Public Act 93-0561

SB1784 Enrolled                      LRB093 10148 BDD 11571 b

    AN ACT concerning financial regulation.

    Be it enacted by the People of  the  State  of  Illinois,
represented in the General Assembly:

    Section 1. Short title. This Act may be cited as the High
Risk Home Loan Act.

    Section  5.    Purpose  and  construction. The purpose of
this Act is to protect borrowers who  enter  into  high  risk
home  loans  from abuse that occurs in the credit marketplace
when creditors and brokers are not sufficiently regulated  in
Illinois.   This  Act  is  to  be  construed  as  a  borrower
protection statute  for  all  purposes.  This  Act  shall  be
liberally construed to effectuate its purpose.

    Section 10.  Definitions. As used in this Act:
    "Approved  credit  counselor"  means  a  credit counselor
approved by the Director of Financial Institutions.
    "Borrower" means a natural person who seeks or obtains  a
high risk home loan.
    "Commissioner"  means  the  Commissioner of the Office of
Banks and Real Estate.
    "Department"   means   the   Department   of    Financial
Institutions.
    "Director" means the Director of Financial Institutions.
    "Good  faith"  means  honesty  in  fact in the conduct or
transaction concerned.
    "High risk home loan" means a home equity loan  in  which
(i)  at  the  time of origination, the annual percentage rate
exceeds by more than 6 percentage points in  the  case  of  a
first  lien  mortgage, or by more than 8 percentage points in
the case of a junior mortgage, the  yield  on  U.S.  Treasury
securities  having comparable periods of maturity to the loan
maturity as of the fifteenth day  of  the  month  immediately
preceding  the month in which the application for the loan is
received by the lender or (ii)  the  total  points  and  fees
payable  by the consumer at or before closing will exceed the
greater of 5% of the total loan  amount  or  $800.  The  $800
figure  shall be adjusted annually on January 1 by the annual
percentage change in the Consumer Price Index for  All  Urban
Consumers  for  all  items  published  by  the  United States
Department of Labor. "High risk home loan" does not include a
loan that is made primarily for a business purpose  unrelated
to  the  residential real property securing the loan or to an
open-end  credit  plan  subject  to  12  CFR  226  (2000,  no
subsequent amendments or editions are included).
    "Home  equity  loan"  means  any  loan  secured  by   the
borrower's  primary residence where the proceeds are not used
as purchase money for the residence.
    "Lender"  means  a  natural  or  artificial  person   who
transfers,  deals in, offers, or makes a high risk home loan.
"Lender" includes, but  is  not  limited  to,  creditors  and
brokers  who transfer, deal in, offer, or make high risk home
loans. "Lender" does not include  purchasers,  assignees,  or
subsequent holders of high risk home loans.
    "Office" means the Office of Banks and Real Estate.
    "Points   and  fees"  means  all  items  required  to  be
disclosed as points and fees under 12 CFR  226.32  (2000,  no
subsequent  amendments  or editions included); the premium of
any single premium credit  life,  credit  disability,  credit
unemployment,  or  any other life or health insurance that is
financed  directly  or  indirectly   into   the   loan;   and
compensation  paid  directly  or  indirectly  to  a  mortgage
broker,  including a broker that originates a loan in its own
name in a table-funded transaction, not otherwise included in
12 CFR 226.4.
    "Reasonable" means fair, proper, just, or  prudent  under
the circumstances.
    "Servicer"  means any entity chartered under the Illinois
Banking Act, the Savings Bank Act, the Illinois Credit  Union
Act,  or  the  Illinois  Savings and Loan Act of 1985 and any
person or entity  licensed  under  the  Residential  Mortgage
License  Act  of  1987, the Consumer Installment Loan Act, or
the Sales Finance Agency  Act  who  is  responsible  for  the
collection  or remittance for, or has the right or obligation
to collect or remit for, any  lender,  note  owner,  or  note
holder   or  for  a  licensee's  own  account,  of  payments,
interest,  principal,  and  trust  items  (such   as   hazard
insurance  and  taxes  on  a  residential  mortgage  loan) in
accordance with the terms of the residential  mortgage  loan,
including loan payment follow-up, delinquency loan follow-up,
loan analysis, and any notifications to the borrower that are
necessary to enable the borrower to keep the loan current and
in good standing.
    "Total  loan amount" has the same meaning as that term is
given in 12 CFR 226.32 and shall be calculated in  accordance
with the Federal Reserve Board's Official Staff Commentary to
that regulation.

    Section 15.  Ability to repay. A creditor or broker shall
not  transfer,  deal in, offer, or make a high risk home loan
if the creditor or broker does not believe at  the  time  the
loan  is  consummated  that the borrower will be able to make
the scheduled payments to repay the obligation based  upon  a
consideration  of  his  or  her  current and expected income,
current obligations, employment status, and  other  financial
resources  (other  than the borrower's equity in the dwelling
that secures repayment of the  loan).  A  borrower  shall  be
presumed  to  be  able  to repay the loan if, at the time the
loan is consummated,  or  at  the  time  of  the  first  rate
adjustment,  in  the  case  of  a lower introductory interest
rate, the borrower's scheduled monthly payments on  the  loan
(including   principal,   interest,   taxes,  insurance,  and
assessments), combined with the scheduled  payments  for  all
other  disclosed  debts,  do not exceed 50% of the borrower's
monthly gross income.

    Section 20.  Verification of ability to repay  loan.  The
lender  shall verify the borrower's ability to repay the loan
in the case of a high risk home loan. The verification  shall
require, at a minimum, the following:
         (1)  That  the  borrower  prepare  and submit to the
    lender a personal income and expense statement in a  form
    prescribed  by  the Commissioner or the Director, who may
    permit the use of other forms such as  the  URLA  (Fannie
    Mae  Form  1003  (10/92), available from Fannie Mae, 3900
    Wisconsin Avenue, NW, Washington,  D.C.  20016-2892,  and
    Freddie  Mac  Form 85 (10/92), available from Freddie Mac
    at 1101 Pennsylvania Avenue,  NW,  Suite  950,  P.O.  Box
    37347,   Washington,   D.C.   20077-0001,  no  subsequent
    amendments or editions) and Transmittal  Summary  (Fannie
    Mae  Form  1077  (3/97),  available from Fannie Mae, 3900
    Wisconsin Avenue, NW, Washington,  D.C.  20016-2892,  and
    Freddie  Mac Form 1008 (3/97), available from Freddie Mac
    at 1101 Pennsylvania Avenue,  NW,  Suite  950,  P.O.  Box
    37347,   Washington,   D.C.   20077-0001,  no  subsequent
    amendments or editions).
         (2)  That the borrower's income is verified by means
    of tax returns,  pay  stubs,  accounting  statements,  or
    other prudent means.
         (3)  That  a credit report is obtained regarding the
    borrower.

    Section 25.  Good faith dealings; fraudulent or deceptive
practices. A lender must act in good faith in  all  relations
with  a borrower, including but not limited to, transferring,
dealing in, offering, or making a high risk home loan.
    No lender shall employ fraudulent or  deceptive  acts  or
practices  in  the making of a high risk home loan, including
deceptive marketing and sales efforts.

    Section 30.  Prepayment penalty. For  any  loan  that  is
subject  to  the provisions of this Act and is not subject to
the provisions of the Home Ownership  and  Equity  Protection
Act  of 1994, no lender shall make a high risk home loan that
includes a penalty provision for payment made: (i) after  the
expiration of the 36-month period following the date the loan
was made; or (ii) that is more than:
         (1)  3%  of  the total loan amount if the prepayment
    is made within the first 12-month  period  following  the
    date the loan was made;
         (2)  2%  of  the total loan amount if the prepayment
    is made within the second 12-month period  following  the
    date the loan was made; or
         (3)  1%  of  the total loan amount if the prepayment
    is made within the third 12-month  period  following  the
    date the loan was made.

    Section  40.  Pre-paid insurance products and warranties.
No lender shall transfer, deal in, offer, or make a high risk
home loan that finances a single premium credit life,  credit
disability,  credit unemployment, or any other life or health
insurance, directly or indirectly. Insurance  calculated  and
paid  on  a  monthly  basis  shall  not  be  considered to be
financed by the lender.

    Section 45.  Refinancing prohibited in certain cases.  No
lender  shall  refinance  any  high risk home loan where such
refinancing charges  additional  points  and  fees  within  a
12-month period after the original loan agreement was signed,
unless  the  refinancing results in a tangible net benefit to
the borrower.

    Section 55.  Financing of points and  fees.    No  lender
shall transfer, deal in, offer, or make a high risk home loan
that  finances  points  and fees in excess of 6% of the total
loan amount.

    Section 60.  Payments to  contractors.  No  lender  shall
make  a  payment  of  any  proceeds  of a high risk home loan
directly to a contractor under a  home  improvement  contract
other than:
         (1)  by   instrument  payable  to  the  borrower  or
    payable jointly to the borrower and contractor; or
         (2)  at  the  election  of  the   borrower,   by   a
    third-party  escrow  agent  in  accordance with the terms
    established in a written agreement that is signed by  the
    borrower,  the lender, and the contractor before the date
    of payment.

    Section  65.  Negative  amortization.  No  lender   shall
transfer,  deal  in,  offer,  or  make a high risk home loan,
other than a loan secured only by a  reverse  mortgage,  with
terms  under  which  the outstanding balance will increase at
any time over the course of  the  loan  because  the  regular
periodic  payments  do  not  cover  the  full  amount  of the
interest  due,  unless  the  negative  amortization  is   the
consequence   of   a  temporary  forbearance  sought  by  the
borrower.

    Section 70.  Negative equity. No lender  shall  transfer,
deal  in, offer, or make a high risk home loan where the loan
amount exceeds the value of the property securing the loan.
    Section  80.  Late  payment  fee.  A  lender  shall   not
transfer,  deal in, offer, or make a high risk home loan that
provides for a late payment fee, except under  the  following
conditions:
         (1)  the  late payment fee shall not be in excess of
    5% of the amount of the payment past due;
         (2)  the late payment fee shall only be assessed for
    a payment past due for 15 days or more;
         (3)  the late payment fee shall not be imposed  more
    than once with respect to a single late payment;
         (4)  a   late   payment  fee  that  the  lender  has
    collected shall be reimbursed if  the  borrower  presents
    proof of having made a timely payment; and
         (5)  a  lender shall treat each payment as posted on
    the same business day as it was received by  the  lender,
    servicer, or lender's agent or at the address provided to
    the  borrower  by the lender, servicer, or lender's agent
    for making payments.

    Section  85.  Payment  compounding.   No   lender   shall
transfer,  deal in, offer, or make a high risk home loan that
includes terms under which  more  than  2  periodic  payments
required  under the loan are consolidated and paid in advance
from the loan proceeds provided to the borrower.

    Section 90.  Call provision. No  lender  shall  transfer,
deal in, offer, or make a high risk home loan that contains a
provision that permits the lender, in its sole discretion, to
accelerate  the  indebtedness,  provided  that this provision
does not prohibit acceleration of a loan in good faith due to
a borrower's failure to abide by the material  terms  of  the
loan.

    Section  95.  Disclosure prior to making a high risk home
loan. A lender shall not transfer, deal in, offer, or make  a
high risk home loan unless the lender has given the following
notice  or  a substantially similar notice in writing, to the
borrower, acknowledged in writing and signed by the  borrower
not  later  than  the  time  the notice is required under the
notice provision contained in 12 CFR 226.31(c):
NOTICE TO BORROWER
YOU SHOULD BE AWARE THAT YOU MIGHT BE ABLE TO OBTAIN  A  LOAN
AT  A  LOWER  COST.  YOU  SHOULD SHOP AROUND AND COMPARE LOAN
RATES AND FEES. LOAN RATES AND CLOSING COSTS  AND  FEES  VARY
BASED  ON  MANY FACTORS, INCLUDING YOUR PARTICULAR CREDIT AND
FINANCIAL  CIRCUMSTANCES,  YOUR   EMPLOYMENT   HISTORY,   THE
LOAN-TO-VALUE  REQUESTED,  AND THE TYPE OF PROPERTY THAT WILL
SECURE YOUR LOAN. THE LOAN RATE  AND  FEES  COULD  ALSO  VARY
BASED ON WHICH LENDER OR BROKER YOU SELECT. IF YOU ACCEPT THE
TERMS  OF  THIS LOAN, THE LENDER WILL HAVE A MORTGAGE LIEN ON
YOUR HOME. YOU COULD LOSE YOUR HOME AND  ANY  MONEY  YOU  PUT
INTO IT IF YOU DO NOT MEET YOUR PAYMENT OBLIGATIONS UNDER THE
LOAN.  YOU  SHOULD CONSULT AN ATTORNEY-AT-LAW AND AN APPROVED
CREDIT  COUNSELOR  OR  OTHER  EXPERIENCED  FINANCIAL  ADVISOR
REGARDING THE RATE, FEES, AND PROVISIONS OF THIS LOAN  BEFORE
YOU   PROCEED.  A  LIST  OF  APPROVED  CREDIT  COUNSELORS  IS
AVAILABLE BY CONTACTING EITHER  THE  ILLINOIS  DEPARTMENT  OF
FINANCIAL  INSTITUTIONS  OR  THE ILLINOIS OFFICE OF BANKS AND
REAL ESTATE. YOU ARE  NOT  REQUIRED  TO  COMPLETE  THIS  LOAN
AGREEMENT MERELY BECAUSE YOU HAVE RECEIVED THIS DISCLOSURE OR
HAVE  SIGNED  A  LOAN  APPLICATION.  ALSO,  YOUR  PAYMENTS ON
EXISTING DEBTS CONTRIBUTE TO YOUR CREDIT RATINGS. YOU  SHOULD
NOT ACCEPT ANY ADVICE TO IGNORE YOUR REGULAR PAYMENTS TO YOUR
EXISTING LENDERS.

    Section  100.  Counseling prior to perfecting foreclosure
proceedings.
    (a)  If a high risk home loan becomes delinquent by  more
than  30  days, the servicer shall send a notice advising the
borrower that he or she may  wish  to  seek  approved  credit
counseling.
    (b)  The  notice  required  in subsection (a) shall, at a
minimum, include the following language:
    "YOUR LOAN IS OR WAS MORE THAN 30 DAYS PAST DUE. YOU  MAY
BE  EXPERIENCING FINANCIAL DIFFICULTY. IT MAY BE IN YOUR BEST
INTEREST TO  SEEK  APPROVED  CREDIT  COUNSELING.  A  LIST  OF
APPROVED  CREDIT  COUNSELORS  MAY BE OBTAINED FROM EITHER THE
ILLINOIS DEPARTMENT OF FINANCIAL INSTITUTIONS OR THE ILLINOIS
OFFICE OF BANKS AND REAL ESTATE."
    (c)  If, within 15 days after mailing the notice provided
for under subsection (b), a  lender,  servicer,  or  lender's
agent  is notified in writing by an approved credit counselor
and  the  approved  credit  counselor  advises  the   lender,
servicer,  or  lender's  agent  that  the borrower is seeking
approved credit counseling, then  the  lender,  servicer,  or
lender's agent shall not institute legal action under Part 15
of  Article  XV  of  the  Code of Civil Procedure for 30 days
after the date of that notice. Only one such 30-day period of
forbearance is allowed under this Section per subject loan.
    (d)  If,  within  the  30-day   period   provided   under
subsection  (c), the lender, servicer, or lender's agent, the
approved credit counselor, and the borrower agree to  a  debt
management plan, then the lender, servicer, or lender's agent
shall  not institute legal action under Part 15 of Article XV
of the Code of Civil  Procedure  for  as  long  as  the  debt
management plan is complied with by the borrower.
    The  agreed  debt  management plan must be in writing and
signed by  the  lender,  servicer,  or  lender's  agent,  the
approved  credit counselor, and the borrower. No modification
of an approved debt management plan can be made  without  the
mutual  agreement of the lender, servicer, or lender's agent,
the approved credit counselor, and the borrower.
    Upon written notice to the lender, servicer, or  lender's
agent, the borrower may change approved credit counselors.
    (e)  If the borrower fails to comply with the agreed debt
management  plan,  then  nothing  in  this  Section  shall be
construed to impair the legal right of the lender,  servicer,
or lender's agent to enforce the contract.

    Section 105.  Right to cure.
    (a)  Before  an  action  is filed to foreclose or collect
money due pursuant to a high risk home loan or  before  other
action  is  taken  to seize or transfer ownership of property
subject to a high risk home  loan,  the  lender  or  lender's
assignee  of  the loan shall deliver to the borrower a notice
of the right to cure the default, informing the  borrower  of
all of the following:
         (1)  The nature of the default.
         (2)  The  borrower's  right  to  cure the default by
    paying the sum of money required, provided that a  lender
    or  assignee  shall  accept  any  partial payment made or
    tendered  in  response  to  the  notice.  If  the  amount
    necessary to cure the default will change within 30  days
    of  the notice due to the application of a daily interest
    rate or the addition of late fees, as allowed by the Act,
    the notice shall give sufficient  information  to  enable
    the  borrower to calculate the amount at any point within
    the 30-day period.
         (3)  The date by which the  borrower  may  cure  the
    default   to  avoid  a  court  action,  acceleration  and
    initiation of foreclosure, or other action to  seize  the
    property, which date shall not be less than 30 days after
    the  date the notice is delivered, and the name, address,
    and telephone number of a person to whom the  payment  or
    tender shall be made.
         (4)  That  if the borrower does not cure the default
    by the date specified, the lender or assignee may file an
    action for money due  or  take  steps  to  terminate  the
    borrower's ownership in the property by requiring payment
    in  full  of  the  high  risk  home loan and commencing a
    foreclosure proceeding  or  other  action  to  seize  the
    property.
         (5)  The  name,  address,  and telephone number of a
    person whom the borrower  may  contact  if  the  borrower
    disagrees  with the assertion that a default has occurred
    or the correctness  of  the  calculation  of  the  amount
    required to cure the default.
    (b)  If  a  lender  or  assignee asserts that grounds for
acceleration exist and requires the payment in  full  of  all
sums  secured  by  the  high  risk home loan, the borrower or
anyone authorized to act on the borrower's behalf may, at any
time before the title is transferred by means of foreclosure,
by judicial proceeding and sale, or  other  means,  cure  the
default,  and  reinstate the high risk home loan. Cure of the
default shall reinstate the borrower to the same position  as
if  the default had not occurred and shall nullify, as of the
date of the cure, an acceleration of any obligation under the
high risk home loan arising from the default.
    (c)  To cure a default under  this  Section,  a  borrower
shall  not  be  required  to  pay any charge, fee, or penalty
attributable to the exercise of the right to cure a  default,
other  than the fees specifically allowed by this subsection.
The borrower shall  not  be  liable  for  any  attorney  fees
relating  to  the  default that are incurred by the lender or
assignee prior to or during the 30-day period  set  forth  in
subsection  (a)  of  this  Section,  nor for any such fees in
excess of $100 that are incurred by the  lender  or  assignee
after  the  expiration  of  the  30-day period but before the
lender or assignee files  a  foreclosure  or  other  judicial
action  or  takes other action to seize or transfer ownership
of the real estate. After the  lender  or  assignee  files  a
foreclosure or other judicial action or takes other action to
seize  or transfer ownership of the real estate, the borrower
shall only be liable for attorney fees  that  are  reasonable
and  actually  incurred by the lender or assignee, based on a
reasonable hourly rate and a reasonable number of hours.
    (d)  If a default is cured prior to the initiation of any
action to foreclose or to seize the residence, the lender  or
assignee shall not institute a proceeding or other action for
that  default.  If a default is cured after the initiation of
any action, the lender or assignee shall take such  steps  as
are necessary to terminate the action.
    (e)  A  lender or a lender's assignee of a high risk home
loan that has the legal right  to  foreclose  shall  use  the
judicial  foreclosure  procedures  provided by law. In such a
proceeding, the borrower may assert  the  nonexistence  of  a
default  and  any  other claim or defense to acceleration and
foreclosure, including  any  claim  or  defense  based  on  a
violation  of  the Act, though no such claim or defense shall
be deemed a compulsory counterclaim.

