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91_SB0378enr SB378 Enrolled LRB9103597JSpc 1 AN ACT relating to the regulations of certain financial 2 businesses, amending named Acts. 3 Be it enacted by the People of the State of Illinois, 4 represented in the General Assembly: 5 Section 5. The Illinois Savings and Loan Act of 1985 is 6 amended by changing Sections 1-6 and 7-11 as follows: 7 (205 ILCS 105/1-6) (from Ch. 17, par. 3301-6) 8 Sec. 1-6. General corporate powers. An association 9 operating under this Act shall be a body corporate and 10 politic and shall have all of thespecificpowers conferred 11 by this Act including, but not limited toand, in addition12thereto, the followinggeneralpowers: 13 (a) To sue and be sued, complain and defend in its 14 corporate name, and to have a common seal, which it may alter 15 or renew at pleasure; 16 (b) To obtain and maintain insurance of the 17 association's withdrawable capital by an insurance 18 corporation as defined in this Act; 19 (c) Notwithstanding anything to the contrary contained 20 in this Act, to become a member of the Federal Home Loan 21 Bank, and to have all of the powers granted to a savings or 22 thrift institution organized under the laws of the United 23 States and which is located and doing business in the State 24 of Illinois, subject to regulations of the Commissioner; 25 (d) To act as a fiscal agent for the United States, the 26 State of Illinois or any department, branch, arm or agency of 27 the State or any unit of local government or school district 28 in the State when duly designated for that purpose, and as 29 agent to perform the reasonable functions as may be required 30 of it; 31 (e) To become a member of or deal with any corporation SB378 Enrolled -2- LRB9103597JSpc 1 or agency of the United States or the State of Illinois, to 2 the extent that the agency assists in furthering or 3 facilitating the association's purposes or powers and to that 4 end to purchase stock or securities thereof or deposit money 5 therewith, and to comply with any other conditions of 6 membership or credit; 7 (f) To make donations in reasonable amounts for the 8 public welfare or for charitable, scientific, religious or 9 educational purposes; 10 (g) To adopt and operate reasonable insurance, bonus, 11 profit sharing, and retirement plans for officers and 12 employees; likewise, directors who are not officers, 13 including, but not limited to, advisory, honorary, and 14 emeritus directors, may participate in those plans; 15 (h) To reject any application for membership, to retire 16 withdrawable capital by enforced retirement as provided in 17 this Act and the by-laws, and to limit the issuance of or 18 payments on withdrawable capital, subject, however, to 19 contractual obligations; 20 (i) To purchase stock in service corporations and to 21 invest in any form of indebtedness of any service corporation 22 as defined in this Act, subject to regulations of the 23 Commissioner; 24 (j) To purchase stock of a corporation whose principal 25 purpose is to operate a safe deposit company or escrow 26 service company; 27 (k) To act as Trustee or Custodian under the Federal 28 Self-Employed Individuals' Tax Retirement Act of 1962 or any 29 amendments thereto or any other retirement account and invest 30 any funds held in such capacity in a savings account of the 31 institution; 32 (l) (Blank); 33 (m) To establish, maintain and operate terminals as 34 authorized by the Electronic Fund Transfer Act and by Section SB378 Enrolled -3- LRB9103597JSpc 1 5 of the Illinois Banking Act. The establishment, 2 maintenance, operation and location of such terminals shall 3 be subject to the approval of the Commissioner; 4 (n) Subject to the approval and regulations of the 5 Commissioner, an association may purchase or assume all or 6 any part of the assets or liabilities of an eligible insured 7 bank; 8 (o) To purchase from a bank, as defined in Section 2 of 9 the Illinois Banking Act, an insubstantial portion of the 10 total deposits of an insured bank. For the purpose of this 11 subparagraph, "insubstantial portion of the total deposits" 12 shall have the same meaning as provided in Section 5(d)(2)(D) 13 of the Federal Deposit Insurance Act; 14 (p) To effect an acquisition of or conversion to another 15 financial institution pursuant to Section 205 of the 16 Financial Institutions Reform, Recovery and Enforcement Act 17 of 1989; 18 (q) To pledge its assets: 19 (1) to enable it to act as an agent for the sale of 20 obligations of the United States; 21 (2) to secure deposits; 22 (3) to secure deposits of money whenever required 23 by the National Bankruptcy Act; 24 (4) to qualify under Section 2-9 of the Corporate 25 Fiduciary Act; and 26 (5) to secure trust funds commingled with the 27 institution's funds, whether deposited by the institution 28 or an affiliate of the institution, as required under 29 Section 2-8 of the Corporate Fiduciary Act; 30 (r) To provide temporary periodic service to persons 31 residing in a bona fide nursing home, senior citizens' 32 retirement home, or long-term care facility; 33 (s) To purchase for its own account shares of stock of a 34 bankers' bank, described in Section 13(b)(1) of the Illinois SB378 Enrolled -4- LRB9103597JSpc 1 Banking Act, on the same terms and conditions as a bank may 2 purchase such shares. In no event shall the total amount of 3 such stock held by an association in such bankers' bank 4 exceed 10% of its capital and surplus (including undivided 5 profits) and in no event shall an association acquire more 6 than 5% of any class of voting securities of such bankers' 7 bank; 8 (t) To effect a conversion to a State bank pursuant to 9 the provisions of the Illinois Banking Act;and10 (u) Subject to Article XLIV of the Illinois Insurance 11 Code, to act as the agent for any fire, life, or other 12 insurance company authorized by the State of Illinois, by 13 soliciting and selling insurance and collecting premiums on 14 policies issued by such company; and may receive for services 15 so rendered such fees or commissions as may be agreed upon 16 between the said association and the insurance company for 17 which it may act as agent; provided, however, that no such 18 association shall in any case assume or guarantee the payment 19 of any premium on insurance policies issued through its 20 agency by its principal; and provided further, that the 21 association shall not guarantee the truth of any statement 22 made by an assured in filing his application for insurance; 23 and.24 (v) To exercise all powers necessary to qualify as a 25 trustee or custodian under federal or State law, however, the 26 authority to accept and execute trusts is subject to the 27 Corporate Fiduciary Act and to the supervision of those 28 activities by the Commissioner. 