Illinois General Assembly - Full Text of SB2885
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Full Text of SB2885  100th General Assembly




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1    AN ACT concerning regulation.
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
4    Section 5. The Illinois Banking Act is amended by changing
5Sections 16 and 35 and by adding Section 80.5 as follows:
6    (205 ILCS 5/16)  (from Ch. 17, par. 323)
7    Sec. 16. Directors. The business and affairs of a State
8bank shall be managed by its board of directors that shall
9exercise its powers as follows:
10    (1) Directors shall be elected as provided in this Act. Any
11omission to elect a director or directors shall not impair any
12of the rights and privileges of the bank or of any person in
13any way interested. The existing directors shall hold office
14until their successors are elected and qualify.
15    (2) (a) Notwithstanding the provisions of any charter
16    heretofore or hereafter issued, the number of directors,
17    not fewer than 5 nor more than 25, may be fixed from time
18    to time by the stockholders at any meeting of the
19    stockholders called for the purpose of electing directors
20    or changing the number thereof by the affirmative vote of
21    at least two-thirds of the outstanding stock entitled to
22    vote at the meeting, and the number so fixed shall be the
23    board regardless of vacancies until the number of directors



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1    is thereafter changed by similar action.
2        (b) Notwithstanding the minimum number of directors
3    specified in paragraph (a) of this subsection, a State bank
4    that has been in existence for 10 years or more and has
5    less than $50,000,000 $20,000,000 in assets, as of the
6    December 31 immediately preceding the annual meeting of
7    shareholders at which directors are elected, may, subject
8    to the approval of the Commissioner, have a minimum of 3
9    directors; provided that if a State bank has fewer than 5
10    directors, at least one director shall not be an officer or
11    employee of the bank. The Commissioner shall annually
12    review the appropriateness of the grant of authority to
13    have a reduced minimum number of directors pursuant to this
14    paragraph (b).
15    (3) Except as otherwise provided in this paragraph (3),
16directors shall hold office until the next annual meeting of
17the stockholders succeeding their election or until their
18successors are elected and qualify. If the board of directors
19consists of 6 or more members, in lieu of electing the
20membership of the whole board of directors annually, the
21charter or by-laws of a State bank may provide that the
22directors shall be divided into either 2 or 3 classes, each
23class to be as nearly equal in number as is possible. The term
24of office of directors of the first class shall expire at the
25first annual meeting of the stockholders after their election,
26that of the second class shall expire at the second annual



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1meeting after their election, and that of the third class, if
2any, shall expire at the third annual meeting after their
3election. At each annual meeting after classification, the
4number of directors equal to the number of the class whose
5terms expire at the time of the meeting shall be elected to
6hold office until the second succeeding annual meeting, if
7there be 2 classes, or until the third succeeding annual
8meeting, if there be 3 classes. Vacancies may be filled by
9stockholders at a special meeting called for the purpose.
10    If authorized by the bank's by-laws or an amendment
11thereto, the directors of a State bank may properly fill a
12vacancy or vacancies arising between shareholders' meetings,
13but at no time may the number of directors selected to fill a
14vacancy in this manner during any interim period between
15shareholders' meetings exceed 33 1/3% of the total membership
16of the board of directors.
17    (4) The board of directors shall hold regular meetings at
18least once each month, provided that, upon prior written
19approval by the Commissioner, the board of directors may hold
20regular meetings less frequently than once each month but at
21least once each calendar quarter. A special meeting of the
22board of directors may be held as provided by the by-laws. A
23special meeting of the board of directors may also be held upon
24call by the Commissioner or a bank examiner appointed under the
25provisions of this Act upon not less than 12 hours notice of
26the meeting by personal service of the notice or by mailing the



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1notice to each of the directors at his residence as shown by
2the books of the bank. A majority of the board of directors
3shall constitute a quorum for the transaction of business
4unless a greater number is required by the charter or the
5by-laws. The act of the majority of the directors present at a
6meeting at which a quorum is present shall be the act of the
7board of directors unless the act of a greater number is
8required by the charter or by the by-laws.
9    (5) A member of the board of directors shall be elected
10president. The board of directors may appoint other officers,
11as the by-laws may provide, and fix their salaries to carry on
12the business of the bank. The board of directors may make and
13amend by-laws (not inconsistent with this Act) for the
14government of the bank and may, by the affirmative vote of a
15majority of the board of directors, establish reasonable
16compensation of all directors for services to the corporation
17as directors, officers, or otherwise. An officer, whether
18elected or appointed by the board of directors or appointed
19pursuant to the by-laws, may be removed by the board of
20directors at any time.
21    (6) The board of directors shall cause suitable books and
22records of all the bank's transactions to be kept.
23    (7) (a) In discharging the duties of their respective
24    positions, the board of directors, committees of the board,
25    and individual directors may, in considering the best long
26    term and short term interests of the bank, consider the



