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90_HB0586enr
205 ILCS 5/3 from Ch. 17, par. 309
Amends the Illinois Banking Act. Makes a technical
change in a Section relating to formation and powers.
LRB9002584JSfg
HB0586 Enrolled LRB9002584JSfg
1 AN ACT authorizing and regulating the sale of insurance
2 by financial institutions.
3 Be it enacted by the People of the State of Illinois,
4 represented in the General Assembly:
5 Section 5. The Illinois Banking Act is amended by
6 changing Sections 5 and 48.2 as follows:
7 (205 ILCS 5/5) (from Ch. 17, par. 311)
8 Sec. 5. General corporate powers. A bank organized
9 under this Act or subject hereto shall be a body corporate
10 and politic and shall, without specific mention thereof in
11 the charter, have all the powers conferred by this Act and
12 the following additional general corporate powers:
13 (1) To sue and be sued, complain, and defend in its
14 corporate name.
15 (2) To have a corporate seal, which may be altered at
16 pleasure, and to use the same by causing it or a facsimile
17 thereof to be impressed or affixed or in any manner
18 reproduced, provided that the affixing of a corporate seal to
19 an instrument shall not give the instrument additional force
20 or effect, or change the construction thereof, and the use of
21 a corporate seal is not mandatory.
22 (3) To make, alter, amend, and repeal bylaws, not
23 inconsistent with its charter or with law, for the
24 administration of the affairs of the bank.
25 (4) To elect or appoint and remove officers and agents
26 of the bank and define their duties and fix their
27 compensation.
28 (5) To adopt and operate reasonable bonus plans,
29 profit-sharing plans, stock-bonus plans, stock-option plans,
30 pension plans and similar incentive plans for its directors,
31 officers and employees.
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1 (5.1) To manage, operate and administer a fund for the
2 investment of funds by a public agency or agencies, including
3 any unit of local government or school district, or any
4 person. The fund for a public agency shall invest in the
5 same type of investments and be subject to the same
6 limitations provided for the investment of public funds. The
7 fund for public agencies shall maintain a separate ledger
8 showing the amount of investment for each public agency in
9 the fund. "Public funds" and "public agency" as used in this
10 Section shall have the meanings ascribed to them in Section 1
11 of the Public Funds Investment Act.
12 (6) To make reasonable donations for the public welfare
13 or for charitable, scientific, religious or educational
14 purposes.
15 (7) To borrow or incur an obligation; and to pledge its
16 assets:
17 (a) to secure its borrowings, its lease of personal
18 or real property or its other nondeposit obligations;
19 (b) to enable it to act as agent for the sale of
20 obligations of the United States;
21 (c) to secure deposits of public money of the
22 United States, whenever required by the laws of the
23 United States, including without being limited to,
24 revenues and funds the deposit of which is subject to the
25 control or regulation of the United States or any of its
26 officers, agents, or employees and Postal Savings funds;
27 (d) to secure deposits of public money of any state
28 or of any political corporation or subdivision thereof
29 including, without being limited to, revenues and funds
30 the deposit of which is subject to the control or
31 regulation of any state or of any political corporation
32 or subdivisions thereof or of any of their officers,
33 agents, or employees;
34 (e) to secure deposits of money whenever required
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1 by the National Bankruptcy Act;
2 (f) to qualify under Section 2-9 of the Corporate
3 Fiduciary Act; and
4 (g) to secure trust funds commingled with the
5 bank's funds, whether deposited by the bank or an
6 affiliate of the bank, pursuant to Section 2-8 of the
7 Corporate Fiduciary Act.
8 (8) To own, possess, and carry as assets all or part of
9 the real estate necessary in or with which to do its banking
10 business, either directly or indirectly through the ownership
11 of all or part of the capital stock, shares or interests in
12 any corporation, association, trust engaged in holding any
13 part or parts or all of the bank premises, engaged in such
14 business and in conducting a safe deposit business in the
15 premises or part of them, or engaged in any activity that the
16 bank is permitted to conduct in a subsidiary pursuant to
17 paragraph (12) of this Section 5.
18 (9) To own, possess, and carry as assets other real
19 estate to which it may obtain title in the collection of its
20 debts or that was formerly used as a part of the bank
21 premises, but title to any real estate except as herein
22 permitted shall not be retained by the bank, either directly
23 or by or through a subsidiary, as permitted by subsection
24 (12) of this Section for a total period of more than 5 years
25 after acquiring title, either directly or indirectly, unless
26 a request for extension of time shall have been submitted in
27 writing to and approved by the Commissioner.
28 (10) To do any act, including the acquisition of stock,
29 necessary to obtain insurance of its deposits, or part
30 thereof, and any act necessary to obtain a guaranty, in whole
31 or in part, of any of its loans or investments by the United
32 States or any agency thereof, and any act necessary to sell
33 or otherwise dispose of any of its loans or investments to
34 the United States or any agency thereof, and to acquire and
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1 hold membership in the Federal Reserve System.
2 (11) Notwithstanding any other provisions of this Act,
3 to do any act and to own, possess, and carry as assets
4 property of the character, including stock, that is at the
5 time authorized or permitted to national banks by an Act of
6 Congress, but subject always to the same limitations and
7 restrictions as are applicable to national banks by the
8 pertinent federal law.
9 (12) To own, possess, and carry as assets stock of one
10 or more corporations that is, or are, engaged in one or more
11 of the following businesses:
12 (a) holding title to and administering assets
13 acquired as a result of the collection or liquidating of
14 loans, investments, or discounts; or
15 (b) holding title to and administering personal
16 property acquired by the bank, directly or indirectly
17 through a subsidiary, for the purpose of leasing to
18 others, provided the lease or leases and the investment
19 of the bank, directly or through a subsidiary, in that
20 personal property otherwise comply with Section 35.1 of
21 this Act; or
22 (c) carrying on or administering any of the
23 activities excepting the receipt of deposits or the
24 payment of checks or other orders for the payment of
25 money in which a bank may engage in carrying on its
26 general banking business; provided, however, that nothing
27 contained in this paragraph (c) shall be deemed to permit
28 a bank organized under this Act or subject hereto to do,
29 either directly or indirectly through any subsidiary, any
30 act, including the making of any loan or investment, or
31 to own, possess, or carry as assets any property that if
32 done by or owned, possessed, or carried by the State bank
33 would be in violation of or prohibited by any provision
34 of this Act.
