Illinois Compiled Statutes
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205 ILCS 5/2
(205 ILCS 5/2)
(from Ch. 17, par. 302)
In this Act, unless the context otherwise
requires, the following words and phrases shall have the following meanings:
"Accommodation party" shall have the meaning ascribed to that term in
Section 3-419 of the Uniform Commercial Code.
"Action" in the sense of a judicial proceeding includes recoupments,
counterclaims, set-off, and any other proceeding in which
rights are determined.
"Affiliate facility" of a bank means a main banking premises or branch
of another commonly owned bank.
The main banking premises or any branch of a bank
may be an "affiliate facility" with respect to one or more other commonly owned
"Appropriate federal banking agency" means the Federal Deposit Insurance
Corporation, the Federal Reserve Bank of Chicago, or the Federal Reserve Bank
of St. Louis, as determined by federal law.
"Bank" means any person doing a banking business whether subject to the
laws of this or any other jurisdiction.
A "banking house", "branch", "branch bank" or "branch
office" shall mean any place of business of a bank at which deposits are
received, checks paid, or loans made, but shall not include any place at
which only records thereof are made, posted, or kept. A place of business
at which deposits are received, checks paid, or loans made shall not be
deemed to be a branch, branch bank, or branch office if the place of
business is adjacent to and connected with the main banking premises, or if
it is separated from the main banking premises by not more than an alley;
provided always that (i) if the place of business is separated by an alley
from the main banking premises there is a connection between the two by
public or private way or by subterranean or overhead passage, and (ii) if
the place of business is in a building not wholly occupied by the bank, the
place of business shall not be within any office or room in which any other
business or service of any kind or nature other than the business of the
bank is conducted or carried on. A place of business at which deposits are
received, checks paid, or loans made shall not be deemed to be a branch,
branch bank, or branch office (i) of any bank if the place is a terminal established and maintained in accordance with
(17) of Section 5 of this Act, or (ii) of a commonly owned bank
by virtue of
transactions conducted at that place on behalf of the other commonly owned bank
under paragraph (23) of Section 5 of this Act if the place is an affiliate
facility with respect to the other bank.
"Branch of an out-of-state bank" means a branch established or maintained in
Illinois by an out-of-state bank as a result of a merger between an Illinois
bank and the out-of-state bank that occurs on or after May 31, 1997, or any
branch established by the out-of-state bank following the merger.
"Bylaws" means the bylaws of a bank that are adopted by the bank's board of
directors or shareholders for the regulation and management of the bank's
affairs. If the bank operates as a limited liability company, however, "bylaws"
means the operating
agreement of the bank.
"Call report fee" means the fee to be paid to the
Commissioner by each State bank pursuant to paragraph (a) of subsection (3)
of Section 48 of this Act.
"Capital" includes the aggregate of outstanding capital stock and
"Cash flow reserve account" means the account within the books and records
of the Commissioner of Banks and Real Estate used to
record funds designated to maintain a reasonable Bank and Trust Company Fund
operating balance to meet agency obligations on a timely basis.
"Charter" includes the original charter and all amendments thereto
and articles of merger or consolidation.
"Commissioner" means the Commissioner of Banks and Real Estate, except that beginning on April 6, 2009 (the effective date of Public Act 95-1047), all references in this Act to the Commissioner of Banks and Real Estate are deemed, in appropriate contexts, to be references to the Secretary of Financial and Professional Regulation.
"Commonly owned banks" means 2 or more banks that each qualify as a bank
subsidiary of the same bank holding company pursuant to Section 18 of the
Federal Deposit Insurance Act; "commonly owned bank" refers to one of a group
of commonly owned banks but only with respect to one or more of the other banks
in the same group.
"Community" means a city, village, or incorporated town and also includes
the area served by the banking offices of a bank, but need not be limited or
expanded to conform to the geographic boundaries of units of local
"Company" means a corporation, limited liability company, partnership,
association, or similar organization and, unless specifically excluded,
includes a "State bank" and a "bank".