    Section 110.  Mortgage Awareness Program.
    (a)  The Mortgage Awareness Program is a  counseling  and
educational  component  that must be provided by the Director
and the Commissioner.
    (b)  The  core  curriculum  of  the  Mortgage   Awareness
Program shall include all of the following:
         (1)  Explanation of the amount financed.
         (2)  Explanation of the finance charge.
         (3)  Explanation of the annual percentage rate.
         (4)  Explanation of the total payments.
         (5)  Explanation   of   the  loan  costs,  including
    broker's fees, finance charges, points,  and  origination
    fees.
         (6)  Explanation of the right of rescission.
         (7)  Explanation of foreclosure procedures.
         (8)  Explanation  of  the  significant  debt ratios,
    including total debt to income, loan debt to income,  and
    loan debt to value of residence.
         (9)  Explanation of adjustable rate mortgage.
         (10)  Explanation of balloon payments.
         (11)  Explanation of credit options.
         (12)  Explanation  of  each  item  that appears on a
    good faith estimate.
         (13)  Explanation of pre-payment penalties.
    (c)  Counseling  session  attendees   must   complete   a
personal  income  and expense statement, as well as a balance
sheet, on forms provided by the Commissioner or the Director.
    (d)  Prior  to  signing  a  certificate  of   completion,
approved  credit counselors shall privately discuss with each
attendee that attendee's income  and  expense  statement  and
balance  sheet, as well as the terms of any loan the attendee
currently has or may be contemplating, and  provide  a  third
party review to establish the affordability of the loan.
    (e)  Counseling   session   attendees  must  be  given  a
brochure that contains information covered  by  the  Mortgage
Awareness Program.
    (f)  Any  lender,  prior to making a high risk home loan,
shall  inform  the  borrower  in  writing  of  the  right  to
participate in the Mortgage Awareness Program.
    (g)  No lender shall offer less favorable loan terms to a
borrower due to a borrower's participation  in  the  Mortgage
Awareness Program.
    (h)  Except  as prohibited elsewhere in this Section, the
borrower may waive participation  in  the  program,  provided
that the waiver occurs no less than 2 business days after the
day  that  the  borrower  receives  the  notice  required  by
subsection  (f)  of  this  Section  and that the waiver is in
writing in a  form  approved  by  the  Commissioner  and  the
Director.

    Section  115.  Report of default and foreclosure rates on
conventional loans.
    (a)  On or before October 1 and April  1  of  each  year,
each  servicer  of  Illinois residential mortgage loans shall
report to the Commissioner or the Director  the  default  and
foreclosure  data  of  conventional  loans  for  the  6-month
periods ending June 30 and December 31, respectively.
    (b)  Each    servicer    shall   report   the   following
information:
         (1)  The  average   quarterly   dollar   amount   of
    conventional  one  to  4 family mortgage loans secured by
    Illinois real estate.
         (2)  The average quarterly  number  of  conventional
    one  to  4 family mortgage loans secured by Illinois real
    estate.
         (3)  The  average   quarterly   dollar   amount   of
    conventional  one  to  4 family mortgage loans secured by
    Illinois real estate that are in default over 90 days.
         (4)  The average quarterly  number  of  conventional
    one  to  4 family mortgage loans secured by Illinois real
    estate that are in default over 90 days.
         (5)  The dollar amount of foreclosures on one  to  4
    family  conventional loans completed during the reporting
    period.
         (6)  The number of foreclosures on one to  4  family
    conventional loans completed during the reporting period.
         (7)  Whether  any  of  the loans where a foreclosure
    was completed were originated less than 18 months  before
    the completed foreclosure.
         (8)  Whether  any  of  the loans where a foreclosure
    was completed had a note rate greater than 10% for  first
    lien  mortgage loans or greater than 12% in the case of a
    junior lien.
    (c)  An officer of the servicer shall sign the form.

    Section 120. Review and analysis.
    (a)  The  Commissioner  or  Director  shall  review   and
analyze   the  default  and  foreclosure  rate  data  reports
submitted under Section 115.
    (b)  The reports and their analyses may be used  for  the
following purposes:
         (1)  In  setting  the scope of a regularly scheduled
    examination.
         (2)  In setting the scope of a special examination.
         (3)  In comparing  the  reported  information  of  a
    servicer.
    (c)  The Commissioner or the Director may correspond with
a  servicer to seek clarification of information contained in
its report and to gather additional data concerning loans  in
default or loans in foreclosure.

    Section 125.  Third party review of high risk home loans.
    (a)  In the case of any high risk home loan, the borrower
shall  be afforded the opportunity to seek independent review
by the Office or the Department of the loan terms,  in  order
to  determine  affordability  of  the  loan,  when and if the
General Assembly appropriates adequate funding to the  Office
or the Department specifically for this Section.
    (b)  The  Office  or  the  Department  shall  inform  the
borrower  of  the  amount  the  borrower  has available for a
monthly mortgage payment based upon the borrower's budget.
    (c)  The Office  or  the  Department  shall  review  loan
information  pertaining  to  balloon  payments and adjustable
interest  rates  and  other  items  disclosed  by  the   loan
documents  affecting  amount  of payment and shall inform the
borrower of such items.
    (d)  If, based upon the review, the  borrower  determines
that  the  loan  is not in his or her best economic interest,
the reviewer shall so notify the lender.  This  determination
shall  enable  the borrower to withdraw from the contemplated
loan with no financial penalty.

    Section 130.  Circumstances voiding mandatory arbitration
provisions. Without regard to whether a  borrower  is  acting
individually  or  on  behalf  of others similarly situated, a
mandatory arbitration provision of  a  high  risk  home  loan
agreement  that  is  oppressive,  unfair,  unconscionable, or
substantially in derogation of the rights of the borrower  is
void.

    Section  135.  Remedies,  enforcement, and limitations of
liability.
    (a)  The remedies provided in this Act are cumulative and
apply to persons or entities subject to this Act.
    (b)  Any knowing violation  of  this  Act  constitutes  a
violation  of  the  Consumer  Fraud  and  Deceptive  Business
Practices Act.
    (c)  If  any  provision  of  an agreement for a high risk
home  loan  violates  this  Act,  then  that   provision   is
unenforceable against the borrower.
    (d)(1)  Any natural or artificial person who purchases or
otherwise  is assigned or subsequently holds a high risk home
loan shall be subject to all affirmative claims and  defenses
with  respect  to  the  loan  that  the borrower could assert
against the lender or broker of the loan, provided that  this
item  (d)(1)  shall  not  apply if the purchaser, assignee or
holder demonstrates by a preponderance of the  evidence  that
it:
         (A)  has  in  place,  at  the  time of the purchase,
    assignment  or  transfer  of  the  loans,  policies  that
    expressly prohibit its purchase, acceptance of assignment
    or holding of any high risk home loans;
         (B)  requires by contract that a seller, assignor or
    transferor of high risk  home  loans  to  the  purchaser,
    assignee  or  transferee  represents  and warrants to the
    purchaser, assignee or transferee  that  either  (i)  the
    seller,  assignor  or transferor will not sell, assign or
    transfer any high  risk  home  loans  to  the  purchaser,
    assignee  or  transferee, or (ii) the seller, assignor or
    transferor is  a  beneficiary  of  a  representation  and
    warranty  from  a previous seller, assignor or transferor
    to that effect; and
         (C)  exercises reasonable due diligence at the  time
    of the purchase, assignment or transfer of high risk home
    loans,  or  within  a reasonable period of time after the
    purchase, assignment or  transfer  of  such  home  loans,
    which   is   intended   by  the  purchaser,  assignee  or
    transferee  to  prevent  the   purchaser,   assignee   or
    transferee   from  purchasing  or  taking  assignment  or
    otherwise holding any high risk home loans, provided that
    this reasonable due diligence requirement may be  met  by
    sampling and need not require loan-by-loan review.
    (2)  Limited   to   the  amount  required  to  reduce  or
extinguish the borrower's liability under the high cost  home
loan  plus  the  amount  required to recover costs, including
reasonable attorney  fees,  a  borrower  acting  only  in  an
individual capacity may assert claims that the borrower could
assert against a lender of the home loan against a subsequent
holder or assignee of the home loan as follows:
         (A)  within  5  years  of the closing date of a high
    risk home loan, a violation of  this  Act  in  connection
    with the loan as an original action; and
         (B)  at any time during the term of a high risk home
    loan,  after  an action to collect on the home loan or to
    foreclose on the collateral securing the  home  loan  has
    been  initiated,  or  the debt arising from the home loan
    has been accelerated, or the home loan has become 60 days
    in default, any defense, claim, counterclaim or action to
    enjoin foreclosure or preserve or  obtain  possession  of
    the home that secures the loan.
    (e)  In  addition to the limitation of liability afforded
to  subsequent  purchasers,  assignees,  or   holders   under
subsection  (d)  of  this  Section, a lender and a subsequent
purchaser, assignee, or holder of the high risk home loan  is
not liable for a violation of this Act if:
         (1)  within 30 days of the loan closing and prior to
    receiving  any notice from the borrower of the violation,
    the  lender  has  made  appropriate  restitution  to  the
    borrower and appropriate  adjustments  are  made  to  the
    loan; or
         (2)  the  violation was not intentional and resulted
    from a bona  fide  error  in  fact,  notwithstanding  the
    maintenance  of  procedures  reasonably  adopted to avoid
    such errors, and within 60 days of the discovery  of  the
    violation  and  prior  to  receiving  any notice from the
    borrower of the violation, the borrower  is  notified  of
    the  violation,  appropriate  restitution  is made to the
    borrower, and appropriate adjustments  are  made  to  the
    loan.

    Section  145.  Subterfuge prohibited. No lender, with the
intent to avoid the application or provisions  of  this  Act,
shall  (i)  divide  a loan transaction into separate parts or
(ii) perform any other subterfuge.

    Section 150.  Preemption  of  administrative  rules.  Any
relevant administrative rule promulgated before the effective

date  of  this  Act  by  the  Department  or  the  Office  is
preempted.

    Section 153.  Reporting of violations. The Office and the
Department must report to the Attorney General all violations
of this Act of which they become aware.

    Section  155.  Rulemaking.  The Office and the Department
may adopt reasonable rules to implement and  administer  this
Act.

    Section  160.  Judicial  review. All final administrative
decisions under this  Act  are  subject  to  judicial  review
pursuant  to  the provisions of the Administrative Review Law
and any rules adopted pursuant thereto.

    Section 165.  Waiver prohibited. There shall be no waiver
of any provision of this Act, except as  explicitly  provided
in subsection (h) of Section 110.

    Section  170.  Superiority of Act. To the extent this Act
conflicts with any other Illinois State financial  regulation
laws,  except  the  Interest  Act,  this  Act is superior and
supersedes those laws for the  purposes  of  regulating  high
risk home loans in Illinois.

    Section  175.   Severability.  The provisions of this Act
are severable under Section 1.31 of the Statute on Statutes.

    Section 800.  The Deposit of State Moneys Act is  amended
by changing Sections 11 and 11.1 as follows:

    (15 ILCS 520/11) (from Ch. 130, par. 30)
    Sec.   11.    Protection  of  public  deposits;  eligible
collateral.
    (a)  For deposits not insured by an agency of the federal
government, the State Treasurer, in his  or  her  discretion,
may  accept  as  collateral  any  of the following classes of
securities, provided there has been no default in the payment
of principal or interest thereon:
         (1)  Bonds, notes, or other securities  constituting
    direct  and general obligations of the United States, the
    bonds, notes, or other securities constituting the direct
    and general obligation of any agency  or  instrumentality
    of the United States, the interest and principal of which
    is  unconditionally  guaranteed by the United States, and
    bonds,  notes,  or  other  securities  or   evidence   of
    indebtedness constituting the obligation of a U.S. agency
    or instrumentality.
         (2)  Direct  and  general  obligation  bonds  of the
    State of Illinois or of any other  state  of  the  United
    States.
         (3)  Revenue  bonds  of this State or any authority,
    board, commission, or similar agency thereof.
         (4)  Direct and  general  obligation  bonds  of  any
    city, town, county, school district, or other taxing body
    of  any  state, the debt service of which is payable from
    general ad valorem taxes.
         (5)  Revenue bonds of any  city,  town,  county,  or
    school district of the State of Illinois.
         (6)  Obligations  issued,  assumed, or guaranteed by
    the International Finance Corporation, the  principal  of
    which is not amortized during the life of the obligation,
    but no such obligation shall be accepted at more than 90%
    of its market value.
         (7)  Illinois  Affordable Housing Program Trust Fund
    Bonds or Notes as defined in and issued pursuant  to  the
    Illinois Housing Development Act.
         (8)  In  an amount equal to at least market value of
    that amount of funds deposited  exceeding  the  insurance
    limitation  provided  by  the  Federal  Deposit Insurance
    Corporation or the National Credit  Union  Administration
    or  other  approved  share  insurer: (i) securities, (ii)
    mortgages, (iii) letters of credit issued  by  a  Federal
    Home Loan Bank, or (iv) loans covered by a State Guaranty
    under the Illinois Farm Development Act.
    (b)  The  State  Treasurer  may  establish  a  system  to
aggregate  permissible securities received as collateral from
financial institutions in a collateral pool to  secure  State
deposits  of the institutions that have pledged securities to
the pool.
    (c)  The Treasurer may at any time declare any particular
security ineligible to qualify as  collateral  when,  in  the
Treasurer's judgment, it is deemed desirable to do so.
    (d)  Notwithstanding any other provision of this Section,
as  security  the  State  Treasurer  may,  in his discretion,
accept a bond, executed by a company authorized  to  transact
the kinds of business described in clause (g) of Section 4 of
the  Illinois  Insurance Code, in an amount not less than the
amount of  the  deposits  required  by  this  Section  to  be
secured,  payable  to  the State Treasurer for the benefit of
the People of the State  of  Illinois,  in  a  form  that  is
acceptable to the State Treasurer.
(Source: P.A. 87-510; 87-575; 87-895; 88-93.)

    (15 ILCS 520/11.1) (from Ch. 130, par. 30.1)
    Sec.  11.1.   The  State  Treasurer  may,  in  his or her
discretion, accept as security  for  State  deposits  insured
certificates  of  deposit or share certificates issued to the
depository institution pledging  them  as  security  and  may
require  security  in  the amount of 125% of the value of the
State  deposit.   Such  certificate  of  deposit   or   share
certificate shall:
    (1)  be  fully  insured  by the Federal Deposit Insurance
Corporation,  the  Federal   Savings   and   Loan   Insurance
Corporation or the National Credit Union Share Insurance Fund
or  issued  by a depository institution which is rated within
the 3 highest classifications established by at least one  of
the 2 standard rating services;
    (2)  be  issued  by a financial institution having assets
of $15,000,000 $30,000,000 or more; and
    (3)  be issued by either a savings and  loan  association
having  a  capital  to  asset ratio of at least 2%, by a bank
having a capital to asset ratio of at least 6% or by a credit
union having a capital to asset ratio of at least 4%.
    The depository institution shall effect the assignment of
the certificate of deposit or share certificate to the  State
Treasurer  and  shall  agree, that in the event the issuer of
the certificate fails to maintain the capital to asset  ratio
required  by  this  Section,  such  certificate of deposit or
share certificate shall be replaced  by  additional  suitable
security.
(Source: P.A. 85-803.)

    Section  805.  The Public Funds Deposit Act is amended by
changing Section 1 as follows:

    (30 ILCS 225/1) (from Ch. 102, par. 34)
    Sec. 1. Deposits. Any treasurer  or  other  custodian  of
public  funds  may  deposit  such funds in a savings and loan
association, savings bank, or State or national bank in  this
State.  When such deposits become collected funds and are not
needed  for  immediate  disbursement,  they shall be invested
within 2 working days at prevailing  rates  or  better.   The
treasurer or other custodian of public funds may require such
bank,  savings  bank,  or  savings  and  loan  association to
deposit with him or her securities guaranteed by agencies and
instrumentalities of the federal government equal  in  market
value  to  the amount by which the funds deposited exceed the
federally insured amount. Any treasurer or other custodian of
public  funds  may  accept  as  security  for  public   funds
deposited  in  such  bank,  savings bank, or savings and loan
association  any  securities  or  other  eligible  collateral
authorized by Sections 11 and 11.1 of the  Deposit  of  State
Moneys  Act  (15  ILCS  520/11  and 11.1) or Section 6 of the
Public Funds Investment Act (30 ILCS 235/6).  Such  treasurer
or  other  custodian is authorized to enter into an agreement
with any  such  bank,  savings  bank,  or  savings  and  loan
association, with any federally insured financial institution
or  trust  company, or with any agency of the U.S. government
relating  to  the  deposit  of  such  securities.  Any   such
treasurer   or  other  custodian  shall  be  discharged  from
responsibility for any funds  for  which  securities  are  so
deposited with him or her, and the funds for which securities
are  so  deposited  shall  not  be  subject  to any otherwise
applicable limitation as to amount.
    No bank, savings bank, or savings  and  loan  association
shall  receive  public  funds  as  permitted by this Section,
unless it has  complied  with  the  requirements  established
pursuant to Section 6 of the Public Funds Investment Act.
(Source: P.A. 91-211, eff. 7-20-99.)

