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92_HB2376eng HB2376 Engrossed LRB9205792LDcs 1 AN ACT in relation to 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 Section 48 as follows: 6 (205 ILCS 5/48) (from Ch. 17, par. 359) 7 Sec. 48. Commissioner's powers; duties. The Commissioner 8 shall have the powers and authority, and is charged with the 9 duties and responsibilities designated in this Act, and a 10 State bank shall not be subject to any other visitorial power 11 other than as authorized by this Act, except those vested in 12 the courts, or upon prior consultation with the Commissioner, 13 a foreign bank regulator with an appropriate supervisory 14 interest in the parent or affiliate of a state bank. In the 15 performance of the Commissioner's duties: 16 (1) The Commissioner shall call for statements from all 17 State banks as provided in Section 47 at least one time 18 during each calendar quarter. 19 (2) (a) The Commissioner, as often as the Commissioner 20 shall deem necessary or proper, and no less frequently than 21 18 months following the preceding examination, shall appoint 22 a suitable person or persons to make an examination of the 23 affairs of every State bank, except that for every eligible 24 State bank, as defined by regulation, the Commissioner in 25 lieu of the examination may accept on an alternating basis 26 the examination made by the eligible State bank's appropriate 27 federal banking agency pursuant to Section 111 of the Federal 28 Deposit Insurance Corporation Improvement Act of 1991, 29 provided the appropriate federal banking agency has made such 30 an examination. A person so appointed shall not be a 31 stockholder or officer or employee of any bank which that HB2376 Engrossed -2- LRB9205792LDcs 1 person may be directed to examine, and shall have powers to 2 make a thorough examination into all the affairs of the bank 3 and in so doing to examine any of the officers or agents or 4 employees thereof on oath and shall make a full and detailed 5 report of the condition of the bank to the Commissioner. In 6 making the examination the examiners shall include an 7 examination of the affairs of all the affiliates of the bank, 8 as defined in subsection (b) of Section 35.2 of this Act, as 9 shall be necessary to disclose fully the conditions of the 10 affiliates, the relations between the bank and the affiliates 11 and the effect of those relations upon the affairs of the 12 bank, and in connection therewith shall have power to examine 13 any of the officers, directors, agents, or employees of the 14 affiliates on oath. After May 31, 1997, the Commissioner may 15 enter into cooperative agreements with state regulatory 16 authorities of other states to provide for examination of 17 State bank branches in those states, and the Commissioner may 18 accept reports of examinations of State bank branches from 19 those state regulatory authorities. These cooperative 20 agreements may set forth the manner in which the other state 21 regulatory authorities may be compensated for examinations 22 prepared for and submitted to the Commissioner. 23 (b) After May 31, 1997, the Commissioner is authorized 24 to examine, as often as the Commissioner shall deem necessary 25 or proper, branches of out-of-state banks. The Commissioner 26 may establish and may assess fees to be paid to the 27 Commissioner for examinations under this subsection (b). The 28 fees shall be borne by the out-of-state bank, unless the fees 29 are borne by the state regulatory authority that chartered 30 the out-of-state bank, as determined by a cooperative 31 agreement between the Commissioner and the state regulatory 32 authority that chartered the out-of-state bank. 33 (2.5) Whenever any State bank, any subsidiary or 34 affiliate of a State bank, or after May 31, 1997, any branch HB2376 Engrossed -3- LRB9205792LDcs 1 of an out-of-state bank causes to be performed, by contract 2 or otherwise, any bank services for itself, whether on or off 3 its premises: 4 (a) that performance shall be subject to 5 examination by the Commissioner to the same extent as if 6 services were being performed by the bank or, after May 7 31, 1997, branch of the out-of-state bank itself on its 8 own premises; and 9 (b) the bank or, after May 31, 1997, branch of the 10 out-of-state bank shall notify the Commissioner of the 11 existence of a service relationship. The notification 12 shall be submitted with the first statement of condition 13 (as required by Section 47 of this Act) due after the 14 making of the service contract or the performance of the 15 service, whichever occurs first. The Commissioner shall 16 be notified of each subsequent contract in the same 17 manner. 