29 (Source: P.A. 89-74, eff. 6-30-95; 89-310, eff. 1-1-96; 30 89-317, eff. 8-11-95; 89-355, eff. 8-17-95; 89-567, eff. 31 7-26-96; 89-603, eff. 8-2-96; 89-626, eff. 8-9-96; 90-14, 32 eff. 7-1-97; 90-41, eff. 10-1-97.) 33 (205 ILCS 105/7-11) (from Ch. 17, par. 3307-11) SB378 Enrolled -5- LRB9103597JSpc 1 Sec. 7-11. Commissioner's authority to take custody and 2 appoint a conservator. The Commissioner in his discretion may 3 take custody of, and appoint a conservator for, the property, 4 liabilities, books, records, business and assets of every 5 kind and character of any association, trust or association 6 in liquidation, for any of the purposes hereinafter 7 enumerated, if it appears from reports made to the 8 Commissioner, or from examination made by or on behalf of the 9 Commissioner: 10 (a) That the directors, officers, trustees or 11 liquidators have neglected, failed or refused to take any 12 action which the Commissioner may deem necessary for the 13 protection of the association or trust or have impeded or 14 obstructed an examination; or 15 (b) That the withdrawable capital of the association is 16 impaired to the extent that the realizable value of its 17 assets is insufficient to pay in full its creditors and 18 holders of its withdrawable capital; or that its permanent 19 reserve capital is impaired; or 20 (c) That the association is unable to continue 21 operation; or 22 (d) That the business of the association, trust or 23 association in liquidation is being conducted in a 24 fraudulent, illegal or unsafe manner; or 25 (e) That the officers, employees, trustees or 26 liquidators have continued to assume duties or perform acts 27 without giving bond as required by the provisions of this 28 Act. 29 Unless the Commissioner finds that an emergency exists 30 which may result in loss to members or creditors and requires 31 that he take custody immediately, he first shall give written 32 notice to the directors, trustees or liquidators specifying 33 the conditions criticized and state a reasonable time within 34 which correction may be made. If however, an association SB378 Enrolled -6- LRB9103597JSpc 1 whose accounts are insured by the Federal Savings and Loan 2 Insurance Corporation is impaired within the meaning of 3 paragraph (b) above, or any other condition exists which 4 would give the Commissioner authority to take custody of an 5 insured institution, the action of the Commissioner can be 6 withheld provided that the Commissioner determines from 7 reports made to him by the Association, and such other 8 examinations as may be deemed necessary, that the Association 9 has sufficient liquid assets and has adopted and implemented 10 an operating plan satisfactory to the Commissioner. In such 11 case the Commissioner may defer a custody action pending a 12 satisfactory resolution of the impairment as suggested by 13 either the Association or the Federal Savings and Loan 14 Insurance Corporation. 15 If any condition exists that would give the Commissioner 16 authority to take custody of an association, the action of 17 the Commissioner may be withheld pending a satisfactory 18 resolution of the condition as suggested by the insurance 19 corporation provided the association has sufficient liquidity 20 and has adopted and implemented an operating plan the 21 Commissioner considers prudent. 22 No action or inaction of the Commissioner taken pursuant 23 to this Article shall cause the Commissioner to be personally 24 liable for such action or inaction unless the Commissioner's 25 action or inaction is found to be in violation of a criminal 26 statute. The Commissioner shall promulgate rules and 27 regulations to govern the determination of a need for a 28 conservator and the selection, appointment and conduct of a 29 conservatorship, including allocation of payment and costs. 30 (Source: P.A. 85-1143.) 31 Section 10. The Savings Bank Act is amended by changing 32 Sections 1007.105, 1008, 4005, 6002, 8016, 9009, 11005, and 33 11008 and adding Section 4014 as follows: SB378 Enrolled -7- LRB9103597JSpc 1 (205 ILCS 205/1007.105) (from Ch. 17, par. 7301-7.105) 2 Sec. 1007.105. "Service corporation" means any 3 corporation that is 51% or more owned by one or more savings 4 banks, or by savings banks and other depository institutions, 5 whose purposes are reasonably incident to the accomplishment 6 of theexpress or incidentalpowers conferred upon savings 7 banks by this Act. 8 (Source: P.A. 86-1213.) 9 (205 ILCS 205/1008) (from Ch. 17, par. 7301-8) 10 Sec. 1008. General corporate powers. 11 (a) A savings bank operating under this Act shall be a 12 body corporate and politic and shall have all of thespecific13powers conferred by this Act including, but not limited to 14and in addition thereto, the followinggeneralpowers: 15 (1) To sue and be sued, complain, and defend in its 16 corporate name and to have a common seal, which it may 17 alter or renew at pleasure. 