    Section  810.  The  State  Officers  and  Employees Money
Disposition Act is amended by changing Section 2c as follows:

    (30 ILCS 230/2c) (from Ch. 127, par. 173a)
    Sec.  2c.  Every   such   officer,   board,   commission,
commissioner,  department,  institution,  arm  or  agency  is
authorized  to  demand  and  receive a bond and securities in
amount and kind satisfactory to him from any bank or  savings
and  loan  association  in which moneys held by such officer,
board, commission, commissioner, department, institution, arm
or agency for or on behalf of the State of Illinois,  may  be
on deposit, such securities to be held by the officer, board,
commission,  commissioner,  department,  institution,  arm or
agency for the period that such moneys are so on deposit  and
then  returned  together  with  interest, dividends and other
accruals to the bank or savings  and  loan  association.  The
bond  or undertaking and such securities shall be conditioned
for the return of the moneys deposited in conformity with the
terms of the deposit.
    Whenever funds deposited with a bank or savings and  loan
association  exceed  the  amount of federal deposit insurance
coverage, a bond, or pledged securities,  or  other  eligible
collateral shall be obtained. Only the types of securities or
other  eligible  collateral which the State Treasurer may, in
his or her discretion, accept for amounts not insured by  the
Federal  Deposit Insurance Corporation or the Federal Savings
and Loan Insurance Corporation under Section 11 of "An Act in
relation  to  State  moneys",  approved  June  28,  1919,  as
amended, may be accepted as pledged  securities.  The  market
value of the bond or pledged securities shall at all times be
equal to or greater than the uninsured portion of the deposit
unless  the  funds deposited are collateralized pursuant to a
system  established  by  the  State  Treasurer  to  aggregate
permissible securities received as collateral from  financial
institutions in a collateral pool to secure State deposits of
the institution that have pledged securities to the pool.
    All  securities  deposited  by a bank or savings and loan
association under the provisions of this Section shall remain
the property of the depositary and  may  be  stamped  by  the
depositary  so  as  to  indicate  that  such  securities  are
deposited  as collateral. Should the bank or savings and loan
association fail or refuse to pay over  the  moneys,  or  any
part   thereof,   deposited  with  it,  the  officer,  board,
commission, commissioner,  department,  institution,  arm  or
agency  may sell such securities upon giving 5 days notice to
the depositary of his intention to so sell  such  securities.
Such sale shall transfer absolute ownership of the securities
so  sold to the vendee thereof. The surplus, if any, over the
amount due to the State and the expenses of the sale shall be
paid to the bank or savings and loan association. Actions may
be brought in the name of the People of the State of Illinois
to enforce the claims  of  the  State  with  respect  to  any
securities   deposited   by   a  bank  or  savings  and  loan
association.
    No bank or savings and  loan  association  shall  receive
public  funds  as  permitted  by  this Section, unless it has
complied  with  the  requirements  established  pursuant   to
Section  6  of  "An  Act  relating  to certain investments of
public funds by public agencies", approved July 23, 1943,  as
now or hereafter amended.
(Source: P.A. 85-257.)

    Section  815.  The Public Funds Investment Act is amended
by changing Section 6 as follows:

    (30 ILCS 235/6) (from Ch. 85, par. 906)
    Sec. 6. Report of financial institutions.
    (a)  No bank shall receive any public funds unless it has
furnished  the  corporate  authorities  of  a  public  agency
submitting a deposit  with  copies  of  the  last  two  sworn
statements  of  resources  and  liabilities which the bank is
required to furnish to the Commissioner  of  Banks  and  Real
Estate  or  to  the  Comptroller  of the Currency.  Each bank
designated as a depository  for  public  funds  shall,  while
acting  as such depository, furnish the corporate authorities
of a public agency with a copy of all statements of resources
and liabilities which  it  is  required  to  furnish  to  the
Commissioner  of  Banks and Real Estate or to the Comptroller
of the Currency; provided, that if such funds or  moneys  are
deposited  in  a  bank,  the  amount of all such deposits not
collateralized  or  insured  by  an  agency  of  the  federal
government shall not exceed 75%  of  the  capital  stock  and
surplus  of  such  bank,  and  the corporate authorities of a
public agency submitting a deposit shall  not  be  discharged
from  responsibility for any funds or moneys deposited in any
bank in excess of such limitation.
    (b)  No savings bank  or  savings  and  loan  association
shall  receive  public  funds  unless  it  has  furnished the
corporate authorities of a public agency submitting a deposit
with copies of the last 2 sworn statements of  resources  and
liabilities  which  the  savings  bank  or  savings  and loan
association is required to furnish  to  the  Commissioner  of
Banks  and  Real  Estate  or  the  Federal  Deposit Insurance
Corporation.   Each  savings  bank  or   savings   and   loan
association  designated  as  a  depository  for  public funds
shall, while acting as such depository, furnish the corporate
authorities of a public agency with a copy of all  statements
of  resources and liabilities which it is required to furnish
to the Commissioner of Banks and Real Estate or  the  Federal
Deposit  Insurance  Corporation; provided, that if such funds
or moneys are deposited in a savings bank or savings and loan
association,  the   amount   of   all   such   deposits   not
collateralized  or  insured  by  an  agency  of  the  federal
government  shall  not  exceed  75%  of the net worth of such
savings bank or savings and loan association  as  defined  by
the  Federal Deposit Insurance Corporation, and the corporate
authorities of a public agency submitting a deposit shall not
be discharged from responsibility for  any  funds  or  moneys
deposited in any savings bank or savings and loan association
in excess of such limitation.
    (c)  No credit union shall receive public funds unless it
has  furnished  the  corporate authorities of a public agency
submitting a share  deposit  with  copies  of  the  last  two
reports  of  examination  prepared  by  or  submitted  to the
Illinois Department of Financial Institutions or the National
Credit Union Administration.  Each credit union designated as
a depository for public funds shall,  while  acting  as  such
depository,  furnish  the  corporate  authorities of a public
agency with a copy of all reports of examination prepared  by
or   furnished   to  the  Illinois  Department  of  Financial
Institutions or the  National  Credit  Union  Administration;
provided  that  if  such  funds  or  moneys are invested in a
credit union account, the amount of all such investments  not
collateralized  or  insured  by  an  agency  of  the  federal
government  or  other approved share insurer shall not exceed
50% of the unimpaired capital  and  surplus  of  such  credit
union,  which  shall  include  shares, reserves and undivided
earnings and the corporate authorities  of  a  public  agency
making   an   investment   shall   not   be  discharged  from
responsibility for any funds or moneys invested in  a  credit
union in excess of such limitation.
    (d)  Whenever  a  public agency deposits any public funds
in a financial institution, the public agency may enter  into
an  agreement  with  the  financial institution requiring any
funds  not  insured  by   the   Federal   Deposit   Insurance
Corporation  or  the  National Credit Union Administration or
other approved share insurer to be collateralized by  any  of
the  following classes of securities, provided there has been
no default in the payment of principal or interest thereon:
         (1)  Bonds, notes, or other securities  constituting
    direct  and general obligations of the United States, the
    bonds, notes, or other securities constituting the direct
    and general obligation of any agency  or  instrumentality
    of the United States, the interest and principal of which
    is  unconditionally  guaranteed by the United States, and
    bonds,  notes,  or  other  securities  or   evidence   of
    indebtedness constituting the obligation of a U.S. agency
    or instrumentality.
         (2)  Direct  and  general  obligation  bonds  of the
    State of Illinois or of any other  state  of  the  United
    States.
         (3)  Revenue  bonds  of this State or any authority,
    board, commission, or similar agency thereof.
         (4)  Direct and  general  obligation  bonds  of  any
    city, town, county, school district, or other taxing body
    of  any  state, the debt service of which is payable from
    general ad valorem taxes.
         (5)  Revenue bonds of any  city,  town,  county,  or
    school district of the State of Illinois.
         (6)  Obligations  issued,  assumed, or guaranteed by
    the International Finance Corporation, the  principal  of
    which is not amortized during the life of the obligation,
    but no such obligation shall be accepted at more than 90%
    of its market value.
         (7)  Illinois  Affordable Housing Program Trust Fund
    Bonds or Notes as defined in and issued pursuant  to  the
    Illinois Housing Development Act.
         (8)  In  an amount equal to at least market value of
    that amount of funds deposited  exceeding  the  insurance
    limitation  provided  by  the  Federal  Deposit Insurance
    Corporation or the National Credit  Union  Administration
    or  other  approved  share  insurer: (i) securities, (ii)
    mortgages, (iii) letters of credit issued  by  a  Federal
    Home Loan Bank, or (iv) loans covered by a State Guaranty
    under the Illinois Farm Development Act.
         (9)  Certificates  of  deposit or share certificates
    issued to the depository  institution  pledging  them  as
    security.  The  public agency may require security in the
    amount of 125% of the value of the public agency deposit.
    Such certificate of deposit or share certificate shall:
              (i)  be fully insured by  the  Federal  Deposit
         Insurance  Corporation, the Federal Savings and Loan
         Insurance Corporation, or the National Credit  Union
         Share  Insurance  Fund  or  issued  by  a depository
         institution which is  rated  within  the  3  highest
         classifications established by at least one of the 2
         standard rating services;
              (ii)  be  issued  by  a  financial  institution
         having assets of $15,000,000 or more; and
              (iii)  be  issued  by either a savings and loan
         association having a capital to asset  ratio  of  at
         least  2%, by a bank having a capital to asset ratio
         of at least 6% or by a credit union having a capital
         to asset ratio of at least 4%.
    The depository institution shall effect the assignment of
the certificate of deposit or share certificate to the public
agency and shall agree that, in the event the issuer  of  the
certificate  fails  to  maintain  the  capital to asset ratio
required by this Section,  such  certificate  of  deposit  or
share  certificate  shall  be replaced by additional suitable
security.
    (e)  The public agency may accept a system established by
the  State  Treasurer  to  aggregate  permissible  securities
received as  collateral  from  financial  institutions  in  a
collateral pool to secure public deposits of the institutions
that have pledged securities to the pool.
    (f)  The  public  agency  may  at  any  time  declare any
particular security ineligible to qualify as collateral when,
in the public agency's judgment, it is deemed desirable to do
so.
    (g)  Notwithstanding any other provision of this Section,
as security a public agency may, at its discretion, accept  a
bond,  executed by a company authorized to transact the kinds
of business described in clause  (g)  of  Section  4  of  the
Illinois  Insurance  Code,  in  an  amount  not less than the
amount of  the  deposits  required  by  this  Section  to  be
secured,  payable to the public agency for the benefit of the
People  of  the  unit  of  government,  in  a  form  that  is
acceptable  to  the  public  agency  securities,   mortgages,
letters  of  credit  issued  by  a Federal Home Loan Bank, or
loans covered by a State Guaranty  under  the  Illinois  Farm
Development  Act  in an amount equal to at least market value
of that amount of funds  deposited  exceeding  the  insurance
limitation   provided   by   the  Federal  Deposit  Insurance
Corporation or the National Credit  Union  Administration  or
other approved share insurer.
    (h) (e)  Paragraphs (a), (b), (c), and (d), (e), (f), and
(g)  of  this  Section  do  not  apply  to  the University of
Illinois,  Southern  Illinois   University,   Chicago   State
University,  Eastern  Illinois  University,  Governors  State
University,  Illinois State University, Northeastern Illinois
University, Northern Illinois  University,  Western  Illinois
University,   the  Cooperative  Computer  Center  and  public
community colleges.
(Source: P.A. 91-324, eff. 1-1-00; 91-773, eff. 6-9-00.)

    Section 820.  The Illinois  Banking  Act  is  amended  by
changing  Sections 2, 5, and 17 and by adding Section 13.6 as
follows:

    (205 ILCS 5/2) (from Ch. 17, par. 302)
    Sec. 2.  General definitions.  In this  Act,  unless  the
context  otherwise  requires, the following words and phrases
shall have the following meanings:
    "Accommodation party" shall have the meaning ascribed  to
that term in Section 3-419 of the Uniform Commercial Code.
    "Action"  in  the sense of a judicial proceeding includes
recoupments, counterclaims, set-off, and any other proceeding
in which rights are determined.
    "Affiliate facility" of  a  bank  means  a  main  banking
premises  or  branch of another commonly owned bank. The main
banking premises or any branch of a bank may be an "affiliate
facility" with respect to one or more  other  commonly  owned
banks.
    "Appropriate  federal  banking  agency" means the Federal
Deposit Insurance Corporation, the Federal  Reserve  Bank  of
Chicago,  or  the  Federal  Reserve  Bank  of  St.  Louis, as
determined by federal law.
    "Bank" means any person doing a banking business  whether
subject to the laws of this or any other jurisdiction.
    A  "banking  house",  "branch",  "branch bank" or "branch
office" shall mean any place of business of a bank  at  which
deposits  are received, checks paid, or loans made, but shall
not include any place at which only records thereof are made,
posted, or kept.  A place of business at which  deposits  are
received,  checks  paid, or loans made shall not be deemed to
be a branch, branch bank, or branch office if  the  place  of
business  is  adjacent to and connected with the main banking
premises, or  if  it  is  separated  from  the  main  banking
premises  by not more than an alley; provided always that (i)
if the place of business is separated by an  alley  from  the
main  banking  premises there is a connection between the two
by public or private  way  or  by  subterranean  or  overhead
passage,  and  (ii) if the place of business is in a building
not wholly occupied by the bank, the place of business  shall
not  be within any office or room in which any other business
or service of any kind or nature other than the  business  of
the  bank  is conducted or carried on. A place of business at
which deposits are received, checks paid, or loans made shall
not be deemed to be a branch, branch bank, or  branch  office
(i)  of  any  bank if the place is a terminal established and
maintained in accordance with paragraph (17) of Section 5  of
this  Act,  or  (ii)  of  a  commonly owned bank by virtue of
transactions conducted at that place on behalf of  the  other
commonly owned bank under paragraph (23) of Section 5 of this
Act if the place is an affiliate facility with respect to the
other bank.
    "Branch   of   an   out-of-state  bank"  means  a  branch
established or maintained in Illinois by an out-of-state bank
as a result of a merger between  an  Illinois  bank  and  the
out-of-state  bank  that  occurs on or after May 31, 1997, or
any branch established by the out-of-state bank following the
merger.
    "Bylaws" means the bylaws of a bank that are  adopted  by
the  bank's  board  of  directors  or  shareholders  for  the
regulation  and management of the bank's affairs. If the bank
operates as a limited liability  company,  however,  "bylaws"
means the operating agreement of the bank.
    "Call  report  fee"  means  the  fee  to  be  paid to the
Commissioner by each State bank pursuant to paragraph (a)  of
subsection (3) of Section 48 of this Act.
    "Capital"  includes  the aggregate of outstanding capital
stock and preferred stock.
    "Cash flow reserve account" means the account within  the
books  and  records  of  the  Commissioner  of Banks and Real
Estate  used  to  record  funds  designated  to  maintain   a
reasonable  Bank  and Trust Company Fund operating balance to
meet agency obligations on a timely basis.
    "Charter"  includes  the   original   charter   and   all
amendments thereto and articles of merger or consolidation.
    "Commissioner"  means  the Commissioner of Banks and Real
Estate or a person authorized by the Commissioner, the Office
of Banks and Real Estate Act, or  this  Act  to  act  in  the
Commissioner's stead.
    "Commonly  owned  banks"  means 2 or more banks that each
qualify as a bank subsidiary of the same bank holding company
pursuant to Section 18 of the Federal Deposit Insurance  Act;
"commonly  owned  bank"  refers to one of a group of commonly
owned banks but only with respect to one or more of the other
banks in the same group.
    "Community" means a city, village, or  incorporated  town
and also includes the area served by the banking offices of a
bank,  but  need not be limited or expanded to conform to the
geographic boundaries of units of local government.
    "Company" means a corporation, limited liability company,
partnership,  business   trust,   association,   or   similar
organization  and,  unless  specifically excluded, includes a
"State bank" and a "bank".
    "Consolidating bank" means a party to a consolidation.
    "Consolidation" takes place when 2 or more  banks,  or  a
trust  company  and  a bank, are extinguished and by the same
process a new bank is created, taking  over  the  assets  and
assuming  the  liabilities  of  the  banks  or  trust company
passing out of existence.
    "Continuing bank" means a merging bank,  the  charter  of
which becomes the charter of the resulting bank.
    "Converting bank" means a State bank converting to become
a  national  bank,  or a national bank converting to become a
State bank.
    "Converting  trust  company"  means   a   trust   company
converting to become a State bank.
    "Court" means a court of competent jurisdiction.
    "Director"  means a member of the board of directors of a
bank. In the case  of  a  manager-managed  limited  liability
company, however, "director" means a manager of the bank and,
in  the  case  of a member-managed limited liability company,
"director" means a member of the bank.  The  term  "director"
does  not  include  an  advisory director, honorary director,
director emeritus, or similar person, unless  the  person  is
otherwise  performing  functions similar to those of a member
of the board of directors.
    "Eligible  depository  institution"  means   an   insured
savings  association  that  is in default, an insured savings
association that is in danger of default, a State or national
bank that is in default or a State or national bank  that  is
in  danger  of  default,  as  those terms are defined in this
Section, or a new bank as that term defined in Section  11(m)
of the Federal Deposit Insurance Act or a bridge bank as that
term  is  defined  in  Section  11(n)  of the Federal Deposit
Insurance Act or a new federal savings association authorized
under Section 11(d)(2)(f) of the  Federal  Deposit  Insurance
Act.
    "Fiduciary"     means     trustee,    agent,    executor,
administrator, committee, guardian  for  a  minor  or  for  a
person   under   legal   disability,   receiver,  trustee  in
bankruptcy, assignee for creditors, or any holder of  similar
position of trust.
    "Financial  institution"  means  a bank, savings and loan
association, credit union, or any licensee under the Consumer
Installment Loan Act or the Sales Finance Agency Act and, for
purposes of Section  48.3,  any  proprietary  network,  funds
transfer  corporation,  or  other entity providing electronic
funds transfer services,  or  any  corporate  fiduciary,  its
subsidiaries,  affiliates,  parent  company,  or  contractual
service provider that is examined by the Commissioner.
    "Foundation" means the Illinois Bank Examiners' Education
Foundation.
    "General  obligation"  means  a  bond,  note,  debenture,
security, or other instrument evidencing an obligation of the
government entity that is the issuer that is supported by the
full  available  resources  of  the issuer, the principal and
interest of which is payable in whole or in part by taxation.
    "Guarantee" means an undertaking or promise to answer for
payment of another's debt or performance of  another's  duty,
liability,  or  obligation  whether  "payment  guaranteed" or
"collection guaranteed".
    "In danger of default" means a State or national bank,  a
federally   chartered   insured  savings  association  or  an
Illinois state chartered  insured  savings  association  with
respect  to which the Commissioner or the appropriate federal
banking agency has  advised  the  Federal  Deposit  Insurance
Corporation that:
         (1)  in  the  opinion  of  the  Commissioner  or the
    appropriate federal banking agency,
              (A)  the State  or  national  bank  or  insured
         savings association is not likely to be able to meet
         the  demands  of  the  State  or  national bank's or
         savings  association's  obligations  in  the  normal
         course of business; and
              (B)  there is no reasonable prospect  that  the
         State   or   national   bank   or   insured  savings
         association will be able to meet  those  demands  or
         pay those obligations without federal assistance; or
         (2)  in  the  opinion  of  the  Commissioner  or the
    appropriate federal banking agency,
              (A)  the State  or  national  bank  or  insured
         savings  association  has  incurred  or is likely to
         incur losses that will deplete all or  substantially
         all of its capital; and
              (B)  there  is  no reasonable prospect that the
         capital of the State or  national  bank  or  insured
         savings  association  will  be  replenished  without
         federal assistance.
    "In  default"  means, with respect to a State or national
bank or an insured savings association, any  adjudication  or
other  official  determination  by  any  court  of  competent
jurisdiction,   the  Commissioner,  the  appropriate  federal
banking agency, or other public authority pursuant to which a
conservator, receiver, or other legal custodian is  appointed
for   a   State  or  national  bank  or  an  insured  savings
association.
    "Insured savings association" means any  federal  savings
association  chartered  under  Section  5 of the federal Home
Owners' Loan Act and any State savings association  chartered
under  the  Illinois  Savings  and  Loan  Act  of  1985  or a
predecessor Illinois  statute,  the  deposits  of  which  are
insured  by  the  Federal Deposit Insurance Corporation.  The
term also includes a  savings  bank  organized  or  operating
under the Savings Bank Act.
    "Insured   savings  association  in  recovery"  means  an
insured  savings  association  that  is   not   an   eligible
depository  institution  and  that  does not meet the minimum
capital requirements applicable with respect to  the  insured
savings association.
    "Issuer"  means  for  purposes of Section 33 every person
who shall have issued or  proposed  to  issue  any  security;
except  that  (1)  with  respect  to certificates of deposit,
voting trust certificates, collateral-trust certificates, and
certificates of  interest  or  shares  in  an  unincorporated
investment  trust not having a board of directors (or persons
performing similar functions), "issuer" means the  person  or
persons  performing  the  acts  and  assuming  the  duties of
depositor or manager pursuant to the provisions of the trust,
agreement, or  instrument  under  which  the  securities  are
issued; (2) with respect to trusts other than those specified
in  clause  (1)  above,  where  the  trustee is a corporation
authorized to accept and execute trusts, "issuer"  means  the
entrusters,  depositors,  or  creators  of  the trust and any
manager or committee charged with the  general  direction  of
the  affairs  of  the trust pursuant to the provisions of the
agreement or instrument creating  the  trust;  and  (3)  with
respect  to  equipment trust certificates or like securities,
"issuer" means the person to whom the equipment  or  property
is or is to be leased or conditionally sold.
    "Letter of credit" and "customer" shall have the meanings
ascribed  to  those  terms  in  Section  5-102 of the Uniform
Commercial Code.
    "Main  banking  premises"  means  the  location  that  is
designated in a bank's charter as its main office.
    "Maker or obligor" means for purposes of Section  33  the
issuer  of  a  security, the promisor in a debenture or other
debt security, or the mortgagor or grantor of a trust deed or
similar conveyance of a security interest in real or personal
property.
    "Merged bank" means  a  merging  bank  that  is  not  the
continuing,  resulting,  or surviving bank in a consolidation
or merger.
    "Merger" includes consolidation.
    "Merging bank" means a party to a bank merger.
    "Merging trust company" means a trust company party to  a
merger with a State bank.
    "Mid-tier  bank holding company" means a corporation that
(a) owns 100% of the issued and outstanding  shares  of  each
class   of   stock   of  a  State  bank,  (b)  has  no  other
subsidiaries, and (c) 100%  of  the  issued  and  outstanding
shares  of the corporation are owned by a parent bank holding
company.
    "Municipality"   means   any   municipality,    political
subdivision, school district, taxing district, or agency.
    "National  bank"  means  a  national  banking association
located in this  State  and  after  May  31,  1997,  means  a
national banking association without regard to its location.
    "Out-of-state bank" means a bank chartered under the laws
of  a  state  other  than Illinois, a territory of the United
States, or the District of Columbia.
    "Parent bank holding company" means a corporation that is
a bank holding  company  as  that  term  is  defined  in  the
Illinois  Bank  Holding  Company Act of 1957 and owns 100% of
the issued and outstanding shares of a mid-tier bank  holding
company.
    "Person"   means   an  individual,  corporation,  limited
liability company, partnership, joint venture, trust, estate,
or unincorporated association.
    "Public agency" means the State of Illinois, the  various
counties,   townships,   cities,   towns,   villages,  school
districts,  educational   service   regions,   special   road
districts,  public  water  supply  districts, fire protection
districts,  drainage  districts,   levee   districts,   sewer
districts,  housing authorities, the Illinois Bank Examiners'
Education Foundation, the  Chicago  Park  District,  and  all
other  political corporations or subdivisions of the State of
Illinois, whether now or hereafter  created,  whether  herein
specifically  mentioned  or  not,  and shall also include any
other state or any political corporation  or  subdivision  of
another state.
    "Public  funds" or "public money" means current operating
funds, special funds, interest and sinking funds,  and  funds
of  any kind or character belonging to, in the custody of, or
subject to the control or regulation of the United States  or
a  public  agency.   "Public  funds"  or "public money" shall
include funds  held  by  any  of  the  officers,  agents,  or
employees  of  the United States or of a public agency in the
course of their official duties and, with respect  to  public
money  of  the  United  States,  shall include Postal Savings
funds.
    "Published" means, unless the context requires otherwise,
the publishing of the notice or  instrument  referred  to  in
some  newspaper  of  general  circulation in the community in
which the bank is located at  least  once  each  week  for  3
successive  weeks.   Publishing shall be accomplished by, and
at the expense of,  the  bank  required  to  publish.   Where
publishing   is  required,  the  bank  shall  submit  to  the
Commissioner  that  evidence  of  the  publication   as   the
Commissioner shall deem appropriate.
    "Qualified   financial   contract"   means  any  security
contract, commodity  contract,  forward  contract,  including
spot  and  forward  foreign  exchange  contracts,  repurchase
agreement,  swap  agreement,  and  any similar agreement, any
option to  enter  into  any  such  agreement,  including  any
combination  of  the  foregoing, and any master agreement for
such  agreements.  A  master  agreement,  together  with  all
supplements  thereto,  shall  be  treated  as  one  qualified
financial contract.   The  contract,  option,  agreement,  or
combination  of  contracts,  options,  or agreements shall be
reflected upon the books, accounts, or records of  the  bank,
or a party to the contract shall provide documentary evidence
of such agreement.
    "Recorded" means the filing or recording of the notice or
instrument  referred  to in the office of the Recorder of the
county wherein the bank is located.
    "Resulting bank" means the bank resulting from  a  merger
or conversion.
    "Securities"  means  stocks, bonds, debentures, notes, or
other similar obligations.
    "Stand-by letter of credit"  means  a  letter  of  credit
under  which  drafts  are  payable  upon  the  condition  the
customer  has  defaulted in performance of a duty, liability,
or obligation.
    "State bank" means any banking  corporation  that  has  a
banking charter issued by the Commissioner under this Act.
    "State  Banking  Board"  means the State Banking Board of
Illinois.
    "Subsidiary" with respect to a specified company means  a
company  that  is  controlled  by the specified company.  For
purposes of paragraphs (8) and (12) of Section 5 of this Act,
"control" means the exercise  of  operational  or  managerial
control  of  a  corporation  by  the  bank,  either  alone or
together with other affiliates of the bank.
    "Surplus" means the aggregate  of  (i)  amounts  paid  in
excess of the par value of capital stock and preferred stock;
(ii)  amounts  contributed  other  than for capital stock and
preferred stock and allocated to  the  surplus  account;  and
(iii) amounts transferred from undivided profits.
    "Tier  1  Capital" and "Tier 2 Capital" have the meanings
assigned to those terms in regulations  promulgated  for  the
appropriate  federal banking agency of a state bank, as those
regulations are now or hereafter amended.
    "Trust company" means  a  limited  liability  company  or
corporation  incorporated  in  this  State for the purpose of
accepting and executing trusts.
    "Undivided profits"  means  undistributed  earnings  less
discretionary transfers to surplus.
    "Unimpaired  capital  and  unimpaired  surplus",  for the
purposes of paragraph (21) of Section 5 and Sections 32,  33,
34, 35.1, 35.2, and 47 of this Act means the sum of the state
bank's  Tier  1  Capital  and  Tier 2 Capital plus such other
shareholder equity as may be included by  regulation  of  the
Commissioner.   Unimpaired  capital  and  unimpaired  surplus
shall  be  calculated  on  the  basis of the date of the last
quarterly call report filed with the  Commissioner  preceding
the  date  of  the  transaction  for which the calculation is
made, provided that: (i) when a material event  occurs  after
the  date  of  the  last quarterly call report filed with the
Commissioner that reduces or increases the bank's  unimpaired
capital  and  unimpaired  surplus  by  10%  or more, then the
unimpaired capital and unimpaired surplus shall be calculated
from the  date  of  the  material  event  for  a  transaction
conducted  after  the date of the material event; and (ii) if
the Commissioner determines for safety and soundness  reasons
that  a  state  bank  should calculate unimpaired capital and
unimpaired surplus more  frequently  than  provided  by  this
paragraph,  the Commissioner may by written notice direct the
bank to calculate unimpaired capital and  unimpaired  surplus
at  a  more  frequent  interval.  In the case of a state bank
newly chartered under Section 13 or a  state  bank  resulting
from a merger, consolidation, or conversion under Sections 21
through  26  for which no preceding quarterly call report has
been filed with  the  Commissioner,  unimpaired  capital  and
unimpaired surplus shall be calculated for the first calendar
quarter  on  the  basis of the effective date of the charter,
merger, consolidation, or conversion.
(Source: P.A. 92-483, eff. 8-23-01.)