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1    effects of any action (including, without limitation,
2    action that may involve or relate to a merger or potential
3    merger or to a change or potential change in control of the
4    bank) upon employees, depositors, suppliers, and customers
5    of the corporation or its subsidiaries, communities in
6    which the main banking premises, branches, offices, or
7    other establishments of the bank or its subsidiaries are
8    located, and all pertinent factors.
9        (b) In discharging the duties of their respective
10    positions, the board of directors, committees of the board,
11    and individual directors shall be entitled to rely on
12    advice, information, opinions, reports or statements,
13    including financial statements and financial data,
14    prepared or presented by: (i) one or more officers or
15    employees of the bank whom the director believes to be
16    reliable and competent in the matter presented; (ii) one or
17    more counsels, accountants, or other consultants as to
18    matters that the director believes to be within that
19    person's professional or expert competence; or (iii) a
20    committee of the board upon which the director does not
21    serve, as to matters within that committee's designated
22    authority; provided that the director's reliance under
23    this paragraph (b) is placed in good faith, after
24    reasonable inquiry if the need for such inquiry is apparent
25    under the circumstances and without knowledge that would
26    cause such reliance to be unreasonable.



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1(Source: P.A. 91-452, eff. 1-1-00; 92-476, eff. 8-23-01.)
2    (205 ILCS 5/35)  (from Ch. 17, par. 343)
3    Sec. 35. Exemptions from loan and investment limits. The
4limitations in Sections 32, 33, 34, and 35.1 upon the
5liabilities of any one person and upon the purchase or holding
6of marketable investment securities shall not apply to the
7following as to which there shall be no limitation:
8    (1) Obligations of, or guaranteed by the United States or
9any department, bureau, board, commission, or establishment of
10the United States, including any corporation wholly owned,
11directly or indirectly, by the United States.
12    (2) Loans to or obligations of any person to the extent
13that they are secured by not less than a like amount of bonds
14or notes of the United States, or certificates of indebtedness
15of the United States, or Treasury Bills of the United States or
16obligations fully guaranteed as to both principal and interest
17by the United States, or to the extent that the same shall be
18secured or covered by guaranty or by commitment or agreement to
19take over or purchase, made by any Federal Reserve Bank or by
20the United States or any department, bureau, board, commission
21or establishment of the United States, including any
22corporation wholly owned, directly or indirectly, by the United
24    (3) Obligations of any corporation wholly owned, directly
25or indirectly, by the United States or of any agency or



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1instrumentality of the United States.
2    (4) General obligations and tax anticipation warrants of
3each state of the United States and general obligations of each
4municipality located in whole or in part in the county in which
5the bank is located.
6    (5) Loans to or obligations of any person to the extent
7that they are secured by not less than the same amount of
8general obligations and tax anticipation warrants of each state
9of the United States and of each municipality located in whole
10or in part in the county in which the bank is located.
11    (6) Loans to or obligations of or investments in those
12subsidiaries, established or acquired pursuant to subsection
13(12) of Section 5 of this Act, all of the stock of which is
14owned by the bank.
15    (7) Loans or extensions of credit secured by a segregated
16deposit account in the lending bank.
17    (8) Obligations of the State of Illinois, and obligations
18guaranteed by the State of Illinois to the extent of the
20    (9) To the ownership of certificates of participation in
21open-end investment companies registered with the Securities
22and Exchange Commission under the Investment Company Act of
231940 and Securities Act of 1933, provided the portfolios of
24such investment companies consist wholly of investments in
25which the bank could invest directly without limitation.
26(Source: P.A. 90-301, eff. 8-1-97.)



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1    (205 ILCS 5/80.5 new)
2    Sec. 80.5. Accounting of Administrative Expenses. Upon
3request of the Board, the Secretary shall provide information
4relating to the prior fiscal year, including:
5        (1) all fees collected under Section 48 of this Act;
6        (2) the total amount deposited into the Bank and Trust
7    Company Fund;
8        (3) the total administrative expenses for the fiscal
9    year; and
10        (4) the amount available to be applied as a credit
11    against fees for the subsequent year as required by
12    subsection (d-1) of Section 48 and the actual amount so
13    credited.