the provisions of this Act and any rule promulgated in accordance with this Act.

(3) To appoint hearing officers and to hire employees or to contract with appropriate persons to execute any of the powers granted to the Secretary Commissioner under this Section for the purpose of administering this Act and any rule promulgated in accordance with this Act.

(4) To subpoena witnesses, to compel their attendance, to administer an oath, to examine any person under oath, and to require the production of any relevant books, papers, accounts, and documents in the course of and pursuant to any investigation being conducted, or any action being taken, by the Secretary Commissioner in respect of any matter relating to the duties imposed upon, or the powers vested in, the Secretary Commissioner under the provisions of this Act or any rule promulgated in accordance with this Act.

(5) To conduct hearings.

(6) To impose civil penalties graduated up to $1,000 against any person for each violation of any provision of this Act, any rule promulgated in accordance with this Act, or any order of the Secretary Commissioner based upon the seriousness of the violation.

(6.5) To initiate, through the Attorney General, injunction proceedings whenever it appears to the Secretary Commissioner that any person, whether licensed under this Act or not, is engaged or about to engage in an act or practice that constitutes or will constitute a violation of this Act or any rule prescribed under the authority of this Act. The Secretary Commissioner may, in his or her discretion, through the Attorney General, apply for an injunction, and upon a proper showing, any circuit court may enter a permanent or preliminary injunction or a temporary restraining order without bond to enforce this Act in addition to the penalties and other remedies provided for in this Act.

(7) To issue a cease and desist order and, for violations of this Act, any order issued by the Secretary Commissioner pursuant to this Act, any rule promulgated in accordance with this Act, or any other applicable law in connection with the operation of a pawnshop, to suspend a license issued under this Act for up to 30 days.

(8) To determine compliance with applicable law and rules related to the operation of pawnshops and to verify the accuracy of reports filed with the Secretary Commissioner, the Secretary Commissioner, not more than one time every 2 years, may, but is not required to, conduct a routine examination of a pawnshop, and in addition, the Secretary Commissioner may examine the affairs of any pawnshop at any time if the Secretary Commissioner has reasonable cause to believe that unlawful or fraudulent activity is occurring, or has occurred, therein.

(9) In response to a complaint, to address any inquiries to any pawnshop in relation to its affairs, and it shall be the duty of the pawnshop to promptly reply in writing to such inquiries. The Secretary Commissioner may also require reports or information from any pawnshop at any time the Secretary Commissioner may deem desirable.

(10) To revoke a license issued under this Act if the Secretary Commissioner determines that (a) a licensee has been convicted of a felony in connection with the operations of a pawnshop; (b) a licensee knowingly, recklessly, or continuously violated this Act, a rule promulgated in accordance with this Act, or any order of the Secretary Commissioner; (c) a fact or condition exists that, if it had existed or had been known at the time of the original application, would have justified license refusal; or (d) the licensee knowingly submits materially false or misleading documents with the intent to deceive the Secretary Commissioner or any other party; or (e) the licensee is unable or ceases to continue to operate the pawnshop.

(10.2) To remove or prohibit the employment of any officer, director, or employee who engages or who has engaged in unsafe, unsound, or unlawful activities.

(10.7) To prohibit the hiring of employees who have been convicted of a felony or of any criminal offense relating to dishonesty or breach of trust in connection with the operation of a pawnshop.

(11) Following license revocation, to take possession and control of a pawnshop for the purpose of examination, reorganization, or liquidation through receivership and to appoint a receiver, which may be the Secretary Commissioner, a pawnshop, or another suitable person.

(b) After consultation with local law enforcement officers, the Attorney General, and the industry, the Secretary Commissioner may by rule require that pawnbrokers operate video camera surveillance systems to record photographic representations of customers and retain the tapes produced for up to 30 days.

(c) Pursuant to rule, the Secretary Commissioner shall issue licenses on an annual or multi-year basis for operating a pawnshop. Any person currently operating or who has operated a pawnshop in this State during the 2 years preceding the effective date of this amendatory Act of 1997 shall be issued a license upon payment of the fee required under this Act. New applicants shall meet standards for a license as established by the Secretary Commissioner. Except with the prior written consent of the Secretary Commissioner, no individual, either a new applicant or a person currently operating a pawnshop, may be issued a license to operate a pawnshop if the individual has been convicted of a felony or of any criminal offense relating to dishonesty or breach of trust in connection with the operations of a pawnshop. The Secretary Commissioner shall establish license fees. The fees shall not exceed the amount reasonably required for administration of this Act. It shall be unlawful to operate a pawnshop without a license issued by the Secretary Commissioner.