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1 The provisions of this subsection (12) shall not apply to
2 and shall not be deemed to limit the powers of a State bank
3 with respect to the ownership, possession, and carrying of
4 stock that a State bank is permitted to own, possess, or
5 carry under this Act.
6 Any bank intending to establish a subsidiary under this
7 subsection (12) shall give written notice to the Commissioner
8 60 days prior to the subsidiary's commencing of business or,
9 as the case may be, prior to acquiring stock in a corporation
10 that has already commenced business. The Commissioner may
11 specify the form of the notice and may promulgate rules and
12 regulations to administer this subsection (12).
13 (13) To accept for payment at a future date not
14 exceeding one year from the date of acceptance, drafts drawn
15 upon it by its customers; and to issue, advise, or confirm
16 letters of credit authorizing the holders thereof to draw
17 drafts upon it or its correspondents.
18 (14) To own and lease personal property acquired by the
19 bank at the request of a prospective lessee and upon the
20 agreement of that person to lease the personal property
21 provided that the lease, the agreement with respect thereto,
22 and the amount of the investment of the bank in the property
23 comply with Section 35.1 of this Act.
24 (15) (a) To establish and maintain, in addition to the
25 main banking premises, branches offering any banking services
26 permitted at the main banking premises of a State bank.
27 (b) To establish and maintain, after May 31, 1997,
28 branches in another state that may conduct any activity in
29 that state that is authorized or permitted for any bank that
30 has a banking charter issued by that state, subject to the
31 same limitations and restrictions that are applicable to
32 banks chartered by that state.
33 (16) (Blank).
34 (17) To establish and maintain terminals, as authorized
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1 by the Electronic Fund Transfer Act.
2 (18) To establish and maintain temporary service booths
3 at any International Fair held in this State which is
4 approved by the United States Department of Commerce, for the
5 duration of the international fair for the sole purpose of
6 providing a convenient place for foreign trade customers at
7 the fair to exchange their home countries' currency into
8 United States currency or the converse. This power shall not
9 be construed as establishing a new place or change of
10 location for the bank providing the service booth.
11 (19) To indemnify its officers, directors, employees,
12 and agents, as authorized for corporations under Section 8.75
13 of the Business Corporation Act of 1983.
14 (20) To own, possess, and carry as assets stock of, or
15 be or become a member of, any corporation, mutual company,
16 association, trust, or other entity formed exclusively for
17 the purpose of providing directors' and officers' liability
18 and bankers' blanket bond insurance or reinsurance to and for
19 the benefit of the stockholders, members, or beneficiaries,
20 or their assets or businesses, or their officers, directors,
21 employees, or agents, and not to or for the benefit of any
22 other person or entity or the public generally.
23 (21) To make debt or equity investments in corporations
24 or projects, whether for profit or not for profit, designed
25 to promote the development of the community and its welfare,
26 provided that the aggregate investment in all of these
27 corporations and in all of these projects does not exceed 5%
28 of the unimpaired capital and unimpaired surplus of the bank
29 and provided that this limitation shall not apply to
30 creditworthy loans by the bank to those corporations or
31 projects. Upon written application to the Commissioner, a
32 bank may make an investment that would, when aggregated with
33 all other such investments, exceed 5% of the unimpaired
34 capital and unimpaired surplus of the bank. The Commissioner
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1 may approve the investment if he is of the opinion and finds
2 that the proposed investment will not have a material adverse
3 effect on the safety and soundness of the bank.
4 (22) To own, possess, and carry as assets the stock of a
5 corporation engaged in the ownership or operation of a travel
6 agency or to operate a travel agency as a part of its
7 business, provided that the bank either owned, possessed, and
8 carried as assets the stock of such a corporation or operated
9 a travel agency as part of its business before July 1, 1991.
10 (23) With respect to affiliate facilities:
11 (a) to conduct at affiliate facilities any of the
12 following transactions for and on behalf of another
13 commonly owned bank, if so authorized by the other bank:
14 receiving deposits; cashing and issuing checks, drafts,
15 and money orders; changing money; and receiving payments
16 on existing indebtedness; and
17 (b) to authorize a commonly owned bank to conduct
18 for and on behalf of it any of the transactions listed in
19 this paragraph (23) at one or more affiliate facilities.
20 Any bank intending to conduct or to authorize a commonly
21 owned bank to conduct at an affiliate facility any of the
22 transactions specified in this paragraph (23) shall give
23 written notice to the Commissioner at least 30 days before
24 any such transaction is conducted at the affiliate facility.
25 (24) To act as the agent for any fire, life, or other
26 insurance company authorized by the State of Illinois, by
27 soliciting and selling insurance and collecting premiums on
28 policies issued by such company; and may receive for services
29 so rendered such fees or commissions as may be agreed upon
30 between the said bank and the insurance company for which it
31 may act as agent; provided, however, that no such bank shall
32 in any case assume or guarantee the payment of any premium on
33 insurance policies issued through its agency by its
34 principal; and provided further, that the bank shall not
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1 guarantee the truth of any statement made by an assured in
2 filing his application for insurance.
3 (Source: P.A. 88-4; 89-208, eff. 9-29-95; 89-310, eff.
4 1-1-96; 89-364, eff. 8-18-95; 89-626, eff. 8-9-96.)
5 (205 ILCS 5/48.2) (from Ch. 17, par. 360.1)
6 Sec. 48.2. Prohibition against certain activities. (a)
7 Any bank, subsidiary, affiliate, officer or employee of such
8 bank subject to this Act shall not:
9 (1) grant any loan on the prior condition, agreement or
10 understanding that the borrower contract with any specific
11 person or organization for the following:
12 (A) insurance services of an agent or broker;
13 (B) legal services rendered to the borrower;
14 (C) services of a real estate agent or broker; or
15 (D) real estate or property management services;
16 (2) require that insurance services, legal services,
17 real estate services or property management services be
18 placed with any subsidiary, affiliate, officer or employee of
19 any bank.
20 (b) Any bank or subsidiary, affiliate, employee,
21 officer, banking house, branch bank, branch office,
22 additional office or agency of such bank that is transacting
23 an insurance business in this State shall comply with Article
24 XLIV Section 499.1 of the "Illinois Insurance Code".
25 (c) Any officer or employee of a bank or its affiliates
26 or subsidiaries who violates this Section is guilty of a
27 business offense, and upon conviction shall be fined not more
28 than $1,000. This Section does not create a private cause of
29 action for civil damages.
