SB0228 95TH GENERAL ASSEMBLY

LRB095 07906 MJR 28068 b

95TH GENERAL ASSEMBLY
State of Illinois
2007 and 2008
SB0228

Introduced 2/7/2007, by Sen. Ira I. Silverstein

SYNOPSIS AS INTRODUCED:

205 ILCS 105/3-8

from Ch. 17, par. 3303-8

Amends the Illinois Savings and Loan Act of 1985. Provides that an association may not disclose to any person, except to the member or holder of capital or his or her duly authorized agent, any financial records relating to that member or holder of capital of that association unless the financial records are disclosed in response to a lawful subpoena, summons, warrant, citation to discover assets, or court order that meets the requirements of specified criteria (now, a disclosure may only be made in response to a lawful subpoena, summons, warrant, or court order). Makes corresponding changes in provisions concerning disclosure procedures and the reimbursement of costs associated with disclosure compliance.

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 Illinois Savings and Loan Act of 1985 is amended by changing Section 3-8 as follows:

(205 ILCS 105/3-8) (from Ch. 17, par. 3303-8)

Sec. 3-8. Access to books and records; communication with members.

(a) Every member or holder of capital shall have the right to inspect the books and records of the association that pertain to his account. Otherwise, the right of inspection and examination of the books and records shall be limited as provided in this Act, and no other person shall have access to the books and records or shall be entitled to a list of the members.

(b) For the purpose of this Section, the term "financial records" means any original, any copy, or any summary of (i) a document granting signature authority over a deposit or account; (ii) a statement, ledger card, or other record on any deposit or account that shows each transaction in or with respect to that account; (iii) a check, draft, or money order drawn on an association or issued and payable by an association; or (iv) any other item containing information pertaining to any relationship established in the ordinary course of an association's business between an association and its customer, including financial statements or other financial information provided by the member or holder of capital.

(c) This Section does not prohibit:

(1) The preparation, examination, handling, or maintenance of any financial records by any officer, employee, or agent of an association having custody of those records or the examination of those records by a certified public accountant engaged by the association to perform an independent audit.

(2) The examination of any financial records by, or the furnishing of financial records by an association to, any officer, employee, or agent of the Commissioner of Banks and Real Estate or federal depository institution regulator for use solely in the exercise of his duties as an officer, employee, or agent.

(3) The publication of data furnished from financial records relating to members or holders of capital where the data cannot be identified to any particular member, holder of capital, or account.

(4) The making of reports or returns required under Chapter 61 of the Internal Revenue Code of 1986.

(5) Furnishing information concerning the dishonor of any negotiable instrument permitted to be disclosed under the Uniform Commercial Code.

(6) The exchange in the regular course of business of (i) credit information between an association and other associations or financial institutions or commercial enterprises, directly or through a consumer reporting agency or (ii) financial records or information derived from financial records between an association and other associations or financial institutions or commercial enterprises for the purpose of conducting due diligence pursuant to a purchase or sale involving the association or assets or liabilities of the association.

(7) The furnishing of information to the appropriate law enforcement authorities where the association reasonably believes it has been the victim of a crime.

(8) The furnishing of information pursuant to the Uniform Disposition of Unclaimed Property Act.

(9) The furnishing of information pursuant to the Illinois Income Tax Act and the Illinois Estate and Generation-Skipping Transfer Tax Act.

(10) The furnishing of information pursuant to the federal "Currency and Foreign Transactions Reporting Act", (Title 31, United States Code, Section 1051 et seq.).

(11) The furnishing of information pursuant to any other statute that by its terms or by regulations promulgated thereunder requires the disclosure of financial records other than by subpoena, summons, warrant, or court order.

(12) The exchange of information between an association and an affiliate of the association; as used in this item, "affiliate" includes any company, partnership, or organization that controls, is controlled by, or is under common control with an association.

(13) The furnishing of information in accordance with the federal Personal Responsibility and Work Opportunity Reconciliation Act of 1996. Any association governed by this Act shall enter into an agreement for data exchanges with a State agency provided the State agency pays to the association a reasonable fee not to exceed its actual cost incurred. An association providing information in accordance with this item shall not be liable to any account holder or other person for any disclosure of information to a State agency, for encumbering or surrendering any assets held by the association in response to a lien or order to withhold and deliver issued by a State agency, or for any other action taken pursuant to this item, including individual or mechanical errors, provided the action does not constitute gross negligence or willful misconduct. An association shall have no obligation to hold, encumber, or surrender assets until it has been served with a subpoena, summons, warrant, court or administrative order, lien, or levy.