"Consolidating bank" means a party to a consolidation.
"Consolidation" takes place when 2 or more banks, or a trust company and
a bank, are extinguished and by the same process a new bank is created,
taking over the assets and assuming the liabilities of the banks or trust
company passing out of existence.
"Continuing bank" means a merging bank, the charter of which becomes the
charter of the resulting bank.
"Converting bank" means a State bank converting to become a national
bank, or a national bank converting to become a State bank.
"Converting trust company" means a trust company converting to become a
"Court" means a court of competent jurisdiction.
"Director" means a member of the board of directors of a bank. In the case
of a manager-managed limited liability company, however, "director" means a
the bank and, in the case of a member-managed limited liability company,
"director" means a member of the bank. The term "director" does not include an
advisory director, honorary director, director emeritus, or similar person,
unless the person is otherwise performing
functions similar to those of a member of the board of directors.
"Director of Banking" means the Director of the Division of Banking of the Department of Financial and Professional Regulation.
"Eligible depository institution" means an insured savings association
that is in default, an insured savings association that is in danger of
default, a State or national bank that is in default or a State or
national bank that is in danger of default, as those terms are defined in this
Section, or a new bank as that term defined in Section 11(m) of the Federal
Deposit Insurance Act or a bridge bank as that term is defined in Section 11(n)
of the Federal Deposit Insurance Act or a new federal savings association
authorized under Section 11(d)(2)(f) of the Federal Deposit Insurance Act.
"Fiduciary" means trustee, agent, executor, administrator, committee,
guardian for a minor or for a person under legal disability, receiver,
trustee in bankruptcy, assignee for creditors, or any holder of similar
position of trust.
"Financial institution" means a bank, savings bank, savings and loan association,
credit union, or any licensee under the Consumer Installment Loan Act or
the Sales Finance Agency Act and, for purposes of Section 48.3, any
proprietary network, funds transfer corporation, or other entity providing
electronic funds transfer services, or any corporate fiduciary, its
subsidiaries, affiliates, parent company, or contractual service provider
that is examined by the Commissioner. For purposes of Section 5c and subsection (b) of Section 13 of this Act, "financial institution" includes any proprietary network, funds transfer corporation, or other entity providing electronic funds transfer services, and any corporate fiduciary.
"Foundation" means the Illinois Bank Examiners' Education Foundation.
"General obligation" means a bond, note, debenture, security, or other
instrument evidencing an obligation of the government entity that is the
issuer that is supported by the
full available resources of the issuer, the principal and interest of which
is payable in whole or in part by taxation.
"Guarantee" means an undertaking or promise to answer for payment of
another's debt or performance of another's duty, liability, or obligation
whether "payment guaranteed" or "collection guaranteed".
"In danger of default" means a State or national bank, a federally chartered
insured savings association or an Illinois state chartered insured savings
association with respect to which the Commissioner or the appropriate
federal banking agency has advised the Federal Deposit Insurance
(1) in the opinion of the Commissioner or the
appropriate federal banking agency,
(A) the State or national bank or insured savings
association is not likely to be able to meet the demands of the State or national bank's or savings association's obligations in the normal course of business; and
(B) there is no reasonable prospect that the
State or national bank or insured savings association will be able to meet those demands or pay those obligations without federal assistance; or
(2) in the opinion of the Commissioner or the
appropriate federal banking agency,
(A) the State or national bank or insured savings
association has incurred or is likely to incur losses that will deplete all or substantially all of its capital; and
(B) there is no reasonable prospect that the
capital of the State or national bank or insured savings association will be replenished without federal assistance.
"In default" means, with respect to a State or national bank or an insured
savings association, any adjudication or other official determination by any
court of competent jurisdiction, the Commissioner, the appropriate federal
banking agency, or other public authority pursuant to which a conservator, receiver,
or other legal custodian is appointed for a State or national bank or an
insured savings association.