30 (d) In any contract or loan which is secured by a
31 mortgage, deed of trust, or conveyance in the nature of a
32 mortgage, on residential real estate, the interest which is
33 computed, calculated, charged, or collected pursuant to such
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1 contract or loan, or pursuant to any regulation or rule
2 promulgated pursuant to this Act, may not be computed,
3 calculated, charged or collected for any period of time
4 occurring after the date on which the total indebtedness,
5 with the exception of late payment penalties, is paid in
6 full. For purposes of this subsection (d) of this Section
7 48.2, a prepayment shall mean the payment of the total
8 indebtedness, with the exception of late payment penalties if
9 incurred or charged, on any date before the date specified in
10 the contract or loan agreement on which the total
11 indebtedness shall be paid in full, or before the date on
12 which all payments, if timely made, shall have been made. In
13 the event of a prepayment of the indebtedness which is made
14 on a date after the date on which interest on the
15 indebtedness was last computed, calculated, charged, or
16 collected but before the next date on which interest on the
17 indebtedness was to be calculated, computed, charged, or
18 collected, the lender may calculate, charge and collect
19 interest on the indebtedness for the period which elapsed
20 between the date on which the prepayment is made and the date
21 on which interest on the indebtedness was last computed,
22 calculated, charged or collected at a rate equal to 1/360 of
23 the annual rate for each day which so elapsed, which rate
24 shall be applied to the indebtedness outstanding as of the
25 date of prepayment. The lender shall refund to the borrower
26 any interest charged or collected which exceeds that which
27 the lender may charge or collect pursuant to the preceding
28 sentence. The provisions of this amendatory Act of 1985
29 shall apply only to contracts or loans entered into on or
30 after January 1, 1986.
31 (e) Any bank, affiliate or subsidiary of such bank which
32 shall engage in making residential mortgage financing
33 transactions, shall with respect to each such transaction,
34 provide the following:
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1 (1) if a contractual obligation is intended to a
2 borrower, a mortgage commitment which shall set forth the
3 material terms, conditions and contingencies of such
4 commitment;
5 (2) if the servicing of a residential mortgage shall be
6 transferred from the original mortgagee, within 45 days of
7 such transfer, written notice sent by certified mail, return
8 receipt requested, to the mortgagor at the address of the
9 property, unless the mortgagor shall have directed
10 correspondence from the mortgagee shall be sent to another
11 address, which notice shall set forth: the name and address
12 of the transferee; the name, address and telephone number to
13 which inquiries by the residential mortgagor should be
14 addressed; and the name and address to which the next 3
15 monthly installments are to be submitted to the transferee
16 and the amount of each of such monthly installment; and
17 (3) if the servicing of a residential mortgage shall be
18 transferred again or if the information in paragraph (2)
19 above shall change, the notice with the corrected information
20 shall be provided within 45 days of such subsequent transfer
21 or change in information by the transferee of the servicing
22 of the mortgage at that time.
23 (Source: P.A. 85-1209; 85-1379.)
24 Section 10. The Illinois Savings and Loan Act of 1985 is
25 amended by changing Section 1-6 as follows:
26 (205 ILCS 105/1-6) (from Ch. 17, par. 3301-6)
27 Sec. 1-6. General corporate powers. An association
28 operating under this Act shall be a body corporate and
29 politic and shall have all of the specific powers conferred
30 by this Act and, in addition thereto, the following general
31 powers:
32 (a) To sue and be sued, complain and defend in its
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1 corporate name, and to have a common seal, which it may alter
2 or renew at pleasure;
3 (b) To obtain and maintain insurance of the
4 association's withdrawable capital by an insurance
5 corporation as defined in this Act;
6 (c) Notwithstanding anything to the contrary contained
7 in this Act, to become a member of the Federal Home Loan
8 Bank, and to have all of the powers granted to a savings or
9 thrift institution organized under the laws of the United
10 States and which is located and doing business in the State
11 of Illinois, subject to regulations of the Commissioner;
12 (d) To act as a fiscal agent for the United States, the
13 State of Illinois or any department, branch, arm or agency of
14 the State or any unit of local government or school district
15 in the State when duly designated for that purpose, and as
16 agent to perform the reasonable functions as may be required
17 of it;
18 (e) To become a member of or deal with any corporation
19 or agency of the United States or the State of Illinois, to
20 the extent that the agency assists in furthering or
21 facilitating the association's purposes or powers and to that
22 end to purchase stock or securities thereof or deposit money
23 therewith, and to comply with any other conditions of
24 membership or credit;
25 (f) To make donations in reasonable amounts for the
26 public welfare or for charitable, scientific, religious or
27 educational purposes;
28 (g) To adopt and operate reasonable insurance, bonus,
29 profit sharing, and retirement plans for officers and
30 employees; likewise, directors who are not officers,
31 including, but not limited to, advisory, honorary, and
32 emeritus directors, may participate in those plans;
33 (h) To reject any application for membership, to retire
34 withdrawable capital by enforced retirement as provided in
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1 this Act and the by-laws, and to limit the issuance of or
2 payments on withdrawable capital, subject, however, to
3 contractual obligations;
4 (i) To purchase stock in service corporations and to
5 invest in any form of indebtedness of any service corporation
6 as defined in this Act, subject to regulations of the
7 Commissioner;
8 (j) To purchase stock of a corporation whose principal
9 purpose is to operate a safe deposit company or escrow
10 service company;
11 (k) To act as Trustee or Custodian under the Federal
12 Self-Employed Individuals' Tax Retirement Act of 1962 or any
13 amendments thereto or any other retirement account and invest
14 any funds held in such capacity in a savings account of the
15 institution;
16 (l) (Blank);
17 (m) To establish, maintain and operate terminals as
18 authorized by the Electronic Fund Transfer Act and by Section
19 5 of the Illinois Banking Act. The establishment,
20 maintenance, operation and location of such terminals shall
21 be subject to the approval of the Commissioner;
22 (n) Subject to the approval and regulations of the
23 Commissioner, an association may purchase or assume all or
24 any part of the assets or liabilities of an eligible insured
25 bank;
26 (o) To purchase from a bank, as defined in Section 2 of
27 the Illinois Banking Act, an insubstantial portion of the
28 total deposits of an insured bank. For the purpose of this
29 subparagraph, "insubstantial portion of the total deposits"
30 shall have the same meaning as provided in Section 5(d)(2)(D)
31 of the Federal Deposit Insurance Act;
32 (p) To effect an acquisition of or conversion to another
33 financial institution pursuant to Section 205 of the
34 Financial Institutions Reform, Recovery and Enforcement Act
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1 of 1989;
2 (q) To pledge its assets:
3 (1) to enable it to act as an agent for the sale of
4 obligations of the United States;
5 (2) to secure deposits;
6 (3) to secure deposits of money whenever required
7 by the National Bankruptcy Act;
8 (4) to qualify under Section 2-9 of the Corporate
9 Fiduciary Act; and
10 (5) to secure trust funds commingled with the
11 institution's funds, whether deposited by the institution
12 or an affiliate of the institution, as required under
13 Section 2-8 of the Corporate Fiduciary Act; and
14 (r) To provide temporary periodic service to persons
15 residing in a bona fide nursing home, senior citizens'
16 retirement home, or long-term care facility; and
17 (s) To purchase for its own account shares of stock of a
18 bankers' bank, described in Section 13(b)(1) of the Illinois
19 Banking Act, on the same terms and conditions as a bank may
20 purchase such shares. In no event shall the total amount of
21 such stock held by an association in such bankers' bank
22 exceed 10% of its capital and surplus (including undivided
23 profits) and in no event shall an association acquire more
24 than 5% of any class of voting securities of such bankers'
25 bank;.