    (205 ILCS 5/5) (from Ch. 17, par. 311)
    Sec. 5.  General  corporate  powers.   A  bank  organized
under  this  Act  or subject hereto shall be a body corporate
and politic and shall, without specific  mention  thereof  in
the  charter,  have  all the powers conferred by this Act and
the following additional general corporate powers:
    (1)  To sue and be sued,  complain,  and  defend  in  its
corporate name.
    (2)  To  have  a  corporate seal, which may be altered at
pleasure, and to use the same by causing it  or  a  facsimile
thereof   to  be  impressed  or  affixed  or  in  any  manner
reproduced, provided that the affixing of a corporate seal to
an instrument shall not give the instrument additional  force
or effect, or change the construction thereof, and the use of
a corporate seal is not mandatory.
    (3)  To  make,  alter,  amend,  and  repeal  bylaws,  not
inconsistent   with   its   charter  or  with  law,  for  the
administration of the affairs of the bank. If this  Act  does
not   provide  specific  guidance  in  matters  of  corporate
governance, the provisions of the Business Corporation Act of
1983 may be used if so provided in the  bylaws,  and  if  the
bank  is  a  limited liability company, the provisions of the
Limited Liability Company Act shall be used.
    (4)  To elect or appoint and remove officers  and  agents
of   the   bank   and  define  their  duties  and  fix  their
compensation.
    (5)  To  adopt  and  operate  reasonable   bonus   plans,
profit-sharing  plans, stock-bonus plans, stock-option plans,
pension plans and similar incentive plans for its  directors,
officers and employees.
    (5.1)  To  manage,  operate and administer a fund for the
investment of funds by a public agency or agencies, including
any unit of local  government  or  school  district,  or  any
person.   The  fund  for  a public agency shall invest in the
same  type  of  investments  and  be  subject  to  the   same
limitations provided for the investment of public funds.  The
fund  for  public  agencies  shall maintain a separate ledger
showing the amount of investment for each  public  agency  in
the  fund. "Public funds" and "public agency" as used in this
Section shall have the meanings ascribed to them in Section 1
of the Public Funds Investment Act.
    (6)  To make reasonable donations for the public  welfare
or  for  charitable,  scientific,  religious  or  educational
purposes.
    (7)  To  borrow or incur an obligation; and to pledge its
assets:
         (a)  to secure its borrowings, its lease of personal
    or real property or its other nondeposit obligations;
         (b)  to enable it to act as agent for  the  sale  of
    obligations of the United States;
         (c)  to  secure  deposits  of  public  money  of the
    United States, whenever  required  by  the  laws  of  the
    United   States,  including  without  being  limited  to,
    revenues and funds the deposit of which is subject to the
    control or regulation of the United States or any of  its
    officers, agents, or employees and Postal Savings funds;
         (d)  to secure deposits of public money of any state
    or  of  any  political corporation or subdivision thereof
    including, without being limited to, revenues  and  funds
    the  deposit  of  which  is  subject  to  the  control or
    regulation of any state or of any  political  corporation
    or  subdivisions  thereof  or  of  any of their officers,
    agents, or employees;
         (e)  to secure deposits of money  whenever  required
    by the National Bankruptcy Act;
         (f)  (blank); and
         (g)  to  secure  trust  funds  commingled  with  the
    bank's  funds,  whether  deposited  by  the  bank  or  an
    affiliate  of  the  bank,  pursuant to Section 2-8 of the
    Corporate Fiduciary Act.
    (8)  To own, possess, and carry as assets all or part  of
the  real estate necessary in or with which to do its banking
business, either directly or indirectly through the ownership
of all or part of the capital stock, shares or  interests  in
any  corporation,  association,  trust engaged in holding any
part or parts or all of the bank premises,  engaged  in  such
business  and  in  conducting  a safe deposit business in the
premises or part of them, or engaged in any activity that the
bank is permitted to conduct  in  a  subsidiary  pursuant  to
paragraph (12) of this Section 5.
    (9)  To  own,  possess,  and  carry  as assets other real
estate to which it may obtain title in the collection of  its
debts  or  that  was  formerly  used  as  a  part of the bank
premises, but title to  any  real  estate  except  as  herein
permitted  shall not be retained by the bank, either directly
or by or through a subsidiary,  as  permitted  by  subsection
(12) of this Section for a total period of more than 10 years
after acquiring title, either directly or indirectly.
    (10)  To  do any act, including the acquisition of stock,
necessary to  obtain  insurance  of  its  deposits,  or  part
thereof, and any act necessary to obtain a guaranty, in whole
or  in part, of any of its loans or investments by the United
States or any agency thereof, and any act necessary  to  sell
or  otherwise  dispose  of any of its loans or investments to
the United States or any agency thereof, and to  acquire  and
hold membership in the Federal Reserve System.
    (11)  Notwithstanding any other provisions of this Act or
any  other  law, to do any act and to own, possess, and carry
as assets property of the character, including stock, that is
at the time authorized or permitted to national banks  by  an
Act  of  Congress, but subject always to the same limitations
and restrictions as are applicable to national banks  by  the
pertinent federal law and subject to applicable provisions of
the Financial Institutions Insurance Sales Law.
    (12)  To  own,  possess, and carry as assets stock of one
or more corporations that is, or are, engaged in one or  more
of the following businesses:
         (a)  holding   title  to  and  administering  assets
    acquired as a result of the collection or liquidating  of
    loans, investments, or discounts; or
         (b)  holding  title  to  and  administering personal
    property acquired by the  bank,  directly  or  indirectly
    through  a  subsidiary,  for  the  purpose  of leasing to
    others, provided the lease or leases and  the  investment
    of  the  bank,  directly or through a subsidiary, in that
    personal property otherwise comply with Section  35.1  of
    this Act; or
         (c)  carrying   on   or  administering  any  of  the
    activities excepting  the  receipt  of  deposits  or  the
    payment  of  checks  or  other  orders for the payment of
    money in which a bank  may  engage  in  carrying  on  its
    general banking business; provided, however, that nothing
    contained in this paragraph (c) shall be deemed to permit
    a  bank organized under this Act or subject hereto to do,
    either directly or indirectly through any subsidiary, any
    act, including the making of any loan or  investment,  or
    to  own, possess, or carry as assets any property that if
    done by or owned, possessed, or carried by the State bank
    would be in violation of or prohibited by  any  provision
    of this Act.
    The provisions of this subsection (12) shall not apply to
and  shall  not be deemed to limit the powers of a State bank
with respect to the ownership, possession,  and  carrying  of
stock  that  a  State  bank  is permitted to own, possess, or
carry under this Act.
    Any bank intending to establish a subsidiary  under  this
subsection (12) shall give written notice to the Commissioner
60  days prior to the subsidiary's commencing of business or,
as the case may be, prior to acquiring stock in a corporation
that has already commenced  business.   After  receiving  the
notice,  the  Commissioner may waive or reduce the balance of
the 60 day notice period.  The Commissioner may  specify  the
form  of  the notice and may promulgate rules and regulations
to administer this subsection (12).
    (13)  To  accept  for  payment  at  a  future  date   not
exceeding  one year from the date of acceptance, drafts drawn
upon it by its customers; and to issue,  advise,  or  confirm
letters  of  credit  authorizing  the holders thereof to draw
drafts upon it or its correspondents.
    (14)  To own and lease personal property acquired by  the
bank  at  the  request  of  a prospective lessee and upon the
agreement of that  person  to  lease  the  personal  property
provided  that the lease, the agreement with respect thereto,
and the amount of the investment of the bank in the  property
comply with Section 35.1 of this Act.
    (15) (a)  To  establish  and maintain, in addition to the
    main banking  premises,  branches  offering  any  banking
    services  permitted  at  the  main  banking premises of a
    State bank.
         (b)  To establish and maintain, after May 31,  1997,
    branches  in  another state that may conduct any activity
    in that state that is authorized  or  permitted  for  any
    bank  that  has  a  banking charter issued by that state,
    subject to the same limitations and restrictions that are
    applicable to banks chartered by that state.
    (16)  (Blank).
    (17)  To establish and maintain terminals, as  authorized
by the Electronic Fund Transfer Act.
    (18)  To  establish and maintain temporary service booths
at any  International  Fair  held  in  this  State  which  is
approved by the United States Department of Commerce, for the
duration  of  the  international fair for the sole purpose of
providing a convenient place for foreign trade  customers  at
the  fair  to  exchange  their  home countries' currency into
United States currency or the converse. This power shall  not
be  construed  as  establishing  a  new  place  or  change of
location for the bank providing the service booth.
    (19)  To indemnify its  officers,  directors,  employees,
and agents, as authorized for corporations under Section 8.75
of the Business Corporation Act of 1983.
    (20)  To  own,  possess, and carry as assets stock of, or
be or become a member of, any  corporation,  mutual  company,
association,  trust,  or  other entity formed exclusively for
the purpose of providing directors' and  officers'  liability
and bankers' blanket bond insurance or reinsurance to and for
the  benefit  of the stockholders, members, or beneficiaries,
or their assets or businesses, or their officers,  directors,
employees,  or  agents,  and not to or for the benefit of any
other person or entity or the public generally.
    (21)  To make debt or equity investments in  corporations
or  projects,  whether for profit or not for profit, designed
to promote the development of the community and its  welfare,
provided  that  the  aggregate  investment  in  all  of these
corporations and in all of these projects does not exceed 10%
of the unimpaired capital and unimpaired surplus of the  bank
and   provided  that  this  limitation  shall  not  apply  to
creditworthy loans by  the  bank  to  those  corporations  or
projects.   Upon  written  application to the Commissioner, a
bank may make an investment that would, when aggregated  with
all  other  such  investments,  exceed  10% of the unimpaired
capital and unimpaired surplus of the bank. The  Commissioner
may  approve the investment if he is of the opinion and finds
that the proposed investment will not have a material adverse
effect on the safety and soundness of the bank.
    (22)  To own, possess, and carry as assets the stock of a
corporation engaged in the ownership or operation of a travel
agency or to operate  a  travel  agency  as  a  part  of  its
business.
    (23)  With respect to affiliate facilities:
         (a)  to  conduct  at affiliate facilities for and on
    behalf of another commonly owned bank, if  so  authorized
    by  the  other bank, all transactions that the other bank
    is authorized or permitted to perform; and
         (b)  to authorize a commonly owned bank  to  conduct
    for  and  on  behalf  of it any of the transactions it is
    authorized  or  permitted  to  perform  at  one  or  more
    affiliate facilities.
    Any bank intending to conduct or to authorize a  commonly
owned  bank  to  conduct  at an affiliate facility any of the
transactions specified in  this  paragraph  (23)  shall  give
written  notice  to  the Commissioner at least 30 days before
any such transaction is conducted at the affiliate facility.
    (24)  To act as the agent for any fire,  life,  or  other
insurance  company  authorized  by  the State of Illinois, by
soliciting and selling insurance and collecting  premiums  on
policies  issued by such company; and to receive for services
so rendered such fees or commissions as may  be  agreed  upon
between  the  bank and the insurance company for which it may
act as agent; provided, however, that no such bank  shall  in
any  case  assume  or guarantee the payment of any premium on
insurance  policies  issued  through  its   agency   by   its
principal;  and  provided  further,  that  the bank shall not
guarantee the truth of any statement made by  an  assured  in
filing his application for insurance.
    (25)  Notwithstanding any other provisions of this Act or
any other law, to offer any product or service that is at the
time   authorized   or   permitted  to  any  insured  savings
association or out-of-state bank by applicable law,  provided
that powers conferred only by this subsection (25):
         (a)  shall always be subject to the same limitations
    and  restrictions  that  are  applicable  to  the insured
    savings association or out-of-state bank for the  product
    or service by such applicable law;
         (b)  shall  be  subject  to applicable provisions of
    the Financial Institutions Insurance Sales Law;
         (c)  shall not include the right to own or conduct a
    real estate brokerage business for which a license  would
    be required under the laws of this State; and
         (d)  shall   not   be   construed   to  include  the
    establishment or maintenance of a branch, nor shall  they
    be construed to limit the establishment or maintenance of
    a branch pursuant to subsection (11).
    Not  less  than  30  days before engaging in any activity
under the authority of this subsection, a bank shall  provide
written notice to the Commissioner of its intent to engage in
the activity.  The notice shall indicate the specific federal
or  state  law,  rule, regulation, or interpretation the bank
intends to use as authority to engage in the activity.
(Source: P.A. 91-330, eff.  7-29-99;  91-849,  eff.  6-22-00;
92-483, eff. 8-23-01; 92-811, eff. 8-21-02.)

