State of Illinois
92nd General Assembly
Legislation

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[ Introduced ][ Engrossed ][ Senate Amendment 001 ]


92_HB1030enr

 
HB1030 Enrolled                                LRB9206827JSpc

 1        AN ACT concerning banking.

 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
 5    changing Sections 16 and 46 as follows:

 6        (205 ILCS 5/16) (from Ch. 17, par. 323)
 7        Sec. 16. Directors. The business and affairs of  a  State
 8    bank  shall  be  managed by its board of directors that shall
 9    exercise its powers as follows:
10        (1)  Directors shall be elected as provided in this  Act.
11    Any  omission  to  elect  a  director  or directors shall not
12    impair any of the rights and privileges of the bank or of any
13    person in any way interested. The  existing  directors  shall
14    hold office until their successors are elected and qualify.
15        (2) (a)  Notwithstanding  the  provisions  of any charter
16        heretofore or hereafter issued, the number of  directors,
17        not fewer than 5 nor more than 25, may be fixed from time
18        to  time  by  the  stockholders  at  any  meeting  of the
19        stockholders called for the purpose of electing directors
20        or changing the number thereof by the affirmative vote of
21        at least two-thirds of the outstanding stock entitled  to
22        vote at the meeting, and the number so fixed shall be the
23        board   regardless  of  vacancies  until  the  number  of
24        directors is thereafter changed by similar action.
25             (b)  Notwithstanding the minimum number of directors
26        specified in paragraph (a) of this  subsection,  a  State
27        bank  that has been in existence for 10 years or more and
28        has less than $20,000,000 in assets, as of  the  December
29        31   immediately   preceding   the   annual   meeting  of
30        shareholders at which directors are elected, may, subject
31        to the approval of the Commissioner, have a minimum of  3
 
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 1        directors; provided that if a State bank has fewer than 5
 2        directors,  at least one director shall not be an officer
 3        or employee of the bank. The Commissioner shall  annually
 4        review  the  appropriateness of the grant of authority to
 5        have a reduced minimum number of  directors  pursuant  to
 6        this paragraph (b).
 7        (3)  Except  as otherwise provided in this paragraph (3),
 8    directors shall hold office until the next annual meeting  of
 9    the  stockholders  succeeding  their  election or until their
10    successors are elected and qualify. If the board of directors
11    consists of 6 or  more  members,  in  lieu  of  electing  the
12    membership  of  the  whole  board  of directors annually, the
13    charter or by-laws of a  State  bank  may  provide  that  the
14    directors  shall  be divided into either 2 or 3 classes, each
15    class to be as nearly equal in number  as  is  possible.  The
16    term  of  office of directors of the first class shall expire
17    at the first annual meeting of the stockholders  after  their
18    election, that of the second class shall expire at the second
19    annual  meeting  after  their election, and that of the third
20    class, if any, shall expire at the third annual meeting after
21    their election. At each annual meeting after  classification,
22    the  number  of  directors  equal  to the number of the class
23    whose terms expire at  the  time  of  the  meeting  shall  be
24    elected  to  hold  office  until the second succeeding annual
25    meeting, if there be 2 classes, or until the third succeeding
26    annual meeting, if there  be  3  classes.  Vacancies  may  be
27    filled  by  stockholders  at a special meeting called for the
28    purpose.
29        If authorized by  the  bank's  by-laws  or  an  amendment
30    thereto,  the  directors  of a State bank may properly fill a
31    vacancy or vacancies arising between shareholders'  meetings,
32    but at no time may the number of directors selected to fill a
33    vacancy  in  this  manner  during  any interim period between
34    shareholders' meetings exceed 33 1/3% of the total membership
 