26 (t) (s) To effect a conversion to a State bank pursuant
27 to the provisions of the Illinois Banking Act; and.
28 (u) Subject to Article XLIV of the Illinois Insurance
29 Code, to act as the agent for any fire, life, or other
30 insurance company authorized by the State of Illinois, by
31 soliciting and selling insurance and collecting premiums on
32 policies issued by such company; and may receive for services
33 so rendered such fees or commissions as may be agreed upon
34 between the said association and the insurance company for
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1 which it may act as agent; provided, however, that no such
2 association shall in any case assume or guarantee the payment
3 of any premium on insurance policies issued through its
4 agency by its principal; and provided further, that the
5 association shall not guarantee the truth of any statement
6 made by an assured in filing his application for insurance.
7 (Source: P.A. 88-481; 89-74, eff. 6-30-95; 89-310, eff.
8 1-1-96; 89-317, eff. 8-11-95; 89-355, eff. 8-17-95; 89-567,
9 eff. 7-26-96; 89-603, eff. 8-2-96; 89-626, eff. 8-9-96;
10 revised 9-13-96.)
11 Section 15. The Savings Bank Act is amended by changing
12 Section 1008 as follows:
13 (205 ILCS 205/1008) (from Ch. 17, par. 7301-8)
14 Sec. 1008. General corporate powers.
15 (a) A savings bank operating under this Act shall be a
16 body corporate and politic and shall have all of the specific
17 powers conferred by this Act and in addition thereto, the
18 following general powers:
19 (1) To sue and be sued, complain, and defend in its
20 corporate name and to have a common seal, which it may
21 alter or renew at pleasure.
22 (2) To obtain and maintain insurance by a deposit
23 insurance corporation as defined in this Act.
24 (3) To act as a fiscal agent for the United States,
25 the State of Illinois or any department, branch, arm, or
26 agency of the State or any unit of local government or
27 school district in the State, when duly designated for
28 that purpose, and as agent to perform reasonable
29 functions as may be required of it.
30 (4) To become a member of or deal with any
31 corporation or agency of the United States or the State
32 of Illinois, to the extent that the agency assists in
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1 furthering or facilitating its purposes or powers and to
2 that end to purchase stock or securities thereof or
3 deposit money therewith, and to comply with any other
4 conditions of membership or credit.
5 (5) To make donations in reasonable amounts for the
6 public welfare or for charitable, scientific, religious,
7 or educational purposes.
8 (6) To adopt and operate reasonable insurance,
9 bonus, profit sharing, and retirement plans for officers
10 and employees and for directors including, but not
11 limited to, advisory, honorary, and emeritus directors,
12 who are not officers or employees.
13 (7) To reject any application for membership; to
14 retire deposit accounts by enforced retirement as
15 provided in this Act and the bylaws; and to limit the
16 issuance of, or payments on, deposit accounts, subject,
17 however, to contractual obligations.
18 (8) To purchase stock in service corporations and
19 to invest in any form of indebtedness of any service
20 corporation as defined in this Act, subject to
21 regulations of the Commissioner.
22 (9) To purchase stock of a corporation whose
23 principal purpose is to operate a safe deposit company or
24 escrow service company.
25 (10) To exercise all the powers necessary to
26 qualify as a trustee or custodian under federal or State
27 law, provided that the authority to accept and execute
28 trusts is subject to the provisions of the Corporate
29 Fiduciary Act and to the supervision of those activities
30 by the Commissioner of Banks and Real Estate.
31 (11) (Blank).
32 (12) To establish, maintain, and operate terminals
33 as authorized by the Electronic Fund Transfer Act. The
34 establishment, maintenance, operation, and location of
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1 those terminals shall be subject to the approval of the
2 Commissioner.
3 (13) Pledge its assets:
4 (A) to enable it to act as agent for the sale
5 of obligations of the United States;
6 (B) to secure deposits;
7 (C) to secure deposits of money whenever
8 required by the National Bankruptcy Act;
9 (D) to qualify under Section 2-9 of the
10 Corporate Fiduciary Act; and
11 (E) to secure trust funds commingled with the
12 savings bank's funds, whether deposited by the
13 savings bank or an affiliate of the savings bank, as
14 required under Section 2-8 of the Corporate
15 Fiduciary Act.
16 (14) To accept for payment at a future date not to
17 exceed one year from the date of acceptance, drafts drawn
18 upon it by its customers; and to issue, advise, or
19 confirm letters of credit authorizing holders thereof to
20 draw drafts upon it or its correspondents.
21 (15) Subject to the regulations of the
22 Commissioner, to own and lease personal property acquired
23 by the savings bank at the request of a prospective
24 lessee and, upon the agreement of that person, to lease
25 the personal property.
26 (16) To establish temporary service booths at any
27 International Fair in this State that is approved by the
28 United States Department of Commerce for the duration of
29 the international fair for the purpose of providing a
30 convenient place for foreign trade customers to exchange
31 their home countries' currency into United States
32 currency or the converse. To provide temporary periodic
33 service to persons residing in a bona fide nursing home,
34 senior citizens' retirement home, or long-term care
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1 facility. These powers shall not be construed as
2 establishing a new place or change of location for the
3 savings bank providing the service booth.