    (205 ILCS 5/13.6 new)
    Sec. 13.6. Banks as limited liability companies.
    (a)  A  bank  may  be  organized  as  a limited liability
company, may convert to a limited liability company,  or  may
merge  with  and  into  a limited liability company under the
applicable laws of this  State  and  of  the  United  States,
including  any rules promulgated thereunder. A bank organized
as a limited  liability  company  shall  be  subject  to  the
provisions  of  the Limited Liability Company Act in addition
to this Act, provided that if  a  provision  of  the  Limited
Liability  Company Act conflicts with a provision of this Act
or with any rule of the Commissioner, the provision  of  this
Act or the rule of the Commissioner shall apply.
    (b)  Any  filing  required  to  be made under the Limited
Liability Company Act shall  be  made  exclusively  with  the
Commissioner,   and   the   Commissioner  shall  possess  the
exclusive authority to regulate the bank as provided in  this
Act.
    (c)  Any  organization as, conversion to, and merger with
or into a limited liability company shall be subject  to  the
prior approval of the Commissioner.
    (d)  A  bank that is a limited liability company shall be
subject to all of the provisions of  this  Act  in  the  same
manner as a bank that is organized in stock form.
    (e)  The Commissioner may promulgate rules to ensure that
a bank that is a limited liability company (i)  is  operating
in  a  safe  and  sound  manner  and  (ii)  is subject to the
Commissioner's authority in the same manner as a bank that is
organized in stock form.

    (205 ILCS 5/17) (from Ch. 17, par. 324)
    Sec. 17.  Changes in charter.
    (a)  By compliance with the  provisions  of  this  Act  a
State bank may:
         (1)  (blank);
         (2)  increase, decrease or change its capital stock,
    whether  issued  or  unissued,  provided  that in no case
    shall the capital be diminished to the prejudice  of  its
    creditors;
         (3)  provide  for  authorized  but  unissued capital
    stock reserved for  issuance  for  one  or  more  of  the
    purposes  provided  for  in  subsection (5) of Section 14
    hereof;
         (4)  authorize   preferred   stock,   or   increase,
    decrease  or  change  the  preferences,   qualifications,
    limitations,  restrictions  or special or relative rights
    of its preferred stock, whether issued  or  unissued,  or
    delegate  authority to its board of directors as provided
    in subsection (d), provided that in  no  case  shall  the
    capital be diminished to the prejudice of its creditors;
         (5)  increase,  decrease  or change the par value of
    its shares of  its  capital  stock  or  preferred  stock,
    whether  issued or unissued, or delegate authority to its
    board of directors as provided in subsection (d);
         (6)  (blank);
         (7)  eliminate cumulative voting rights under all or
    specified  circumstances,  or  eliminate  voting   rights
    entirely,  as  to any class or classes or series of stock
    of the bank pursuant to  paragraph  (3)  of  Section  15,
    provided that one class of shares or series thereof shall
    always have voting in respect to all matters in the bank,
    and  provided further that the proposal to eliminate such
    voting rights receives the approval of the holders of 70%
    of the outstanding shares of stock entitled  to  vote  as
    provided  in  paragraph  (7)  of  subsection  (b) of this
    Section 17;
         (8)  increase, decrease, or change its capital stock
    or preferred stock, whether issued or unissued,  for  the
    purpose  of eliminating fractional shares or avoiding the
    issuance of fractional shares, provided that in  no  case
    shall  the  capital be diminished to the prejudice of its
    creditors; or
         (9)  make such other change in its charter as may be
    authorized in this Act.
    (b)  To effect a change or  changes  in  a  State  bank's
charter as provided for in this Section 17:
         (1)  The board of directors shall adopt a resolution
    setting  forth  the proposed amendment and directing that
    it be submitted to a vote at a meeting  of  stockholders,
    which may be either an annual or special meeting.
         (2)  If the meeting is a special meeting, written or
    printed  notice  setting  forth the proposed amendment or
    summary thereof shall be given  to  each  stockholder  of
    record  entitled to vote at such meeting at least 30 days
    before such meeting and in the manner  provided  in  this
    Act for the giving of notice of meetings of stockholders.
         (3)  At   such   special  meeting,  a  vote  of  the
    stockholders entitled to  vote  shall  be  taken  on  the
    proposed  amendment.  Except as provided in paragraph (7)
    of this subsection (b), the proposed amendment  shall  be
    adopted  upon  receiving  the  affirmative  vote  of  the
    holders  of at least two-thirds of the outstanding shares
    of stock entitled to vote at such meeting, unless holders
    of preferred stock are entitled to vote  as  a  class  in
    respect  thereof,  in  which event the proposed amendment
    shall be adopted upon receiving the affirmative  vote  of
    the  holders  of  at  least two-thirds of the outstanding
    shares of each class of shares  entitled  to  vote  as  a
    class  in  respect  thereof  and of the total outstanding
    shares entitled to vote at such meeting.  Any  number  of
    amendments may be submitted to the stockholders and voted
    upon  by  them  at  one  meeting.   A  certificate of the
    amendment, or amendments, verified by the president, or a
    vice-president,  or   the   cashier,   shall   be   filed
    immediately in the office of the Commissioner.
         (4)  At  any  annual meeting without a resolution of
    the board of directors and without  a  notice  and  prior
    publication, as hereinabove provided, a proposition for a
    change  in  the  bank's  charter  as provided for in this
    Section 17 may be submitted to a vote of the stockholders
    entitled to vote at the annual meeting,  except  that  no
    proposition  for  authorized  but  unissued capital stock
    reserved for issuance for one or  more  of  the  purposes
    provided for in subsection (5) of Section 14 hereof shall
    be  submitted  without  complying  with the provisions of
    said subsection.  The proposed amendment shall be adopted
    upon receiving the affirmative vote of the holders of  at
    least  two-thirds  of  the  outstanding  shares  of stock
    entitled to vote  at  such  meeting,  unless  holders  of
    preferred  stock  are  entitled  to  vote  as  a class in
    respect thereof, in which event  the  proposed  amendment
    shall  be  adopted upon receiving the affirmative vote of
    the holders of at least  two-thirds  of  the  outstanding
    shares  of  each  class  of  shares entitled to vote as a
    class in respect thereof and the total outstanding shares
    entitled to vote at such meeting.  A certificate  of  the
    amendment, or amendments, verified by the president, or a
    vice-president  or cashier, shall be filed immediately in
    the office of the Commissioner.
         (5)  If an amendment or amendments shall be approved
    in  writing  by  the  Commissioner,  the   amendment   or
    amendments   so   adopted   and   so  approved  shall  be
    accomplished  in  accordance  with  the   vote   of   the
    stockholders.  The Commissioner may impose such terms and
    conditions on the approval of the amendment or amendments
    as  he  deems necessary or appropriate.  The Commissioner
    shall revoke such approval in the event such amendment or
    amendments are not effected within one year from the date
    of the issuance of  the  Commissioner's  certificate  and
    written  approval except for transactions permitted under
    subsection (5) of Section 14 of this Act.
         (6)  No amendment or amendments shall  affect  suits
    in  which  the  bank  is  a  party,  nor affect causes of
    action, nor affect rights of persons in  any  particular,
    nor shall actions brought against such bank by its former
    name be abated by a change of name.
         (7)  A  proposal  to  amend the charter to eliminate
    cumulative  voting  rights   under   all   or   specified
    circumstances, or to eliminate voting rights entirely, as
    to  any  class  or  classes or series or stock of a bank,
    pursuant to paragraph (3) of Section 15 and paragraph (7)
    of subsection (a) of this Section 17,  shall  be  adopted
    only  upon  such  proposal  receiving the approval of the
    holders  of  70%  of  the  outstanding  shares  of  stock
    entitled to vote at the meeting  where  the  proposal  is
    presented for approval, unless holders of preferred stock
    are  entitled  to  vote as a class in respect thereof, in
    which event the proposed amendment shall be adopted  upon
    receiving  the  approval  of  the  holders  of 70% of the
    outstanding shares of each class of  shares  entitled  to
    vote  as  a  class  in  respect  thereof and of the total
    outstanding shares entitled to vote at the meeting  where
    the  proposal is presented for approval.  The proposal to
    amend the charter pursuant to this paragraph (7)  may  be
    voted upon at the annual meeting or a special meeting.
         (8)  Written  or  printed  notice of a stockholders'
    meeting to vote on a proposal to  increase,  decrease  or
    change  the  capital stock or preferred stock pursuant to
    paragraph (8) of subsection (a) of this Section 17 and to
    eliminate fractional shares  or  avoid  the  issuance  of
    fractional  shares  shall be given to each stockholder of
    record entitled to vote at the meeting at least  30  days
    before the meeting and in the manner provided in this Act
    for the giving of notice of meetings of stockholders, and
    shall include all of the following information:
              (A)  A statement of the purpose of the proposed
         reverse stock split.
              (B)  A statement of the amount of consideration
         being offered for the bank's stock.
              (C)  A  statement  that  the bank considers the
         transaction  fair  to  the   stockholders,   and   a
         statement  of  the  material  facts  upon which this
         belief is based.
              (D)  A statement that the bank has  secured  an
         opinion  from  a  third  party  with  respect to the
         fairness, from a financial point  of  view,  of  the
         consideration   to   be   paid,   the  identity  and
         qualifications of the third  party,  how  the  third
         party  was  selected,  and any material relationship
         between the third party and the bank.
              (E)  A summary of  the  opinion  including  the
         basis  for  and  the  methods  of  arriving  at  the
         findings  and  any limitation imposed by the bank in
         arriving at fair value and a  statement  making  the
         opinion  available  for  reviewing or copying by any
         stockholder.
              (F)  A statement  that  objecting  stockholders
         will  be  entitled to the fair value of those shares
         that are voted against the charter amendment,  if  a
         proper   demand   is   made  on  the  bank  and  the
         requirements are  satisfied  as  specified  in  this
         Section.
If a stockholder shall file with the bank, prior to or at the
meeting   of  stockholders  at  which  the  proposed  charter
amendment is submitted to a vote, a written objection to  the
proposed  charter  amendment  and  shall  not  vote  in favor
thereof,  and  if  the  stockholder,  within  20  days  after
receiving written notice of the date  the  charter  amendment
was  accomplished pursuant to paragraph (5) of subsection (a)
of this Section 17, shall make written demand on the bank for
payment of the fair value of the stockholder's shares  as  of
the  day  prior  to  the  date  on  which  the vote was taken
approving the charter amendment, the bank shall  pay  to  the
stockholder,   upon   surrender   of   the   certificate   or
certificates  representing the stock, the fair value thereof.
The demand shall state the number  of  shares  owned  by  the
objecting stockholder.  The bank shall provide written notice
of  the  date on which the charter amendment was accomplished
to all stockholders who  have  filed  written  objections  in
order that the objecting stockholders may know when they must
file written demand if they choose to do so.  Any stockholder
failing  to  make  demand  within  the 20-day period shall be
conclusively  presumed  to  have  consented  to  the  charter
amendment and shall be bound by the terms thereof.  If within
30 days after the date  on  which  a  charter  amendment  was
accomplished  the  value of the shares is agreed upon between
the objecting stockholders and  the  bank,  payment  therefor
shall  be  made  within  90  days after the date on which the
charter amendment was accomplished, upon the surrender of the
stockholder's certificate or  certificates  representing  the
shares.  Upon  payment  of  the  agreed  value  the objecting
stockholder shall cease to have any interest in the shares or
in  the  bank.   If  within  such  period  of  30  days   the
stockholder  and the bank do not so agree, then the objecting
stockholder may, within 60 days after the expiration  of  the
30-day  period,  file a complaint in the circuit court asking
for a finding and determination of  the  fair  value  of  the
shares,  and  shall  be entitled to judgment against the bank
for the amount of the fair value as of the day prior  to  the
date  on  which  the  vote  was  taken  approving the charter
amendment with interest thereon to the date of the  judgment.
The practice, procedure and judgment shall be governed by the
Civil  Practice  Law. The judgment shall be payable only upon
and simultaneously with the surrender  to  the  bank  of  the
certificate  or  certificates  representing the shares.  Upon
payment of the  judgment,  the  objecting  stockholder  shall
cease  to  have  any interest in the shares or the bank.  The
shares may be held and disposed of by the bank.   Unless  the
objecting  stockholder  shall  file such complaint within the
time herein limited, the stockholder and all persons claiming
under the stockholder shall be conclusively presumed to  have
approved  and  ratified  the  charter amendment, and shall be
bound by  the  terms  thereof.  The  right  of  an  objecting
stockholder  to  be  paid the fair value of the stockholder's
shares of stock as herein provided shall cease  if  and  when
the bank shall abandon the charter amendment.
    (c)  The   purchase  and  holding  and  later  resale  of
treasury stock of a state bank pursuant to the provisions  of
subsection  (6)  of  Section 14 may be accomplished without a
change in its charter reflecting any decrease or increase  in
capital stock.
    (d)  A  State  bank may amend its charter for the purpose
of authorizing its board  of  directors  to  issue  preferred
stock;  to  increase,  decrease,  or  change the par value of
shares of its preferred stock, whether issued or unissued; or
to   increase,   decrease,   or   change   the   preferences,
qualifications,  limitations,  restrictions,  or  special  or
relative rights of its preferred  stock,  whether  issued  or
unissued;  provided  that  in  no  case  shall the capital be
diminished to the  prejudice  of  the  bank's  creditors.  An
amendment to the bank's charter granting such authority shall
establish  ranges,  limits,  or  restrictions  that  must  be
observed  when  the board exercises the discretion authorized
by the amendment.
    Once  such  an  amendment  is  adopted  and  approved  as
provided in this subsection, and without  further  action  by
the bank's stockholders, the board may exercise its delegated
authority  by  adopting  a  resolution specifying the actions
that it is taking with respect to the  preferred  stock.  The
board  may fully exercise its delegated authority through one
resolution or it may exercise its delegated authority through
a series of resolutions, provided that  the  board's  actions
remain  at  all  times  within  the  ranges, limitations, and
restrictions  specified  in  the  amendment  to  the   bank's
charter.
    A  resolution  adopted  by the board under this authority
shall be submitted to  the  Commissioner  for  approval.  The
Commissioner  shall  approve  the  resolution,  or  state any
objections to  the  resolution,  within  30  days  after  the
receipt  of  the  resolution  adopted  by  the  board.  If no
objections are specified by the Commissioner within that time
frame, the resolution will be deemed to be  approved  by  the
Commissioner.   Once   approved,   the  resolution  shall  be
incorporated as an addendum to the  bank's  charter  and  the
board  may  proceed  to  effect  the changes set forth in the
resolution.
(Source: P.A. 91-322, eff. 1-1-00; 92-483, eff. 8-23-01.)

    Section 825.  The Savings Bank Act is amended by changing
Sections 1007.55 and 1008 and by adding Section  1007.125  as
follows:

    (205 ILCS 205/1007.55) (from Ch. 17, par. 7301-7.55)
    Sec. 1007.55.  "Director" means any director, trustee, or
other person performing similar functions with respect to any
organization  whether  incorporated or unincorporated. In the
case of a manager-managed limited liability company, however,
"director" means a manager of the savings bank,  and  in  the
case   of   a   member-managed   limited  liability  company,
"director" means a member  of  the  savings  bank.  The  term
"director"  does  not  include an advisory director, honorary
director, director emeritus, or similar  person,  unless  the
person  is otherwise performing functions similar to those of
a director.

    (205 ILCS 205/1007.125 new)
    Sec. 1007.125.  "Bylaws" means the bylaws  of  a  savings
bank  that  are  adopted  by  the  savings  bank's  board  of
directors  or  shareholders for the regulation and management
of the savings bank's affairs. If the savings  bank  operates
as  a  limited liability company, however, "bylaws" means the
operating agreement of the savings bank.
(Source: P.A. 86-1213.)

