(205 ILCS 205/6011) (from Ch. 17, par. 7306-11)
Sec. 6011.
Effect of unauthorized investments.
(a) Every loan or other investment made in violation of this
Act shall be due and payable according to its terms, and the
obligation thereof shall not be impaired.
(b) Every director or officer of a savings bank who shall knowingly
participate in or assent to, or who shall knowingly
permit any of the officers or agents of the savings bank to make,
investments not authorized by this Act shall be liable
individually for all damage that the savings bank may sustain in
consequence of the investments, in addition to any criminal
penalties prescribed by this Act.
(c) The Commissioner may require every director or officer
of a savings bank who shall knowingly participate in or
assent to, or who shall knowingly permit any of the officers or
agents of the savings bank to make, investments not authorized by
this Act to deposit with the savings bank an indemnity bond,
insurance, or collateral of a kind and amount sufficient to
indemnify the savings bank against damages that the savings bank
may sustain in consequence of the investments. The amount
considered sufficient to indemnify the savings bank shall, in the
case of an unauthorized investment, be the difference between the
book value and the market value of the investment at the time the
Commissioner makes his determination that the investment is
unauthorized. The amount considered sufficient to indemnify the
savings bank, in the case of an unauthorized loan, shall be the
difference between the book value of the loan and the amount that
could have been made under the provisions of this Act. Whenever
an unauthorized investment has been sold or disposed of without
recourse, the Commissioner shall release all or part of the
indemnity after deducting any loss. Whenever the balance of an
unauthorized loan has been reduced to an amount that would permit
the loan to be made under the provisions of this Act, the
indemnity shall be released, provided that the Commissioner in
making the determination may require an independent appraisal of
the security.
(Source: P.A. 86-1213.)
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