4 (17) To indemnify its officers, directors,
5 employees, and agents, as authorized for corporations
6 under Section 8.75 of the Business Corporations Act of
7 1983.
8 (18) To provide data processing services to others
9 on a for-profit basis.
10 (19) To utilize any electronic technology to
11 provide customers with home banking services.
12 (20) Subject to the regulations of the
13 Commissioner, to enter into an agreement to act as a
14 surety.
15 (21) Subject to the regulations of the
16 Commissioner, to issue credit cards, extend credit
17 therewith, and otherwise engage in or participate in
18 credit card operations.
19 (22) To purchase for its own account shares of
20 stock of a bankers' bank, described in Section 13(b)(1)
21 of the Illinois Banking Act, on the same terms and
22 conditions as a bank may purchase such shares. In no
23 event shall the total amount of such stock held by a
24 savings bank an association in such bankers' bank exceed
25 10% of its capital and surplus (including undivided
26 profits) and in no event shall a savings bank an
27 association acquire more than 5% of any class of voting
28 securities of such bankers' bank.
29 (23) Subject to Article XLIV of the Illinois
30 Insurance Code, to act as the agent for any fire, life,
31 or other insurance company authorized by the State of
32 Illinois, by soliciting and selling insurance and
33 collecting premiums on policies issued by such company;
34 and may receive for services so rendered such fees or
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1 commissions as may be agreed upon between the said
2 savings bank and the insurance company for which it may
3 act as agent; provided, however, that no such savings
4 bank shall in any case assume or guarantee the payment of
5 any premium on insurance policies issued through its
6 agency by its principal; and provided further, that the
7 savings bank shall not guarantee the truth of any
8 statement made by an assured in filing his application
9 for insurance.
10 (b) If this Act fails to provide specific guidance in
11 matters of corporate governance, the provisions of the
12 Business Corporation Act of 1983 may be used.
13 (Source: P.A. 88-112; 88-481; 88-670, eff. 12-2-94; 89-74,
14 eff. 6-30-95; 89-310, eff. 1-1-96; 89-317, eff. 8-11-95;
15 89-355, eff. 8-17-95; 89-508, eff. 7-3-96; 89-603, eff.
16 8-2-96; 89-626, eff. 8-9-96; revised 9-9-96.)
17 Section 20. The Illinois Credit Union Act is amended by
18 changing Sections 13 and 55 as follows:
19 (205 ILCS 305/13) (from Ch. 17, par. 4414)
20 Sec. 13. General Powers. A credit union may:
21 (1) Make contracts; sue and be sued; adopt and use a
22 common seal and alter same;
23 (2) Acquire, lease (either as lessee or lessor), hold,
24 pledge, mortgage, sell and dispose of real property, either
25 in whole or in part, or any interest therein, as may be
26 necessary or is incidental to its present or future
27 operations and needs subject to such limitations as may be
28 imposed thereon in rules and regulations promulgated by the
29 Director; acquire, lease (either as lessee or lessor), hold,
30 pledge, mortgage, sell and dispose or personal property,
31 either in whole or in part, or any interest therein, as may
32 be necessary or is incidental to its present or future
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1 operations and needs;
2 (3) At the discretion of the Board of Directors, require
3 the payment of an entrance fee or annual membership fee, or
4 both, of any person admitted to membership;
5 (4) Receive savings from its members in the form of
6 shares of various classes, or special purpose share accounts;
7 act as custodian of its members' accounts; issue shares in
8 trust as provided in this Act;
9 (5) Lend its funds to its members and otherwise as
10 hereinafter provided;
11 (6) Borrow from any source in accordance with policy
12 established by the Board of Directors to a maximum of 50% of
13 capital, surplus and reserves;
14 (7) Discount and sell any obligations owed to the credit
15 union;
16 (8) Honor requests for withdrawals or transfers of all
17 or any part of member share accounts, and any classes
18 thereof, in any manner approved by the credit union Board of
19 Directors;
20 (9) Sell all or substantially all of its assets or
21 purchase all or substantially all of the assets of another
22 credit union, subject to the prior approval of the Director;
23 (10) Invest surplus funds as provided in this Act;
24 (11) Make deposits in banks, savings banks, savings and
25 loan associations, trust companies; and invest in shares,
26 classes of shares or share certificates of other credit
27 unions;
28 (12) Assess charges and fees to members in accordance
29 with board resolution;
30 (13) Hold membership in and pay dues to associations and
31 organizations; to invest in shares, stocks or obligations of
32 any credit union organization;
33 (14) Declare dividends and pay interest refunds to
34 borrowers as provided in this Act;
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1 (15) Collect, receive and disburse monies in connection
2 with providing negotiable checks, money orders and other
3 money-type instruments, and for such other purposes as may
4 provide benefit or convenience to its members, and charge a
5 reasonable fee for such services;
6 (16) Act as fiscal agent for and receive deposits from
7 the federal government, this state or any agency or political
8 subdivision thereof;
9 (17) Receive savings from nonmembers in the form of
10 shares or share accounts in the case of credit unions serving
11 predominantly low-income members. The term "low income
12 members" shall mean those members whose annual income falls
13 at or below the lower level standard of living classification
14 as established by the Bureau of Labor Statistics and updated
15 by the Employment and Training Administration of the U.S.
16 Department of Labor. The term "predominantly" is defined as a
17 simple majority; and
18 (18) To establish, maintain, and operate terminals as
19 authorized by the Electronic Fund Transfer Act; and
20 (19) Subject to Article XLIV of the Illinois Insurance
21 Code, to act as the agent for any fire, life, or other
22 insurance company authorized by the State of Illinois, by
23 soliciting and selling insurance and collecting premiums on
24 policies issued by such company; and may receive for services
25 so rendered such fees or commissions as may be agreed upon
26 between the said credit union and the insurance company for
27 which it may act as agent; provided, however, that no such
28 credit union shall in any case assume or guarantee the
29 payment of any premium on insurance policies issued through
30 its agency by its principal; and provided further, that the
31 credit union shall not guarantee the truth of any statement
32 made by an assured in filing his application for insurance.
33 (Source: P.A. 88-235; 89-310, eff. 1-1-96.)
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1 (205 ILCS 305/55) (from Ch. 17, par. 4456)
2 Sec. 55. Insurance for Members. (1) A credit union may
3 purchase or make available insurance for its members.