    (205 ILCS 205/1008) (from Ch. 17, par. 7301-8)
    Sec. 1008. General corporate powers.
    (a)  A savings bank operating under this Act shall  be  a
body  corporate  and politic and shall have all of the powers
conferred by this Act including,  but  not  limited  to,  the
following powers:
         (1)  To sue and be sued, complain, and defend in its
    corporate  name  and  to have a common seal, which it may
    alter or renew at pleasure.
         (2)  To obtain and maintain insurance by  a  deposit
    insurance corporation as defined in this Act.
         (3)  To act as a fiscal agent for the United States,
    the  State of Illinois or any department, branch, arm, or
    agency of the State or any unit of  local  government  or
    school  district  in  the State, when duly designated for
    that  purpose,  and  as  agent  to   perform   reasonable
    functions as may be required of it.
         (4)  To   become  a  member  of  or  deal  with  any
    corporation or agency of the United States or  the  State
    of  Illinois,  to  the  extent that the agency assists in
    furthering or facilitating its purposes or powers and  to
    that  end  to  purchase  stock  or  securities thereof or
    deposit money therewith, and to  comply  with  any  other
    conditions of membership or credit.
         (5)  To make donations in reasonable amounts for the
    public  welfare or for charitable, scientific, religious,
    or educational purposes.
         (6)  To  adopt  and  operate  reasonable  insurance,
    bonus, profit sharing, and retirement plans for  officers
    and  employees  and  for  directors  including,  but  not
    limited  to,  advisory, honorary, and emeritus directors,
    who are not officers or employees.
         (7)  To reject any application  for  membership;  to
    retire   deposit   accounts  by  enforced  retirement  as
    provided in this Act and the bylaws;  and  to  limit  the
    issuance  of,  or payments on, deposit accounts, subject,
    however, to contractual obligations.
         (8)  To purchase stock in service  corporations  and
    to  invest  in  any  form  of indebtedness of any service
    corporation  as  defined  in   this   Act,   subject   to
    regulations of the Commissioner.
         (9)  To   purchase  stock  of  a  corporation  whose
    principal purpose is to operate a safe deposit company or
    escrow service company.
         (10)  To  exercise  all  the  powers  necessary   to
    qualify  as a trustee or custodian under federal or State
    law, provided that the authority to  accept  and  execute
    trusts  is  subject  to  the  provisions of the Corporate
    Fiduciary Act and to the supervision of those  activities
    by the Commissioner.
         (11)  (Blank).
         (12)  To  establish, maintain, and operate terminals
    as authorized by the Electronic Fund Transfer Act.
         (13)  To pledge its assets:
              (A)  to enable it to act as agent for the  sale
         of obligations of the United States;
              (B)  to secure deposits;
              (C)  to   secure  deposits  of  money  whenever
         required by the National Bankruptcy Act;
              (D)  (blank); and
              (E)  to secure trust funds commingled with  the
         savings  bank's  funds,  whether  deposited  by  the
         savings bank or an affiliate of the savings bank, as
         required   under   Section   2-8  of  the  Corporate
         Fiduciary Act.
         (14)  To accept for payment at a future date not  to
    exceed one year from the date of acceptance, drafts drawn
    upon  it  by  its  customers;  and  to  issue, advise, or
    confirm letters of credit authorizing holders thereof  to
    draw drafts upon it or its correspondents.
         (15)  Subject    to    the    regulations   of   the
    Commissioner, to own and lease personal property acquired
    by the savings bank  at  the  request  of  a  prospective
    lessee  and,  upon the agreement of that person, to lease
    the personal property.
         (16)  To establish temporary service booths  at  any
    International  Fair in this State that is approved by the
    United States Department of Commerce for the duration  of
    the  international  fair  for  the purpose of providing a
    convenient place for foreign trade customers to  exchange
    their   home   countries'  currency  into  United  States
    currency or the converse.  To provide temporary  periodic
    service  to persons residing in a bona fide nursing home,
    senior  citizens'  retirement  home,  or  long-term  care
    facility.   These  powers  shall  not  be  construed   as
    establishing  a  new  place or change of location for the
    savings bank providing the service booth.
         (17)  To   indemnify   its   officers,    directors,
    employees,  and  agents,  as  authorized for corporations
    under Section 8.75 of the Business  Corporations  Act  of
    1983.
         (18)  To  provide data processing services to others
    on a for-profit basis.
         (19)  To  utilize  any  electronic   technology   to
    provide customers with home banking services.
         (20)  Subject    to    the    regulations   of   the
    Commissioner, to enter into an  agreement  to  act  as  a
    surety.
         (21)  Subject    to    the    regulations   of   the
    Commissioner,  to  issue  credit  cards,  extend   credit
    therewith,  and  otherwise  engage  in  or participate in
    credit card operations.
         (22)  To purchase for  its  own  account  shares  of
    stock  of  a bankers' bank, described in Section 13(b)(1)
    of the Illinois  Banking  Act,  on  the  same  terms  and
    conditions  as  a  bank  may purchase such shares.  In no
    event shall the total amount of  such  stock  held  by  a
    savings  bank  in  such  bankers'  bank exceed 10% of its
    capital and surplus (including undivided profits) and  in
    no event shall a savings bank acquire more than 5% of any
    class of voting securities of such bankers' bank.
         (23)  With respect to affiliate facilities:
              (A)  to  conduct at affiliate facilities any of
         the following transactions for and on behalf of  any
         affiliated  depository institution, if so authorized
         by the affiliate or affiliates: receiving  deposits;
         renewing   deposits;  cashing  and  issuing  checks,
         drafts, money orders, travelers checks,  or  similar
         instruments;  changing  money; receiving payments on
         existing indebtedness;  and  conducting  ministerial
         functions   with   respect   to  loan  applications,
         servicing  loans,   and   providing   loan   account
         information; and
              (B)  to   authorize  an  affiliated  depository
         institution to conduct for and on behalf of it,  any
         of the transactions listed in this subsection at one
         or more affiliate facilities.
         A  savings bank intending to conduct or to authorize
    an affiliated depository institution  to  conduct  at  an
    affiliate  facility  any of the transactions specified in
    this  subsection  shall  give  written  notice   to   the
    Commissioner at least 30 days before any such transaction
    is conducted at an affiliate facility.  All conduct under
    this  subsection  shall  be on terms consistent with safe
    and sound banking practices and applicable law.
         (24)  Subject  to  Article  XLIV  of  the   Illinois
    Insurance  Code,  to act as the agent for any fire, life,
    or other insurance company authorized  by  the  State  of
    Illinois,   by   soliciting  and  selling  insurance  and
    collecting premiums on policies issued by  such  company;
    and  may  receive  for  services so rendered such fees or
    commissions as  may  be  agreed  upon  between  the  said
    savings  bank  and the insurance company for which it may
    act as agent; provided, however,  that  no  such  savings
    bank shall in any case assume or guarantee the payment of
    any  premium  on  insurance  policies  issued through its
    agency by its principal; and provided further,  that  the
    savings  bank  shall  not  guarantee  the  truth  of  any
    statement  made  by  an assured in filing his application
    for insurance.
         (25)  To become a member of the  Federal  Home  Loan
    Bank  and  to  have  the  powers  granted  to  a  savings
    association organized under the Illinois Savings and Loan
    Act  of 1985 or the laws of the United States, subject to
    regulations of the Commissioner.
         (26)  To offer any product or service that is at the
    time authorized or permitted to a bank by applicable law,
    but  subject  always  to   the   same   limitations   and
    restrictions  that  are  applicable  to  the bank for the
    product or service by such applicable law and subject  to
    the  applicable  provisions of the Financial Institutions
    Insurance Sales Law and rules of the Commissioner.
    (b)  If this Act or the regulations  adopted  under  this
Act fail to provide specific guidance in matters of corporate
governance, the provisions of the Business Corporation Act of
1983  may  be  used,  or  if  the  savings  bank is a limited
liability company, the provisions of  the  Limited  Liability
Company shall be used.
    (c)  A  savings  bank  may  be  organized  as  a  limited
liability   company,  may  convert  to  a  limited  liability
company, or may merge  with  and  into  a  limited  liability
company,  under  the applicable laws of this State and of the
United States, including any rules promulgated thereunder.  A
savings  bank  organized as a limited liability company shall
be subject to the provisions of the Limited Liability Company
Act in addition to this Act, provided that if a provision  of
the  Limited Liability Company Act conflicts with a provision
of this Act  or  with  any  rule  of  the  Commissioner,  the
provision  of  this Act or the rule of the Commissioner shall
apply.
    Any  filing  required  to  be  made  under  the   Limited
Liability  Company  Act  shall  be  made exclusively with the
Commissioner,  and  the  Commissioner   shall   possess   the
exclusive  authority to regulate the savings bank as provided
in this Act.
    Any organization as, conversion to, and  merger  with  or
into  a  limited  liability  company  shall be subject to the
prior approval of the Commissioner.
    A savings bank that is a limited liability company  shall
be  subject  to all of the provisions of this Act in the same
manner as a savings bank that is organized in stock form.
    The Commissioner may promulgate rules to  ensure  that  a
savings  bank  that  is  a  limited  liability company (i) is
operating in a safe and sound manner and (ii) is  subject  to
the  Commissioner's authority in the same manner as a savings
bank that is organized in stock form.
(Source: P.A.  91-97,  eff.  7-9-99;  91-357,  eff.  7-29-99;
92-483, eff. 8-23-01.)

    Section  830.   The  Residential  Mortgage License Act of
1987 is amended by changing Sections 1-4, 2-4, 2-6, 3-2, 3-5,
and 4-5 and by adding Sections 4-8.1, 4-8.2, and Article 7 as
follows:

    (205 ILCS 635/1-4) (from Ch. 17, par. 2321-4)
    Sec. 1-4.  Definitions.
    (a)  "Residential real  property"  or  "residential  real
estate"  shall  mean  real  property  located  in  this State
improved by a one-to-four family dwelling used  or  occupied,
wholly  or  partly,  as  the home or residence of one or more
persons  and  may  refer,  subject  to  regulations  of   the
Commissioner,  to  unimproved  real property upon which those
kinds dwellings are to be constructed.
    (b)  "Making a residential mortgage loan" or  "funding  a
residential  mortgage  loan"  shall  mean for compensation or
gain, either  directly  or  indirectly,  advancing  funds  or
making  a commitment to advance funds to a loan applicant for
a residential mortgage loan.
    (c)  "Soliciting, processing, placing, or  negotiating  a
residential  mortgage  loan"  shall  mean for compensation or
gain, either directly or indirectly, accepting or offering to
accept  an  application  for  a  residential  mortgage  loan,
assisting or offering to  assist  in  the  processing  of  an
application  for  a  residential mortgage loan on behalf of a
borrower, or negotiating or offering to negotiate  the  terms
or conditions of a residential mortgage loan with a lender on
behalf  of  a  borrower  including,  but  not limited to, the
submission of credit packages for the  approval  of  lenders,
the   preparation   of   residential  mortgage  loan  closing
documents, including a closing in the name of a broker.
    (d)  "Exempt person or entity" shall mean the following:
         (1) (i)  Any banking organization or foreign banking
    corporation licensed  by  the  Illinois  Commissioner  of
    Banks and Real Estate or the United States Comptroller of
    the Currency to transact business in this State; (ii) any
    national  bank,  federally  chartered  savings  and  loan
    association,  federal savings bank, federal credit union;
    (iii) any  pension  trust,  bank  trust,  or  bank  trust
    company;  (iv)  any savings and loan association, savings
    bank, or credit union organized under the laws of this or
    any other state; (v) any  Illinois  Consumer  Installment
    Loan  Act licensee; (vi) any insurance company authorized
    to transact business in  this  State;  (vii)  any  entity
    engaged solely in commercial mortgage lending; (viii) any
    service  corporation of a savings and loan association or
    savings bank organized under the laws of  this  State  or
    the  service corporation of a federally chartered savings
    and loan association or savings bank having its principal
    place of business in this State,  other  than  a  service
    corporation licensed or entitled to reciprocity under the
    Real  Estate  License Act of 2000; or (ix) any first tier
    subsidiary of a bank, the  charter  of  which  is  issued
    under   the   Illinois   Banking   Act  by  the  Illinois
    Commissioner of Banks and Real Estate, or the first  tier
    subsidiary  of  a  bank  chartered  by  the United States
    Comptroller of the Currency and that  has  its  principal
    place  of business in this State, provided that the first
    tier subsidiary is regularly  examined  by  the  Illinois
    Commissioner  of Banks and Real Estate or the Comptroller
    of the Currency, or a consumer compliance examination  is
    regularly conducted by the Federal Reserve Board.
         (1.5)  Any  employee of a person or entity mentioned
    in item (1) of this subsection.
         (2)  Any person or entity  that  either  (i)  has  a
    physical  presence in Illinois or (ii) does not originate
    mortgage loans in the ordinary course of business  making
    or  acquiring  residential mortgage loans with his or her
    or its own funds for his or her  or  its  own  investment
    without  intent  to make, acquire, or resell more than 10
    residential mortgage loans in any one calendar year.
         (3)  Any person employed by a licensee to assist  in
    the  performance  of the activities regulated by this Act
    who is compensated in any manner by only one licensee.
         (4)  Any person licensed pursuant to the Real Estate
    License Act of 2000, who engages only in  the  taking  of
    applications  and  credit  and  appraisal  information to
    forward to a licensee or an exempt entity under this  Act
    and  who is compensated by either a licensee or an exempt
    entity under this Act, but is not compensated  by  either
    the buyer (applicant) or the seller.
         (5)  Any  individual,  corporation,  partnership, or
    other  entity  that  originates,  services,  or   brokers
    residential  mortgage  loans,  as  these  activities  are
    defined  in  this  Act,  and  who  or  which  receives no
    compensation  for  those  activities,  subject   to   the
    Commissioner's  regulations with regard to the nature and
    amount of compensation.
         (6)  A person who prepares supporting  documentation
    for  a  residential  mortgage loan application taken by a
    licensee and performs  ministerial functions pursuant  to
    specific   instructions   of  the  licensee  who  neither
    requires nor permits the preparer to exercise his or  her
    discretion  or  judgment;  provided that this activity is
    engaged in  pursuant  to  a  binding,  written  agreement
    between the licensee and the preparer that:
              (A)  holds  the  licensee fully accountable for
         the preparer's action; and
              (B)  otherwise meets the requirements  of  this
         Section   and  this  Act,  does  not  undermine  the
         purposes  of  this  Act,  and  is  approved  by  the
         Commissioner.
    (e)  "Licensee" or "residential mortgage licensee"  shall
mean  a person, partnership, association, corporation, or any
other entity who or which is licensed pursuant to this Act to
engage in the activities regulated by this Act.
    (f)  "Mortgage loan" "residential mortgage loan" or "home
mortgage loan" shall mean a loan to or for the benefit of any
natural  person  made  primarily  for  personal,  family,  or
household use, primarily secured  by  either  a  mortgage  on
residential  real  property or certificates of stock or other
evidence of ownership interests  in  and  proprietary  leases
from,   corporations,   partnerships,  or  limited  liability
companies formed for the purpose of cooperative ownership  of
residential real property, all located in Illinois.
    (g)  "Lender"   shall   mean   any  person,  partnership,
association, corporation, or  any  other  entity  who  either
lends or invests money in residential mortgage loans.
    (h)  "Ultimate  equitable owner" shall mean a person who,
directly  or  indirectly,  owns  or  controls  an   ownership
interest   in   a  corporation,  foreign  corporation,  alien
business organization, trust, or any other form  of  business
organization   regardless  of  whether  the  person  owns  or
controls the ownership interest through one or  more  persons
or  one  or  more  proxies,  powers  of  attorney,  nominees,
corporations, associations, partnerships, trusts, joint stock
companies,  or  other entities or devices, or any combination
thereof.
    (i)  "Residential mortgage financing  transaction"  shall
mean  the  negotiation, acquisition, sale, or arrangement for
or the offer to negotiate, acquire, sell, or arrange  for,  a
residential   mortgage  loan  or  residential  mortgage  loan
commitment.
    (j)  "Personal residence address"  shall  mean  a  street
address and shall not include a post office box number.
    (k)  "Residential  mortgage loan commitment" shall mean a
contract for residential mortgage loan financing.
    (l)  "Party   to   a   residential   mortgage   financing
transaction" shall mean a borrower, lender, or loan broker in
a residential mortgage financing transaction.
    (m)  "Payments" shall mean payment of all or any  of  the
following: principal, interest and escrow reserves for taxes,
insurance  and  other related reserves, and reimbursement for
lender advances.
    (n)  "Commissioner" shall mean the Commissioner of  Banks
and  Real  Estate or a person authorized by the Commissioner,
the Office of Banks and Real Estate Act, or this Act  to  act
in the Commissioner's stead.
    (o)  "Loan   brokering",   "brokering",   or   "brokerage
service" shall mean the act of helping to obtain from another
entity,  for  a  borrower, a loan secured by residential real
estate situated  in  Illinois  or  assisting  a  borrower  in
obtaining  a loan secured by residential real estate situated
in Illinois in return for consideration to be paid by  either
the  borrower  or  the  lender including, but not limited to,
contracting for the delivery of residential mortgage loans to
a third party lender and soliciting, processing, placing,  or
negotiating residential mortgage loans.
    (p)  "Loan  broker"  or  "broker"  shall  mean  a person,
partnership, association, corporation, or  limited  liability
company,    other    than    those   persons,   partnerships,
associations, corporations, or  limited  liability  companies
exempted  from  licensing pursuant to Section 1-4, subsection
(d), of this Act, who performs the  activities  described  in
subsections (c) and (o) of this Section.
    (q)  "Servicing"  shall mean the collection or remittance
for or the right or obligation to collect or  remit  for  any
lender,  noteowner,  noteholder,  or  for  a  licensee's  own
account,  of  payments, interests, principal, and trust items
such as hazard insurance and taxes on a residential  mortgage
loan in accordance with the terms of the residential mortgage
loan;  and  includes loan payment follow-up, delinquency loan
follow-up,  loan  analysis  and  any  notifications  to   the
borrower  that  are  necessary to enable the borrower to keep
the loan current and in good standing.
    (r)  "Full service office" shall mean office and staff in
Illinois   reasonably   adequate   to   handle    efficiently
communications,  questions, and other matters relating to any
application for, or an  existing  home  mortgage  secured  by
residential  real estate situated in Illinois with respect to
which  the  licensee  is  brokering,   funding   originating,
purchasing,  or  servicing.   The management and operation of
each full service office  must  include  observance  of  good
business  practices such as adequate, organized, and accurate
books and records; ample  phone  lines,  hours  of  business,
staff training and supervision, and provision for a mechanism
to resolve consumer inquiries, complaints, and problems.  The
Commissioner  shall  issue  regulations  with regard to these
requirements and shall include an  evaluation  of  compliance
with  this Section in his or her periodic examination of each
licensee.
    (s)  "Purchasing" shall mean the purchase of conventional
or government-insured mortgage loans secured  by  residential
real  estate  situated  in Illinois from either the lender or
from the secondary market.
    (t)  "Borrower" shall mean the person or persons who seek
the services of a loan broker, originator, or lender.
    (u)  "Originating" shall mean the issuing of  commitments
for and funding of residential mortgage loans.
    (v)  "Loan  brokerage  agreement"  shall  mean  a written
agreement in which a broker  or  loan  broker  agrees  to  do
either of the following:
         (1)  obtain  a  residential  mortgage  loan  for the
    borrower  or  assist  the   borrower   in   obtaining   a
    residential mortgage loan; or
         (2)  consider  making a residential mortgage loan to
    the borrower.
    (w)  "Advertisement"   shall   mean   the   attempt    by
publication,   dissemination,   or   circulation  to  induce,
directly  or  indirectly,  any  person  to   enter   into   a
residential  mortgage  loan agreement or residential mortgage
loan brokerage agreement relative to a  mortgage  secured  by
residential real estate situated in Illinois.
    (x)  "Residential   Mortgage   Board"   shall   mean  the
Residential Mortgage Board created in  Section  1-5  of  this
Act.
    (y)  "Government-insured  mortgage  loan"  shall mean any
mortgage loan made on the security of residential real estate
insured by the Department of Housing and Urban Development or
Farmers  Home  Loan  Administration,  or  guaranteed  by  the
Veterans Administration.
    (z)  "Annual audit" shall mean a certified audit  of  the
licensee's  books and records and systems of internal control
performed by a certified public accountant in accordance with
generally  accepted  accounting  principles   and   generally
accepted auditing standards.
    (aa)  "Financial  institution"  shall  mean a savings and
loan association, savings  bank,  credit  union,  or  a  bank
organized  under  the  laws of Illinois or a savings and loan
association, savings bank, credit union or a  bank  organized
under  the  laws  of  the  United States and headquartered in
Illinois.
    (bb)  "Escrow agent" shall mean a third party, individual
or entity charged with the fiduciary obligation  for  holding
escrow  funds  on  a  residential mortgage loan pending final
payout of those funds in accordance with  the  terms  of  the
residential mortgage loan.
    (cc)  "Net worth" shall have the meaning ascribed thereto
in Section 3-5 of this Act.
    (dd)  "Affiliate" shall mean:
         (1)  any   entity   that  directly  controls  or  is
    controlled by the licensee and any other company that  is
    directly  affecting activities regulated by this Act that
    is controlled by the company that controls the licensee;
         (2)  any entity:
              (A)  that   is    controlled,    directly    or
         indirectly,  by  a trust or otherwise, by or for the
         benefit  of   shareholders   who   beneficially   or
         otherwise  control, directly or indirectly, by trust
         or otherwise,  the  licensee  or  any  company  that
         controls the licensee; or
              (B)  a majority of the directors or trustees of
         which  constitute  a majority of the persons holding
         any such office with the  licensee  or  any  company
         that controls the licensee;
         (3)  any company, including a real estate investment
    trust,  that  is  sponsored  and advised on a contractual
    basis by the licensee or any subsidiary or  affiliate  of
    the licensee.
    The  Commissioner  may  define by rule and regulation any
terms  used  in  this  Act  for  the  efficient   and   clear
administration of this Act.
    (ee)  "First   tier   subsidiary"  shall  be  defined  by
regulation incorporating the comparable definitions  used  by
the  Office  of  the  Comptroller  of  the  Currency  and the
Illinois Commissioner of Banks and Real Estate.
    (ff)  "Gross  delinquency  rate"   means   the   quotient
determined  by  dividing  (1)  the  sum  of (i) the number of
government-insured  residential  mortgage  loans  funded   or
purchased  by  a licensee in the preceding calendar year that
are  delinquent  and  (ii)   the   number   of   conventional
residential   mortgage  loans  funded  or  purchased  by  the
licensee in the preceding calendar year that  are  delinquent
by  (2)  the  sum  of  (i)  the  number of government-insured
residential  mortgage  loans  funded  or  purchased  by   the
licensee  in  the preceding calendar year and (ii) the number
of  conventional  residential  mortgage   loans   funded   or
purchased by the licensee in the preceding calendar year.
    (gg)  "Delinquency  rate  factor" means the factor set by
rule of the Commissioner that is multiplied  by  the  average
gross  delinquency rate of licensees, determined annually for
the immediately preceding calendar year, for the  purpose  of
determining   which   licensees  shall  be  examined  by  the
Commissioner pursuant to subsection (b)  of  Section  4-8  of
this Act.
    (hh)  "Loan originator" means any natural person who, for
compensation or in the expectation  of  compensation,  either
directly  or  indirectly  makes,  offers  to  make, solicits,
places, or negotiates a residential mortgage loan.
(Source: P.A. 90-772, eff. 1-1-99; 91-245, eff. 12-31-99.)

