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90_SB1528eng
205 ILCS 5/16.1 from Ch. 17, par. 323.1
Amends the Illinois Banking Act. Adds a caption to a
Section concerning the removal of bank directors.
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1 AN ACT concerning financial regulation, amending named
2 Acts.
3 Be it enacted by the People of the State of Illinois,
4 represented in the General Assembly:
5 Section 5. The Illinois Bank Examiners' Education
6 Foundation Act is amended by changing Section 6 as follows:
7 (20 ILCS 3210/6) (from Ch. 17, par. 406)
8 Sec. 6. The Board shall have the power:
9 (1) To promulgate reasonable rules for the purpose of
10 administering the provisions of this Act.
11 (2) To issue orders for the purpose of administering the
12 provisions of this Act and any rule promulgated in accordance
13 with this Act.
14 (3) To require the Commissioner to furnish the Board
15 space for meetings to be held by the Board as well as to
16 require the Commissioner to provide the technical assistance
17 and clerical and professional support as the Board may
18 require.
19 (4) To adopt its own bylaws with respect to board
20 meetings and procedures. The bylaws shall provide that:
21 (A) A majority of the whole Board constitutes a
22 quorum.
23 (B) A majority of the quorum shall constitute
24 effective action except that a vote of a majority of the
25 whole Board shall be necessary for the approval of rules
26 and regulations proposed for adoption by the Commissioner
27 under paragraph (1) of this Section and shall be
28 necessary for recommendations made to the Commissioner
29 with regard to proposed amendments to this Act or to the
30 administrative practices hereunder.
31 (C) The Board shall meet at least once in each
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1 calendar year and upon the call of the Commissioner or a
2 majority of the Board quarter. The Commissioner or a
3 majority of the Board may call such special or additional
4 meetings as may be deemed he or they deem necessary or
5 desirable.
6 (5) To authorize the transfer of funds from the Illinois
7 Bank Examiners' Education Fund to the Bank and Trust Company
8 Fund. Any amount so transferred shall be retransferred to
9 the Illinois Bank Examiners' Education Fund from the Bank and
10 Trust Company Fund within a period not to exceed 3 years.
11 (6) To maintain and direct the investments of the
12 Illinois Bank Examiners' Education Fund as provided in the
13 Illinois Banking Act and to issue an annual report to the
14 Governor, the General Assembly and all State-chartered banks
15 on the activities of the Foundation during the preceding year
16 which shall include, but is not limited to, detailing the
17 monies generated and deposited into the Illinois Bank
18 Examiners' Education Fund by the special education fee,
19 voluntary contributions, and income from investments and the
20 expenditures from the Fund.
21 (Source: P.A. 86-1449; 87-1038.)
22 Section 10. The Illinois Banking Act is amended by
23 changing Sections 5, 9, 10, 13, 21.1, 24, 48, and 48.1 as
24 follows:
25 (205 ILCS 5/5) (from Ch. 17, par. 311)
26 Sec. 5. General corporate powers. A bank organized
27 under this Act or subject hereto shall be a body corporate
28 and politic and shall, without specific mention thereof in
29 the charter, have all the powers conferred by this Act and
30 the following additional general corporate powers:
31 (1) To sue and be sued, complain, and defend in its
32 corporate name.
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1 (2) To have a corporate seal, which may be altered at
2 pleasure, and to use the same by causing it or a facsimile
3 thereof to be impressed or affixed or in any manner
4 reproduced, provided that the affixing of a corporate seal to
5 an instrument shall not give the instrument additional force
6 or effect, or change the construction thereof, and the use of
7 a corporate seal is not mandatory.
8 (3) To make, alter, amend, and repeal bylaws, not
9 inconsistent with its charter or with law, for the
10 administration of the affairs of the bank.
11 (4) To elect or appoint and remove officers and agents
12 of the bank and define their duties and fix their
13 compensation.
14 (5) To adopt and operate reasonable bonus plans,
15 profit-sharing plans, stock-bonus plans, stock-option plans,
16 pension plans and similar incentive plans for its directors,
17 officers and employees.
18 (5.1) To manage, operate and administer a fund for the
19 investment of funds by a public agency or agencies, including
20 any unit of local government or school district, or any
21 person. The fund for a public agency shall invest in the
22 same type of investments and be subject to the same
23 limitations provided for the investment of public funds. The
24 fund for public agencies shall maintain a separate ledger
25 showing the amount of investment for each public agency in
26 the fund. "Public funds" and "public agency" as used in this
27 Section shall have the meanings ascribed to them in Section 1
28 of the Public Funds Investment Act.