4 (2) A credit union may enter into cooperative marketing
5 arrangements to facilitate its members' voluntary purchase of
6 insurance including, but not by way of limitation, life
7 insurance, disability insurance, accident and health
8 insurance, property insurance, liability insurance and legal
9 expense insurance.
10 Nothing in this Act shall be construed to allow credit
11 unions to engage in the retail sale of insurance to their
12 members.
13 (Source: P.A. 81-329.)
14 Section 25. The Corporate Fiduciary Act is amended by
15 changing Section 1-6 as follows:
16 (205 ILCS 620/1-6) (from Ch. 17, par. 1551-6)
17 Sec. 1-6. General Corporate Powers. A corporate
18 fiduciary shall have the powers:
19 (a) if it is a State bank, those powers granted under
20 Sections 3 and 5 of the Illinois Banking Act, as now or
21 hereafter amended; and
22 (b) if it is a State savings and loan association, those
23 powers granted under Sections 1-6 through 1-8 of the Illinois
24 Savings and Loan Act of 1985, as now or hereafter amended;
25 and
26 (c) if it is a corporation organized under the Business
27 Corporation Act of 1983, as now or hereafter amended, those
28 powers granted in Sections 4.01 through 4.24 of the Trusts
29 and Trustees Act, as now or hereafter amended, to the extent
30 the exercise of such powers by the corporate fiduciary are
31 not contrary to the instrument containing the appointment of
32 the corporate fiduciary, the court order appointing the
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1 corporate fiduciary or any other statute specifically
2 limiting the power of the corporate fiduciary under the
3 circumstances; and
4 (d) subject to Article XLIV of the Illinois Insurance
5 Code, to act as the agent for any fire, life, or other
6 insurance company authorized by the State of Illinois, by
7 soliciting and selling insurance and collecting premiums on
8 policies issued by such company; and may receive for services
9 so rendered such fees or commissions as may be agreed upon
10 between the said corporate fiduciary and the insurance
11 company for which it may act as agent; provided, however,
12 that no such corporate fiduciary shall in any case assume or
13 guarantee the payment of any premium on insurance policies
14 issued through its agency by its principal; and provided
15 further, that the corporate fiduciary shall not guarantee the
16 truth of any statement made by an assured in filing his
17 application for insurance.
18 The Commissioner may specify powers of corporate
19 fiduciaries generally or of a particular corporate fiduciary
20 and by rule or order limit or restrict such powers of
21 corporate fiduciaries or a particular corporate fiduciary if
22 he finds the exercise of such power by corporate fiduciaries
23 generally or of the corporate fiduciary in particular may
24 tend to be an unsafe or unsound practice, or if such power is
25 otherwise not in the interest of beneficiaries of any
26 fiduciary appointment.
27 (Source: P.A. 86-754.)
28 Section 30. The Illinois Insurance Code is amended by
29 changing Section 499.1 and adding Article XLIV as follows:
30 (215 ILCS 5/499.1) (from Ch. 73, par. 1065.46-1)
31 Sec. 499.1. Registered firms.
32 (a) Any corporation or partnership transacting insurance
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1 business as an insurance agency shall register with the
2 Director before transacting insurance business in this State.
3 Such registration shall remain in effect as long as the firm
4 pays the annual fee required by Section 509.1 of this Code by
5 the date due, unless the registration is revoked or suspended
6 pursuant to Section 505.1 of this Code.
7 (b) Each firm required to register before acting as a
8 registered firm pursuant to this Article shall appoint one or
9 more licensed insurance producers who are officers,
10 directors, or partners in the firm to be responsible for the
11 firm's compliance with the insurance laws and Title 50 of the
12 Illinois Administrative Code. Such individual or individuals
13 shall submit to the Director a registration form and the fees
14 required by Section 509.1. The Director shall prescribe the
15 registration form and may require any documents reasonably
16 necessary to verify the information contained in the
17 registration form. Within 30 days of a change in officers,
18 directors, or partners who are appointed to be responsible
19 for the firm's compliance with the insurance laws and Title
20 50 of the Illinois Administrative Code, the firm shall report
21 the change to the Department.
22 (c) The registered firm shall inform the Director in
23 writing of a change in its business address within 30 days of
24 such change.
25 (d) Each registered firm shall disclose its members,
26 officers or directors who are authorized to act as insurance
27 producers, and report any changes in such personnel to the
28 Director within 30 days of such changes.
29 (e) (Blank). A registered firm may not be a national
30 bank located in a city, village or incorporated town with a
31 population exceeding 5,000 according to the last federal
32 census, a State bank or a trust company, or a subsidiary,
33 affiliate, officer or employee of any such national or State
34 bank or trust company contributing directly or indirectly to
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1 the income of such bank or trust company any profit or fees
2 or part thereof derived from the solicitation, negotiation or
3 effecting of insurance.
4 (Source: P.A. 89-240, eff. 1-1-96.)
5 (215 ILCS 5/Art. XLIV heading new)
6 Article XLIV. FINANCIAL INSTITUTIONS
7 INSURANCE SALES LAW
8 (215 ILCS 5/1400 new)
9 Sec. 1400. Title. This Article may be cited as the
10 Financial Institutions Insurance Sales Law.
11 (215 ILCS 5/1401 new)
12 Sec. 1401. Purpose. The purpose of this Article is to
13 increase the availability of insurance products to the
14 citizens of this State by expanding those businesses
15 authorized to sell insurance products to include financial
16 institutions, and to protect the interests of the citizens of
17 this State by regulating their authority to do so. This
18 Article does not apply to activities or services conducted in
19 this State by or for a financial institution that do not
20 require licensure as an insurance producer, temporary
21 insurance producer, limited insurance representative, or
22 registered firm.
