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Public Act 92-0573
HB4952 Enrolled LRB9214703JSpc
AN ACT concerning banks.
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 32 and 35.1 as follows:
(205 ILCS 5/32) (from Ch. 17, par. 339)
Sec. 32. Basic loaning limits. The liabilities
outstanding at one time to a state bank of a person for money
borrowed, including the liabilities of a partnership or joint
venture in the liabilities of the several members thereof,
shall not exceed 25% of the amount of the unimpaired capital
and unimpaired surplus of the bank.
The liabilities to any state bank of a person may exceed
25% of the unimpaired capital and unimpaired surplus of the
bank, provided that (i) the excess amount from time to time
outstanding is fully secured by readily marketable collateral
having a market value, as determined by reliable and
continuously available quotations, at least equal to the
excess amount outstanding; and (ii) the total liabilities
shall not exceed 30% of the unimpaired capital and unimpaired
surplus of the bank.
The following shall not be considered as money borrowed
within the meaning of this Section:
(1) The purchase or discount of bills of exchange
drawn in good faith against actually existing values.
(2) The purchase or discount of commercial or
business paper actually owned by the person negotiating
the same.
(3) The purchase of or loaning money in exchange
for evidences of indebtedness which shall be secured by
mortgage or trust deed upon productive real estate the
value of which, as ascertained by the oath of 2 qualified
appraisers, neither of whom shall be an officer,
director, or employee of the bank or of any subsidiary or
affiliate of the bank, is double the amount of the
principal debt secured at the time of the original
purchase of evidence of indebtedness or loan of money and
which is still double the amount of the principal debt
secured at the time of any renewal of the indebtedness or
loan, and which mortgage or trust deed is shown, either
by a guaranty policy of a title guaranty company approved
by the Commissioner or by a registrar's certificate of
title in any county having adopted the provisions of the
Registered Titles (Torrens) Act, or by the opinion of an
attorney-at-law, to be a first lien upon the real estate
therein described, and real estate shall not be deemed to
be encumbered within the meaning of this subsection (3)
by reason of the existence of instruments reserving
rights-of-way, sewer rights and rights in wells, building
restrictions or other restrictive covenants, nor by
reason of the fact it is subject to lease under which
rents or profits are reserved by the owners.
(4) The purchase of marketable investment
securities.
(5) The liability to a state bank of a person who
is an accommodation party to, or guarantor of payment
for, any evidence of indebtedness of another person who
obtains a loan from or discounts paper with or sells
paper to the state bank; but the total liability to a
state bank of a person as an accommodation party or
guarantor of payment in respect of such evidences of
indebtedness shall not exceed 25% 20% of the amount of
the unimpaired capital and unimpaired surplus of the
bank; provided however that the liability of an
accommodation party to paper excepted under subsection 2
of this Section shall not be included in the computation
of this limitation.
(6) The liability to a state bank of a person, who
as a guarantor, guarantees collection of the obligation
or indebtedness of another person.
The total liabilities of any one person, for money
borrowed, or otherwise, shall not exceed 25% of the deposits
of the bank, and those total liabilities shall at no time
exceed 50% of the amount of the unimpaired capital and
unimpaired surplus of the bank. Absent an actual unremedied
breach, the obligation or responsibility for breach of
warranties or representations, express or implied, of a
person transferring negotiable or non-negotiable paper to a
bank without recourse and without guaranty of payment, shall
not be included in determining the amount of liabilities of
the person to the bank for borrowed money or otherwise; and
in the event of and to the extent of an unremedied breach,
the amount remaining unpaid for principal and interest on the
paper in respect of which the unremedied breach exists shall
thereafter for the purpose of determining whether subsequent
transactions giving rise to additional liability of the
person to the state bank for borrowed money or otherwise are
within the limitations of Sections 32 through 34 of this Act,
be included in computing the amount of liabilities of the
person for borrowed money or otherwise.
The liability of a person to a state bank on account of
acceptances made or issued by the state bank on behalf of the
person shall be included in the computation of the total
liabilities of the person for money borrowed except to the
extent the acceptances grow out of transactions of the
character described in subsection (6) of Section 34 of this
Act and are otherwise within the limitations of that
subsection; provided nevertheless that any such excepted
acceptances acquired by the state bank which accepted the
same shall be included in the computation of the liabilities
of the person to the state bank for money borrowed.
(Source: P.A. 92-336, eff. 8-10-01.)
(205 ILCS 5/35.1) (from Ch. 17, par. 344)
Sec. 35.1. Lease limitations. In exercise of the power
conferred by paragraph (14) of Section 5 of this Act to own
and lease personal property, a state bank shall be subject to
the following limitations and restrictions in addition to
those contained in that paragraph:
(a) The unamortized investment of the bank in personal
property subject to any lease or series of leases which is or
are the responsibility of a person shall not, when added to
any liability of such person for money borrowed, exceed 25%
20% of the unimpaired capital and unimpaired surplus of the
bank. The term "unamortized investment" means the total cost
of such property to the bank less so much of the payments
theretofore received by the bank from the lessee and other
sources, which under generally accepted principles of
accounting are applicable to amortization of the investment.
(b) The amount of unamortized investment of the bank in
personal property subject to a lease or leases which are the
responsibility of a person shall for the purpose of computing
the total permitted amount of liability of such person to the
bank for money borrowed or otherwise under Section 32 of this
Act be treated as the liability of such person.
(c) No such lease or related agreement shall obligate
the bank to maintain, repair or service the personal
property, or unconditionally obligate the bank to restore or
replace the same, or in effect unconditionally place on the
bank the risk of such restoration or replacement, in the
event of loss, theft or destruction of or damage to such
property from any cause other than a wilful act of the bank.
The limitations and restrictions set forth in paragraphs
(a), (b) and (c) above shall apply and be complied with even
though such owning and leasing is carried on by the bank, in
whole or in part, through the medium of a subsidiary as
permitted by paragraph (12) of Section 5 of this Act.
In the event a state bank acquires by purchase or
discount a lease, or the sums due and to become due
thereunder, of personal property made by a lessor other than
the bank or such a subsidiary, paragraph (b) of this Section
35.1 shall also apply to the obligation of the lessee under
such lease.
(Source: P.A. 88-546.)
Section 99. Effective date. This Act takes effect upon
becoming law.
Passed in the General Assembly April 25, 2002.
Approved June 26, 2002.
Effective June 26, 2002.
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