(d) In addition to license fees, the Secretary Commissioner may, by rule, establish fees in connection with a review, approval, or provision of a service, and levy a reasonable charge to recover the cost of the review, approval, or service (such as a change in control, change in location, or renewal of a license). The Secretary Commissioner may also levy a reasonable charge to recover the cost of an examination if the Secretary Commissioner determines that unlawful or fraudulent activity has occurred. The Secretary Commissioner may require payment of the fees and charges provided in this Act by certified check, money order, an electronic transfer of funds, or an automatic debit of an account.

(e) The Pawnbroker Regulation Fund is established as a special fund in the State treasury. Moneys collected under this Act shall be deposited into the Fund and used for the administration of this Act. In the event that General Revenue Funds are appropriated to the Office of the Secretary of Financial and Professional Regulation Commissioner of Banks and Real Estate for the initial implementation of this Act, the Governor may direct the repayment from the Pawnbroker Regulation Fund to the General Revenue Fund of such advance in an amount not to exceed $30,000. The Governor may direct this interfund transfer at such time as he deems appropriate by giving appropriate written notice. Moneys in the Pawnbroker Regulation Fund may be transferred to the Professions Indirect Cost Fund, as authorized under Section 2105-300 of the Department of Professional Regulation Law of the Civil Administrative Code of Illinois.

(f) The Secretary Commissioner may, by rule, require all pawnshops to provide for the expenses that would arise from the administration of the receivership of a pawnshop under this Act through the assessment of fees, the requirement to pledge surety bonds, or such other methods as determined by the Secretary Commissioner.

(g) All final administrative decisions of the Secretary Commissioner under this Act shall be subject to judicial review pursuant to the provisions of the Administrative Review Law. For matters involving administrative review, venue shall be in either Sangamon County or Cook County.

(Source: P.A. 94-91, eff. 7-1-05.)

Section 40. The Corporate Fiduciary Act is amended by changing Sections 1-5.15, 2-7, 4-5, 5-1, 5-3, 5-5, 5-6, 5-8, and 5-9 as follows:

(205 ILCS 620/1-5.15 new)

Sec. 1-5.15. Secretary of Financial and Professional Regulation. "Secretary" means the Secretary of Financial and Professional Regulation or a person authorized by the Secretary, the Office of Banks and Real Estate Act, or this Act to act in the Secretary's stead.

(205 ILCS 620/2-7) (from Ch. 17, par. 1552-7)

Sec. 2-7. A corporate fiduciary so incorporated or authorized after January 1, 1988, shall have minimum capital as determined by the Secretary Commissioner as necessary for safe and sound operation of a corporate fiduciary. The Commissioner shall record such organization capital requirements in the Office of the Secretary of State. During the time that a corporate fiduciary shall continue in its fiduciary business, it shall not withdraw, or permit to be withdrawn, either in the form of dividends or otherwise, any portion of its capital except as approved by the Secretary Commissioner. The Secretary Commissioner may, after a corporate fiduciary has been incorporated or authorized require additional capital if the Secretary Commissioner finds the condition and operations of the corporate fiduciary or its proposed scope of operations require such additional capital to achieve or maintain a safe and sound condition.

(Source: P.A. 90-301, eff. 8-1-97.)

(205 ILCS 620/4-5) (from Ch. 17, par. 1554-5)

Sec. 4-5. Certificate of authority; fees; certificate of reciprocity.

(a) Prior to the time any foreign corporation acts in this State as testamentary trustee, trustee appointed by any court, trustee under any written agreement, declaration or instrument of trust, executor, administrator, administrator to collect, guardian or in any other like fiduciary capacity, such foreign corporation shall apply to the Secretary of Financial and Professional Regulation Commissioner of Banks and Real Estate for a certificate of authority with reference to the fiduciary capacity or capacities in which such foreign corporation proposes to act in this State, and the Secretary of Financial and Professional Regulation Commissioner of Banks and Real Estate shall issue a certificate of authority to such corporation concerning only the fiduciary capacity or such of the fiduciary capacities to which the application pertains and with respect to which he has been furnished satisfactory evidence that such foreign corporation meets the requirements of Section 4-2 of this Act. The certificate of authority shall set forth the fiduciary capacity or capacities, as the case may be, for which the certificate is issued, and shall recite and certify that such foreign corporation is eligible to act in this State in such fiduciary capacity or capacities, as the case may be, pursuant to the provisions of this Act. The certificate of authority shall remain in full force and effect until such time as such foreign corporation violates any order of the Director of the Division or Secretary arising under this Act, any provision of this Act, or any rule promulgated in accordance with this Act or ceases to be eligible so to act under the provisions of this Act.

