Full Text of HB3227 99th General Assembly
HB3227 99TH GENERAL ASSEMBLY |
| | 99TH GENERAL ASSEMBLY
State of Illinois
2015 and 2016 HB3227 Introduced , by Rep. Frank J. Mautino SYNOPSIS AS INTRODUCED: |
| 205 ILCS 5/5 | from Ch. 17, par. 311 | 205 ILCS 5/14 | from Ch. 17, par. 321 |
205 ILCS 5/14.1 | from Ch. 17, par. 321.1 |
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Amends the Illinois Banking Act. Provides that, for the purpose of declaring dividends pursuant specified provisions, upon prior written approval of the Secretary of Financial and Professional Regulation, and without undergoing a quasi-reorganization, a State bank may restate its capital accounts to remove a deficit in its undivided profit account by eliminating such deficit into its surplus account so that the undivided profit account is restated to zero. Provides that nothing in provisions concerning general corporate powers shall be construed to require the filing of a notice or application for approval with the United States Office of the Comptroller of the Currency or a bank supervisor of another state as a condition to the right of a State bank to exercise any of the powers conferred in this State. Provides that the Secretary shall adopt rules under specified provisions. Effective immediately.
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| | A BILL FOR |
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| 1 | | AN ACT concerning regulation.
| 2 | | Be it enacted by the People of the State of Illinois,
| 3 | | represented in the General Assembly:
| 4 | | Section 5. The Illinois Banking Act is amended by changing | 5 | | Sections 5, 14, and 14.1 as follows:
| 6 | | (205 ILCS 5/5) (from Ch. 17, par. 311)
| 7 | | Sec. 5. General corporate powers. A bank organized under | 8 | | this Act
or subject hereto shall be a body corporate and | 9 | | politic and shall,
without specific mention thereof in the | 10 | | charter, have all the powers
conferred by this Act and the | 11 | | following additional general corporate
powers:
| 12 | | (1) To sue and be sued, complain, and defend in its | 13 | | corporate name.
| 14 | | (2) To have a corporate seal, which may be altered at | 15 | | pleasure, and
to use the same by causing it or a facsimile | 16 | | thereof to be impressed or
affixed or in any manner | 17 | | reproduced, provided that the affixing of a
corporate
seal | 18 | | to an instrument shall not give the instrument additional | 19 | | force or effect,
or change the construction thereof, and | 20 | | the use of a corporate seal is not
mandatory.
| 21 | | (3) To make, alter, amend, and repeal bylaws, not | 22 | | inconsistent with
its charter or with law, for the | 23 | | administration of the affairs of the bank.
If this Act does |
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| 1 | | not provide specific guidance in matters of corporate
| 2 | | governance, the provisions of the Business Corporation Act | 3 | | of 1983 may be
used if so provided in the bylaws, and if | 4 | | the bank is a limited liability
company, the provisions of | 5 | | the Limited Liability Company Act shall be used.
| 6 | | (4) To elect or appoint and remove officers and agents | 7 | | of the bank
and define their duties and fix their | 8 | | compensation.
| 9 | | (5) To adopt and operate reasonable bonus plans, | 10 | | profit-sharing
plans, stock-bonus plans, stock-option | 11 | | plans, pension plans and similar
incentive plans for its | 12 | | directors, officers and employees.
| 13 | | (5.1) To manage, operate and administer a fund for the | 14 | | investment of funds
by a public agency or agencies, | 15 | | including any unit of local government or
school district, | 16 | | or any person. The fund for a public agency shall invest in
| 17 | | the same type of investments and be subject to the same | 18 | | limitations provided
for the investment of public funds. | 19 | | The fund for public agencies shall
maintain a separate | 20 | | ledger showing the amount of investment for each public
| 21 | | agency in the fund. "Public funds" and "public agency" as | 22 | | used in this Section
shall have the meanings ascribed to | 23 | | them in Section 1 of the Public Funds
Investment Act.
| 24 | | (6) To make reasonable donations for the public welfare | 25 | | or for charitable,
scientific, religious or educational | 26 | | purposes.