HB1030 Enrolled            -3-                 LRB9206827JSpc
 1    of the board of directors.
 2        (4)  The board of directors shall hold  regular  meetings
 3    at  least  once each month, provided that, upon prior written
 4    approval by the Commissioner, the board of directors may hold
 5    regular meetings less frequently than once each month but  at
 6    least  once  each calendar quarter.  A special meeting of the
 7    board of directors may be held as provided by the by-laws.  A
 8    special meeting of the board of directors may  also  be  held
 9    upon  call  by  the Commissioner or a bank examiner appointed
10    under the provisions of this Act upon not less than 12  hours
11    notice of the meeting by personal service of the notice or by
12    mailing  the notice to each of the directors at his residence
13    as shown by the books of the bank.  A majority of  the  board
14    of directors shall constitute a quorum for the transaction of
15    business  unless  a greater number is required by the charter
16    or the by-laws.  The act of the  majority  of  the  directors
17    present  at  a  meeting at which a quorum is present shall be
18    the act of the board of directors unless the act of a greater
19    number is required by the charter or by the by-laws.
20        (5)  A member of the board of directors shall be  elected
21    president. The board of directors may appoint other officers,
22    as  the  by-laws may provide, and fix their salaries to carry
23    on the business of the bank.  The board of directors may make
24    and amend by-laws (not inconsistent with this  Act)  for  the
25    government  of the bank and may, by the affirmative vote of a
26    majority of the  board  of  directors,  establish  reasonable
27    compensation of all directors for services to the corporation
28    as  directors,  officers,  or otherwise.  An officer, whether
29    elected or appointed by the board of directors  or  appointed
30    pursuant  to  the  by-laws,  may  be  removed by the board of
31    directors at any time.
32        (6)  The board of directors shall  cause  suitable  books
33    and records of all the bank's transactions to be kept.
34        (7) (a)  In  discharging  the  duties of their respective
 
HB1030 Enrolled            -4-                 LRB9206827JSpc
 1        positions, the board  of  directors,  committees  of  the
 2        board,  and  individual directors may, in considering the
 3        best long term and short  term  interests  of  the  bank,
 4        consider  the  effects  of any action (including, without
 5        limitation, action that may involve or relate to a merger
 6        or potential merger or to a change or potential change in
 7        control  of  the  bank)   upon   employees,   depositors,
 8        suppliers,  and  customers  of  the  corporation  or  its
 9        subsidiaries,  communities  in  which  the  main  banking
10        premises,  branches,  offices, or other establishments of
11        the  bank  or  its  subsidiaries  are  located,  and  all
12        pertinent factors.
13             (b)  In discharging the duties of  their  respective
14        positions,  the  board  of  directors,  committees of the
15        board, and individual directors shall be entitled to rely
16        on advice, information, opinions, reports or  statements,
17        including   financial   statements  and  financial  data,
18        prepared or presented by: (i) one  or  more  officers  or
19        employees  of  the  bank whom the director believes to be
20        reliable and competent in the matter presented; (ii)  one
21        or more counsels, accountants, or other consultants as to
22        matters  that  the  director  believes  to be within that
23        person's professional or expert competence;  or  (iii)  a
24        committee  of  the board upon which the director does not
25        serve, as to matters within that  committee's  designated
26        authority;  provided  that  the director's reliance under
27        this  paragraph  (b)  is  placed  in  good  faith,  after
28        reasonable inquiry  if  the  need  for  such  inquiry  is
29        apparent  under  the  circumstances and without knowledge
30        that would cause such reliance to be unreasonable.
31    (Source: P.A. 90-301, eff. 8-1-97; 91-452, eff. 1-1-00.)

32        (205 ILCS 5/46) (from Ch. 17, par. 357)
33        Sec.  46.  Misleading  practices  and  names  prohibited;
 