18 (2) To obtain and maintain insurance by a deposit 19 insurance corporation as defined in this Act. 20 (3) To act as a fiscal agent for the United States, 21 the State of Illinois or any department, branch, arm, or 22 agency of the State or any unit of local government or 23 school district in the State, when duly designated for 24 that purpose, and as agent to perform reasonable 25 functions as may be required of it. 26 (4) To become a member of or deal with any 27 corporation or agency of the United States or the State 28 of Illinois, to the extent that the agency assists in 29 furthering or facilitating its purposes or powers and to 30 that end to purchase stock or securities thereof or 31 deposit money therewith, and to comply with any other 32 conditions of membership or credit. 33 (5) To make donations in reasonable amounts for the SB378 Enrolled -8- LRB9103597JSpc 1 public welfare or for charitable, scientific, religious, 2 or educational purposes. 3 (6) To adopt and operate reasonable insurance, 4 bonus, profit sharing, and retirement plans for officers 5 and employees and for directors including, but not 6 limited to, advisory, honorary, and emeritus directors, 7 who are not officers or employees. 8 (7) To reject any application for membership; to 9 retire deposit accounts by enforced retirement as 10 provided in this Act and the bylaws; and to limit the 11 issuance of, or payments on, deposit accounts, subject, 12 however, to contractual obligations. 13 (8) To purchase stock in service corporations and 14 to invest in any form of indebtedness of any service 15 corporation as defined in this Act, subject to 16 regulations of the Commissioner. 17 (9) To purchase stock of a corporation whose 18 principal purpose is to operate a safe deposit company or 19 escrow service company. 20 (10) To exercise all the powers necessary to 21 qualify as a trustee or custodian under federal or State 22 law, provided that the authority to accept and execute 23 trusts is subject to the provisions of the Corporate 24 Fiduciary Act and to the supervision of those activities 25 by the Commissionerof Banks and Real Estate. 26 (11) (Blank). 27 (12) To establish, maintain, and operate terminals 28 as authorized by the Electronic Fund Transfer Act.The29establishment, maintenance, operation, and location of30those terminals shall be subject to the approval of the31Commissioner.32 (13) To pledge its assets: 33 (A) to enable it to act as agent for the sale 34 of obligations of the United States; SB378 Enrolled -9- LRB9103597JSpc 1 (B) to secure deposits; 2 (C) to secure deposits of money whenever 3 required by the National Bankruptcy Act; 4 (D) to qualify under Section 2-9 of the 5 Corporate Fiduciary Act; and 6 (E) to secure trust funds commingled with the 7 savings bank's funds, whether deposited by the 8 savings bank or an affiliate of the savings bank, as 9 required under Section 2-8 of the Corporate 10 Fiduciary Act. 11 (14) To accept for payment at a future date not to 12 exceed one year from the date of acceptance, drafts drawn 13 upon it by its customers; and to issue, advise, or 14 confirm letters of credit authorizing holders thereof to 15 draw drafts upon it or its correspondents. 16 (15) Subject to the regulations of the 17 Commissioner, to own and lease personal property acquired 18 by the savings bank at the request of a prospective 19 lessee and, upon the agreement of that person, to lease 20 the personal property. 21 (16) To establish temporary service booths at any 22 International Fair in this State that is approved by the 23 United States Department of Commerce for the duration of 24 the international fair for the purpose of providing a 25 convenient place for foreign trade customers to exchange 26 their home countries' currency into United States 27 currency or the converse. To provide temporary periodic 28 service to persons residing in a bona fide nursing home, 29 senior citizens' retirement home, or long-term care 30 facility. These powers shall not be construed as 31 establishing a new place or change of location for the 32 savings bank providing the service booth. 33 (17) To indemnify its officers, directors, 34 employees, and agents, as authorized for corporations SB378 Enrolled -10- LRB9103597JSpc 1 under Section 8.75 of the Business Corporations Act of 2 1983. 3 (18) To provide data processing services to others 4 on a for-profit basis. 5 (19) To utilize any electronic technology to 6 provide customers with home banking services. 7 (20) Subject to the regulations of the 8 Commissioner, to enter into an agreement to act as a 9 surety. 10 (21) Subject to the regulations of the 11 Commissioner, to issue credit cards, extend credit 12 therewith, and otherwise engage in or participate in 13 credit card operations. 14 (22) To purchase for its own account shares of 15 stock of a bankers' bank, described in Section 13(b)(1) 16 of the Illinois Banking Act, on the same terms and 17 conditions as a bank may purchase such shares. In no 18 event shall the total amount of such stock held by a 19 savings bank in such bankers' bank exceed 10% of its 20 capital and surplus (including undivided profits) and in 21 no event shall a savings bank acquire more than 5% of any 22 class of voting securities of such bankers' bank. 23 (23) With respect to affiliate facilities: 24 (A) to conduct at affiliate facilities any of 25 the following transactions for and on behalf of any 26 affiliated depository institution, if so authorized 27 by the affiliate or affiliates: receiving deposits; 28 renewing deposits; cashing and issuing checks, 29 drafts, money orders, travelers checks, or similar 30 instruments; changing money; receiving payments on 31 existing indebtedness; and conducting ministerial 32 functions with respect to loan applications, 33 servicing loans, and providing loan account 34 information; and SB378 Enrolled -11- LRB9103597JSpc 1 (B) to authorize an affiliated depository 2 institution to conduct for and on behalf of it, any 3 of the transactions listed in this subsection at one 4 or more affiliate facilities. 