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| 1 | | (7) To borrow or incur an obligation; and to pledge its | 2 | | assets:
| 3 | | (a) to secure its borrowings, its lease of personal | 4 | | or real property or
its other nondeposit obligations;
| 5 | | (b) to enable it to act as agent for the sale of | 6 | | obligations of the
United States;
| 7 | | (c) to secure deposits of public money of the | 8 | | United States,
whenever required by the laws of the | 9 | | United States, including without
being limited to, | 10 | | revenues and funds the deposit of which is subject to
| 11 | | the control or regulation of the United States or any | 12 | | of its officers,
agents, or employees and Postal | 13 | | Savings funds;
| 14 | | (d) to secure deposits of public money of any state | 15 | | or of any
political corporation or subdivision thereof
| 16 | | including, without being limited to, revenues and | 17 | | funds the deposit of which
is subject to the control or | 18 | | regulation of any state or of any political
corporation | 19 | | or subdivisions thereof or of any of their officers, | 20 | | agents, or
employees;
| 21 | | (e) to secure deposits of money whenever required | 22 | | by the National
Bankruptcy Act;
| 23 | | (f) (blank); and
| 24 | | (g) to secure trust funds commingled with the | 25 | | bank's funds, whether
deposited by the bank or an | 26 | | affiliate of the bank, pursuant to Section 2-8 of
the |
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| 1 | | Corporate Fiduciary Act.
| 2 | | (8) To own, possess, and carry as assets all or part of | 3 | | the real
estate necessary in or with which to do its | 4 | | banking business, either
directly or indirectly through | 5 | | the ownership of all or part of the
capital stock, shares | 6 | | or interests in any corporation, association,
trust | 7 | | engaged in holding any part or parts or all of the bank
| 8 | | premises, engaged in such business and in conducting a safe
| 9 | | deposit business in the premises or part of them, or | 10 | | engaged in any activity
that the bank is permitted to | 11 | | conduct in a subsidiary pursuant to paragraph
(12) of this | 12 | | Section 5.
| 13 | | (9) To own, possess, and carry as assets other real | 14 | | estate to
which it may obtain title in the collection of | 15 | | its debts or that was
formerly used as a part of the bank | 16 | | premises, but title to
any real estate except as herein | 17 | | permitted shall not be retained by the
bank, either | 18 | | directly or by or through a subsidiary, as permitted by
| 19 | | subsection (12) of this Section for a total period of more | 20 | | than 10
years
after acquiring title, either directly or | 21 | | indirectly.
| 22 | | (10) To do any act, including the acquisition of stock, | 23 | | necessary to
obtain insurance of its deposits, or part | 24 | | thereof, and any act necessary
to obtain a guaranty, in | 25 | | whole or in part, of any of its loans or
investments by the | 26 | | United States or any agency thereof, and any act
necessary |
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| 1 | | to sell or otherwise dispose of any of its loans or
| 2 | | investments to the United States or any agency thereof, and | 3 | | to acquire
and hold membership in the Federal Reserve | 4 | | System.
| 5 | | (11) Notwithstanding any other provisions of this Act | 6 | | or any
other law, to do any act
and to own, possess, and | 7 | | carry as assets property of the character,
including stock, | 8 | | that is at the time authorized or permitted to
national | 9 | | banks by an Act of Congress, but subject always to the same
| 10 | | limitations and restrictions as are applicable to national | 11 | | banks by the
pertinent federal law and subject to | 12 | | applicable provisions of the
Financial Institutions | 13 | | Insurance Sales Law.
| 14 | | (12) To own, possess, and carry as assets stock of one | 15 | | or more
corporations that is, or are, engaged in one or | 16 | | more of the
following businesses:
| 17 | | (a) holding title to and administering assets | 18 | | acquired
as a result of the collection or liquidating | 19 | | of loans, investments, or
discounts; or
| 20 | | (b) holding title to and administering personal | 21 | | property acquired by
the bank, directly or indirectly | 22 | | through a subsidiary, for the
purpose of leasing to | 23 | | others, provided the lease or leases and the
investment | 24 | | of the bank, directly or through a subsidiary, in that
| 25 | | personal property otherwise comply with Section 35.1 | 26 | | of this Act; or
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| 1 | | (c) carrying on or administering any of the | 2 | | activities excepting the
receipt of deposits or the | 3 | | payment of checks or other orders for the
payment of | 4 | | money in which a bank may engage in carrying on its | 5 | | general
banking business; provided, however, that | 6 | | nothing contained in this
paragraph (c) shall be deemed | 7 | | to permit a bank organized under this Act or
subject | 8 | | hereto to do, either directly or indirectly through any
| 9 | | subsidiary, any act, including the making of any loan | 10 | | or investment, or to
own, possess, or carry as assets | 11 | | any property that if done by or owned,
possessed, or | 12 | | carried by the State bank would be in violation of or
| 13 | | prohibited by any provision of this Act.