18 For purposes of this subsection (2.5), the term "bank 19 services" means services such as sorting and posting of 20 checks and deposits, computation and posting of interest and 21 other credits and charges, preparation and mailing of checks, 22 statements, notices, and similar items, or any other 23 clerical, bookkeeping, accounting, statistical, or similar 24 functions performed for a State bank, including but not 25 limited to electronic data processing related to those bank 26 services. 27 (3) The expense of administering this Act, including the 28 expense of the examinations of State banks as provided in 29 this Act, shall to the extent of the amounts resulting from 30 the fees provided for in paragraphs (a), (a-2), and (b) of 31 this subsection (3) be assessed against and borne by the 32 State banks: 33 (a) Each bank shall pay to the Commissioner a Call 34 Report Fee which shall be paid in quarterly installments HB2376 Engrossed -4- LRB9205792LDcs 1 equal to one-fourth of the sum of the annual fixed fee of 2 $800, plus a variable fee based on the assets shown on 3 the quarterly statement of condition delivered to the 4 Commissioner in accordance with Section 47 for the 5 preceding quarter according to the following schedule: 6 16¢ per $1,000 of the first $5,000,000 of total assets, 7 15¢ per $1,000 of the next $20,000,000 of total assets, 8 13¢ per $1,000 of the next $75,000,000 of total assets, 9 9¢ per $1,000 of the next $400,000,000 of total assets, 10 7¢ per $1,000 of the next $500,000,000 of total assets, 11 and 5¢ per $1,000 of all assets in excess of 12 $1,000,000,000, of the State bank. The Call Report Fee 13 shall be calculated by the Commissioner and billed to the 14 banks for remittance at the time of the quarterly 15 statements of condition provided for in Section 47. The 16 Commissioner may require payment of the fees provided in 17 this Section by an electronic transfer of funds or an 18 automatic debit of an account of each of the State banks. 19 In case more than one examination of any bank is deemed 20 by the Commissioner to be necessary in any examination 21 frequency cycle specified in subsection 2(a) of this 22 Section, and is performed at his direction, the 23 Commissioner may assess a reasonable additional fee to 24 recover the cost of the additional examination; provided, 25 however, that an examination conducted at the request of 26 the State Treasurer pursuant to the Uniform Disposition 27 of Unclaimed Property Act shall not be deemed to be an 28 additional examination under this Section. In lieu of the 29 method and amounts set forth in this paragraph (a) for 30 the calculation of the Call Report Fee, the Commissioner 31 may specify by rule that the Call Report Fees provided by 32 this Section may be assessed semiannually or some other 33 period and may provide in the rule the formula to be used 34 for calculating and assessing the periodic Call Report HB2376 Engrossed -5- LRB9205792LDcs 1 Fees to be paid by State banks. 2 (a-1) If in the opinion of the Commissioner an 3 emergency exists or appears likely, the Commissioner may 4 assign an examiner or examiners to monitor the affairs of 5 a State bank with whatever frequency he deems 6 appropriate, including but not limited to a daily basis. 7 The reasonable and necessary expenses of the Commissioner 8 during the period of the monitoring shall be borne by the 9 subject bank. The Commissioner shall furnish the State 10 bank a statement of time and expenses if requested to do 11 so within 30 days of the conclusion of the monitoring 12 period. 13 (a-2) On and after January 1, 1990, the reasonable 14 and necessary expenses of the Commissioner during 15 examination of the performance of electronic data 16 processing services under subsection (2.5) shall be borne 17 by the banks for which the services are provided. An 18 amount, based upon a fee structure prescribed by the 19 Commissioner, shall be paid by the banks or, after May 20 31, 1997, branches of out-of-state banks receiving the 21 electronic data processing services along with the Call 22 Report Fee assessed under paragraph (a) of this 23 subsection (3). 