23 (215 ILCS 5/1402 new)
24 Sec. 1402. Definitions. For the purposes of this
25 Article:
26 "Financial institution" means:
27 (1) a State bank, a national bank, or an
28 out-of-state bank, as those terms are defined in the
29 Illinois Banking Act, or any subsidiary of a State bank,
30 a national bank, or an out-of-state bank;
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1 (2) a foreign banking corporation, as that term is
2 defined in the Foreign Banking Office Act, or any
3 subsidiary of a foreign banking corporation;
4 (3) a corporate fiduciary, as that term is defined
5 in the Corporate Fiduciary Act;
6 (4) a savings bank organized under the Savings Bank
7 Act, an out-of-state savings bank chartered under the
8 laws of a state other than Illinois, a territory of the
9 United States, or the District of Columbia, or a federal
10 savings bank organized under federal law, or any
11 subsidiary of a savings bank, an out-of-state savings
12 bank or a federal savings bank;
13 (5) an association or federal association, as those
14 terms are defined in the Illinois Savings and Loan Act of
15 1985, or any subsidiary of an association or federal
16 association;
17 (6) an out-of-state savings and loan association
18 chartered under the laws of a state other than Illinois,
19 a territory of the United States or the District of
20 Columbia, or a federal savings and loan association
21 organized under federal law whose principal business
22 office is located outside of Illinois, or any subsidiary
23 of an out-of-state savings and loan association or
24 federal savings and loan association whose principal
25 business office is located outside of Illinois; or
26 (7) a credit union as defined in the Illinois Credit
27 Union Act, or any subsidiary of a credit union.
28 To the extent that any entity other than a financial
29 institution conducts insurance activities in this State on
30 behalf of or on the premises of the financial institution,
31 such entity shall be subject to this Article for the purposes
32 of those activities.
33 "Insurance" means all lines of insurance defined and
34 regulated as insurance under this Code, but for the purposes
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1 of this Article, "insurance" shall not include the following
2 lines of insurance, provided that this paragraph shall not be
3 deemed to preclude or otherwise limit regulation of the
4 following lines of insurance pursuant to and to the extent
5 otherwise provided by any other insurance law of this State:
6 (1) credit life, credit accident and health, credit
7 involuntary unemployment, credit casualty and credit
8 property insurance;
9 (2) extended service contracts and warranty
10 agreements;
11 (3) insurance obtained by the debtor to provide
12 payment for the difference between the remaining balance
13 on a loan or other extension of credit and the amount of
14 insurance coverage on the collateral securing the loan or
15 other extension of credit;
16 (4) insurance placed by a financial institution on
17 collateral used in connection with a loan or other
18 extension of credit when a debtor breaches the
19 contractual obligation to provide that insurance;
20 (5) title insurance regulated by the Title Insurance
21 Act; and
22 (6) private mortgage insurance and financial
23 guarantee insurance.
24 (215 ILCS 5/1403 new)
25 Sec. 1403. Licensure requirements for financial
26 institutions.
27 (a) A financial institution transacting insurance
28 business in this State shall register with the Director
29 pursuant to the Illinois Insurance Code and shall be subject
30 to the laws, rules, and penalties of the Illinois Insurance
31 Code.
32 (b) The solicitation and sale of insurance by a financial
33 institution shall be conducted only by individuals who have
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1 been issued and maintain an insurance producer's license
2 pursuant to the Illinois Insurance Code and shall be subject
3 to the laws, rules, and penalties of the Illinois Insurance
4 Code.
5 (c) For the purposes of this Section, a "financial
6 institution" means the subsidiary of a financial institution
7 when the financial institution is transacting insurance
8 business in this State only through the subsidiary. For the
9 purposes of Section 499.1 of the Illinois Insurance Code, a
10 financial institution shall be deemed to be a corporation.
11 (215 ILCS 5/1404 new)
12 Sec. 1404. Subsidiaries or divisions. A financial
13 institution shall not qualify for registration as a
14 registered firm under Section 499.1 of this Code unless: (1)
15 it establishes a separate subsidiary that acts as the
16 registered firm or (2) it is otherwise permitted by law to
17 sell insurance directly through the financial institution,
18 and it establishes a separate division within the financial
19 institution to conduct the business of the registered firm.
20 The subsidiary or division acting as a registered firm shall
21 maintain records for insurance transactions that are
22 separate and distinct from the records of the financial
23 institution.
24 (215 ILCS 5/1405 new)
25 Sec. 1405. Extensions of credit. A financial
26 institution shall not delay or impede the completion of a
27 loan transaction or other transactions involving the
28 extension of credit for the purpose of influencing a
29 customer's selection of any insurance product.
30 (215 ILCS 5/1406 new)
31 Sec. 1406. Insurance and financial institution
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1 products.
2 (a) No financial institution may offer banking products
3 or services, or fix or vary the consideration of the offer,
4 on a condition or requirement that the customer obtain
5 insurance from the financial institution or any affiliate of
6 the financial institution.
7 (b) A financial institution that offers banking products
8 or services in conformity with the provisions of Section 106
9 of the Bank Holding Company Act Amendments of 1970 (12 U.S.C.
10 1972) shall be deemed to be in compliance with the provisions
11 of subsection (a) of this Section.
12 (c) No financial institution shall require that a
13 customer or prospective customer of the financial institution
14 purchase an insurance product from any particular registered
15 firm or insurance producer as a condition for the lending of
16 money or extension of credit, the establishment or
17 maintenance of a checking, savings, or other deposit account,
18 or the establishment or maintenance of a trust account.
19 (215 ILCS 5/1407 new)
20 Sec. 1407. Rebating and discounting.
21 (a) No financial institution may offer a rebate on an
22 insurance product in violation of Section 151 of this Code.
23 (b) No financial institution may offer a discount on a
24 loan or extension of credit for the purpose of inducing the
25 customer to purchase insurance required in connection with
26 the loan or extension of credit.
27 (215 ILCS 5/1408 new)
28 Sec. 1408. Discrimination prohibited. No financial
29 institution may:
30 (1) require as a condition of providing any product or
31 service or renewal of any contract for providing a product or
32 service to any customer, that the customer acquire, finance,
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1 or negotiate any policy or contract of insurance through a
2 particular insurer, insurance producer, or registered firm;
3 (2) in connection with a loan or extension of credit that
4 requires a borrower to obtain insurance, reject an insurance
5 policy solely because the policy has been issued or
6 underwritten by any person who is not associated with the
7 financial institution;
8 (3) impose any discriminatory requirement on any
9 insurance producer who is not associated with the financial
10 institution that is not imposed on any insurance producer who
11 is associated with the financial institution; or
12 (4) if the financial institution is a registered firm,
13 require any debtor, insurer, or insurance producer to pay a
14 separate charge in connection with the handling of insurance
15 that is required under a contract, unless: (i) the financial
16 institution is the registered firm providing the insurance,
17 (ii) if the financial institution is not the registered firm
18 providing the insurance, the charge would be uniformly
19 applied if the financial institution was the registered firm
20 providing the insurance, or (iii) the charge is otherwise
21 permitted by this Code or other applicable State or federal
22 law.