| 14 | | The provisions of this subsection (12) shall not apply | 15 | | to and shall not
be deemed to limit the powers of a State | 16 | | bank with respect to the
ownership, possession, and | 17 | | carrying of stock that a State bank is permitted to
own, | 18 | | possess, or carry under this Act.
| 19 | | Any bank intending to establish a subsidiary under this | 20 | | subsection
(12) shall give written notice to the | 21 | | Commissioner 60 days prior to the
subsidiary's commencing | 22 | | of business or, as the case may be, prior to
acquiring | 23 | | stock in a corporation that has already commenced business. | 24 | | After
receiving the notice, the Commissioner may waive or | 25 | | reduce the balance of the
60 day notice period. The
| 26 | | Commissioner may specify the form of the notice, may |
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| 1 | | designate the types of subsidiaries not subject to this | 2 | | notice requirement, and may promulgate rules
and | 3 | | regulations to administer this subsection (12).
| 4 | | (13) To accept for payment at a future date not | 5 | | exceeding one year
from the date of acceptance, drafts | 6 | | drawn upon it by its customers; and
to issue, advise, or | 7 | | confirm letters of credit authorizing the holders
thereof | 8 | | to draw drafts upon it or its correspondents.
| 9 | | (14) To own and lease personal property acquired by the | 10 | | bank at the
request of a prospective lessee and upon the | 11 | | agreement of that person to
lease the personal property | 12 | | provided that the lease, the agreement
with respect | 13 | | thereto, and the amount of the investment of the bank in
| 14 | | the property comply with Section 35.1 of this Act.
| 15 | | (15)(a) To establish and maintain, in addition to the | 16 | | main
banking premises, branches offering any banking | 17 | | services permitted at the main
banking premises of a State | 18 | | bank.
| 19 | | (b) To establish and maintain, after May 31, 1997, | 20 | | branches in
another state that may conduct any activity in | 21 | | that state that is authorized or
permitted for any bank | 22 | | that has a banking charter issued by that state, subject
to | 23 | | the same limitations and restrictions that are applicable | 24 | | to banks chartered
by that state.
| 25 | | (16) (Blank).
| 26 | | (17) To establish and maintain terminals, as |
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| 1 | | authorized by the
Electronic Fund Transfer Act.
| 2 | | (18) To establish and maintain temporary service | 3 | | booths at any
International Fair held in this State which | 4 | | is approved by the United
States Department of Commerce, | 5 | | for the duration of the international fair
for the sole | 6 | | purpose of providing a convenient place for foreign trade
| 7 | | customers at the fair to exchange their home countries' | 8 | | currency into
United States currency or the converse. This | 9 | | power shall not be construed
as establishing a new place or | 10 | | change of location for the bank providing
the service | 11 | | booth.
| 12 | | (19) To indemnify its officers, directors, employees, | 13 | | and
agents, as authorized for corporations under Section | 14 | | 8.75 of the
Business Corporation Act of 1983.
| 15 | | (20) To own, possess, and carry as assets stock of, or | 16 | | be or become a
member of, any corporation, mutual company, | 17 | | association, trust, or other
entity formed exclusively for | 18 | | the purpose of providing directors' and
officers' | 19 | | liability and bankers' blanket bond insurance or | 20 | | reinsurance
to and for the benefit of the stockholders, | 21 | | members, or beneficiaries, or their
assets or businesses, | 22 | | or their officers, directors, employees, or agents, and
not | 23 | | to or for the benefit of any other person or entity or the | 24 | | public
generally.
