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Public Act 92-0476
HB1030 Enrolled LRB9206827JSpc
AN ACT concerning banking.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Illinois Banking Act is amended by
changing Sections 16 and 46 as follows:
(205 ILCS 5/16) (from Ch. 17, par. 323)
Sec. 16. Directors. The business and affairs of a State
bank shall be managed by its board of directors that shall
exercise its powers as follows:
(1) Directors shall be elected as provided in this Act.
Any omission to elect a director or directors shall not
impair any of the rights and privileges of the bank or of any
person in any way interested. The existing directors shall
hold office until their successors are elected and qualify.
(2) (a) Notwithstanding the provisions of any charter
heretofore or hereafter issued, the number of directors,
not fewer than 5 nor more than 25, may be fixed from time
to time by the stockholders at any meeting of the
stockholders called for the purpose of electing directors
or changing the number thereof by the affirmative vote of
at least two-thirds of the outstanding stock entitled to
vote at the meeting, and the number so fixed shall be the
board regardless of vacancies until the number of
directors is thereafter changed by similar action.
(b) Notwithstanding the minimum number of directors
specified in paragraph (a) of this subsection, a State
bank that has been in existence for 10 years or more and
has less than $20,000,000 in assets, as of the December
31 immediately preceding the annual meeting of
shareholders at which directors are elected, may, subject
to the approval of the Commissioner, have a minimum of 3
directors; provided that if a State bank has fewer than 5
directors, at least one director shall not be an officer
or employee of the bank. The Commissioner shall annually
review the appropriateness of the grant of authority to
have a reduced minimum number of directors pursuant to
this paragraph (b).
(3) Except as otherwise provided in this paragraph (3),
directors shall hold office until the next annual meeting of
the stockholders succeeding their election or until their
successors are elected and qualify. If the board of directors
consists of 6 or more members, in lieu of electing the
membership of the whole board of directors annually, the
charter or by-laws of a State bank may provide that the
directors shall be divided into either 2 or 3 classes, each
class to be as nearly equal in number as is possible. The
term of office of directors of the first class shall expire
at the first annual meeting of the stockholders after their
election, that of the second class shall expire at the second
annual meeting after their election, and that of the third
class, if any, shall expire at the third annual meeting after
their election. At each annual meeting after classification,
the number of directors equal to the number of the class
whose terms expire at the time of the meeting shall be
elected to hold office until the second succeeding annual
meeting, if there be 2 classes, or until the third succeeding
annual meeting, if there be 3 classes. Vacancies may be
filled by stockholders at a special meeting called for the
purpose.
If authorized by the bank's by-laws or an amendment
thereto, the directors of a State bank may properly fill a
vacancy or vacancies arising between shareholders' meetings,
but at no time may the number of directors selected to fill a
vacancy in this manner during any interim period between
shareholders' meetings exceed 33 1/3% of the total membership
of the board of directors.
(4) The board of directors shall hold regular meetings
at least once each month, provided that, upon prior written
approval by the Commissioner, the board of directors may hold
regular meetings less frequently than once each month but at
least once each calendar quarter. A special meeting of the
board of directors may be held as provided by the by-laws. A
special meeting of the board of directors may also be held
upon call by the Commissioner or a bank examiner appointed
under the provisions of this Act upon not less than 12 hours
notice of the meeting by personal service of the notice or by
mailing the notice to each of the directors at his residence
as shown by the books of the bank. A majority of the board
of directors shall constitute a quorum for the transaction of
business unless a greater number is required by the charter
or the by-laws. The act of the majority of the directors
present at a meeting at which a quorum is present shall be
the act of the board of directors unless the act of a greater
number is required by the charter or by the by-laws.
(5) A member of the board of directors shall be elected
president. The board of directors may appoint other officers,
as the by-laws may provide, and fix their salaries to carry
on the business of the bank. The board of directors may make
and amend by-laws (not inconsistent with this Act) for the
government of the bank and may, by the affirmative vote of a
majority of the board of directors, establish reasonable
compensation of all directors for services to the corporation
as directors, officers, or otherwise. An officer, whether
elected or appointed by the board of directors or appointed
pursuant to the by-laws, may be removed by the board of
directors at any time.
(6) The board of directors shall cause suitable books
and records of all the bank's transactions to be kept.
(7) (a) In discharging the duties of their respective
positions, the board of directors, committees of the
board, and individual directors may, in considering the
best long term and short term interests of the bank,
consider the effects of any action (including, without
limitation, action that may involve or relate to a merger
or potential merger or to a change or potential change in
control of the bank) upon employees, depositors,
suppliers, and customers of the corporation or its
subsidiaries, communities in which the main banking
premises, branches, offices, or other establishments of
the bank or its subsidiaries are located, and all
pertinent factors.