(b) Each foreign corporation making application for a certificate of authority shall pay reasonable fees to the Secretary of Financial and Professional Regulation Commissioner of Banks and Real Estate as determined by the Secretary Commissioner for the services of his office.

(c) Any foreign corporation holding a certificate of reciprocity which recites and certifies that such foreign corporation is eligible to act in this State in any such fiduciary capacity pursuant to the provisions of Article IV of this Act or any predecessor Act upon the same subject, issued prior to the effective date of this amendatory Act of 1987 may act in this State under such certificate of reciprocity in any such fiduciary capacity without applying for a new certificate of authority. Such certificate of reciprocity shall remain in full force and effect until such time as such foreign corporation ceases to be eligible so to act under the provisions of Article IV of this Act.

(d) Any foreign corporation acting in Illinois under a certificate of authority or a certificate of reciprocity shall report changes in its name or address to the Secretary Commissioner and shall notify the Secretary Commissioner when it is no longer serving as a corporate fiduciary in Illinois.

(e) The provisions of this Section shall not apply to a foreign corporation establishing or acquiring and maintaining a place of business in this State to conduct business as a fiduciary in accordance with Article IVA of this Act.

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

(205 ILCS 620/5-1) (from Ch. 17, par. 1555-1)

Sec. 5-1. Secretary's Commissioner's powers. The Secretary of Financial and Professional Regulation Commissioner of Banks and Real Estate shall have the following powers and authority and is charged with the duties and responsibilities designated in this Act:

(a) To promulgate, in accordance with the Illinois Administrative Procedure Act, reasonable rules for the purpose of administering the provisions of this Act and for the purpose of incorporating by reference rules promulgated by the Federal Deposit Insurance Corporation, the Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency, the Office of Thrift Supervision, or their successors that pertain to corporate fiduciaries, including, but not limited to, standards for the operation and conduct of the affairs of corporate fiduciaries;

(b) To issue orders for the purpose of administering the provisions of this Act and any rule promulgated in accordance with this Act;

(c) To appoint hearing officers to conduct hearings held pursuant to any of the powers granted to the Secretary Commissioner under this Section for the purpose of administering this Act and any rule promulgated in accordance with this Act;

(d) To subpoena witnesses, to compel their attendance, to administer an oath, to examine any person under oath and to require the production of any relevant books, papers, accounts and documents in the course of and pursuant to any investigation being conducted, or any action being taken, by the Secretary Commissioner in respect of any matter relating to the duties imposed upon, or the powers vested in, the Secretary Commissioner under the provisions of this Act, or any rule or regulation promulgated in accordance with this Act;

(e) To conduct hearings;

(f) To promulgate the form and content of any applications required under this Act;

(g) To impose civil penalties in an amount not to exceed the amount a federal regulatory agency is authorized to charge under federal law of up to $10,000 against any person or corporate fiduciary for each violation of any provision of this Act, any rule promulgated in accordance with this Act, any order of the Secretary Commissioner or any other action which, in the Secretary's Commissioner's discretion, is a detriment or impediment to accepting or executing trusts; and

(h) To address any inquiries to any corporate fiduciary, or the officers thereof, in relation to its doings and conditions, or any other matter connected with its affairs, and it shall be the duty of any corporate fiduciary or person so addressed, to promptly reply in writing to such inquiries. The Secretary Commissioner may also require reports from any corporate fiduciary at any time he may deem desirable.

(Source: P.A. 89-364, eff. 8-18-95; 89-508, eff. 7-3-96.)

(205 ILCS 620/5-3) (from Ch. 17, par. 1555-3)

Sec. 5-3. Violations; orders.

(a) Whenever it appears to the Secretary Commissioner from any examination, statement of condition or report, that any corporate fiduciary has committed any violation of law, has made or published a false statement of condition or is conducting its business in an unsafe, unsound or unauthorized manner, he may shall, by an order under his signature, direct the discontinuance of such illegal and unsafe, unsound or unauthorized practices and that the corporate fiduciary strictly conform with the requirements of the law, and with safety and security in its transactions.