"Insured savings association" means any federal savings association chartered
under Section 5 of the federal Home Owners' Loan Act and any State savings
association chartered under the Illinois Savings and Loan Act of 1985 or a
predecessor Illinois statute, the deposits of which are insured by the Federal
Deposit Insurance Corporation. The term also includes a savings bank organized
or operating under the Savings Bank Act.
"Insured savings association in recovery" means an insured savings
association that is not an eligible depository institution and that does
not meet the minimum capital requirements applicable with respect to the
insured savings association.
"Issuer" means for purposes of Section 33 every person who shall have
issued or proposed to issue any security; except that (1) with respect to
certificates of deposit, voting trust certificates, collateral-trust
certificates, and certificates of interest or shares in an unincorporated
investment trust not having a board of directors (or persons performing
similar functions), "issuer" means the person or persons performing the
acts and assuming the duties of depositor or manager pursuant to the
provisions of the trust, agreement, or instrument under which the
securities are issued; (2) with respect to trusts other than those
specified in clause (1) above, where the trustee is a corporation
authorized to accept and execute trusts, "issuer" means the entrusters,
depositors, or creators of the trust and any manager or committee charged
with the general direction of the affairs of the trust pursuant to the
provisions of the agreement or instrument creating the trust; and (3) with
respect to equipment trust certificates or like securities, "issuer" means
the person to whom the equipment or property is or is to be leased or
"Letter of credit" and "customer" shall have the meanings ascribed to
those terms in Section 5-102 of the Uniform Commercial Code.
"Main banking premises" means the location that is designated in a
bank's charter as its main office.
"Maker or obligor" means for purposes of Section 33 the issuer of a
security, the promisor in a debenture or other debt security, or the
mortgagor or grantor of a trust deed or similar conveyance of a security
interest in real or personal property.
"Merged bank" means a merging bank that is not the continuing, resulting,
or surviving bank in a consolidation or merger.
"Merger" includes consolidation.
"Merging bank" means a party to a bank merger.
"Merging trust company" means a trust company party to a merger with
a State bank.
"Mid-tier bank holding company" means a corporation that (a) owns 100% of
the issued and outstanding shares of each class of stock of a State bank, (b)
has no other subsidiaries, and (c) 100% of the issued and outstanding shares of
the corporation are owned by a parent bank holding company.
"Municipality" means any municipality, political subdivision, school
district, taxing district, or agency.
"National bank" means a national banking association located in this
State and after May 31, 1997, means a national banking association without
regard to its location.
"Out-of-state bank" means a bank chartered under the laws of a state other
than Illinois, a territory of the United States, or the District of Columbia.
"Parent bank holding company" means a corporation that is a bank holding
company as that term is defined in the Illinois Bank Holding Company Act of
1957 and owns 100% of the issued and outstanding shares of a mid-tier bank
"Person" means an individual, corporation, limited liability company,
venture, trust, estate, or unincorporated association.
"Public agency" means the State of Illinois, the various counties,
cities, towns, villages, school districts, educational service regions, special
road districts, public water supply districts, fire protection districts,
drainage districts, levee districts, sewer districts, housing authorities, the
Illinois Bank Examiners' Education Foundation, the Chicago Park District, and
all other political corporations or subdivisions of the State of Illinois,
whether now or hereafter created, whether herein specifically mentioned or
not, and shall also include any other
state or any political corporation or subdivision of another state.
"Public funds" or "public money" means
current operating funds, special funds, interest and sinking funds, and funds
of any kind or character belonging to, in the custody of, or subject to the
control or regulation of the United States or a public agency. "Public funds"
or "public money" shall include funds held by any of the officers, agents, or
employees of the United States or of a public agency in the course of their
official duties and, with respect to public money of the United States, shall
include Postal Savings funds.