(b) In discharging the duties of their respective
positions, the board of directors, committees of the
board, and individual directors shall be entitled to rely
on advice, information, opinions, reports or statements,
including financial statements and financial data,
prepared or presented by: (i) one or more officers or
employees of the bank whom the director believes to be
reliable and competent in the matter presented; (ii) one
or more counsels, accountants, or other consultants as to
matters that the director believes to be within that
person's professional or expert competence; or (iii) a
committee of the board upon which the director does not
serve, as to matters within that committee's designated
authority; provided that the director's reliance under
this paragraph (b) is placed in good faith, after
reasonable inquiry if the need for such inquiry is
apparent under the circumstances and without knowledge
that would cause such reliance to be unreasonable.
(Source: P.A. 90-301, eff. 8-1-97; 91-452, eff. 1-1-00.)
(205 ILCS 5/46) (from Ch. 17, par. 357)
Sec. 46. Misleading practices and names prohibited;
penalty.
(a) No person, firm, partnership, or corporation that is
not a bank shall transact business in this State in a manner
which has a substantial likelihood of misleading the public
by implying that the business is a bank, or shall use the
word "bank", "banker", or "banking" in connection with the
business. Any person, firm, partnership or corporation
violating this Section shall be deemed guilty of a Class A
misdemeanor, and the Attorney General or State's Attorney of
the county in which any such violation occurs may restrain
such violation by a complaint for injunctive relief.
(b) If the Commissioner is of the opinion and finds that
a person, firm, partnership, or corporation that is not a
bank has transacted or intends to transact business in this
State in a manner which has a substantial likelihood of
misleading the public by implying that the business is a
bank, or has used or intends to use the word "bank",
"banker", or "banking" in connection with the business, then
the Commissioner may direct that person, firm, partnership,
or corporation to cease and desist from transacting the
business or using the word "bank", "banker", or "banking".
If that person, firm, partnership, or corporation persists in
transacting the business or using the word "bank", "banker",
or "banking", then the Commissioner may impose a civil
penalty of up to $10,000 for each violation. Each day that
the person, firm, partnership, or corporation continues
transacting the business or using the word "bank", "banker",
or "banking" in connection with the business shall constitute
a separate violation of these provisions.
(c) A person, firm, partnership, or corporation that is
not a bank, and is not transacting or intending to transact
business in this State in a manner that has a substantial
likelihood of misleading the public by implying that such
business is a bank, may apply to the Commissioner for
permission to use the word "bank", "banker", or "banking" in
connection with the business. If the Commissioner determines
that there is no substantial likelihood of misleading the
public, and upon such conditions as the Commissioner may
impose to prevent the person, firm, partnership, or
corporation from holding itself out in a misleading manner,
then such person, firm, partnership, or corporation may use
the word "bank", "banker", or "banking".
(d) (1) No person, firm, partnership, or
corporation may use the name of an existing bank, or a
name deceptively similar to that of an existing bank,
when marketing to or soliciting business from customers
or prospective customers if the reference to the existing
bank is made (i) without the consent of the existing bank
and (ii) in a manner that could cause a reasonable person
to believe that the marketing material or solicitation
originated from or is endorsed by the existing bank or
that the existing bank is in any other way responsible
for the marketing material or solicitation.
(2) An existing bank may, in addition to any other
remedies available under the law, report an alleged
violation of this subsection (d) to the Commissioner. If
the Commissioner finds the marketing material or
solicitation in question to be in violation of this
subsection, the Commissioner may direct the person, firm,
partnership, or corporation to cease and desist from
using that marketing material or solicitation in
Illinois. If that person, firm, partnership, or
corporation persists in the use of the marketing material
or solicitation, then the Commissioner may impose a civil
penalty of up to $10,000 for each violation. Each
instance in which the marketing material or solicitation
is sent to a customer or prospective customer shall
constitute a separate violation of these provisions.
(3) Nothing in this subsection (d) prohibits the
use of or reference to the name of an existing bank in
marketing materials or solicitations, provided that the
use or reference would not deceive or confuse a
reasonable person regarding whether the marketing
material or solicitation originated from or was endorsed
by the existing bank or whether the existing bank was in
any other way responsible for the marketing material or
solicitation. The Commissioner is authorized to
promulgate rules to administer these provisions.
(Source: P.A. 89-567, eff. 7-26-96.)
Section 99. Effective date. This Act takes effect upon
becoming law.
Passed in the General Assembly May 30, 2001.
Approved August 23, 2001.
Effective August 23, 2001.
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