    (205 ILCS 635/2-4) (from Ch. 17, par. 2322-4)
    Sec. 2-4.  Averments of Licensee.  Each  application  for
license  or for the renewal of a license shall be accompanied
by the following averments stating that the applicant:
    (a)  Will maintain  at  least  one  full  service  office
within  the State of Illinois pursuant to Section 3-4 of this
Act;
    (b)  Will maintain staff reasonably adequate to meet  the
requirements of Section 3-4 of this Act;
    (c)  Will  keep  and  maintain  for  36  months  the same
written records as  required  by  the  federal  Equal  Credit
Opportunity  Act,  and  any  other  information  required  by
regulations  of  the Commissioner regarding any home mortgage
in the course of the  conduct  of  its  residential  mortgage
business;
    (d)  Will  file  with  the  Commissioner,  when  due, any
report or reports which it is required to file under  any  of
the provisions of this Act;
    (e)  Will  not  engage, whether as principal or agent, in
the practice of rejecting residential  mortgage  applications
without  reasonable  cause,  or  varying terms or application
procedures without reasonable cause, for  home  mortgages  on
real  estate  within  any  specific  geographic area from the
terms or procedures generally provided by the licensee within
other geographic areas of the State;
    (f)  Will  not  engage  in   fraudulent   home   mortgage
underwriting practices;
    (g)  Will   not   make   payment,   whether  directly  or
indirectly, of any kind to any in house or fee  appraiser  of
any  government or private money lending agency with which an
application for a  home  mortgage  has  been  filed  for  the
purpose  of  influencing  the  independent  judgment  of  the
appraiser  with respect to the value of any real estate which
is to be covered by such home mortgage;
    (h)  Has filed tax returns (State and  Federal)  for  the
past  3  years or filed with the Commissioner an accountant's
or attorney's statement as to why no return was filed;
    (i)  Will not engage in any discrimination  or  redlining
activities prohibited by Section 3-8 of this Act;
    (j)  Will not knowingly make any false promises likely to
influence    or    persuade,    or   pursue   a   course   of
misrepresentation  and   false   promises   through   agents,
solicitors, advertising or otherwise;
    (k)  Will   not  knowingly  misrepresent,  circumvent  or
conceal, through whatever subterfuge or device,  any  of  the
material  particulars  or  the  nature  thereof,  regarding a
transaction to which it is a party to the injury  of  another
party thereto;
    (l)  Will   disburse   funds   in   accordance  with  its
agreements;
    (m)  Has not committed a crime against the  law  of  this
State,  any  other  state  or of the United States, involving
moral turpitude, fraudulent or dishonest dealing, and that no
final judgment has been entered against it in a civil  action
upon  grounds of fraud, misrepresentation or deceit which has
not been previously reported to the Commissioner;
    (n)  Will account or deliver to any person  any  personal
property   such   as  money,  fund,  deposit,  check,  draft,
mortgage, other document or thing of value,  which  has  come
into  its possession, and which is not its property, or which
it is not in law or  equity  entitled  to  retain  under  the
circumstances,  at  the time which has been agreed upon or is
required by law, or, in the absence of  a  fixed  time,  upon
demand   of  the  person  entitled  to  such  accounting  and
delivery;
    (o)  Has not engaged in any conduct which would be  cause
for denial of a license;
    (p)  Has not become insolvent;
    (q)  Has not submitted an application for a license under
this Act which contains a material misstatement;
    (r)  Has   not   demonstrated   by   course  of  conduct,
negligence or incompetence in performing any act for which it
is required to hold a license under this Act;
    (s)  Will advise  the  Commissioner  in  writing  of  any
changes  to  the  information  submitted  on  the most recent
application for license within 30 days of said  change.   The
written  notice  must  be  signed  in  the  same  form as the
application for license being amended;
    (t)  Will comply with the provisions of this Act, or with
any lawful order, rule or regulation made or issued under the
provisions of this Act;
    (u)  Will  submit  to   periodic   examination   by   the
Commissioner as required by this Act;
    (v)  Will advise the Commissioner in writing of judgments
entered  against,  and  bankruptcy  petitions by, the license
applicant within 5 days of occurrence;
    (w)  Will advise the Commissioner in  writing  within  30
days  when  the  license  applicant requests a licensee under
this  Act  to  repurchase  a  loan,  and  the   circumstances
therefor; and
    (x)  Will  advise  the  Commissioner in writing within 30
days when the  license  applicant  is  requested  by  another
entity to repurchase a loan, and the circumstances therefor.
    (y)  Will  at  all  times act in a manner consistent with
subsections (a) and (b) of Section 1-2 of this Act.
    (x) Will not knowingly hire or employ a  loan  originator
who is not registered with the Commissioner as required under
Section 7-1 of this Act.
    A  licensee  who  fails  to  fulfill  obligations  of  an
averment,   to  comply  with  averments  made,  or  otherwise
violates any of the averments made under this  Section  shall
be subject to the penalties in Section 4-5 of this Act.
(Source: P.A. 90-301, eff. 8-1-97.)

    (205 ILCS 635/2-6) (from Ch. 17, par. 2322-6)
    Sec. 2-6.  License issuance and renewal; fee.
    (a)  Beginning   May  1,  1992,  licenses  issued  before
January 1, 1988, shall be renewed every 2  years  on  May  1.
Beginning May 1, 1992, licenses issued on or after January 1,
1988,  shall  be  renewed every 2 years on the anniversary of
the date of the issuance of the original  license.   Licenses
issued  for  first  time  applicants on or after May 1, 1992,
shall be renewed on the first anniversary of  their  issuance
and  every  2  years thereafter.   Properly completed renewal
application forms and filing fees must  be  received  by  the
Commissioner 60 45 days prior to the renewal date.
    (b)  It  shall  be the responsibility of each licensee to
accomplish renewal of its license; failure of the licensee to
receive renewal forms absent a request sent by certified mail
for such forms will not waive said responsibility. Failure by
a licensee to submit a properly completed renewal application
form and fees in a timely fashion, absent a written extension
from the Commissioner,  will  result  in  the  assessment  of
additional fees, as follows:
         (1)  A  fee of $500 will be assessed to the licensee
    30 days after the proper renewal  date  and  $1,000  each
    month  thereafter, until the license is either renewed or
    expires pursuant to Section 2-6, subsections (c) and (d),
    of this Act.
         (2)  Such fee will be assessed without prior  notice
    to  the  licensee,  but  will  be  assessed only in cases
    wherein the Commissioner has in  his  or  her  possession
    documentation  of  the licensee's continuing activity for
    which the unrenewed license was issued.
    (c)  A license which is not renewed by the date  required
in  this  Section  shall  automatically  become inactive.  No
activity regulated by this Act  shall  be  conducted  by  the
licensee  when  a  license  becomes  inactive.   An  inactive
license may be reactivated by filing a completed reactivation
application  with  the  Commissioner,  payment of the renewal
fee, and payment of a reactivation fee equal to  the  renewal
fee.
    (d)  A  license  which  is not renewed within one year of
becoming inactive shall expire.
    (e)  A  licensee  ceasing  an  activity   or   activities
regulated  by  this Act and desiring to no longer be licensed
shall so inform the Commissioner in writing and, at the  same
time,  convey the license and all other symbols or indicia of
licensure.   The  licensee  shall  include  a  plan  for  the
withdrawal from regulated business, including a timetable for
the disposition  of  the  business.   Upon  receipt  of  such
written  notice,  the  Commissioner  shall  issue a certified
statement canceling the license.
(Source: P.A. 90-301, eff. 8-1-97.)

    (205 ILCS 635/3-2) (from Ch. 17, par. 2323-2)
    Sec. 3-2.  Annual audit.
    (a)  At the licensee's fiscal year-end, but  in  no  case
more  than  12 months after the last audit conducted pursuant
to  this  Section,  except  as  otherwise  provided  in  this
Section, it shall be mandatory for each residential  mortgage
licensee  to  cause its books and accounts to be audited by a
certified public accountant not connected with such licensee.
The books and records of all licensees under this  Act  shall
be  maintained  on  an  accrual  basis.   The  audit  must be
sufficiently comprehensive in scope to permit the  expression
of  an  opinion  on  the  financial statements, which must be
prepared in accordance  with  generally  accepted  accounting
principles,   and   must  be  performed  in  accordance  with
generally accepted auditing standards.   Notwithstanding  the
requirements  of  this subsection, a licensee that is a first
tier subsidiary may  submit  audited  consolidated  financial
statements   of  its  parent  as  long  as  the  consolidated
statements are supported by  consolidating  statements.   The
licensee's  chief  financial  officer  shall  attest  to  the
licensee's    financial    statements    disclosed   in   the
consolidating statements.
    (b)  As used herein, the  term  "expression  of  opinion"
includes  either  (1) an unqualified opinion, (2) a qualified
opinion, (3) a disclaimer  of  opinion,  or  (4)  an  adverse
opinion.
    (c)  If a qualified or adverse opinion is expressed or if
an opinion is disclaimed, the reasons therefore must be fully
explained.   An  opinion, qualified as to a scope limitation,
shall not be acceptable.
    (d)  The most recent audit report shall be filed with the
Commissioner within 90 days after the end of  the  licensee's
fiscal  year  at  the  time  of  the  annual  license renewal
payment.  The report filed with  the  Commissioner  shall  be
certified  by  the certified public accountant conducting the
audit.  The Commissioner may promulgate rules regarding  late
audit reports.
    (e)  If any licensee required to make an audit shall fail
to  cause  an  audit to be made, the Commissioner shall cause
the same to be made by a certified public accountant  at  the
licensee's  expense.   The  Commissioner  shall  select  such
certified  public  accountant  by  advertising for bids or by
such other fair and impartial means as he or she  establishes
by regulation.
    (f)  In  lieu  of the audit required by this Section, the
Commissioner may accept any audit made  in  conformance  with
the  audit requirements of the U.S. Department of Housing and
Urban Development.
    (g)  With  respect  to  licensees   who   solely   broker
residential  mortgage  loans  as defined in subsection (o) of
Section 1-4, instead of the audit required by  this  Section,
the  Commissioner may accept compilation financial statements
prepared at  least  every  12  months,  and  the  compilation
financial  statement  must  be  prepared  by  an  independent
certified  public  accountant  licensed  under  the  Illinois
Public Accounting Act with full disclosure in accordance with
generally  accepted  accounting  principals and must shall be
submitted within 90 days after  the  end  of  the  licensee's
fiscal  year  at  the  time  of  the  annual  license renewal
payment.  If a licensee under this Section fails  to  file  a
compilation  as  required,  the  Commissioner  shall cause an
audit of the licensee's books and accounts to be  made  by  a
certified  public  accountant at the licensee's expense.  The
Commissioner shall select the certified public accountant  by
advertising  for  bids  or  by  such other fair and impartial
means as he or she establishes by rule.  A licensee who files
false  or  misleading  compilation  financial  statements  is
guilty of a business offense and shall be fined not less than
$5,000.
    (h)  The workpapers of the certified  public  accountants
employed by each licensee for purposes of this Section are to
be  made  available to the Commissioner or the Commissioner's
designee  upon  request  and  may  be   reproduced   by   the
Commissioner  or the Commissioner's designee to enable to the
Commissioner to carry out the purposes of this Act.
    (i)  Notwithstanding any other provision of this Section,
if a licensee relying  on  subsection  (g)  of  this  Section
causes  its  books  to be audited at any other time or causes
its financial statements to be reviewed, a complete  copy  of
the   audited  or  reviewed  financial  statements  shall  be
delivered to the Commissioner  at  the  time  of  the  annual
license  renewal payment following receipt by the licensee of
the audited or reviewed financial statements.  All workpapers
shall be made available to  the  Commissioner  upon  request.
The  financial statements and workpapers may be reproduced by
the Commissioner or the Commissioner's designee to carry  out
the purposes of this Act.
(Source:  P.A.  89-74,  eff.  6-30-95;  89-355, eff. 8-17-95;
90-772, eff. 1-1-99.)

    (205 ILCS 635/3-5) (from Ch. 17, par. 2323-5)
    Sec. 3-5.  Net worth requirement. A licensee that holds a
license on the effective date of this amendatory Act  of  the
93rd  General Assembly Every licensee shall have and maintain
a net worth of not less than $100,000; however, no later than
2 years after the effective date of this  amendatory  Act  of
the  93rd  General Assembly, the licensee must maintain a net
worth of not  less  than  $150,000.  A  licensee  that  first
obtains a license after the effective date of this amendatory
Act of the 93rd General Assembly must have and maintain a net
worth  of  not  less  than  $150,000.  Notwithstanding  other
requirements of this Section, the net worth requirement for a
residential mortgage licensee licensees whose only licensable
activity  is that of brokering residential mortgage loans and
that holds a license on the effective date of this amendatory
Act of the 93rd General Assembly shall be  $35,000;  however,
no  later  than  2  years  after  the  effective date of this
amendatory Act of the 93rd  General  Assembly,  the  licensee
must  maintain  a  net worth of not less than $50,000. Such a
licensee that first obtains a  license  after  the  effective
date of this amendatory Act of the 93rd General Assembly must
have  and  maintain a net worth of not less than $50,000. Net
worth shall be evidenced by a balance  sheet  prepared  by  a
certified  public  accountant  in  accordance  with generally
accepted  accounting  principles   and   generally   accepted
auditing standards or by the compilation financial statements
authorized   under   subsection  (g)  of  Section  3-2.   The
Commissioner may promulgate rules with respect to  net  worth
definitions   and   requirements   for  residential  mortgage
licensees as necessary to accomplish  the  purposes  of  this
Act.   In  lieu  of  the net worth requirement established by
this  Section,  the  Commissioner  may  accept  evidence   of
conformance  by  the licensee with the net worth requirements
of  the  United  States  Department  of  Housing  and   Urban
Development.
(Source: P.A. 89-355, eff. 8-17-95; 89-508, eff. 7-3-96.)