"Published" means, unless the context requires otherwise, the publishing
of the notice or instrument referred to in some newspaper of general
circulation in the community in which the bank is located at least once
each week for 3 successive weeks. Publishing shall be accomplished by, and
at the expense of, the bank required to publish. Where publishing is
required, the bank shall submit to the Commissioner that evidence of the
publication as the Commissioner shall deem appropriate.
"Qualified financial contract" means any security contract,
commodity contract, forward contract, including spot and
forward foreign exchange contracts, repurchase agreement, swap agreement, and
similar agreement, any option to enter into any such agreement, including any
combination of the foregoing, and any master agreement for such agreements.
A master agreement, together with all supplements thereto, shall be treated
as one qualified financial contract. The contract, option, agreement, or
combination of contracts, options, or agreements shall be reflected upon the
books, accounts, or records of the bank, or a party to the contract shall
provide documentary evidence of such agreement.
"Recorded" means the filing or recording of the notice or instrument
referred to in the office of the Recorder of the county wherein
the bank is located.
"Resulting bank" means the bank resulting from a merger or conversion.
"Secretary" means the Secretary of Financial and Professional Regulation, or a person authorized by the Secretary or by this Act to act in the Secretary's stead.
"Securities" means stocks, bonds, debentures, notes, or other similar
"Stand-by letter of credit" means a letter of credit under which drafts
are payable upon the condition the customer has defaulted in performance of
a duty, liability, or obligation.
"State bank" means any banking corporation that has a banking charter
issued by the Commissioner under
"State Banking Board" means the State Banking Board of Illinois.
"Subsidiary" with respect to a specified company means a company that is
controlled by the specified company. For purposes of paragraphs (8) and (12)
of Section 5 of this Act, "control" means the exercise of operational or
managerial control of a corporation by the bank, either alone or together with
other affiliates of the bank.
"Surplus" means the aggregate of (i) amounts paid in excess of the par
value of capital stock and preferred stock; (ii) amounts contributed other
than for capital stock and preferred stock and allocated to the surplus
account; and (iii) amounts transferred from undivided profits.
"Tier 1 Capital" and "Tier 2 Capital" have the meanings assigned to those
terms in regulations promulgated for the appropriate federal banking agency of
a state bank, as those regulations are now or hereafter amended.
"Trust company" means a limited liability company or corporation
incorporated in this State for the
purpose of accepting and executing trusts.
"Undivided profits" means undistributed earnings less discretionary
transfers to surplus.
"Unimpaired capital and unimpaired surplus", for the purposes of paragraph
(21) of Section 5 and Sections 32, 33, 34, 35.1, 35.2, and 47 of this Act means
the sum of the state bank's Tier 1 Capital and Tier 2 Capital plus such other
shareholder equity as may be included by
regulation of the Commissioner. Unimpaired capital and unimpaired surplus
shall be calculated on the basis of the date of the last quarterly call report
filed with the Commissioner preceding the date of the transaction for which the
calculation is made, provided that: (i) when a material event occurs after the
date of the last quarterly call report filed with the Commissioner that reduces
or increases the bank's unimpaired capital and unimpaired surplus by 10% or
more, then the unimpaired capital and unimpaired surplus shall be calculated
from the date of the material
event for a transaction conducted after the date of the material event; and
(ii) if the Commissioner determines for safety and soundness reasons that a
state bank should calculate unimpaired capital and unimpaired surplus more
frequently than provided by this paragraph, the Commissioner may by written
notice direct the bank to calculate unimpaired capital and unimpaired surplus
at a more frequent interval. In the case of a state bank newly chartered under
Section 13 or a state bank resulting from a merger, consolidation, or
conversion under Sections 21 through 26 for which no preceding quarterly call
report has been filed with the Commissioner, unimpaired capital and unimpaired
surplus shall be calculated for the first calendar quarter on the basis of the
effective date of the charter, merger, consolidation, or conversion.
(Source: P.A. 95-924, eff. 8-26-08; 95-1047, eff. 4-6-09; 96-1000, eff. 7-2-10; 96-1163, eff. 1-1-11.)