| 25 | | (21) To make debt or equity investments in corporations | 26 | | or projects,
whether for profit or not for profit, designed |
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| 1 | | to promote the development
of the community and its | 2 | | welfare, provided that the aggregate investment in
all of | 3 | | these corporations and in all of these projects does not | 4 | | exceed 10% of
the
unimpaired capital and unimpaired surplus | 5 | | of the bank and provided that
this
limitation shall not | 6 | | apply to creditworthy loans by the bank to those
| 7 | | corporations or projects. Upon written application to the | 8 | | Commissioner, a
bank may make an investment that would, | 9 | | when aggregated with all other
such investments, exceed 10% | 10 | | of the unimpaired capital and
unimpaired
surplus of the
| 11 | | bank. The Commissioner may approve the investment if he is | 12 | | of the opinion
and finds that the proposed investment will | 13 | | not have a material adverse
effect on the safety and | 14 | | soundness of the bank.
| 15 | | (22) To own, possess, and carry as assets the stock of | 16 | | a corporation
engaged in the ownership or operation of a | 17 | | travel agency or to operate a
travel agency as a part of | 18 | | its business.
| 19 | | (23) With respect to affiliate facilities:
| 20 | | (a) to conduct at affiliate facilities for and on | 21 | | behalf of another
commonly owned bank, if so
authorized | 22 | | by the other bank, all transactions that the other bank | 23 | | is
authorized or permitted to perform; and
| 24 | | (b) to authorize a commonly owned bank to conduct | 25 | | for and on behalf of
it any of the transactions it is | 26 | | authorized or permitted to perform at one or
more
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| 1 | | affiliate facilities.
| 2 | | Any bank intending to conduct or to authorize a | 3 | | commonly owned bank to
conduct at an affiliate facility any | 4 | | of the transactions specified in this
paragraph (23) shall | 5 | | give written notice to the Commissioner at least 30
days | 6 | | before any such transaction is conducted at the affiliate | 7 | | facility.
| 8 | | (24) To act as the agent for any fire, life, or other | 9 | | insurance company
authorized by the State of Illinois, by | 10 | | soliciting and selling insurance and
collecting premiums | 11 | | on policies issued by such company; and to
receive for | 12 | | services so rendered such fees or commissions as may be | 13 | | agreed upon
between the bank and the insurance company for | 14 | | which it may act as
agent; provided, however, that no such | 15 | | bank shall in any case assume or
guarantee the payment of | 16 | | any premium on insurance policies issued through its
agency | 17 | | by its principal; and provided further, that the bank shall | 18 | | not
guarantee the truth of any statement made by an assured | 19 | | in filing his
application for insurance.
| 20 | | (25) Notwithstanding any other provisions of this Act | 21 | | or any other law,
to offer any product or service that is | 22 | | at the time authorized or permitted to
any insured savings | 23 | | association or out-of-state bank by applicable law,
| 24 | | provided that powers
conferred only by this subsection | 25 | | (25):
| 26 | | (a) shall always be subject to the same limitations |
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| 1 | | and restrictions that
are applicable to the insured | 2 | | savings association or out-of-state bank for
the | 3 | | product or service by
such applicable law;
| 4 | | (b) shall be subject to applicable provisions of | 5 | | the Financial
Institutions Insurance Sales Law;
| 6 | | (c) shall not include the right to own or conduct a | 7 | | real estate brokerage
business for which a license | 8 | | would be required under the laws of this State;
and
| 9 | | (d) shall not be construed to include the | 10 | | establishment or maintenance of
a branch, nor shall | 11 | | they be construed to limit the establishment or | 12 | | maintenance
of a branch pursuant to subsection (11).
| 13 | | Not less than 30 days before engaging in any activity | 14 | | under the authority
of this subsection, a bank shall | 15 | | provide written notice to the Commissioner of
its intent to | 16 | | engage in the activity. The notice shall indicate the | 17 | | specific
federal or state law, rule, regulation, or | 18 | | interpretation the bank intends to
use as authority to | 19 | | engage in the activity.
| 20 | | (26) Nothing in this Section shall be construed to | 21 | | require the filing of a notice or application for approval | 22 | | with the United States Office of the Comptroller of the | 23 | | Currency or a bank supervisor of another state as a | 24 | | condition to the right of a State bank to exercise any of | 25 | | the powers conferred by this Section in this State. | 26 | | (Source: P.A. 98-44, eff. 6-28-13.)
