SB2996ham001 96TH GENERAL ASSEMBLY

Financial Institutions Committee

Adopted in House Comm. on Apr 28, 2010

09600SB2996ham001 LRB096 16388 RPM 40313 a

AMENDMENT TO SENATE BILL 2996

AMENDMENT NO. ______. Amend Senate Bill 2996 as follows:

on page 5, immediately below line 21, by inserting the following:

"Section 7. The Illinois Bank Examiners' Education Foundation Act is amended by changing Sections 3.01, 4, and 5 as follows:

(20 ILCS 3210/3.01) (from Ch. 17, par. 403.1)

Sec. 3.01. "Board" means the State Banking Board of Illinois as established under the provisions of the Illinois Banking Act Board of Trustees of the Illinois Bank Examiners' Education Foundation created by this Act.

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

(20 ILCS 3210/4) (from Ch. 17, par. 404)

Sec. 4. The Foundation shall establish an endowment fund with the monies in the Illinois Bank Examiners' Education Fund. The income from such Fund shall be used to pay for continuing education and professional training activity for the examination employees of the Commissioner's office authorized by the Board of the Illinois Bank Examiners' Education Program and to pay for reasonable expenses incurred by the Board in the course of administering its official duties under this Act. The continuing education and professional training activity to be funded by the Foundation shall be a supplement to the education and training expenditures regularly being made from the Bank & Trust Company Fund for such purposes.

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

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

Sec. 5. The Foundation shall be governed by the a Board of Trustees. The Board shall consist of the 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.

For carrying out their official duties under this Act, the Board members 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 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 said their official duties.

(Source: P.A. 84-1127.)"; and

by replacing line 3 on page 11 through line 3 on page 15 with the following:

"(205 ILCS 5/32) (from Ch. 17, par. 339)

Sec. 32. Basic loaning limits. The liabilities outstanding at one time to a state bank of a person for money borrowed, including the liabilities of a partnership or joint venture in the liabilities of the several members thereof, shall not exceed 25% of the amount of the unimpaired capital and unimpaired surplus of the bank.

The liabilities to any state bank of a person may exceed 25% of the unimpaired capital and unimpaired surplus of the bank, provided that (i) the excess amount from time to time outstanding is fully secured by readily marketable collateral having a market value, as determined by reliable and continuously available quotations, at least equal to the excess amount outstanding; and (ii) the total liabilities shall not exceed 30% of the unimpaired capital and unimpaired surplus of the bank.

The following shall not be considered as money borrowed within the meaning of this Section:

(1) The purchase or discount of bills of exchange drawn in good faith against actually existing values.

(2) The purchase or discount of commercial or business paper actually owned by the person negotiating the same.

(3) The purchase of or loaning money in exchange for evidences of indebtedness which shall be secured by mortgage or trust deed upon productive real estate the value of which, as ascertained by the oath of 2 qualified appraisers, neither of whom shall be an officer, director, or employee of the bank or of any subsidiary or affiliate of the bank, is double the amount of the principal debt secured at the time of the original purchase of evidence of indebtedness or loan of money and which is still double the amount of the principal debt secured at the time of any renewal of the indebtedness or loan, and which mortgage or trust deed is shown, either by a guaranty policy of a title guaranty company approved by the Commissioner or by a registrar's certificate of title in any county having adopted the provisions of the Registered Titles (Torrens) Act, or by the opinion of an attorney-at-law, to be a first lien upon the real estate therein described, and real estate shall not be deemed to be encumbered within the meaning of this subsection (3) by reason of the existence of instruments reserving rights-of-way, sewer rights and rights in wells, building restrictions or other restrictive covenants, nor by reason of the fact it is subject to lease under which rents or profits are reserved by the owners.

(4) The purchase of marketable investment securities.

(5) The liability to a state bank of a person who is an accommodation party to, or guarantor of payment for, any evidence of indebtedness of another person who obtains a loan from or discounts paper with or sells paper to the state bank; but the total liability to a state bank of a person as an accommodation party or guarantor of payment in respect of such evidences of indebtedness shall not exceed 25% of the amount of the unimpaired capital and unimpaired surplus of the bank; provided however that the liability of an accommodation party to paper excepted under subsection 2 of this Section shall not be included in the computation of this limitation.

(6) The liability to a state bank of a person, who as a guarantor, guarantees collection of the obligation or indebtedness of another person.