5 A savings bank intending to conduct or to authorize 6 an affiliated depository institution to conduct at an 7 affiliate facility any of the transactions specified in 8 this subsection shall give written notice to the 9 Commissioner at least 30 days before any such transaction 10 is conducted at an affiliate facility. All conduct under 11 this subsection shall be on terms consistent with safe 12 and sound banking practices and applicable law. 13 (24) Subject to Article XLIV of the Illinois 14 Insurance Code, to act as the agent for any fire, life, 15 or other insurance company authorized by the State of 16 Illinois, by soliciting and selling insurance and 17 collecting premiums on policies issued by such company; 18 and may receive for services so rendered such fees or 19 commissions as may be agreed upon between the said 20 savings bank and the insurance company for which it may 21 act as agent; provided, however, that no such savings 22 bank shall in any case assume or guarantee the payment of 23 any premium on insurance policies issued through its 24 agency by its principal; and provided further, that the 25 savings bank shall not guarantee the truth of any 26 statement made by an assured in filing his application 27 for insurance. 28 (25) To become a member of the Federal Home Loan 29 Bank and to have the powers granted to a savings 30 association organized under the Illinois Savings and Loan 31 Act of 1985 or the laws of the United States, subject to 32 regulations of the Commissioner. 33 (26) To offer any product or service that is at the 34 time authorized or permitted to a bank by applicable law, SB378 Enrolled -12- LRB9103597JSpc 1 but subject always to the same limitations and 2 restrictions that are applicable to the bank for the 3 product or service by such applicable law and subject to 4 the applicable provisions of the Financial Institutions 5 Insurance Sales Law and rules of the Commissioner. 6 (b) If this Act or the regulations adopted under this 7 Act fail to provide specific guidance in matters of corporate 8 governance, the provisions of the Business Corporation Act of 9 1983 may be used. 10 (Source: P.A. 89-74, eff. 6-30-95; 89-310, eff. 1-1-96; 11 89-317, eff. 8-11-95; 89-355, eff. 8-17-95; 89-508, eff. 12 7-3-96; 89-603, eff. 8-2-96; 89-626, eff. 8-9-96; 90-14, eff. 13 7-1-97; 90-41, eff. 10-1-97; 90-270, eff. 7-30-97; 90-301, 14 eff. 8-1-97; 90-655, eff. 7-30-98; 90-665, eff. 7-30-98; 15 revised 10-31-98.) 16 (205 ILCS 205/4005) (from Ch. 17, par. 7304-5) 17 Sec. 4005. Voting. 18 (a) Voting at a meeting may be either in person or by 19 proxy executed in writing by the member or stockholder or by 20 his duly authorized attorney-in-fact. 21 (b) In the determination of all questions requiring 22 ascertainment of who is entitled to vote and of the number of 23 outstanding shares, the following rules shall apply: 24 (1) The date of determination shall be the record 25 date for voting provided in this Act. 26 (2) Each person holding one or more withdrawable 27 accounts in a mutual savings bank shall have the vote of 28 one share for each $100 of the aggregate withdrawal value 29 of the accounts and shall have the vote of one share for 30 any fraction of $100; however, subject to regulation of 31 the Commissioner, a mutual savings bank may in its 32 by-laws limit the number of votes a person may cast to 33 1,000 votes. A mutual savings bank may adopt a different SB378 Enrolled -13- LRB9103597JSpc 1 voting arrangement if the Commissioner finds that the 2 arrangement would not be inequitable to members and if 3 the members approve the arrangement by an affirmative 4 vote of at least two-thirds of the votes entitled to be 5 cast, however, the voting arrangement need not obtain the 6 foregoing member approval if such voting arrangement is 7 otherwise approved as part of a corporate change under 8 this Act. 9 (3) Each holder of capital stock held shall have 10 one vote for each share held. 11 (4) Shares owned by the savings bank shall not be 12 counted or voted. 13 (5) A savings bank authorized to issue stock shall 14 provide in its articles of incorporation that voting 15 rights may be vested exclusively in stockholders. 16 (Source: P.A. 88-579, eff. 8-12-94.) 17 (205 ILCS 205/4014 new) 18 Sec. 4014. Waiver of notice. Whenever any notice 19 whatsoever is required to be given under this Act or under 20 the provisions of the articles of incorporation or bylaws of 21 a savings bank, a waiver thereof in writing signed by the 22 person entitled to the notice, whether before or after the 23 time stated therein, shall be deemed equivalent to the giving 24 of the notice. Attendance at any meeting shall constitute 25 waiver of notice thereof unless the person at the meeting 26 objects to the holding of the meeting because proper notice 27 was not given. 28 (205 ILCS 205/6002) (from Ch. 17, par. 7306-2) 29 Sec. 6002. Investment in loans. Subject to the 30 regulations of the Commissioner, a savings bank may loan 31 funds as follows: 32 (1) On the security of deposit accounts, but no such SB378 Enrolled -14- LRB9103597JSpc 1 loan shall exceed the withdrawal value of the pledged 2 account. 3 (2) On the security of real estate: 4 (A) of a value, determined in accordance with this 5 Act, sufficient to provide good and ample security for 6 the loan; 7 (B) with a fee simple title or a leasehold title; 8 (C) with the title established by evidence of title 9 as is consistent with sound lending practices in the 10 locality; 11 (D) with the security interest in the real estate 12 evidenced by an appropriate written instrument and the 13 loan evidenced by a note, bond, or similar written 14 instrument; a loan on the security of the whole of the 15 beneficial interest in a land trust satisfies the 16 requirements of this paragraph if the title to the land 17 is held by a corporate trustee and if the real estate 18 held in the land trust meets the other requirements of 19 this subsection; 20 (E) with a mortgage loan not to exceed 40 years. 21 (3) For the purpose of repair, improvement, 22 rehabilitation, furnishing, or equipment of real estate. 