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| 1 | | (205 ILCS 5/14) (from Ch. 17, par. 321)
| 2 | | Sec. 14. Stock. Unless otherwise provided for in this Act | 3 | | provisions
of general application to stock of a state bank | 4 | | shall be as follows:
| 5 | | (1) All banks shall have their capital divided into shares | 6 | | of a par value
of not less than $1 each and not more than $100 | 7 | | each, however, the par value
of shares of a bank effecting a | 8 | | reverse stock split pursuant to item (8)
of subsection (a) of | 9 | | Section 17 may temporarily exceed this limit provided
it | 10 | | conforms to the limits immediately after the reverse stock | 11 | | split is
completed. No issue of capital stock or preferred | 12 | | stock shall be valid until
not less than the par value of all | 13 | | such stock so issued shall be paid in and
notice thereof by the | 14 | | president, a vice-president or cashier of the
bank has been | 15 | | transmitted to the Commissioner. In the case of an increase
in | 16 | | capital stock by the declaration of a stock dividend, the | 17 | | capitalization
of retained earnings effected by such stock | 18 | | dividend shall constitute the
payment for such shares required | 19 | | by the preceding sentence, provided that
the surplus of said | 20 | | bank after such stock dividend shall be at least equal
to fifty | 21 | | per cent of the capital as increased. The charter shall not | 22 | | limit
or deny the voting power of the shares of any class of | 23 | | stock except as
provided in Section 15(3) of this Act.
| 24 | | (2) Pursuant to action taken in accordance with the | 25 | | requirements of
Section 17, a bank may issue preferred stock of |
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| 1 | | one or more
classes as shall be approved by the Commissioner as | 2 | | hereinafter provided,
and make such amendment to its charter as | 3 | | may be necessary for this
purpose; but in the case of any newly | 4 | | organized bank which has not yet
issued capital stock the | 5 | | requirements of Section 17 shall not
apply.
| 6 | | (3) Without limiting the authority herein contained a bank, | 7 | | when so
provided in its charter and when approved by the | 8 | | Commissioner, may issue
shares of preferred stock:
| 9 | | (a) Subject to the right of the bank to redeem any of | 10 | | such shares at not
exceeding the price fixed by the charter | 11 | | for the redemption thereof;
| 12 | | (b) Subject to the provisions of subsection (8) of this | 13 | | Section 14
entitling the holders thereof to cumulative or | 14 | | noncumulative dividends;
| 15 | | (c) Having preference over any other class or classes | 16 | | of shares as to
the payment of dividends;
| 17 | | (d) Having preference as to the assets of the bank over | 18 | | any other class
or classes of shares upon the voluntary or | 19 | | involuntary liquidation of the
bank;
| 20 | | (e) Convertible into shares of any other class of | 21 | | stock, provided that
preferred shares shall not be | 22 | | converted into shares of a different par
value unless that | 23 | | part of the capital of the bank represented by such
| 24 | | preferred shares is at the time of the conversion equal to | 25 | | the aggregate
par value of the shares into which the | 26 | | preferred shares are to be
converted.
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| 1 | | (4) If any part of the capital of a bank consists of | 2 | | preferred stock,
the determination of whether or not the | 3 | | capital of such bank is impaired
and the amount of such | 4 | | impairment shall be based upon the par value of its
stock even | 5 | | though the amount which the holders of such preferred stock
| 6 | | shall be entitled to receive in the event of retirement or | 7 | | liquidation
shall be in excess of the par value of such | 8 | | preferred stock.
| 9 | | (5) Pursuant to action taken in accordance with the | 10 | | requirements of
Section 17 of this Act, a state bank may | 11 | | provide for a specified
number of authorized but unissued | 12 | | shares of capital stock for one or more
of the following | 13 | | purposes:
| 14 | | (a) Reserved for issuance under stock option plan or | 15 | | plans to directors,
officers or employees;
| 16 | | (b) Reserved for issuance upon conversion of | 17 | | convertible preferred stock
issued pursuant to and in | 18 | | compliance with the provisions of subsections (2)
and (3) | 19 | | of this Section 14.
