State of Illinois
92nd General Assembly
Legislation

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92_HB4955

 
                                               LRB9214701JSpc

 1        AN ACT concerning banks.

 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 37 as follows:

 6        (205 ILCS 5/37) (from Ch. 17, par. 347)
 7        Sec. 37. Loans to officers and loans on and purchases  of
 8    bank's own stock.
 9        (1)  No  state  bank  shall make any loan or extension of
10    credit  in  excess  of  the  limits,  as  determined  by  the
11    Commissioner,  at  any  one  time  outstanding  each  to  its
12    president, or to any of its vice presidents or  its  salaried
13    officers  or  employees  or  directors  or to corporations or
14    firms, controlled by them, or in the management of which  any
15    of  them  are actively engaged, unless such loan or extension
16    of credit shall have been first approved,  by  the  board  of
17    directors.   The  Commissioner shall prescribe such limits by
18    rules. A state bank that is in compliance with the provisions
19    of Regulation O adopted by the  Board  of  Governors  of  the
20    Federal  Reserve System (12 CFR 215) shall be deemed to be in
21    compliance with this subsection and with the rules pertaining
22    to this subsection.
23        (2)  It shall not be lawful for a state bank to make  any
24    loan  or  discount  on  the security of the shares of its own
25    capital stock or preferred stock or on the  security  of  its
26    own   debentures  or  evidences  of  debt  which  are  either
27    convertible into capital stock or are junior  or  subordinate
28    in  right  of  payment to deposit or other liabilities of the
29    bank.
30        (3)(a)  For purposes of this Section, "control" means (i)
31    ownership, control, or power to  vote  25%  or  more  of  the
 
                            -2-                LRB9214701JSpc
 1    outstanding  shares  of  any  class of voting security of the
 2    corporation  or  firm,  directly  or  indirectly,  or  acting
 3    through or in concert with one or more  other  persons;  (ii)
 4    control  in any manner over the election of a majority of the
 5    directors of the corporation or firm; or (iii) the  power  to
 6    exercise  a  controlling  influence  over  the  management or
 7    policies of the corporation or firm, directly or  indirectly,
 8    or acting through or in concert with one or more persons.
 9        (3)(b)  A  person  does  not have the power to exercise a
10    controlling influence over the management or  policies  of  a
11    corporation or firm solely by virtue of the person's position
12    as an officer or director of the corporation or firm.
13        (3)(c)  A  person  is presumed to have control, including
14    the power  to  exercise  a  controlling  influence  over  the
15    management or policies, of a corporation or firm if:
16             (i)  the person:
17                  (A)  is  an  executive  officer,  director,  or
18             individual   exercising  similar  functions  of  the
19             corporation or firm; and
20                  (B)  directly or indirectly owns, controls,  or
21             has  the power to vote more than 10% of any class of
22             voting securities of the corporation or firm; or
23             (ii) (A)  the person directly  or  indirectly  owns,
24             controls,  or has the power to vote more than 10% of
25             any class of voting securities of the corporation or
26             firm; and
27                  (B)  no other  person  directly  or  indirectly
28             owns,  controls,  or has the power to vote a greater
29             percentage of that class of voting securities.
30        (3)(d)  A person  may  rebut  a  presumption  established
31    under  subdivision  (3)(c)  of  this  Section  by  submitting
32    written  materials  that,  in  the  Commissioner's  judgment,
33    demonstrate an absence of control.
34    (Source: P.A. 92-483, eff. 8-23-01.)
 
                            -3-                LRB9214701JSpc
 1        Section  99.  Effective date.  This Act takes effect upon
 2    becoming law.

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