23 (4) For the purpose of financing or refinancing an 24 existing ownership interest in certificates of stock, 25 certificates of beneficial interest, other evidence of an 26 ownership interest in, or a proprietary lease from a 27 corporation, trust, or partnership formed for the purpose of 28 the cooperative ownership of real estate, secured by the 29 assignment or transfer of certificates or other evidence of 30 ownership of the borrower. 31 (5) Through the purchase of loans that, at the time of 32 purchase, the savings bank could make in accordance with this 33 Section and the bylaws. 34 (6) Through the purchase of installment contracts for SB378 Enrolled -15- LRB9103597JSpc 1 the sale of real estate and title thereto that is subject to 2 the contracts, but in each instance only if the savings bank, 3 at the time of purchase, could make a mortgage loan of the 4 same amount and for the same length of time on the security 5 of the real estate. 6 (7) Through loans guaranteed or insured, wholly or in 7 part, by the United States or any of its instrumentalities. 8 (8) Subject to regulations adopted by the Commissioner, 9 through secured or unsecured loans for business, corporate, 10 commercial, or agricultural purposes; provided that the total 11 of all loans granted under this paragraph shall not exceed 12 15% of the savings bank's total assets unless a greater 13 amount is authorized in writing by the Commissioner. 14 (9) For the purpose of mobile home financing subject, 15 however, to the regulation of the Commissioner. 16 (10) Through loans secured by the cash surrender value 17 of any life insurance policy or any collateral that would be 18 a legal investment under the terms of this Act if made by the 19 savings bank. 20 (11) Any provision of this Act or any other law, except 21 for paragraph (18) of Section 6003, to the contrary 22 notwithstanding, but subject to the Financial Institutions 23 Insurance Sales Law and subject to the Commissioner's 24 regulations, any savings bank may make any loan or investment 25 or engage in any activity that it could make or engage in if 26 it were organized under State law as a savings and loan 27 association or under federal law as a federal savings and 28 loan association or federal savings bank. 29 (12) A savings bank may issue letters of credit or other 30 similar arrangements only as provided for by regulation of 31 the Commissioner with regard to aggregate amounts permitted, 32 take out commitments for stand-by letters of credit, 33 underlying documentation and underwriting, legal limitations 34 on loans of the savings bank, control and subsidiary records, SB378 Enrolled -16- LRB9103597JSpc 1 and other procedures deemed necessary by the Commissioner. 2 (13) For the purpose of automobile financing, subject to 3 the regulation of the Commissioner. 4 (14) For the purpose of financing primary, secondary, 5 undergraduate, or postgraduate education. 6 (15) Through revolving lines of credit on the security 7 of a first or junior lien on the borrower's personal 8 residence, based primarily on the borrower's equity, the 9 proceeds of which may be used for any purpose; those loans 10 being commonly referred to as home equity loans. 11 (16) As secured or unsecured credit to cover the payment 12 of checks, drafts, or other funds transfer orders in excess 13 of the available balance of an account on which they are 14 drawn, subject to the regulations of the Commissioner. 15 (Source: P.A. 90-301, eff. 8-1-97.) 16 (205 ILCS 205/8016) (from Ch. 17, par. 7308-16) 17 Sec. 8016. Procedure for conversion from a savings bank 18 charter. 19 (a) Any savings bank operating under this Act may 20 convert to any other depository institution charteredbecome21a State savings and loan association or State bank under22Illinois charter or a federal associationunder the laws and 23 regulations of this State or under the laws and regulations 24 of the United States in accordance with the following 25 requirementsprocedure: 26 (1) The converting savings bank shall notify the 27 Commissioner of its intent to convert. Notice should be 28 submitted when the savings bank first submits a request to 29 convert to the appropriate State or federal authorities, but 30 in no case less than 30 days before the conversion. Approval 31 of the conversion by the Commissioner shall not be required 32 except when the savings bank converts to a depository 33 institution that is also chartered by the Commissioner in SB378 Enrolled -17- LRB9103597JSpc 1 which case the savings bank shall comply with State law and 2 regulations applicable to the conversion to such depository 3 institution. 4 (2)(1)The board of directors shall approve a plan of 5 conversion by resolution adopted by majority vote of all of 6 the directors.The plan shall set forth, among other terms,7the following:8(A) a financial statement of the savings bank as of9the last business day of the month preceding the adoption10of the plan;11(B) the disposition of deposit accounts and capital12stock, if any;13(C) adjustments, if any, in the value of the14deposit accounts when exchanged for comparable accounts15in the converted institution;16(D) the disposition of any obligations or17liabilities; and18(E) any other information that may be required by19the Commissioner.20(2) The plan shall not be submitted to the members until21approved by the Commissioner.22(3)The Commissioner may approve the plan; or if the23Commissioner disapproves the plan, he shall state his24objections in writing and give the converting savings bank an25opportunity to amend the plan to obviate the objections.26Approval shall be given if the Commissioner finds that the27plan meets the requirements of this Act and the plan is28equitable and protects the rights of all persons affected,29including contingent interests as theretofore may have been30created in the retained earnings, if any.31(4) After receipt of approval from the Commissioner, the32plan of conversion shall be mailed to each member and may be33submitted to a vote at an annual or special meeting of the34members.SB378 Enrolled -18- LRB9103597JSpc 1 (3) Upon notice prescribed by subsection (a) of Section 2 4003 of this Act, the plan of conversion shall be adopted 3 upon receiving in the affirmative two-thirds or more of the 4 total number of votes that all members of the savings bank 5 are entitled to cast. A report of proceedingsat the meeting6, certified by the president or a vice president and attested 7 by the secretary, shall be filed promptly with the 8 Commissioner. 