| 20 | | (c) Reserved for issuance upon conversion of | 21 | | convertible debentures or
other convertible evidences of | 22 | | indebtedness issued by a state bank,
provided always that | 23 | | the terms of such conversion have been approved by the
| 24 | | Commissioner;
| 25 | | (d) Reserved for issuance by the declaration of a stock | 26 | | dividend.
If and when any shares of capital stock are |
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| 1 | | proposed to be authorized and
reserved for any of the | 2 | | purposes set forth in subparagraphs (a), (b) or (c)
above, | 3 | | the notice of the meeting, whether special or annual, of
| 4 | | stockholders at which such proposition is to be considered | 5 | | shall be
accompanied by a statement setting forth or | 6 | | summarizing the terms upon
which the shares of capital | 7 | | stock so reserved are to be issued, and the
extent to which | 8 | | any preemptive rights of stockholders are inapplicable to
| 9 | | the issuance of the shares so reserved or to the | 10 | | convertible preferred
stock or convertible debentures or | 11 | | other convertible evidences of
indebtedness, and the | 12 | | approving vote of the holders of at least two-thirds
of the | 13 | | outstanding shares of stock entitled to vote at such | 14 | | meeting of the
terms of such issuance shall be requisite | 15 | | for the adoption of any amendment
providing for the | 16 | | reservation of authorized but unissued shares for any of
| 17 | | said purposes. Nothing in this subsection (5) contained | 18 | | shall be deemed to
authorize the issuance of any capital | 19 | | stock for a consideration less than
the par value thereof.
| 20 | | (6) Upon written application to the Commissioner 60 days | 21 | | prior to the
proposed purchase and receipt of the written | 22 | | approval of the Commissioner,
a state bank may purchase and | 23 | | hold as treasury stock such amounts of the
total number of | 24 | | issued and outstanding shares of its capital and preferred
| 25 | | stock outstanding as the Commissioner determines is consistent | 26 | | with safety
and soundness of the bank. The Commissioner may |
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| 1 | | specify the manner of
accounting for the treasury stock and the | 2 | | form of notice prior to ultimate
disposition of the shares. | 3 | | Except as authorized in this subsection, it
shall not be lawful | 4 | | for a state bank to purchase or hold any additional
such shares | 5 | | or securities described in subsection (2) of Section 37 unless
| 6 | | necessary to prevent loss upon a debt previously contracted in | 7 | | good faith,
in which event such shares or securities so | 8 | | purchased or acquired shall,
within 6 months from the time of | 9 | | purchase or acquisition, be sold or
disposed of at public or | 10 | | private sale. Any state bank which intends to
purchase and hold | 11 | | treasury stock as authorized in this subsection (6) shall
file | 12 | | a written application with the Commissioner 60 days prior to | 13 | | any such
proposed purchase. The application shall state the | 14 | | number of shares to be
purchased, the consideration for the | 15 | | shares, the name and address of the
person from whom the shares | 16 | | are to be purchased, if known, and the total
percentage of its | 17 | | issued and outstanding shares to be held by the bank after
the | 18 | | purchase. The total consideration paid by a state bank for | 19 | | treasury stock
shall reduce capital and surplus of the bank for | 20 | | purposes of Sections of this
Act relating to lending and | 21 | | investment limits which require computation of
capital and | 22 | | surplus. After considering and approving an application to
| 23 | | purchase and hold treasury stock under this subsection, the | 24 | | Commissioner may
waive or reduce the balance of the 60 day | 25 | | application period. The Commissioner
may specify the form of | 26 | | the application for approval to acquire treasury stock
and |
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| 1 | | promulgate rules and regulations for the administration of this | 2 | | subsection
(6). A state bank may acquire or resell its own | 3 | | shares as
treasury stock pursuant to this subsection (6) | 4 | | without a change in its charter
pursuant to Section 17. Such | 5 | | stock may be held for any purpose permitted in
subsection (5) | 6 | | of this Section 14 or may be resold upon such reasonable terms
| 7 | | as the board of directors may determine provided notice is | 8 | | given to the
Commissioner prior to the resale of such stock.