24 (a-3) After May 31, 1997, the reasonable and 25 necessary expenses of the Commissioner during examination 26 of the performance of electronic data processing services 27 under subsection (2.5) at or on behalf of branches of 28 out-of-state banks shall be borne by the out-of-state 29 banks, unless those expenses are borne by the state 30 regulatory authorities that chartered the out-of-state 31 banks, as determined by cooperative agreements between 32 the Commissioner and the state regulatory authorities 33 that chartered the out-of-state banks. 34 (b) "Fiscal year" for purposes of this Section 48 HB2376 Engrossed -6- LRB9205792LDcs 1 is defined as a period beginning July 1 of any year and 2 ending June 30 of the next year. The Commissioner shall 3 receive for each fiscal year, commencing with the fiscal 4 year ending June 30, 1987, a contingent fee equal to the 5 lesser of the aggregate of the fees paid by all State 6 banks under paragraph (a) of subsection (3) for that 7 year, or the amount, if any, whereby the aggregate of the 8 administration expenses, as defined in paragraph (c), for 9 that fiscal year exceeds the sum of the aggregate of the 10 fees payable by all State banks for that year under 11 paragraph (a) of subsection (3), plus any amounts 12 transferred into the Bank and Trust Company Fund from the 13 State Pensions Fund for that year, plus all other amounts 14 collected by the Commissioner for that year under any 15 other provision of this Act, plus the aggregate of all 16 fees collected for that year by the Commissioner under 17 the Corporate Fiduciary Act, excluding the receivership 18 fees provided for in Section 5-10 of the Corporate 19 Fiduciary Act, and the Foreign Banking Office Act. The 20 aggregate amount of the contingent fee thus arrived at 21 for any fiscal year shall be apportioned amongst, 22 assessed upon, and paid by the State banks and foreign 23 banking corporations, respectively, in the same 24 proportion that the fee of each under paragraph (a) of 25 subsection (3), respectively, for that year bears to the 26 aggregate for that year of the fees collected under 27 paragraph (a) of subsection (3). The aggregate amount of 28 the contingent fee, and the portion thereof to be 29 assessed upon each State bank and foreign banking 30 corporation, respectively, shall be determined by the 31 Commissioner and shall be paid by each, respectively, 32 within 120 days of the close of the period for which the 33 contingent fee is computed and is payable, and the 34 Commissioner shall give 20 days advance notice of the HB2376 Engrossed -7- LRB9205792LDcs 1 amount of the contingent fee payable by the State bank 2 and of the date fixed by the Commissioner for payment of 3 the fee. 4 (c) The "administration expenses" for any fiscal 5 year shall mean the ordinary and contingent expenses for 6 that year incident to making the examinations provided 7 for by, and for otherwise administering, this Act, the 8 Corporate Fiduciary Act, excluding the expenses paid from 9 the Corporate Fiduciary Receivership account in the Bank 10 and Trust Company Fund, the Foreign Banking Office Act, 11 the Electronic Fund Transfer Act, and the Illinois Bank 12 Examiners' Education Foundation Act, including all 13 salaries and other compensation paid for personal 14 services rendered for the State by officers or employees 15 of the State, including the Commissioner and the Deputy 16 Commissioners, all expenditures for telephone and 17 telegraph charges, postage and postal charges, office 18 stationery, supplies and services, and office furniture 19 and equipment, including typewriters and copying and 20 duplicating machines and filing equipment, surety bond 21 premiums, and travel expenses of those officers and 22 employees, employees, expenditures or charges for the 23 acquisition, enlargement or improvement of, or for the 24 use of, any office space, building, or structure, or 25 expenditures for the maintenance thereof or for 26 furnishing heat, light, or power with respect thereto, 27 all to the extent that those expenditures are directly 28 incidental to such examinations or administration. The 29 Commissioner shall not be required by paragraphs (c) or 30 (d-1) of this subsection (3) to maintain in any fiscal 31 year's budget appropriated reserves for accrued vacation 32 and accrued sick leave that is required to be paid to 33 employees of the Commissioner upon termination of their 34 service with the Commissioner in an amount that is more HB2376 Engrossed -8- LRB9205792LDcs 1 than is reasonably anticipated to be necessary for any 2 anticipated turnover in employees, whether due to normal 3 attrition or due to layoffs, terminations, or 4 resignations. 