29 (6) To make reasonable donations for the public welfare
30 or for charitable, scientific, religious or educational
31 purposes.
32 (7) To borrow or incur an obligation; and to pledge its
33 assets:
34 (a) to secure its borrowings, its lease of personal
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1 or real property or its other nondeposit obligations;
2 (b) to enable it to act as agent for the sale of
3 obligations of the United States;
4 (c) to secure deposits of public money of the
5 United States, whenever required by the laws of the
6 United States, including without being limited to,
7 revenues and funds the deposit of which is subject to the
8 control or regulation of the United States or any of its
9 officers, agents, or employees and Postal Savings funds;
10 (d) to secure deposits of public money of any state
11 or of any political corporation or subdivision thereof
12 including, without being limited to, revenues and funds
13 the deposit of which is subject to the control or
14 regulation of any state or of any political corporation
15 or subdivisions thereof or of any of their officers,
16 agents, or employees;
17 (e) to secure deposits of money whenever required
18 by the National Bankruptcy Act;
19 (f) (blank); and
20 (g) to secure trust funds commingled with the
21 bank's funds, whether deposited by the bank or an
22 affiliate of the bank, pursuant to Section 2-8 of the
23 Corporate Fiduciary Act.
24 (8) To own, possess, and carry as assets all or part of
25 the real estate necessary in or with which to do its banking
26 business, either directly or indirectly through the ownership
27 of all or part of the capital stock, shares or interests in
28 any corporation, association, trust engaged in holding any
29 part or parts or all of the bank premises, engaged in such
30 business and in conducting a safe deposit business in the
31 premises or part of them, or engaged in any activity that the
32 bank is permitted to conduct in a subsidiary pursuant to
33 paragraph (12) of this Section 5.
34 (9) To own, possess, and carry as assets other real
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1 estate to which it may obtain title in the collection of its
2 debts or that was formerly used as a part of the bank
3 premises, but title to any real estate except as herein
4 permitted shall not be retained by the bank, either directly
5 or by or through a subsidiary, as permitted by subsection
6 (12) of this Section for a total period of more than 10 years
7 after acquiring title, either directly or indirectly.
8 (10) To do any act, including the acquisition of stock,
9 necessary to obtain insurance of its deposits, or part
10 thereof, and any act necessary to obtain a guaranty, in whole
11 or in part, of any of its loans or investments by the United
12 States or any agency thereof, and any act necessary to sell
13 or otherwise dispose of any of its loans or investments to
14 the United States or any agency thereof, and to acquire and
15 hold membership in the Federal Reserve System.
16 (11) Notwithstanding any other provisions of this Act or
17 any other law, to do any act and to own, possess, and carry
18 as assets property of the character, including stock, that is
19 at the time authorized or permitted to national banks by an
20 Act of Congress, but subject always to the same limitations
21 and restrictions as are applicable to national banks by the
22 pertinent federal law and subject to applicable provisions of
23 the Financial Institutions Insurance Sales Law.
24 (12) To own, possess, and carry as assets stock of one
25 or more corporations that is, or are, engaged in one or more
26 of the following businesses:
27 (a) holding title to and administering assets
28 acquired as a result of the collection or liquidating of
29 loans, investments, or discounts; or
30 (b) holding title to and administering personal
31 property acquired by the bank, directly or indirectly
32 through a subsidiary, for the purpose of leasing to
33 others, provided the lease or leases and the investment
34 of the bank, directly or through a subsidiary, in that
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1 personal property otherwise comply with Section 35.1 of
2 this Act; or
3 (c) carrying on or administering any of the
4 activities excepting the receipt of deposits or the
5 payment of checks or other orders for the payment of
6 money in which a bank may engage in carrying on its
7 general banking business; provided, however, that nothing
8 contained in this paragraph (c) shall be deemed to permit
9 a bank organized under this Act or subject hereto to do,
10 either directly or indirectly through any subsidiary, any
11 act, including the making of any loan or investment, or
12 to own, possess, or carry as assets any property that if
13 done by or owned, possessed, or carried by the State bank
14 would be in violation of or prohibited by any provision
15 of this Act.