(14) The furnishing of information to law enforcement authorities, the Illinois Department on Aging and its regional administrative and provider agencies, the Department of Human Services Office of Inspector General, or public guardians: (i) upon subpoena by the investigatory entity or the guardian, or (ii) if there is suspicion by the association that a customer who is an elderly or disabled person has been or may become the victim of financial exploitation. For the purposes of this item (14), the term: (i) "elderly person" means a person who is 60 or more years of age, (ii) "disabled person" means a person who has or reasonably appears to the association to have a physical or mental disability that impairs his or her ability to seek or obtain protection from or prevent financial exploitation, and (iii) "financial exploitation" means tortious or illegal use of the assets or resources of an elderly or disabled person, and includes, without limitation, misappropriation of the elderly or disabled person's assets or resources by undue influence, breach of fiduciary relationship, intimidation, fraud, deception, extortion, or the use of assets or resources in any manner contrary to law. An association or person furnishing information pursuant to this item (14) shall be entitled to the same rights and protections as a person furnishing information under the Elder Abuse and Neglect Act, the Illinois Domestic Violence Act of 1986, and the Abuse of Adults with Disabilities Intervention Act.

(15) The disclosure of financial records or information as necessary to effect, administer, or enforce a transaction requested or authorized by the member or holder of capital, or in connection with:

(A) servicing or processing a financial product or service requested or authorized by the member or holder of capital;

(B) maintaining or servicing an account of a member or holder of capital with the association; or

(C) a proposed or actual securitization or secondary market sale (including sales of servicing rights) related to a transaction of a member or holder of capital.

Nothing in this item (15), however, authorizes the sale of the financial records or information of a member or holder of capital without the consent of the member or holder of capital.

(16) The disclosure of financial records or information as necessary to protect against or prevent actual or potential fraud, unauthorized transactions, claims, or other liability.

(17)(a) The disclosure of financial records or information related to a private label credit program between a financial institution and a private label party in connection with that private label credit program. Such information is limited to outstanding balance, available credit, payment and performance and account history, product references, purchase information, and information related to the identity of the customer.

(b)(l) For purposes of this paragraph (17) of subsection (c) of Section 3-8, a "private label credit program" means a credit program involving a financial institution and a private label party that is used by a customer of the financial institution and the private label party primarily for payment for goods or services sold, manufactured, or distributed by a private label party.

(2) For purposes of this paragraph (17) of subsection (c) of Section 3-8, a "private label party" means, with respect to a private label credit program, any of the following: a retailer, a merchant, a manufacturer, a trade group, or any such person's affiliate, subsidiary, member, agent, or service provider.

(d) An association may not disclose to any person, except to the member or holder of capital or his duly authorized agent, any financial records relating to that member or holder of capital of that association unless:

(1) The member or holder of capital has authorized disclosure to the person; or

(2) The financial records are disclosed in response to a lawful subpoena, summons, warrant, citation to discover assets, or court order that meets the requirements of subsection (e) of this Section.

(e) An association shall disclose financial records under subsection (d) of this Section pursuant to a lawful subpoena, summons, warrant, citation to discover assets, or court order only after the association mails a copy of the subpoena, summons, warrant, or court order to the person establishing the relationship with the association, if living, and, otherwise, his personal representative, if known, at his last known address by first class mail, postage prepaid, unless the association is specifically prohibited from notifying that person by order of court.

(f)(1) Any officer or employee of an association who knowingly and willfully furnishes financial records in violation of this Section is guilty of a business offense and, upon conviction, shall be fined not more than $1,000.

(2) Any person who knowingly and willfully induces or attempts to induce any officer or employee of an association to disclose financial records in violation of this Section is guilty of a business offense and, upon conviction, shall be fined not more than $1,000.

(g) However, if any member desires to communicate with the other members of the association with reference to any question pending or to be presented at a meeting of the members, the association shall give him upon request a statement of the approximate number of members entitled to vote at the meeting and an estimate of the cost of preparing and mailing the communication. The requesting member then shall submit the communication to the Commissioner who, if he finds it to be appropriate and truthful, shall direct that it be prepared and mailed to the members upon the requesting member's payment or adequate provision for payment of the expenses of preparation and mailing.

(h) An association shall be reimbursed for costs that are necessary and that have been directly incurred in searching for, reproducing, or transporting books, papers, records, or other data of a customer required to be reproduced pursuant to a lawful subpoena, warrant, citation to discover assets, or court order.

(Source: P.A. 93-271, eff. 7-22-03; 94-495, eff. 8-8-05; 94-851, eff. 6-13-06.)