093_SB0235eng

 
SB235 Engrossed                      LRB093 03314 JLS 03332 b

 1        AN ACT in relation to banking.

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

 4        Section 5.  The Illinois Banking Act is amended by adding
 5    Section 6.5 as follows:

 6        (205 ILCS 5/6.5 new)
 7        Sec.  6.5.  Reliance  on  power  of  attorney;  notice to
 8    customer.
 9        (a)  Within 10 days after a bank acts in reliance upon  a
10    written  power  of  attorney  naming  a  bank customer as the
11    principal, the bank shall notify the customer in  writing  of
12    the  reliance by certified or registered mail with restricted
13    delivery.  The notice shall be mailed to the customer at  the
14    customer's  address,  as set forth in the bank's records, and
15    shall set forth sufficient information to allow the  customer
16    to  identify  the  transaction and must include a copy of the
17    power of attorney.
18        (b)  The customer must examine the  notice  to  determine
19    whether  any  transaction  was  not  authorized because of an
20    alteration of the power of attorney or  because  a  purported
21    signature by or on behalf of the customer was not authorized.
22    Within  30  days after receipt of the notice made pursuant to
23    subsection (a), the customer must  notify  the  bank  of  any
24    unauthorized  transaction discovered or that should have been
25    discovered from an examination of the notice.
26        (c)  If the bank proves that the  customer  failed,  with
27    respect  to  a  transaction  disclosed in a notice, to comply
28    with the duties imposed on the customer  by  subsection  (b),
29    the  customer is precluded from asserting a claim against the
30    bank based upon:
31             (1)  the customer's unauthorized  signature  or  any
 
SB235 Engrossed             -2-      LRB093 03314 JLS 03332 b
 1        alteration  of  the  power  of attorney, if the bank also
 2        proves that it suffered a loss by reason of the  failure;
 3        and
 4             (2)  the   customer's   unauthorized   signature  or
 5        alteration by the same wrongdoer on the power of attorney
 6        previously relied on in good faith by  the  bank  if  the
 7        transaction  was  consummated  before  the  bank received
 8        notice from the customer of the unauthorized signature or
 9        alteration.
10        (d)  If the customer proves that the bank did not rely on
11    the power of attorney in good  faith,  the  preclusion  under
12    subsection (c) does not apply.