| 9 | | (7) During the time that a state bank shall continue its | 10 | | banking
business, it shall not withdraw or permit to be | 11 | | withdrawn, either in the
form of dividends or otherwise, any | 12 | | portion of its capital, but nothing in
this subsection shall | 13 | | prevent a reduction or change of the capital stock or
the | 14 | | preferred stock under the provisions of Sections 17 through 30 | 15 | | of this
Act, a purchase of treasury stock under the provisions | 16 | | of subsection (6) of
this Section 14 or a redemption of | 17 | | preferred stock pursuant to charter
provisions therefor.
| 18 | | (8) (a) Subject to the provisions of this Act, the board of | 19 | | directors of
a state bank from time to time may declare a | 20 | | dividend of so much of the net
profits of such bank as it | 21 | | shall judge expedient, subject to item (b) of this Section | 22 | | and applicable federal law, but each bank before the
| 23 | | declaration of a dividend shall carry at least one-tenth of | 24 | | its net profits
since the date of the declaration of the | 25 | | last preceding dividend, or since
the issuance of its | 26 | | charter in the case of its first dividend, to its
surplus |
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| 1 | | until the same shall be equal to its capital.
| 2 | | (b) No dividends shall be paid by a state bank while it | 3 | | continues its
banking business to an amount greater than | 4 | | its net profits then on hand,
deducting first therefrom its | 5 | | losses and bad debts. All debts due to a
state bank on | 6 | | which interest is past due and unpaid for a period of 6
| 7 | | months or more, unless the same are well secured and in the | 8 | | process of
collection, shall be considered bad debts. | 9 | | (c) For the purpose of declaring dividends pursuant to | 10 | | paragraph (b) of this Section, upon prior written approval | 11 | | of the Secretary, and without undergoing a | 12 | | quasi-reorganization pursuant to Section 14.1, a State | 13 | | bank may restate its capital accounts to remove a deficit | 14 | | in its undivided profit account by eliminating such deficit | 15 | | into its surplus account so that the undivided profit | 16 | | account is restated to zero. The Secretary shall adopt | 17 | | rules to implement this paragraph (c) and Section 14.1.
| 18 | | (9) A State bank may, but shall not be obliged to, issue a | 19 | | certificate for
a fractional share, and, by action of its board | 20 | | of directors, may in lieu
thereof, pay cash equal to the value | 21 | | of the fractional share. A certificate
for a fractional share | 22 | | shall entitle the holder to exercise fractional voting
rights, | 23 | | to receive dividends, and to participate in any of the assets | 24 | | of the
bank in the event of liquidation.
| 25 | | (Source: P.A. 92-483, eff. 8-23-01; 92-651, eff. 7-11-02.)
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| 1 | | (205 ILCS 5/14.1) (from Ch. 17, par. 321.1)
| 2 | | Sec. 14.1. Quasi-Reorganization of Capital Upon a Change in | 3 | | Control.
For the purposes of declaring dividends pursuant to | 4 | | Section 14(8)(b) of
this Act, subject to rules adopted by the | 5 | | Secretary under paragraph (c) of subsection (8) of Section 14, | 6 | | if a State bank:
| 7 | | (1) incurs a change in ownership of more than 50% of its | 8 | | voting stock; and
| 9 | | (2) has a deficit in its net profits then on hand at the | 10 | | time of such
change in ownership; and
| 11 | | (3) receives the prior written approval of the Secretary | 12 | | Commissioner ; such bank
may restate its asset and liability | 13 | | accounts to fair value for the purpose
of reorganizing the | 14 | | capital accounts of the bank so that net profits then
on hand | 15 | | are restated to zero; provided that in no event may total | 16 | | capital
be increased as a result of a capital reorganization | 17 | | made pursuant to this Section.
| 18 | | (Source: P.A. 87-841.)
| 19 | | Section 99. Effective date. This Act takes effect upon | 20 | | becoming law.
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