The total liabilities of any one person, for money borrowed, or otherwise, shall not exceed 25% of the deposits of the bank, and those total liabilities shall at no time exceed 50% of the amount of the unimpaired capital and unimpaired surplus of the bank. Absent an actual unremedied breach, the obligation or responsibility for breach of warranties or representations, express or implied, of a person transferring negotiable or non-negotiable paper to a bank without recourse and without guaranty of payment, shall not be included in determining the amount of liabilities of the person to the bank for borrowed money or otherwise; and in the event of and to the extent of an unremedied breach, the amount remaining unpaid for principal and interest on the paper in respect of which the unremedied breach exists shall thereafter for the purpose of determining whether subsequent transactions giving rise to additional liability of the person to the state bank for borrowed money or otherwise are within the limitations of Sections 32 through 34 of this Act, be included in computing the amount of liabilities of the person for borrowed money or otherwise.

The liability of a person to a state bank on account of acceptances made or issued by the state bank on behalf of the person shall be included in the computation of the total liabilities of the person for money borrowed except to the extent the acceptances grow out of transactions of the character described in subsection (6) of Section 34 of this Act and are otherwise within the limitations of that subsection; provided nevertheless that any such excepted acceptances acquired by the state bank which accepted the same shall be included in the computation of the liabilities of the person to the state bank for money borrowed.

The Secretary may adopt rules to address the funding by banks of any loan commitment, when such funding would involve additional extensions of credit to be made after the unimpaired capital and unimpaired surplus of the bank have decreased and the Secretary determines that such decrease in unimpaired capital and unimpaired surplus would cause the additional extensions of credit to result in an unsafe and unsound condition.

(Source: P.A. 92-336, eff. 8-10-01; 92-573, eff. 6-26-02.)"; and

on page 33, by replacing lines 11 and 12 with the following: "this Act, any order of the Commissioner, or any other action"; and

on page 47, line 25, by replacing "and 10-1" with "10-1, and 11-1"; and

on page 81, immediately below line 18, by inserting the following:

"(205 ILCS 105/11-1) (from Ch. 17, par. 3311-1)

Sec. 11-1. Offenses and penalties. Any person who violates the provisions of Sections 3-9, 3-10, 5-11 or 5-12 (b) of this Act is guilty of a Business Offense.

The Commissioner, in addition to any other powers granted in this Act, shall have the power and authority to impose civil penalties of up to $100,000 against any person for each violation of any provision of this Act, any rule promulgated in accordance with this Act, any order of the Commissioner, or any other action that in the Commissioner's discretion is an unsafe or unsound banking practice.

(Source: P.A. 86-137.)"; and

on page 81, line 20, by replacing "and 9004," with "9004, and 11006,"; and

on page 82, line 3, by replacing "of Banks and Real Estate" with "of Banks and Real Estate"; and

on page 97, line 2, by replacing "the hearing" with "a hearing"; and

on page 109, line 24, by replacing "the savings" with "such savings"; and

on page 113, immediately below line 8, by inserting the following:

"(205 ILCS 205/11006) (from Ch. 17, par. 7311-6)

Sec. 11006. Civil penalties. The Commissioner, in addition to any other powers granted in this Act, shall have the power and authority to:

(1) Impose civil penalties of up to $100,000 $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 Commissioner, or any other action that in the Commissioner's discretion, is an unsafe or unsound banking practice.

(2) 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.

(Source: P.A. 86-1213.)"; and

on page 114, immediately below line 2, by inserting the following:

"(2.5) To order restitution to consumers suffering damages resulting from violations of this Act, rules promulgated in accordance with this Act, or other laws or regulations related to the operation of a pawnshop."; and

on page 116, by replacing lines 20 and 21 with the following:

"officer, director, employee, or agent of the pawnshop who engages in or has engaged in unlawful activities that relate to the operation of a pawnshop."; and

on page 116, line 24, by replacing "establish" with "established"; and

by replacing line 13 on page 120 through line 4 on page 122 with the following:

"(205 ILCS 510/5.5 new)

Sec. 5.5. Replacement of articles or property; insurance. In the event that any articles or property pledged are lost or rendered inoperable the pawnbroker shall replace the articles or property with identical articles or property, except that if the pawnbroker cannot reasonably obtain identical articles or property, the pawnbroker shall replace the articles or property with like articles or property.

No pawnbroker shall conduct business in this State, unless the pawnbroker maintains insurance coverage covering all hazards equal to at least 2 times the aggregate value of the outstanding loans for items held in pawn. Such insurance shall be obtained from an insurance company authorized to do business in Illinois

The pawnbroker shall file a copy of proof of insurance coverage with the Secretary. A pawnbroker or an insurance company shall not cancel the insurance coverage except upon notice to the Secretary by certified mail, return receipt requested. The cancellation is not effective prior to 30 days after the Secretary receives the notice.".