16 The provisions of this subsection (12) shall not apply to
17 and shall not be deemed to limit the powers of a State bank
18 with respect to the ownership, possession, and carrying of
19 stock that a State bank is permitted to own, possess, or
20 carry under this Act.
21 Any bank intending to establish a subsidiary under this
22 subsection (12) shall give written notice to the Commissioner
23 60 days prior to the subsidiary's commencing of business or,
24 as the case may be, prior to acquiring stock in a corporation
25 that has already commenced business. After receiving the
26 notice, the Commissioner may waive or reduce the balance of
27 the 60 day notice period. The Commissioner may specify the
28 form of the notice and may promulgate rules and regulations
29 to administer this subsection (12).
30 (13) To accept for payment at a future date not
31 exceeding one year from the date of acceptance, drafts drawn
32 upon it by its customers; and to issue, advise, or confirm
33 letters of credit authorizing the holders thereof to draw
34 drafts upon it or its correspondents.
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1 (14) To own and lease personal property acquired by the
2 bank at the request of a prospective lessee and upon the
3 agreement of that person to lease the personal property
4 provided that the lease, the agreement with respect thereto,
5 and the amount of the investment of the bank in the property
6 comply with Section 35.1 of this Act.
7 (15) (a) To establish and maintain, in addition to the
8 main banking premises, branches offering any banking services
9 permitted at the main banking premises of a State bank.
10 (b) To establish and maintain, after May 31, 1997,
11 branches in another state that may conduct any activity in
12 that state that is authorized or permitted for any bank that
13 has a banking charter issued by that state, subject to the
14 same limitations and restrictions that are applicable to
15 banks chartered by that state.
16 (16) (Blank).
17 (17) To establish and maintain terminals, as authorized
18 by the Electronic Fund Transfer Act.
19 (18) To establish and maintain temporary service booths
20 at any International Fair held in this State which is
21 approved by the United States Department of Commerce, for the
22 duration of the international fair for the sole purpose of
23 providing a convenient place for foreign trade customers at
24 the fair to exchange their home countries' currency into
25 United States currency or the converse. This power shall not
26 be construed as establishing a new place or change of
27 location for the bank providing the service booth.
28 (19) To indemnify its officers, directors, employees,
29 and agents, as authorized for corporations under Section 8.75
30 of the Business Corporation Act of 1983.
31 (20) To own, possess, and carry as assets stock of, or
32 be or become a member of, any corporation, mutual company,
33 association, trust, or other entity formed exclusively for
34 the purpose of providing directors' and officers' liability
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1 and bankers' blanket bond insurance or reinsurance to and for
2 the benefit of the stockholders, members, or beneficiaries,
3 or their assets or businesses, or their officers, directors,
4 employees, or agents, and not to or for the benefit of any
5 other person or entity or the public generally.
6 (21) To make debt or equity investments in corporations
7 or projects, whether for profit or not for profit, designed
8 to promote the development of the community and its welfare,
9 provided that the aggregate investment in all of these
10 corporations and in all of these projects does not exceed 10%
11 of the unimpaired capital and unimpaired surplus of the bank
12 and provided that this limitation shall not apply to
13 creditworthy loans by the bank to those corporations or
14 projects. Upon written application to the Commissioner, a
15 bank may make an investment that would, when aggregated with
16 all other such investments, exceed 10% of the unimpaired
17 capital and unimpaired surplus of the bank. The Commissioner
18 may approve the investment if he is of the opinion and finds
19 that the proposed investment will not have a material adverse
20 effect on the safety and soundness of the bank.
21 (22) To own, possess, and carry as assets the stock of a
22 corporation engaged in the ownership or operation of a travel
23 agency or to operate a travel agency as a part of its
24 business, provided that the bank either owned, possessed, and
25 carried as assets the stock of such a corporation or operated
26 a travel agency as part of its business before July 1, 1991.
27 (23) With respect to affiliate facilities:
28 (a) to conduct at affiliate facilities any of the
29 following transactions for and on behalf of another
30 commonly owned bank, if so authorized by the other bank:
31 receiving deposits; cashing and issuing checks, drafts,
32 and money orders; changing money; and receiving payments
33 on existing indebtedness; and
34 (b) to authorize a commonly owned bank to conduct
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1 for and on behalf of it any of the transactions listed in
2 this paragraph (23) at one or more affiliate facilities.
3 Any bank intending to conduct or to authorize a commonly
4 owned bank to conduct at an affiliate facility any of the
5 transactions specified in this paragraph (23) shall give
6 written notice to the Commissioner at least 30 days before
7 any such transaction is conducted at the affiliate facility.