(b) If a corporate fiduciary refuses or neglects to make a required statement of condition or any report required under this Act, or to comply with an order as above stated, or if it appears to the Secretary Commissioner that it is unsafe or inexpedient for the corporate fiduciary to continue to transact business, or that extraordinary withdrawals of money are jeopardizing the interests of remaining depositors, or that any corporate fiduciary or officer of a corporate fiduciary has abused his trust or is guilty of misconduct in his official position, injurious to the corporate fiduciary, or that it has suffered a serious loss, he shall enter an order appropriate to the circumstances, which may include the appointment of a receiver as hereinafter provided, the taking of possession of the corporate fiduciary, or the removal of a director, officer, employee, or agent of the corporate fiduciary, or he may, represented by the Attorney General, seek an injunction or other appropriate order from the court.

(c) No dividends shall be paid by a corporate fiduciary while it continues its business as a corporate fiduciary to an amount greater than its net profits then on hand, deducting first therefrom its losses and bad debts.

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

(205 ILCS 620/5-5) (from Ch. 17, par. 1555-5)

Sec. 5-5. A special meeting of the board of directors may be held upon call by the Secretary Commissioner or an examiner appointed under the provisions of this Act, upon not less than 12 hours notice of such meeting by personal service of such notice, or by mailing said notice to each of the directors at his residence as shown by the books of the corporate fiduciary, or by any other method of delivery, provided such method provides proof of service and receipt.

(Source: P.A. 85-858.)

(205 ILCS 620/5-6) (from Ch. 17, par. 1555-6)

Sec. 5-6. Removal orders. Whenever, in the opinion of the Secretary Commissioner, any director, officer, employee, or agent of a corporate fiduciary or subsidiary or corporate parent of the corporate fiduciary shall have violated any law, rule, or order relating to the corporate fiduciary or subsidiary or corporate parent of the corporate fiduciary, shall have engaged in an unsafe or unsound practice in conducting the business of the corporate fiduciary or subsidiary or corporate parent of the corporate fiduciary, or shall have violated any law or engaged or participated in any unsafe or unsound practice in connection with any financial institution or other business entity such that the character and fitness of the director, officer, employee, or agent does not assure reasonable promise of safe and sound operation of the corporate fiduciary or subsidiary or corporate parent of the corporate fiduciary, the Secretary Commissioner may issue an order of removal. If in the opinion of the Secretary Commissioner, any former director, officer, employee, or agent of a corporate fiduciary or subsidiary or corporate parent of the corporate fiduciary, prior to the termination of his or her service with the corporate fiduciary or subsidiary or corporate parent of the corporate fiduciary, violated any law, rule, or order relating to the corporate fiduciary or subsidiary or corporate parent of the corporate fiduciary or engaged in an unsafe or unsound practice in conducting the business of the corporate fiduciary or subsidiary or corporate parent of the corporate fiduciary or violated any law or engaged or participated in any unsafe or unsound practice in connection with any financial institution or other business entity such that the character and fitness of the director, officer, employee, or agent would not have assured reasonable promise of safe and sound operation of the corporate fiduciary or subsidiary or corporate parent of the corporate fiduciary, the Secretary Commissioner may issue an order prohibiting that person from further service with a corporate fiduciary or subsidiary or corporate parent of the corporate fiduciary as a director, officer, employee, or agent. An order issued pursuant to this Section shall be served upon the director, officer, employee, or agent. A copy of the order shall be sent to each director of the corporate fiduciary affected by personal service, certified mail return receipt requested, or any other method that provides proof of service and receipt. The person affected by the action may request a hearing before the Board of Banks and Trust Companies State Banking Board of Illinois, hereafter "the Board", within 10 days after receipt of the order of removal or prohibition. The hearing shall be held by the Board according to the same procedures used pursuant to Section 48 of the Illinois Banking Act, and the hearing shall be held within 30 days after the request has been received by the Board. After concluding the hearing, the Board shall make a determination approving, modifying, or disapproving the order of the Secretary Commissioner as its final administrative decision. A copy of the order shall be served upon the corporate fiduciary of which the person is a director, officer, employee, or agent, whereupon the person shall cease to be a director, officer, employee, or agent of the corporate fiduciary. Any person who has been removed or prohibited by an order of the Secretary Commissioner under this Section or subsection (7) of Section 48 of the Illinois Banking Act may not thereafter serve as director, officer, employee, or agent of any State bank or corporate fiduciary, or of any other entity that is subject to licensure or regulation by the Secretary Commissioner or the Department of Financial and Professional Regulation Office of Banks and Real Estate unless the Secretary Commissioner has granted prior approval in writing. The Secretary Commissioner may institute a civil action against the director, officer, employee, or agent subject to an order issued under this Section and against the corporate fiduciary to enforce compliance with or to enjoin any violation of the terms of the order.

