093_SB0771enr SB771 Enrolled LRB093 03108 JLS 03125 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 5 changing Section 34 as follows: 6 (205 ILCS 5/34) (from Ch. 17, par. 342) 7 Sec. 34. Exceptions to loans and investment limits. The 8 limitations in Sections 32, 33, and 35.1 of this Act upon the 9 liabilities of any one person and upon the purchase and 10 holding of marketable investment securities shall not apply: 11 (1) To the extent of 50% of the unimpaired capital and 12 unimpaired surplus of any bank, to loans to or obligations of 13 any person to the extent that the loan shall be secured by a 14 like amount of obligations of or guaranteed by the United 15 States or by the State of Illinois, or by a like amount of 16 obligations of any corporation wholly owned directly or 17 indirectly by the United States or of any agency or 18 instrumentality of the United States or of the State of 19 Illinois, including any unit of local government or school 20 district, provided that the total liabilities to any bank of 21 any one person shall not exceed 50% of such unimpaired 22 capital and unimpaired surplus. 23 (2) To the extent of 30% of the unimpaired capital and 24 unimpaired surplus of any bank, to loans to or obligations of 25 any person to the extent that the same shall be secured by 26 shipping documents or instruments transferring or securing 27 title covering livestock or giving a lien on livestock when 28 the market value of the livestock securing the obligation is 29 not at the time of the making of the loan less than 115% of 30 the principal amount of the obligation, provided that the 31 total liabilities to any bank of any one person shall not SB771 Enrolled -2- LRB093 03108 JLS 03125 b 1 exceed 50% of the unimpaired capital and unimpaired surplus. 2 (3) To the extent of the unimpaired capital and 3 unimpaired surplus of any bank, to the purchase of or holding 4 by any bank of the general obligations of each municipality 5 located in the State of Illinois or in any other state of the 6 United States or to the purchase of or holding of the tax 7 anticipation warrants of each such municipality. 8 (4) To the obligations as endorser, whether with or 9 without recourse, or as guarantor, whether conditional or 10 unconditional, of negotiable or nonnegotiable installment 11 consumer paper of the person transferring the same if the 12 bank's files or the knowledge of its officers of the 13 financial condition of each maker of those obligations is 14 reasonably adequate and if an officer of the bank, designated 15 for that purpose by the board of directors of the bank, 16 certifies that the responsibility of each maker of the 17 obligations has been evaluated and that the bank is relying 18 primarily upon each maker for the payment of the obligations; 19 certification shall be in writing and shall be retained as 20 part of the records of the bank. 21 (5) To the issuance, advice, or confirmation of letters 22 of credit; however, if the letter of credit is a standby 23 letter of credit, it shall be included within the limit under 24 Section 32 for the person who has procured the issuance of 25 the standby letter of credit unless the issuing bank has, at 26 the time of issuance, an irrevocable commitment by another 27 bank to purchase or participate out any amounts that may 28 later be drawn under the letter of credit that would create a 29 loan in excess of the limits under Section 32 for the person 30 or the amounts are secured by pledge of United States 31 government securities, a segregated deposit account, or 32 other security that would exempt a loan so secured by 33 application of Section 34 or 35 of this Act; if, however, a 34 commitment to purchase or participate is in place, the SB771 Enrolled -3- LRB093 03108 JLS 03125 b 1 amounts are not included in the limits under Section 32 for 2 the person until drafts are presented upon the letter. 3 (6) To the acceptance of drafts or bills of exchange 4 that grow out of transactions involving the importation or 5 exportation of goods; or that grow out of transactions 6 involving the domestic shipment of goods, provided documents 7 of title covering the goods secure the acceptances at the 8 time of acceptance; or that are secured at the time of 9 acceptances by documents of title covering readily marketable 10 staples; but the aggregate amount of these acceptances by any 11 State bank on behalf of any one person at any one time 12 outstanding shall not exceed 20% of the unimpaired capital 13 and unimpaired surplus of the bank unless the part thereof in 14 excess of that percentum of unimpaired capital and unimpaired 15 surplus is and will remain secured by accompanying documents 16 of title or proceeds thereof growing out of the same 17 transaction or by substituted security of similar character; 18 provided further, however, that the aggregate amount of the 19 acceptances on behalf of any one person outstanding at any 20 one time shall not exceed 50% of the amount of unimpaired 21 capital and unimpaired surplus of the bank. The provisions of 22 this paragraph (6) apply to the acceptances by a State bank 23 on behalf of any one person and not to the purchase by a 24 State bank of other banks' acceptances. A State bank may 25 purchase acceptances from other banks in amounts not to 26 exceed 50% of the State bank's unimpaired capital and 27 unimpaired surplus from any one bank. 28 (7) To the extent of 20% of the unimpaired capital and 29 unimpaired surplus of any bank, to the purchase of or holding 30 by any bank of obligations of the State of Israel or 31 obligations fully guaranteed by the State of Israel as to 32 payment of principal and interest. 33 (8) To the purchase of stock in a Federal Home Loan 34 Bank. SB771 Enrolled -4- LRB093 03108 JLS 03125 b 1 (Source: P.A. 90-301, eff. 8-1-97.) 2 Section 99. Effective date. This Act takes effect upon 3 becoming law.