5 (d) The aggregate of all fees collected by the 6 Commissioner under this Act, the Corporate Fiduciary Act, 7 or the Foreign Banking Office Act on and after July 1, 8 1979, shall be paid promptly after receipt of the same, 9 accompanied by a detailed statement thereof, into the 10 State treasury and shall be set apart in a special fund 11 to be known as the "Bank and Trust Company Fund", except 12 as provided in paragraph (c) of subsection (11) of this 13 Section. All earnings received from investments of funds 14 in the Bank and Trust Company Fund shall be deposited in 15 the Bank and Trust Company Fund and may be used for the 16 same purposes as fees deposited in that Fund. The amount 17 from time to time deposited into the Bank and Trust 18 Company Fund shall be used to offset the ordinary 19 administrative expenses of the Commissioner of Banks and 20 Real Estate as defined in this Section. Nothing in this 21 amendatory Act of 1979 shall prevent continuing the 22 practice of paying expenses involving salaries, 23 retirement, social security, and State-paid insurance 24 premiums of State officers by appropriations from the 25 General Revenue Fund. However, the General Revenue Fund 26 shall be reimbursed for those payments made on and after 27 July 1, 1979, by an annual transfer of funds from the 28 Bank and Trust Company Fund. 29 (d-1) Adequate funds shall be available in the Bank 30 and Trust Company Fund to permit the timely payment of 31 administration expenses. In each fiscal year the total 32 administration expenses shall be deducted from the total 33 fees collected by the Commissioner and the remainder 34 transferred into the Cash Flow Reserve Account, unless HB2376 Engrossed -9- LRB9205792LDcs 1 the balance of the Cash Flow Reserve Account prior to the 2 transfer equals or exceeds one-fourth of the total 3 initial appropriations from the Bank and Trust Company 4 Fund for the subsequent year, in which case the remainder 5 shall be credited to State banks and foreign banking 6 corporations and applied against their fees for the 7 subsequent year. The amount credited to each State bank 8 and foreign banking corporation shall be in the same 9 proportion as the Call Report Fees paid by each for the 10 year bear to the total Call Report Fees collected for the 11 year. If, after a transfer to the Cash Flow Reserve 12 Account is made or if no remainder is available for 13 transfer, the balance of the Cash Flow Reserve Account is 14 less than one-fourth of the total initial appropriations 15 for the subsequent year and the amount transferred is 16 less than 5% of the total Call Report Fees for the year, 17 additional amounts needed to make the transfer equal to 18 5% of the total Call Report Fees for the year shall be 19 apportioned amongst, assessed upon, and paid by the State 20 banks and foreign banking corporations in the same 21 proportion that the Call Report Fees of each, 22 respectively, for the year bear to the total Call Report 23 Fees collected for the year. The additional amounts 24 assessed shall be transferred into the Cash Flow Reserve 25 Account. For purposes of this paragraph (d-1), the 26 calculation of the fees collected by the Commissioner 27 shall exclude the receivership fees provided for in 28 Section 5-10 of the Corporate Fiduciary Act. 29 (e) The Commissioner may upon request certify to 30 any public record in his keeping and shall have authority 31 to levy a reasonable charge for issuing certifications of 32 any public record in his keeping. 33 (f) In addition to fees authorized elsewhere in 34 this Act, the Commissioner may, in connection with a HB2376 Engrossed -10- LRB9205792LDcs 1 review, approval, or provision of a service, levy a 2 reasonable charge to recover the cost of the review, 3 approval, or service. 