9 (4) The savings bank shall pay all accrued supervisory 10 fees and other fees and assessments under this Act as of the 11 date of conversion. 12 (5) Upon completion of the conversion, the charter of 13 the savings bank shall automatically terminate and the 14 savings bank charter or a true copy of the charter shall be 15 returned to the Commissioner. 16 (b) If the Commissioner finds that any requirement of 17 this Section would prevent under applicable law a depository 18 institution that is not a savings bank from converting to a 19 savings bank, the Commissioner may waive any requirement 20 having that effect.Within 90 days after the date of the21meeting, the savings bank shall take the action prescribed22and authorized by the laws and regulations of the State of23Illinois or the United States to complete its conversion to a24State association, State bank or federal association.25(6) Upon receipt of a State or federal charter, the26savings bank shall file promptly with the Commissioner either27a copy of the charter or a certificate of the appropriate28State or federal officer setting forth the facts concerning29the issuance of the charter; and upon recording the charter30in the same manner as the savings bank's articles of31incorporation, the savings bank shall cease to be a savings32bank operating under the Act.33 (Source: P.A. 89-567, eff. 7-26-96.) SB378 Enrolled -19- LRB9103597JSpc 1 (205 ILCS 205/9009) (from Ch. 17, par. 7309-9) 2 Sec. 9009. Orders of the Commissioner. 3 (a) If the affairs of the savings bank, savings bank 4 subsidiary or affiliate, or savings bank holding company are 5 not being conducted in accordance with this Act, the 6 Commissioner shall require the directors, officers, and 7 employees to take any necessary corrective action. If the 8 necessary corrective action is not taken, the Commissioner 9 may issue a formal order to the directors of the savings 10 bank, subsidiary, affiliate, or holding company, to be 11 delivered either personally or by registered or certified 12 mail, specifying a date, which may be immediate or may be a 13 later date, for the performance of the corrective action by 14 the savings bank, subsidiary, affiliate, or holding company. 15 The order or any part thereof shall be subject to Section 16 11006 of this Act. 17 (b) If the formal order of the Commissioner, in whole or 18 in part, contains a finding that the business of the savings 19 bank or holding company is being conducted in a fraudulent, 20 illegal, unsafe, or unsound manner or that the violation 21 thereof or the continuance by the savings bank or holding 22 company of the practice to be corrected could cause 23 insolvency, substantial dissipation of assets or earnings, or 24 the impairment of its capital, the order or part thereof 25 shall be complied with immediately on or before the effective 26 date thereof until modified or withdrawn by the Commissioner 27 or modified or terminated by a circuit court. The 28 Commissioner may apply to the circuit court of the county in 29 which the savings bank or holding company is located for 30 enforcement of an order requiring prompt compliance. 31 (c) If the order, or part thereof, is not subject to 32 subsection (b) and if no hearing pursuant to Section 9018 of 33 this Act has been requestedwithin 5 days of the effective34date of the order, the Commissioner may, at any time within SB378 Enrolled -20- LRB9103597JSpc 1 90 days after the effective date of the order, institute suit 2 in the circuit court of Sangamon County or the circuit court 3 of the county in which the savings bank or holding company is 4 located to compel the directors, officers, or employees to 5 take the required corrective action. The court, after due 6 process of law, shall adjudicate the question, enter the 7 proper order or orders, and enforce them. 8 (d) No provision of this Section shall interfere with 9 the exercise by the Commissioner of any provision of Article 10 11. 11 (Source: P.A. 86-1213.) 12 (205 ILCS 205/11005) (from Ch. 17, par. 7311-5) 13 Sec. 11005. Institution affiliated party. As used in 14 this Act, the term "institution affiliated party" shall mean 15 a director, officer, employee, agent, or controlling 16 stockholder of a savings bank operating under this Act; a 17 person who has filed or is required to file a 18 change-in-control notice with the Commissioner; any person 19 subject to an order of or a party to an agreement with the 20 Commissioner pertaining to a savings bank; a shareholder of, 21 consultant to, joint venture partner of, or an independent 22 contractor for (including accountants, appraisers and 23 attorneys) any other person who participates in a significant 24 way in the affairs of a savings bank operating under this 25 Act. 26 (Source: P.A. 86-1213.) 27 (205 ILCS 205/11008) (from Ch. 17, par. 7311-8) 28 Sec. 11008. Unauthorized participation by convicted 29 individual. 30 (a) Except with the prior written consent of the 31 Commissioner, no person who has been convicted of any 32 criminal offense involving dishonesty or a breach of trust SB378 Enrolled -21- LRB9103597JSpc 1 may own or control directly or indirectly more than 0.001% of 2 the capital stock of, receive benefit directly or indirectly 3 from, or participate,directly or indirectly,in any manner 4 in the conduct of the affairs of a savings bank. 5 (b) A savings bank may not permit participation by a 6 person described in subsection (a). 7 (c) Whoever knowingly violates subsection (a) or (b) is 8 guilty of a Class 3 felony and may be fined not more than 9 $10,000 for each day of violation. 10 (Source: P.A. 86-1213.) 