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

(205 ILCS 620/5-8) (from Ch. 17, par. 1555-8)

Sec. 5-8. All final administrative decisions of the Secretary Commissioner, or of the Board of Banks and Trust Companies State Banking Board of Illinois where this Act provides a hearing before such Board to review a decision of the Secretary Commissioner, shall be subject to review pursuant to the provisions of the Administrative Review Law, as now or hereafter amended, and the rules adopted pursuant thereto. For matters involving administrative review, venue shall be in either Sangamon County or Cook County.

(Source: P.A. 86-754.)

(205 ILCS 620/5-9) (from Ch. 17, par. 1555-9)

Sec. 5-9. Statement of condition.

(a) Each corporate fiduciary shall file with the Secretary Commissioner, when requested, a statement under oath, of the condition of such corporate fiduciary as of the date requested. The statement of condition shall be in such form and contain such statements, returns and information, as to the affairs, business conditions, and resources of the corporate fiduciary or of its trust department, as the case may be, as the said Secretary Commissioner may, from time to time prescribe or require.

(b) Such statement of condition shall be verified by the affidavit of the president, vice president or principal accounting officer of said corporate fiduciary, who shall also state in such affidavit that he has examined the books and accounts of said corporate fiduciary or of its trust department, as the case may be for the purpose of making said report or statement, and that the information contained in the statement or report is accurate to the best of his knowledge and belief. If the statement is submitted in electronic form, the Secretary Commissioner may, in the call for the report, specify the manner in which the appropriate officer of the corporate fiduciary shall verify the statement of condition.

(c) (Blank). The corporate fiduciary shall cause a proper abstract of the statements of assets and liabilities reported under sub-section (a) of this Section to be published once in a newspaper of general circulation, circulated in the city, town or village where the corporate fiduciary is located. Such publication shall be paid for by said corporate fiduciary which shall cause to be provided to the Commissioner a certificate of publication from the publishing newspaper in such form as the Commissioner shall require. When the corporate fiduciary is a State bank, qualified under this Act, the statements published in compliance with the Illinois Banking Act may be accepted by the Commissioner in compliance with the publication requirements of this Section although an annual statement of condition may still be required.

(d) Any corporate fiduciary which fails to file an accurate statement of condition on or before the date it is due, to publish the report if required to be published, or which fails to provide evidence of such publication may be fined $100 for each day of noncompliance.

(e) Any corporate fiduciary which is the victim of a robbery or experiences a shortage of funds in excess of $10,000, an apparent misapplication of the corporate fiduciary's funds by an officer, employee, director, or agent, a charge-off of assets of the corporate fiduciary, or any adverse legal action in an amount in excess of 10% of total capital and surplus of the corporate fiduciary, including but not limited to, the entry of an adverse money judgment against the corporate fiduciary shall report that information in writing to the Secretary Commissioner within 7 days. Compliance with the time frames prescribed by the United States Department of Treasury's Financial Crimes Enforcement Network shall be deemed compliance with this Section. Neither the corporate fiduciary, its directors, officers, employees or agents, in the preparation or filing of the reports required by this subsection, shall be subject to any liability for libel, slander or other charges resulting from information supplied in such reports, except when the supplying of such information is done in a corrupt or malicious manner or otherwise not in good faith.

(Source: P.A. 89-364, eff. 8-18-95.)

Section 45. The Foreign Bank Representative Office Act is amended by changing Section 2 as follows:

(205 ILCS 650/2) (from Ch. 17, par. 2852)

Sec. 2. Definitions. As used in this Act, unless the context requires otherwise:

(a) "Commissioner" means the Commissioner of Banks and Real Estate or a person authorized by the Commissioner, the Office of Banks and Real Estate Act, or this Act to act in the Commissioner's stead.

(b) "Foreign bank" means (1) a bank or trust company which is organized under the laws of any state or territory of the United States, including the District of Columbia, other than the State of Illinois; (2) a national bank having its principal place of business in any state or territory of the United States, including the District of Columbia, other than the State of Illinois; or (3) a bank or trust company organized and operating under the laws of a country other than the United States of America.

(c) "Representative office" means an office in the State of Illinois at which a foreign bank engages in representational functions but does not conduct a commercial banking business.

(d) "Secretary" means the Secretary of Financial and Professional Regulation or a person authorized by the Secretary, the Office of Banks and Real Estate Act, or this Act to act in the Secretary's stead.

(Source: P.A. 89-364, eff. 8-18-95; 89-508, eff. 7-3-96.)

(205 ILCS 680/Act rep.)

Section 50. The Financial Institution Activity Reporting Act is repealed.

Section 99. Effective date. This Act takes effect January 1, 2009.