4 (4) Nothing contained in this Act shall be construed to 5 limit the obligation relative to examinations and reports of 6 any State bank, deposits in which are to any extent insured 7 by the United States or any agency thereof, nor to limit in 8 any way the powers of the Commissioner with reference to 9 examinations and reports of that bank. 10 (5) The nature and condition of the assets in or 11 investment of any bonus, pension, or profit sharing plan for 12 officers or employees of every State bank or, after May 31, 13 1997, branch of an out-of-state bank shall be deemed to be 14 included in the affairs of that State bank or branch of an 15 out-of-state bank subject to examination by the Commissioner 16 under the provisions of subsection (2) of this Section, and 17 if the Commissioner shall find from an examination that the 18 condition of or operation of the investments or assets of the 19 plan is unlawful, fraudulent, or unsafe, or that any trustee 20 has abused his trust, the Commissioner shall, if the 21 situation so found by the Commissioner shall not be corrected 22 to his satisfaction within 60 days after the Commissioner has 23 given notice to the board of directors of the State bank or 24 out-of-state bank of his findings, report the facts to the 25 Attorney General who shall thereupon institute proceedings 26 against the State bank or out-of-state bank, the board of 27 directors thereof, or the trustees under such plan as the 28 nature of the case may require. 29 (6) The Commissioner shall have the power: 30 (a) To promulgate reasonable rules for the purpose 31 of administering the provisions of this Act. 32 (b) To issue orders for the purpose of 33 administering the provisions of this Act and any rule 34 promulgated in accordance with this Act. HB2376 Engrossed -11- LRB9205792LDcs 1 (c) To appoint hearing officers to execute any of 2 the powers granted to the Commissioner under this Section 3 for the purpose of administering this Act and any rule 4 promulgated in accordance with this Act. 5 (d) To subpoena witnesses, to compel their 6 attendance, to administer an oath, to examine any person 7 under oath, and to require the production of any relevant 8 books, papers, accounts, and documents in the course of 9 and pursuant to any investigation being conducted, or any 10 action being taken, by the Commissioner in respect of any 11 matter relating to the duties imposed upon, or the powers 12 vested in, the Commissioner under the provisions of this 13 Act or any rule promulgated in accordance with this Act. 14 (e) To conduct hearings. 15 (7) Whenever, in the opinion of the Commissioner, any 16 director, officer, employee, or agent of a State bank or, 17 after May 31, 1997, of any branch of an out-of-state bank 18 shall have violated any law, rule, or order relating to that 19 bank or shall have engaged in an unsafe or unsound practice 20 in conducting the business of that bank or shall have 21 violated any law or engaged or participated in any unsafe or 22 unsound practice in connection with any financial institution 23 or other business entity such that the character and fitness 24 of the director, officer, employee, or agent does not assure 25 reasonable promise of safe and sound operation of the State 26 bank, the Commissioner may issue an order of removal. If, in 27 the opinion of the Commissioner, any former director, 28 officer, employee, or agent of a State bank, prior to the 29 termination of his or her service with that bank, violated 30 any law, rule, or order relating to that State bank or 31 engaged in an unsafe or unsound practice in conducting the 32 business of that bank or violated any law or engaged or 33 participated in any unsafe or unsound practice in connection 34 with any financial institution or other business entity such HB2376 Engrossed -12- LRB9205792LDcs 1 that the character and fitness of the director, officer, 2 employee, or agent would not have assured reasonable promise 3 of safe and sound operation of the State bank, the 4 Commissioner may issue an order prohibiting that person from 5 further service with a bank as a director, officer, employee, 6 or agent. An order issued pursuant to this subsection shall 7 be served upon the director, officer, employee, or agent. A 8 copy of the order shall be sent to each director of the bank 9 affected by registered mail. The person affected by the 10 action may request a hearing before the State Banking Board 11 within 10 days after receipt of the order of removal. The 12 hearing shall be held by the Board within 30 days after the 13 request has been received by the Board. The Board shall make 14 a determination approving, modifying, or