11 Section 15. The Corporate Fiduciary Act is amended by 12 changing Sections 1-3, 1-5.07, 1-5.08, 1-6, 3-3, 4-1, and 4-4 13 as follows: 14 (205 ILCS 620/1-3) (from Ch. 17, par. 1551-3) 15 Sec. 1-3. Scope of Act; application to national banks, 16 federally chartered savings and loan associations or 17 federally chartered savings banks. After January 1, 1988, no 18 national bank chartered by the Comptroller of the Currency 19 and having its main office in Illinois or federal savings and 20 loan association or federal savings bank chartered by the 21 Federal Home Loan Bank Board and having its main office in 22 Illinois shall be required to obtain a certificate of 23 authority under this Act or in any manner submit to the 24 regulation or supervision pursuant to this Act, but such 25 national bank, federal savings and loan association or 26 federal savings bank shall only be required to obtain the 27 authority to accept and execute trusts from the particular 28 federal agency which granted its charter, to be exempt from 29 the provisions of this Act. Nothing in this Section 1-3 shall 30 exempt national banks, federal savings and loan associations 31 or federal savings banks whose main offices are located 32 outside of Illinois from compliance with the provisions of SB378 Enrolled -22- LRB9103597JSpc 1 Article IV of this Act. 2 On January 1, 1988, any certificate of authority which 3 has been issued under the provisions of this Act to a 4 national bank, federally chartered savings and loan 5 association or federally chartered savings bank in Illinois 6 shall expire and be of no further force and effect and upon 7 the request of the Commissioner, shall be surrendered. 8 After January 1, 1988, aanyState bank thatwhichhas a 9 certificate of authority under this Act andwhichproposes to 10 convert to a national bank andora State chartered savings 11 and loan association and a State chartered savings bank that 12 has a certificate of authority under this Act andwhich13 proposes to convert to a federally chartered savings and loan 14 association or federally chartered savings bank, shall notify 15 the Commissioner of such fact and upon obtaining its charter 16 from the relevant federal regulator, shall surrender its 17 certificate of authority issued pursuant to this Act. 18 (Source: P.A. 86-754.) 19 (205 ILCS 620/1-5.07) (from Ch. 17, par. 1551-5.07) 20 Sec. 1-5.07. "Depository institution" includes banks, 21 savings and loan associations, savings banks, and credit 22 unions. 23 (Source: P.A. 85-858.) 24 (205 ILCS 620/1-5.08) (from Ch. 17, par. 1551-5.08) 25 Sec. 1-5.08. "Foreign corporation" means: 26 (a) any bank, savings and loan association, savings 27 bank, or other corporation now or hereafter organized under 28 the laws of any state or territory of the United States of 29 America, including the District of Columbia, other than the 30 State of Illinois; 31 (b) any national banking association having its 32 principal place of business in any state or territory of the SB378 Enrolled -23- LRB9103597JSpc 1 United States of America, including the District of Columbia, 2 other than the State of Illinois; and 3 (c) any federal savings and loan association or federal 4 savings bank having its principal place of business in any 5 state or territory of the United States of America, including 6 the District of Columbia, other than the State of Illinois. 7 (Source: P.A. 85-858.) 8 (205 ILCS 620/1-6) (from Ch. 17, par. 1551-6) 9 Sec. 1-6. General Corporate Powers. A corporate 10 fiduciary shall have the powers: 11 (a) if it is a State bank, those powers granted 12 under Sections 3 and 5 of the Illinois Banking Act, as13now or hereafter amended; and 14 (b) if it is a State savings and loan association, 15 those powers granted under Sections 1-6 through 1-8 of 16 the Illinois Savings and Loan Act of 1985, as now or17hereafter amended; and 18 (c) if it is a State savings bank, those powers 19 granted under the Savings Bank Act; and 20 (d)(c)if it is a corporation organized under the 21 Business Corporation Act of 1983, as now or hereafter 22 amended, or a limited liability company organized under 23 the Limited Liability Company Act, those powers granted 24 in Sections 4.01 through 4.24 of the Trusts and Trustees 25 Act, as now or hereafter amended, to the extent the 26 exercise of such powers by the corporate fiduciary are 27 not contrary to the instrument containing the appointment 28 of the corporate fiduciary, the court order appointing 29 the corporate fiduciary or any other statute specifically 30 limiting the power of the corporate fiduciary under the 31 circumstances; and 32 (e)(d)subject to Article XLIV of the Illinois 33 Insurance Code, to act as the agent for any fire, life, SB378 Enrolled -24- LRB9103597JSpc 1 or other insurance company authorized by the State of 2 Illinois, by soliciting and selling insurance and 3 collecting premiums on policies issued by such company; 4 and may receive for services so rendered such fees or 5 commissions as may be agreed upon between the said 6 corporate fiduciary and the insurance company for which 7 it may act as agent; provided, however, that no such 8 corporate fiduciary shall in any case assume or guarantee 9 the payment of any premium on insurance policies issued 10 through its agency by its principal; and provided 11 further, that the corporate fiduciary shall not guarantee 12 the truth of any statement made by an assured in filing 13 his application for insurance. 14 The Commissioner may specify powers of corporate 15 fiduciaries generally or of a particular corporate fiduciary 16 and by rule or order limit or restrict such powers of 17 corporate fiduciaries or a particular corporate fiduciary if 18 he finds the exercise of such power by corporate fiduciaries 19 generally or of the corporate fiduciary in particular may 20 tend to be an unsafe or unsound practice, or if such power is 21 otherwise not in the interest of beneficiaries of any 22 fiduciary appointment. 23 (Source: P.A. 90-41, eff. 10-1-97; 90-424, eff. 1-1-98; 24 90-655, eff. 7-30-98.) 