23 (215 ILCS 5/1409 new)
24 Sec. 1409. Disclosure. A financial institution shall
25 clearly and conspicuously disclose in any written
26 advertisement or promotional or informational material
27 regarding an insurance product that the insurance offered,
28 recommended, sponsored, or sold:
29 (1) is not a deposit;
30 (2) is not insured by the Federal Deposit Insurance
31 Corporation, or in the case of a credit union, by the
32 National Credit Union Share Insurance Fund;
33 (3) is not guaranteed by the financial institution or an
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1 affiliated insured depository institution; and
2 (4) where appropriate, involves investment risk,
3 including potential loss of principal.
4 (215 ILCS 5/1410 new)
5 Sec. 1410. Misleading advertising. No financial
6 institution or registered firm may employ any advertisement
7 that would mislead or otherwise cause a reasonable person to
8 believe mistakenly that the State of Illinois or the federal
9 government is responsible for the insurance sales activities
10 of the financial institution or stands behind the financial
11 institution's credit, or that the financial institution, the
12 State of Illinois, or the federal government guarantees any
13 returns on insurance products or is a source of payment of
14 any insurance obligation of or sold by the financial
15 institution.
16 (215 ILCS 5/1411 new)
17 Sec. 1411. Commissions and compensation. No financial
18 institution shall pay, directly or indirectly, any
19 commission, service fee, brokerage, or other valuable
20 consideration to any person for services as an insurance
21 producer, temporary insurance producer, or limited insurance
22 representative, or for such services by the person's members,
23 officers, directors or employees, unless the person, and any
24 member, officer, director, or employee performing the
25 service, held a valid license regarding the class of
26 insurance as to which the service was rendered, or unless the
27 person was a properly registered firm at the time the service
28 was performed. No person, other than a person properly
29 licensed or registered in accordance with Article XXXI of
30 this Code at the time the person performs services as an
31 insurance producer, temporary insurance producer, or limited
32 insurance representative, shall accept any commission,
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1 service fee, brokerage, or other valuable consideration for
2 such services. This Section shall not prevent payment or
3 receipt of:
4 (1) renewal or other deferred commissions to or by any
5 person entitled thereto under this Section;
6 (2) fees to or by a financial institution or any other
7 person for services that do not require licensure as an
8 insurance producer, temporary insurance producer, limited
9 insurance representative, or registered firm; or
10 (3) consideration paid to a financial institution by a
11 registered firm, insurance producer, insurance company, or
12 any other person pursuant to any lease agreement.
13 (215 ILCS 5/1412 new)
14 Sec. 1412. Solicitations to loan applicants.
15 (a) A financial institution that requires a customer to
16 obtain insurance in connection with a loan or extension of
17 credit and that offers that insurance either directly or
18 through an affiliate shall clearly disclose to the customer
19 in writing at the time of written application or at closing
20 if no written application is obtained in a form substantially
21 similar to the following:
22 "You may obtain insurance required in connection
23 with your loan or extension of credit from any insurance
24 agent, broker, or firm that sells such insurance. Your
25 choice of insurance provider will not affect our credit
26 decision or your credit terms.".
27 (b) This Section shall not apply when a financial
28 institution is contacting a customer in the course of direct
29 or mass marketing to a group of persons in a manner that
30 bears no relation to the customer's loan application or
31 credit decision.
32 (215 ILCS 5/1413 new)
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1 Sec. 1413. Separate physical location and sales force
2 when insurance is solicited or sold in connection with a
3 loan.
4 (a) An employee of a financial institution may not
5 solicit or sell insurance at the same desk where a loan
6 transaction is conducted when the insurance is solicited or
7 sold in connection with the same loan.
8 (b) A loan officer of a financial institution who is
9 involved in the application, solicitation, or closing of a
10 loan transaction may not solicit or sell insurance in
11 connection with the same loan, but such loan officer may
12 refer the loan customer to another insurance producer who is
13 not involved in the application, solicitation, or closing of
14 the same loan transaction.
15 (c) Subsections (a) and (b) of this Section shall not
16 apply to a financial institution, other than a credit union,
17 or a branch location of a financial institution, other than a
18 credit union, that has less than $100,000,000 in deposits.
19 (d) Subsections (a) and (b) of this Section shall not
20 apply to a credit union or a branch location of a credit
21 union that has less than $30,000,000 in deposits.
22 (215 ILCS 5/1414 new)
23 Sec. 1414. Signage. Signs concerning the availability
24 of insurance products offered by the financial institution or
25 by any registered firm shall be clearly displayed in the same
26 area where applications for loans or other extensions of
27 credit are being taken or closed and shall include the
28 disclosure set forth in subsection (a) of Section 1412.
29 (215 ILCS 5/1415 new)
30 Sec. 1415. Confidential customer information.
31 (a) A financial institution that is a registered firm may
32 not release a customer's insurance information to any person
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1 other than an officer, director, employee, agent, or
2 affiliate of the financial institution without the written
3 consent of the customer. For the purposes of this Section,
4 "insurance information" means information concerning the
5 premiums, terms and conditions of insurance coverage,
6 insurance claims, and the insurance history of a customer
7 contained in the financial institution's records.
8 (b) Subsection (a) of this Section shall not apply to:
9 (1) names, addresses, and telephone numbers derived
10 in any manner from the financial institution's records,
11 or
12 (2) the release of insurance information as
13 otherwise authorized by State or federal law.
14 (c) A financial institution shall not require premium
15 information when requiring evidence of insurance in
16 connection with a loan or extension of credit and shall not
17 use such premium information for the purpose of soliciting
18 insurance without the written consent of the customer.
19 (d) A financial institution may not use health
20 information obtained from a customer's insurance records for
21 any purpose other than for its activities as a registered
22 firm pursuant to this Code.
23 (215 ILCS 5/1416 new)
24 Sec. 1416. Prohibited defenses. A violation of any
25 provision of this Article shall not be used as a defense by
26 any person in any action by a financial institution to
27 recover the amount owing on any loan or extension of credit.
28 Section 35. Severability. The provisions of this
29 amendatory Act of 1997 and the changes made to existing
30 statutory law by this amendatory Act of 1997 are severable
31 under Section 1.31 of the Statute on Statutes.
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1 Section 99. Effective date. This Act takes effect on
2 October 1, 1997.