disapproving the 15 order of the Commissioner as its final administrative 16 decision. If a hearing is held by the Board, the Board shall 17 make its determination within 60 days from the conclusion of 18 the hearing. Any person affected by a decision of the Board 19 under this subsection (7) of Section 48 of this Act may have 20 the decision reviewed only under and in accordance with the 21 Administrative Review Law and the rules adopted pursuant 22 thereto. A copy of the order shall also be served upon the 23 bank of which he is a director, officer, employee, or agent, 24 whereupon he shall cease to be a director, officer, employee, 25 or agent of that bank. The Commissioner may institute a 26 civil action against the director, officer, or agent of the 27 State bank or, after May 31, 1997, of the branch of the 28 out-of-state bank against whom any order provided for by this 29 subsection (7) of this Section 48 has been issued, and 30 against the State bank or, after May 31, 1997, out-of-state 31 bank, to enforce compliance with or to enjoin any violation 32 of the terms of the order. Any person who has been the 33 subject of an order of removal or an order of prohibition 34 issued by the Commissioner under this subsection or Section HB2376 Engrossed -13- LRB9205792LDcs 1 5-6 of the Corporate Fiduciary Act may not thereafter serve 2 as director, officer, employee, or agent of any State bank or 3 of any branch of any out-of-state bank, or of any corporate 4 fiduciary, as defined in Section 1-5.05 of the Corporate 5 Fiduciary Act, or of any other entity that is subject to 6 licensure or regulation by the Commissioner or the Office of 7 Banks and Real Estate unless the Commissioner has granted 8 prior approval in writing. 9 (8) The Commissioner may impose civil penalties of up to 10 $10,000 against any person for each violation of any 11 provision of this Act, any rule promulgated in accordance 12 with this Act, any order of the Commissioner, or any other 13 action which in the Commissioner's discretion is an unsafe or 14 unsound banking practice. 15 (9) The Commissioner may impose civil penalties of up to 16 $100 against any person for the first failure to comply with 17 reporting requirements set forth in the report of examination 18 of the bank and up to $200 for the second and subsequent 19 failures to comply with those reporting requirements. 20 (10) All final administrative decisions of the 21 Commissioner hereunder shall be subject to judicial review 22 pursuant to the provisions of the Administrative Review Law. 23 For matters involving administrative review, venue shall be 24 in either Sangamon County or Cook County. 25 (11) The endowment fund for the Illinois Bank Examiners' 26 Education Foundation shall be administered as follows: 27 (a) (Blank). 28 (b) The Foundation is empowered to receive 29 voluntary contributions, gifts, grants, bequests, and 30 donations on behalf of the Illinois Bank Examiners' 31 Education Foundation from national banks and other 32 persons for the purpose of funding the endowment of the 33 Illinois Bank Examiners' Education Foundation. 34 (c) The aggregate of all special educational fees HB2376 Engrossed -14- LRB9205792LDcs 1 collected by the Commissioner and property received by 2 the Commissioner on behalf of the Illinois Bank 3 Examiners' Education Foundation under this subsection 4 (11) on or after June 30, 1986, shall be either (i) 5 promptly paid after receipt of the same, accompanied by a 6 detailed statement thereof, into the State Treasury and 7 shall be set apart in a special fund to be known as "The 8 Illinois Bank Examiners' Education Fund" to be invested 9 by either the Treasurer of the State of Illinois in the 10 Public Treasurers' Investment Pool or in any other 11 investment he is authorized to make or by the Illinois 12 State Board of Investment as the board of trustees of the 13 Illinois Bank Examiners' Education Foundation may direct 14 or (ii) deposited into an account maintained in a 15 commercial bank or corporate fiduciary in the name of the 16 Illinois Bank Examiners' Education Foundation pursuant to 17 the order and direction of the Board of Trustees of the 18 Illinois Bank Examiners' Education Foundation. 19 (12) (Blank). 20 (Source: P.A. 90-14, eff. 7-1-97; 90-301, eff. 8-1-97; 21 90-665, eff. 7-30-98; 91-16, eff. 7-1-99.) 22 Section 99. Effective date. This Act takes effect July 23 1, 2001.