    (205 ILCS 635/4-5) (from Ch. 17, par. 2324-5)
    Sec. 4-5.  Suspension, revocation of licenses; fines.
    (a)  Upon  written notice to a licensee, the Commissioner
may suspend or revoke any license issued pursuant to this Act
if he or she shall make a finding  of  one  or  more  of  the
following in the notice that:
         (1)  Through  separate acts or an act or a course of
    conduct, the licensee has violated any provisions of this
    Act,  any  rule  or   regulation   promulgated   by   the
    Commissioner  or  of any other law, rule or regulation of
    this State or the United States.
         (2)  Any fact or condition exists which, if  it  had
    existed  at the time of the original application for such
    license would have warranted the Commissioner in refusing
    originally to issue such license.
         (3)  If a licensee is other than an individual,  any
    ultimate equitable owner, officer, director, or member of
    the  licensed  partnership,  association, corporation, or
    other entity has so acted or failed to act  as  would  be
    cause  for suspending or revoking a license to that party
    as an individual.
    (b)  No license shall be suspended or revoked, except  as
provided  in  this  Section,  nor shall any licensee be fined
without notice of his or her right to a hearing  as  provided
in Section 4-12 of this Act.
    (c)  The  Commissioner,  on  good  cause  shown  that  an
emergency  exists,  may  suspend any license for a period not
exceeding 180 days, pending investigation.   Upon  a  showing
that  a  licensee  has  failed  to  meet  the  experience  or
educational  requirements  of Section 2-2 or the requirements
of subsection (g) of  Section  3-2,  the  Commissioner  shall
suspend,  prior  to  hearing as provided in Section 4-12, the
license until those requirements have been met.
    (d)  The provisions of subsection (e) of Section  2-6  of
this  Act  shall  not  affect  a licensee's civil or criminal
liability for acts committed prior to surrender of a license.
    (e)  No  revocation,  suspension  or  surrender  of   any
license   shall  impair  or  affect  the  obligation  of  any
pre-existing lawful contract between  the  licensee  and  any
person.
    (f)  Every  license issued under this Act shall remain in
force and effect until the same shall  have  expired  without
renewal,  have  been  surrendered,  revoked  or  suspended in
accordance  with  the  provisions  of  this  Act,   but   the
Commissioner  shall  have  authority to reinstate a suspended
license or to issue a new license to a licensee whose license
shall have been revoked if no fact or condition  then  exists
which  would  have  warranted  the  Commissioner  in refusing
originally to issue such license under this Act.
    (g)  Whenever the Commissioner shall revoke or suspend  a
license  issued pursuant to this Act or fine a licensee under
this Act, he or she shall forthwith execute  in  duplicate  a
written order to that effect.  The Commissioner shall publish
notice of such order in the Illinois Register and a newspaper
of  general circulation in the county in which the license is
located and shall forthwith serve a copy of such  order  upon
the  licensee.   Any such order may be reviewed in the manner
provided by Section 4-12 of this Act.
    (h)  When the Commissioner finds any person in  violation
of  the  grounds  set  forth in subsection (i), he or she may
enter  an  order  imposing  one  or  more  of  the  following
penalties:
         (1)  Revocation of license;
         (2)  Suspension   of   a    license    subject    to
    reinstatement  upon  satisfying all reasonable conditions
    the Commissioner may specify;
         (3)  Placement  of  the  licensee  or  applicant  on
    probation for  a  period  of  time  and  subject  to  all
    reasonable conditions as the Commissioner may specify;
         (4)  Issuance of a reprimand;
         (5)  Imposition  of  a  fine  not  to exceed $25,000
    $10,000 for each count of separate offense; and
         (6)  Denial of a license.
    (i)  The following  acts  shall  constitute  grounds  for
which  the  disciplinary  actions specified in subsection (h)
above may be taken:
         (1)  Being convicted or found guilty, regardless  of
    pendency  of  an  appeal,  of a crime in any jurisdiction
    which involves fraud, dishonest dealing, or any other act
    of moral turpitude;
         (2)  Fraud, misrepresentation, deceit or  negligence
    in any mortgage financing transaction;
         (3)  A  material or intentional misstatement of fact
    on an initial or renewal application;
         (4)  Failure   to    follow    the    Commissioner's
    regulations  with respect to placement of funds in escrow
    accounts;
         (5)  Insolvency or filing under any provision of the
    Bankruptcy Code as a debtor;
         (6)  Failure to account or deliver to any person any
    property such as any money, fund, deposit, check,  draft,
    mortgage,  or other document or thing of value, which has
    come into his or her hands and which is not  his  or  her
    property  or  which  he  or  she  is not in law or equity
    entitled to retain, under the circumstances  and  at  the
    time which has been agreed upon or is required by law or,
    in the absence of a fixed time, upon demand of the person
    entitled to such accounting and delivery;
         (7)  Failure  to  disburse  funds in accordance with
    agreements;
         (8)  Any misuse, misapplication, or misappropriation
    of trust funds or escrow funds;
         (9)  Having  a  license,  or  the   equivalent,   to
    practice any profession or occupation revoked, suspended,
    or  otherwise  acted  against,  including  the  denial of
    licensure by a  licensing  authority  of  this  State  or
    another  state, territory or country for fraud, dishonest
    dealing or any other act of moral turpitude;
         (10)  Failure to issue a  satisfaction  of  mortgage
    when  the  residential  mortgage  has  been  executed and
    proceeds  were  not  disbursed  to  the  benefit  of  the
    mortgagor  and  when  the  mortgagor   has   fully   paid
    licensee's costs and commission;
         (11)  Failure  to  comply  with  any  order  of  the
    Commissioner  or rule made or issued under the provisions
    of this Act;
         (12)  Engaging in activities regulated by  this  Act
    without  a  current,  active  license unless specifically
    exempted by this Act;
         (13)  Failure to pay in a  timely  manner  any  fee,
    charge or fine under this Act;
         (14)  Failure   to   maintain,  preserve,  and  keep
    available for examination, all books, accounts  or  other
    documents required by the provisions of this  Act and the
    rules of the Commissioner;
         (15)  Refusal   to   permit   an   investigation  or
    examination of the licensee's or  its  affiliates'  books
    and  records or refusal to comply with the Commissioner's
    subpoena or subpoena duces tecum;
         (16)  A pattern of substantially underestimating the
    maximum closing costs;
         (17)  Failure to comply with  or  violation  of  any
    provision of this Act.
    (j)  A  licensee  shall  be  subject  to the disciplinary
actions specified in this Act for  violations  of  subsection
(i)  by  any  officer,  director, shareholder, joint venture,
partner,  ultimate  equitable  owner,  or  employee  of   the
licensee.
    (k)  Such  licensee  shall  be  subject  to suspension or
revocation for employee actions only if there is a pattern of
repeated  violations  by  employees  or  the   licensee   has
knowledge of the violations.
    (l)  Procedure for surrender of license:
         (1)  The  Commissioner  may, after 10 days notice by
    certified mail to the licensee at the address  set  forth
    on  the  license,  stating the contemplated action and in
    general the grounds therefor and the date, time and place
    of a hearing thereon, and after  providing  the  licensee
    with  a  reasonable opportunity to be heard prior to such
    action,  fine  such  licensee  an  amount  not  exceeding
    $10,000 per violation, or revoke or suspend  any  license
    issued hereunder if he or she finds that:
              (i)  The licensee has failed to comply with any
         provision  of  this  Act  or  any  order,  decision,
         finding,   rule,  regulation  or  direction  of  the
         Commissioner lawfully made pursuant to the authority
         of this Act; or
              (ii)  Any fact or condition exists which, if it
         had existed at the time of the original  application
         for  the  license,  clearly would have warranted the
         Commissioner in refusing to issue the license.
         (2)  Any  licensee  may  surrender  a   license   by
    delivering  to the Commissioner written notice that he or
    she thereby surrenders such license, but surrender  shall
    not affect the licensee's civil or criminal liability for
    acts committed prior to surrender or entitle the licensee
    to a return of any part of the license fee.
(Source: P.A. 89-355, eff. 8-17-95.)

    (205 ILCS 635/4-8.1 new)
    Sec.   4-8.1.   Confidential   information.  In  hearings
conducted under this Act, information presented into evidence
that was acquired by the licensee when serving any individual
in connection with  a  residential  mortgage,  including  all
financial  information  of  the  individual,  shall be deemed
strictly confidential and shall be  made  available  only  as
part  of  the record of a hearing under this Act or otherwise
(i) when  the  record  is  required,  in  its  entirety,  for
purposes  of judicial review or (ii) upon the express written
consent of the individual served, or in the case  of  his  or
her  death  or disability, the consent of his or her personal
representative.

    (205 ILCS 635/4-8.2 new)
    Sec. 4-8.2. Reports of violations.  Any  person  licensed
under  this  Act  or  any  other  person  may  report  to the
Commissioner any information to show that a person subject to
this Act is or may be in violation of this Act.

    (205 ILCS 635/Art. VII heading new)
        ARTICLE VII. REGISTRATION OF LOAN ORIGINATORS

    (205 ILCS 635/7-1 new)
    Sec. 7-1. Registration required; rules  and  regulations.
Beginning   6   months  after  the  effective  date  of  this
amendatory Act of the 93rd General Assembly, it  is  unlawful
for  any  natural  person  to  act or assume to act as a loan
originator, as defined in subsection  (hh)  of  Section  1-4,
without  being  registered  with  the Commissioner unless the
natural person  is  exempt  under  items  (1)  and  (1.5)  of
subsection  (d)  of Section 1-4 of this Act. The Commissioner
shall promulgate  rules  prescribing  the  criteria  for  the
registration  and  regulation  of loan originators, including
but  not  limited  to,  qualifications,  fees,   examination,
education, supervision, and enforcement.

    Section  835.   The  Limited  Liability  Company  Act  is
amended by changing Sections 1-25, 5-5, 5-55, 37-5, and 37-35
as follows:

    (805 ILCS 180/1-25)
    Sec.  1-25.   Nature  of  business.  A  limited liability
company may be formed for  any  lawful  purpose  or  business
except:
         (1)  (Blank)   banking,   exclusive  of  fiduciaries
    organized for the  purpose  of  accepting  and  executing
    trusts;
         (2)  insurance  unless,  for the purpose of carrying
    on business as a member of a group including incorporated
    and individual unincorporated underwriters, the  Director
    of  Insurance finds that the group meets the requirements
    of subsection (3) of Section 86 of the Illinois Insurance
    Code and the limited liability company, if insolvent,  is
    subject to liquidation by the Director of Insurance under
    Article XIII of the Illinois Insurance Code;
         (3)  the   practice  of  dentistry  unless  all  the
    members and managers are licensed as dentists  under  the
    Illinois Dental Practice Act; or
         (4)  the   practice   of  medicine  unless  all  the
    managers, if any, are licensed to practice medicine under
    the Medical Practice Act of 1987 and any of the following
    conditions apply:
              (A)  the member  or  members  are  licensed  to
         practice  medicine under the Medical Practice Act of
         1987; or
              (B)  the member or  members  are  a  registered
         medical   corporation   or   corporations  organized
         pursuant to the Medical Corporation Act; or
              (C)  the member or members are  a  professional
         corporation  organized  pursuant to the Professional
         Service Corporation Act of  physicians  licensed  to
         practice medicine in all its branches; or
              (D)  the   member  or  members  are  a  medical
         limited liability company or companies.
(Source: P.A. 91-593, eff. 8-14-99; 92-144, eff. 7-24-01.)

    (805 ILCS 180/5-5)
    Sec. 5-5.  Articles of organization.
    (a)  The articles of organization shall set forth all  of
the following:
         (1)  The  name  of the limited liability company and
    the address of its principal place of business which may,
    but need not be a place of business in this State.
         (2)  The purposes for which  the  limited  liability
    company  is  organized,  which may be stated to be, or to
    include, the transaction of any or all lawful  businesses
    for  which  limited  liability companies may be organized
    under this Act.
         (3)  The  name  of  its  registered  agent  and  the
    address of its registered office.
         (4)  If the  limited  liability  company  is  to  be
    managed  by a manager or managers, the names and business
    addresses of the initial manager or managers.
         (5)  If management of the limited liability  company
    is  to  be vested in the members under Section 15-1, then
    the names and addresses of the initial member or members.
         (6)  The latest date, if any, upon which the limited
    liability company is to  dissolve  and  other  events  of
    dissolution,  if  any,  that  may  be  agreed upon by the
    members under Section 35-1 hereof.
         (7)  The name and address of each organizer.
         (8)  Any other provision, not inconsistent with law,
    that the members elect to set  out  in  the  articles  of
    organization  for  the regulation of the internal affairs
    of  the  limited   liability   company,   including   any
    provisions   that,   under  this  Act,  are  required  or
    permitted to be set out in the operating agreement of the
    limited liability company.
    (b)  A limited liability company is organized at the time
articles of organization are filed by the Secretary of  State
or  at any later time, not more than 60 days after the filing
of the articles of organization, specified in the articles of
organization.
    (c)  Articles of organization for the organization  of  a
limited  liability  company  for the purpose of accepting and
executing trusts shall not be filed by the Secretary of State
until there is delivered to him or her a  statement  executed
by  the  Commissioner  of the Office of Banks and Real Estate
that the organizers of the  limited  liability  company  have
made  arrangements  with  the  Commissioner  of the Office of
Banks and Real Estate to comply with the Corporate  Fiduciary
Act.
    (d)  Articles  of  organization for the organization of a
limited liability company as a bank or a savings bank must be
filed with the Commissioner of Banks and Real Estate  or,  if
the bank or savings bank will be organized under federal law,
with the appropriate federal banking regulator.
(Source: P.A. 90-424, eff. 1-1-98.)

    (805 ILCS 180/5-55)
    Sec. 5-55.  Filing in Office of Secretary of State.
    (a)  Whenever  any  provision  of  this  Act  requires  a
limited  liability  company  to  file  any  document with the
Office of the Secretary of State, the requirement means that:
         (1)  the original document, executed as described in
    Section 5-45, and, if required by this Act to be filed in
    duplicate, one copy (which may  be  a  signed  carbon  or
    photocopy)  shall  be  delivered  to  the  Office  of the
    Secretary of State;
         (2)  all fees and charges authorized by  law  to  be
    collected  by  the  Secretary of State in connection with
    the filing of the  document  shall  be  tendered  to  the
    Secretary of State; and
         (3)  unless  the  Secretary  of State finds that the
    document does not conform to law, he or she  shall,  when
    all fees have been paid:
              (A)  endorse  on  the  original and on the copy
         the word "Filed" and the month, day, and year of the
         filing thereof;
              (B)  file in his or her office the original  of
         the document; and
              (C)  return the copy to the person who filed it
         or to that person's representative.
    (b)  If   another   Section   of  this  Act  specifically
prescribes a manner of filing or signing a specified document
that  differs  from  the  corresponding  provisions  of  this
Section, then the  provisions  of  the  other  Section  shall
govern.
    (c) Whenever any provision of this Act requires a limited
liability  company  that  is a bank or a savings bank to file
any document, that requirement means that the filing shall be
made exclusively with the  Commissioner  of  Banks  and  Real
Estate  or,  if  the  bank or savings bank is organized under
federal law, with the appropriate federal  banking  regulator
at  such  times  and  in  such  manner  as  required  by  the
Commissioner or federal regulator.
(Source: P.A. 92-33, eff. 7-1-01.)

    (805 ILCS 180/37-5)
    Sec. 37-5.  Definitions.  In this Article:
    "Corporation"  means (i) a corporation under the Business
Corporation Act of 1983, a predecessor law, or comparable law
of another jurisdiction or (ii) a bank or savings bank.
    "General partner" means a partner in a partnership and  a
general partner in a limited partnership.
    "Limited  partner"  means  a limited partner in a limited
partnership.
    "Limited partnership" means a limited partnership created
under  the  Revised  Uniform  Limited  Partnership   Act,   a
predecessor law, or comparable law of another jurisdiction.
    "Partner"  includes  a  general  partner  and  a  limited
partner.
    "Partnership"  means  a  general  partnership  under  the
Uniform Partnership Act, a predecessor law, or comparable law
of another jurisdiction.
    "Partnership  agreement"  means  an  agreement  among the
partners concerning the partnership or limited partnership.
    "Shareholder" means a shareholder in a corporation.
(Source: P.A. 90-424, eff. 1-1-98.)
    (805 ILCS 180/37-35)
    Sec. 37-35.  Article not exclusive. This Article does not
preclude an entity from being converted or merged under other
law. A bank or savings bank that converts to or  merges  with
and  into a limited liability company shall be subject to the
provisions of this Article or to other applicable law to  the
extent  that  those provisions do not conflict with the State
or federal law pursuant to which the conversion or merger  of
the bank or savings bank is authorized.
(Source: P.A. 90-424, eff. 1-1-98.)

    Section  840.   The  Illinois  Fairness in Lending Act is
amended by changing Sections 2, 3, and 5 as follows:

    (815 ILCS 120/2) (from Ch. 17, par. 852)
    Sec. 2. As used in this Act:
    (a)  "Financial  Institution"  means  any  bank,   credit
union,  insurance  company, mortgage banking company, savings
bank, or savings and loan association, or  other  residential
mortgage  lender which operates or has a place of business in
this State.
    (b)  "Person" means any natural person.
    (c)  "Varying the terms of a loan" includes, but  is  not
limited to the following practices:
    (1)  Requiring  a  greater than average down payment than
is usual for the particular type of a loan involved.
    (2)  Requiring a shorter period of amortization  than  is
usual for the particular type of loan involved.
    (3)  Charging  a  higher  interest rate than is usual for
the particular type of loan involved.
    (4)  An underappraisal of real estate or  other  item  of
property offered as security.
    (d)  "Equity  stripping"  means  to  assist  a  person in
obtaining a loan secured by the person's principal  residence
for  the  primary  purpose  of  receiving fees related to the
financing when (i) the loan decreased the person's equity  in
the  principal  residence  and  (ii)  at the time the loan is
made, the financial institution does not  reasonably  believe
that  the  person will be able to make the scheduled payments
to repay  the  loan.  "Equity  stripping"  does  not  include
reverse  mortgages  as  defined in Section 5a of the Illinois
Banking Act, Section 1-6a of the Illinois  Savings  and  Loan
Act  of 1985, or subsection (3) of Section 46 of the Illinois
Credit Union Act.
    (e)  "Loan  flipping"  means  to  assist  a   person   in
refinancing   a   loan  secured  by  the  person's  principal
residence for the primary purpose of receiving  fees  related
to  the  refinancing  when  (i)  the  refinancing of the loan
results in no tangible benefit to the person and (ii) at  the
time  the  loan  is  made, the financial institution does not
reasonably believe that the  refinancing  of  the  loan  will
result in a tangible benefit to the person.
    (f)   "Principal  residence"  means  a  person's  primary
residence that is a dwelling consisting of 4 or fewer  family
units  or  that is in a dwelling consisting of condominium or
cooperative units.
(Source: P.A. 81-1391.)

    (815 ILCS 120/3) (from Ch. 17, par. 853)
    Sec. 3. No financial institution, in connection  with  or
in contemplation of any loan to any person, may:
    (a)  Deny or vary the terms of a loan on the basis that a
specific parcel of real estate offered as security is located
in a specific geographical area.
    (b)  Deny  or  vary  the  terms  of a loan without having
considered all of the regular and dependable income  of  each
person who would be liable for repayment of the loan.
    (c)  Deny  or  vary the terms of a loan on the sole basis
of  the  childbearing  capacity  of  an   applicant   or   an
applicant's spouse.
    (d)  Utilize  lending  standards  that  have  no economic
basis and which are discriminatory in effect.
    (e)  Engage in equity stripping or loan flipping.
(Source: P.A. 81-1391.)

    (815 ILCS 120/5) (from Ch. 17, par. 855)
    Sec.  5.  (a)  Subject  to  the  limitation  imposed   by
subsection (b), any person who has been aggrieved as a result
of  a violation of this Act may bring an individual action in
the circuit court of  the  county  in  which  the  particular
financial institution involved is located or doing business.
    Upon a finding that a financial institution has committed
a  violation of this Act, the court may award actual damages,
and may in its discretion award court costs.
    (b)  If the same events or circumstances would constitute
the basis for an action under this Act or an action under any
other  Act,  the  aggrieved  person  may  elect  between  the
remedies proposed by the two Acts but may not bring  actions,
either administrative or judicial, under more than one of the
two Acts in relation to those same events or circumstances.
    (c)  An  action  to enjoin any person subject to this Act
from engaging in activity in violation  of this  Act  may  be
maintained in the name of the people of the State of Illinois
by  the  Attorney  General  or by the State's Attorney of the
county in which the action is brought.  This remedy shall  be
in  addition  to other remedies provided for any violation of
this Act.
(Source: P.A. 81-1391.)

    Section 845.  The Consumer Fraud and  Deceptive  Business
Practices Act is amended by changing Section 2Z as follows:
    (815 ILCS 505/2Z) (from Ch. 121 1/2, par. 262Z)
    Sec.  2Z.   Violations  of  other  Acts.   Any person who
knowingly violates the Automotive Repair Act, the Home Repair
and Remodeling  Act,  the  Dance  Studio  Act,  the  Physical
Fitness   Services   Act,  the  Hearing  Instrument  Consumer
Protection  Act,  the  Illinois  Union  Label  Act,  the  Job
Referral and Job Listing Services  Consumer  Protection  Act,
the  Travel  Promotion  Consumer  Protection  Act, the Credit
Services Organizations Act, the Automatic  Telephone  Dialers
Act,  the  Pay-Per-Call Services Consumer Protection Act, the
Telephone Solicitations Act, the Illinois Funeral  or  Burial
Funds  Act,  the Cemetery Care Act, the Safe and Hygienic Bed
Act, the Pre-Need Cemetery Sales Act, the High Risk Home Loan
Act, subsection (a) or (b) of Section 3-10 of  the  Cigarette
Tax  Act,  subsection  (a)  or  (b)  of  Section  3-10 of the
Cigarette Use Tax Act, the Electronic Mail Act, or  paragraph
(6)  of  subsection  (k)  of  Section  6-305  of the Illinois
Vehicle Code commits an unlawful practice within the  meaning
of this Act.
(Source:  P.A.  91-164,  eff.  7-16-99;  91-230, eff. 1-1-00;
91-233, eff.  1-1-00;  91-810,  eff.  6-13-00;  92-426,  eff.
1-1-02.)

    Section 900. Severability. The provisions of this Act are
severable under Section 1.31 of the Statute on Statutes.