HB1030 Enrolled            -5-                 LRB9206827JSpc
 1    penalty.
 2        (a)  No person, firm, partnership, or corporation that is
 3    not a bank shall transact business in this State in a  manner
 4    which  has  a substantial likelihood of misleading the public
 5    by implying that the business is a bank,  or  shall  use  the
 6    word  "bank",  "banker",  or "banking" in connection with the
 7    business.  Any  person,  firm,  partnership  or   corporation
 8    violating  this  Section  shall be deemed guilty of a Class A
 9    misdemeanor, and the Attorney General or State's Attorney  of
10    the  county  in  which any such violation occurs may restrain
11    such violation by a complaint for injunctive relief.
12        (b)  If the Commissioner is of the opinion and finds that
13    a person, firm, partnership, or corporation  that  is  not  a
14    bank  has  transacted or intends to transact business in this
15    State in a manner  which  has  a  substantial  likelihood  of
16    misleading  the  public  by  implying  that the business is a
17    bank, or  has  used  or  intends  to  use  the  word  "bank",
18    "banker",  or "banking" in connection with the business, then
19    the Commissioner may direct that person,  firm,  partnership,
20    or  corporation  to  cease  and  desist  from transacting the
21    business or using the word "bank",  "banker",  or  "banking".
22    If that person, firm, partnership, or corporation persists in
23    transacting  the business or using the word "bank", "banker",
24    or "banking",  then  the  Commissioner  may  impose  a  civil
25    penalty  of  up to $10,000 for each violation.  Each day that
26    the  person,  firm,  partnership,  or  corporation  continues
27    transacting the business or using the word "bank",  "banker",
28    or "banking" in connection with the business shall constitute
29    a separate violation of these provisions.
30        (c)  A  person, firm, partnership, or corporation that is
31    not a bank, and is not transacting or intending  to  transact
32    business  in  this  State  in a manner that has a substantial
33    likelihood of misleading the public  by  implying  that  such
34    business  is  a  bank,  may  apply  to  the  Commissioner for
 
HB1030 Enrolled            -6-                 LRB9206827JSpc
 1    permission to use the word "bank", "banker", or "banking"  in
 2    connection with the business.  If the Commissioner determines
 3    that  there  is  no  substantial likelihood of misleading the
 4    public, and upon such  conditions  as  the  Commissioner  may
 5    impose   to   prevent   the  person,  firm,  partnership,  or
 6    corporation from holding itself out in a  misleading  manner,
 7    then  such  person, firm, partnership, or corporation may use
 8    the word "bank", "banker", or "banking".
 9             (d) (1)  No   person,    firm,    partnership,    or
10        corporation  may  use  the name of an existing bank, or a
11        name deceptively similar to that  of  an  existing  bank,
12        when  marketing  to or soliciting business from customers
13        or prospective customers if the reference to the existing
14        bank is made (i) without the consent of the existing bank
15        and (ii) in a manner that could cause a reasonable person
16        to believe that the marketing  material  or  solicitation
17        originated  from  or  is endorsed by the existing bank or
18        that the existing bank is in any  other  way  responsible
19        for the marketing material or solicitation.
20             (2)  An  existing bank may, in addition to any other
21        remedies available  under  the  law,  report  an  alleged
22        violation of this subsection (d) to the Commissioner.  If
23        the   Commissioner   finds   the  marketing  material  or
24        solicitation in question  to  be  in  violation  of  this
25        subsection, the Commissioner may direct the person, firm,
26        partnership,  or  corporation  to  cease  and desist from
27        using  that  marketing  material   or   solicitation   in
28        Illinois.    If   that   person,  firm,  partnership,  or
29        corporation persists in the use of the marketing material
30        or solicitation, then the Commissioner may impose a civil
31        penalty of  up  to  $10,000  for  each  violation.   Each
32        instance  in which the marketing material or solicitation
33        is sent to  a  customer  or  prospective  customer  shall
34        constitute a separate violation of these provisions.
 
HB1030 Enrolled            -7-                 LRB9206827JSpc
 1             (3)  Nothing  in  this  subsection (d) prohibits the
 2        use of or reference to the name of an  existing  bank  in
 3        marketing  materials  or solicitations, provided that the
 4        use  or  reference  would  not  deceive  or   confuse   a
 5        reasonable   person   regarding   whether  the  marketing
 6        material or solicitation originated from or was  endorsed
 7        by  the existing bank or whether the existing bank was in
 8        any other way responsible for the marketing  material  or
 9        solicitation.    The   Commissioner   is   authorized  to
10        promulgate rules to administer these provisions.
11    (Source: P.A. 89-567, eff. 7-26-96.)

12        Section 99.  Effective date.  This Act takes effect  upon
13    becoming law.

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