25 (205 ILCS 620/3-3) (from Ch. 17, par. 1553-3) 26 Sec. 3-3. Successor trustee. 27 (a) If any corporate fiduciary merges into, or becomes 28 consolidated with, another corporate fiduciary qualified to 29 administer trusts or is succeeded in its trust business by 30 any corporate fiduciary by purchase or otherwise; or if a 31 bank holding company causes a subsidiary, qualified to 32 administer trusts, to succeed to part or all of the trust 33 business of any other subsidiary of the same bank holding SB378 Enrolled -25- LRB9103597JSpc 1 company, the surviving, consolidated, successor corporate 2 fiduciary or subsidiary shall become successor fiduciary in 3 place of such predecessor corporate fiduciary, unless 4 expressly prohibited by the provisions of the trust 5 instrument, with all the rights, powers and duties which were 6 granted to or imposed on such predecessor corporate 7 fiduciary. 8 (b) (Blank). 9 (c) Notwithstanding any other provision of law, a 10 corporate fiduciary may delegate to any of its affiliates 11 qualified to administer trusts any or all fiduciary duties, 12 actions or decisions, discretionary or otherwise, and the 13 delegating corporate fiduciary shall not be required to 14 review any delegated actions or decisions taken by the 15 affiliate. The term "affiliate" means any state bank, any 16 state savings bank, any state savings and loan association, 17 any national bank, any trust company, or any other 18 corporation, which is qualified to act as a fiduciary in this 19 or any other state and which is a member of the same 20 affiliated group (within the meaning of Section 1504 of the 21 Internal Revenue Code of 1986, as amended). 22 (Source: P.A. 89-205, eff. 1-1-96; 89-364, eff. 8-18-95; 23 89-567, eff. 7-26-96; 89-686, eff. 6-1-97; 90-14, eff. 24 7-1-97.) 25 (205 ILCS 620/4-1) (from Ch. 17, par. 1554-1) 26 Sec. 4-1. Foreign corporate fiduciary; certificate of 27 authority. After July 13, 1953, no foreign corporation, 28 including banks, savings banks, and savings and loan 29 associations, now or hereafter organized under the laws of 30 any other state or territory, and no national banking 31 association having its principal place of business in any 32 other state or territory or federal savings and loan 33 association or federal savings bank having its principal SB378 Enrolled -26- LRB9103597JSpc 1 place of business in any other state or territory, may 2 procure a certificate of authority under Article II of this 3 Act and any certificate of authority heretofore issued 4 hereunder to any such foreign corporation or to any such 5 national banking association shall become null and void on 6 July 13, 1953, except that any such foreign corporation or 7 any such national banking association actually acting as 8 trustee, executor, administrator, administrator to collect, 9 guardian, or in any other like fiduciary capacity in this 10 State on July 13, 1953, may continue to act as such fiduciary 11 in that particular trust or estate until such time as it has 12 completed its duties thereunder. Such foreign corporation 13 and such national banking association shall be subject to the 14 provisions in this Article IV, regardless of whether its 15 certificate of authority was obtained before July 13, 1953. 16 The right and eligibility of any foreign corporation, any 17 national banking association having its principal place of 18 business in any other state or territory or any federal 19 savings and loan association or federal savings bank having 20 its principal place of business in any other state or 21 territory hereafter to act as trustee, executor, 22 administrator, administrator to collect, guardian, or in any 23 other like fiduciary capacity in this State shall be governed 24 solely by the provisions of this Act. Provided, however, 25 that the Commissioner shall not be required to conduct an 26 annual examination of such foreign corporation pursuant to 27 Section 5-2 of this Act, but may examine such foreign 28 corporation as the Commissioner deems appropriate. 29 "Principal place of business" of any bank, federal savings 30 and loan association or savings bank, for purposes of this 31 Article IV, means the principal office as designated on the 32 charter by its principal regulator. 33 (Source: P.A. 89-364, eff. 8-18-95.) SB378 Enrolled -27- LRB9103597JSpc 1 (205 ILCS 620/4-4) (from Ch. 17, par. 1554-4) 2 Sec. 4-4. Place of business not to be established in 3 State; not deemed transacting business. 4 (a) A foreign corporation, as defined in Section 1-5.08 5 of this Act, shall not establish in this State a place of 6 business, branch office, or agency for the conduct of 7 business as a fiduciary and because it is not permitted to 8 establish in this State a place of business, branch office or 9 agency, a foreign corporation insofar as it acts in a 10 fiduciary capacity in this State pursuant to the provisions 11 of this Act shall not be deemed to be transacting business in 12 this State. The foreign corporation may apply for, and 13 procure from the Commissioner, a license to establish a 14 representative office pursuant to the Foreign Bank 15 Representative Office Act. 16 (b) Notwithstanding subsection (a) of this Section 4-4, 17 after May 31, 1997, a branch of an out-of-state bank, as 18 defined in Section 2 of the Illinois Banking Act, and a 19 foreign association, as defined in Section 1-10.31 of the 20 Illinois Savings and Loan Act of 1985, may establish an 21 office in this State for the conduct of business as a 22 fiduciary, provided: (i) fiduciary business conducted in this 23 State by a branch of an out-of-state bank is subject to 24 examination by the Commissioner; and (ii) the trust 25 activities of the branch of the out-of-state bank are subject 26 to regulation, including enforcement actions, by the 27 Commissioner to the same extent as Illinois corporate 28 fiduciaries. 29 (Source: P.A. 89-208, eff. 9-29-95; 89-364, eff. 8-18-95; 30 89-626, eff. 8-9-96; 90-665, eff. 7-30-98.) 31 Section 99. Effective date. This Act takes effect upon 32 becoming law.