8 (24) To act as the agent for any fire, life, or other
9 insurance company authorized by the State of Illinois, by
10 soliciting and selling insurance and collecting premiums on
11 policies issued by such company; and to may receive for
12 services so rendered such fees or commissions as may be
13 agreed upon between the said bank and the insurance company
14 for which it may act as agent; provided, however, that no
15 such bank shall in any case assume or guarantee the payment
16 of any premium on insurance policies issued through its
17 agency by its principal; and provided further, that the bank
18 shall not guarantee the truth of any statement made by an
19 assured in filing his application for insurance.
20 (25) Notwithstanding any other provisions of this Act or
21 any other law, to offer any product or service that is at the
22 time authorized or permitted to any insured savings
23 association by applicable law, provided that powers conferred
24 only by this subsection (25):
25 (a) shall always be subject to the same limitations
26 and restrictions that are applicable to the insured
27 savings association for the product or service by such
28 applicable law;
29 (b) shall be subject to applicable provisions of
30 the Financial Institutions Insurance Sales Law;
31 (c) shall not include the right to own or conduct a
32 real estate brokerage business for which a license would
33 be required under the laws of this State; and
34 (d) shall not be construed to include the
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1 establishment or maintenance of a branch, nor shall they
2 be construed to limit the establishment or maintenance of
3 a branch pursuant to subsection (11).
4 (Source: P.A. 89-208, eff. 9-29-95; 89-310, eff. 1-1-96;
5 89-364, eff. 8-18-95; 89-626, eff. 8-9-96; 90-41, eff.
6 10-1-97; 90-301, eff. 8-1-97; revised 10-22-97.)
7 (205 ILCS 5/9) (from Ch. 17, par. 316)
8 Sec. 9. Contents of application. The application for a
9 permit to organize shall be in a form specified by the
10 Commissioner and shall be filed with the Commissioner signed
11 by each of the applicants and shall be acknowledged before
12 some officer authorized by law to acknowledge deeds. It shall
13 state:
14 (1) The name, residence, business or occupation and
15 address of each applicant, and a statement of the proposed
16 management;
17 (2) The name for the proposed bank;
18 (3) The location of the proposed bank;
19 (4) The amount of capital and, surplus and reserve for
20 operating expenses for the proposed bank;
21 (5) The number of shares of capital stock, the number of
22 shares and classes of preferred stock, if any, the par value
23 of the capital stock and preferred stock, and the amount for
24 which each share of capital stock and preferred stock is to
25 be sold;
26 (6) A statement of the financial worth of each of the
27 applicants;
28 (7) (Blank);
29 (8) Such other relevant information as the Commissioner
30 may require.
31 (Source: P.A. 90-301, eff. 8-1-97.)
32 (205 ILCS 5/10) (from Ch. 17, par. 317)
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1 Sec. 10. Permit to organize. Upon the filing of an
2 application for a permit to organize, the Commissioner shall
3 investigate the truth of the statements therein and shall
4 consider the proposed bank's capital structure, its future
5 earnings prospects, the general character, experience, and
6 qualifications of its proposed management, its proposed plan
7 of operation, and the convenience and needs of the area
8 sought to be served and notwithstanding the provisions of
9 Section 7 of this Act, the Commissioner shall not approve the
10 application and issue a permit to organize unless he shall be
11 of the opinion and finds:
12 (1) That the proposed capital at least meets the minimum
13 requirements of this Act determined by the Commissioner
14 pursuant to Section 7 of this Act including additional
15 capital necessitated by the circumstances of the proposed
16 bank including its size, scope of operations and market in
17 which it proposes to operate;
18 (2) That the future earnings prospects are favorable;
19 (3) That the general character, experience, and
20 qualifications of its proposed management and its proposed
21 plan of operation are is such as to assure reasonable promise
22 of successful, safe and sound operation;
23 (4) That the name of the proposed bank is not the same
24 as or deceptively similar to the name of any other bank then
25 operating in this State; and
26 (5) That the convenience and needs of the area sought to
27 be served by the proposed bank will be promoted.
28 (Source: P.A. 86-368.)
29 (205 ILCS 5/13) (from Ch. 17, par. 320)
30 Sec. 13. Issuance of charter.
31 (a) When the directors have organized as provided in
32 Section 12 of this Act, and the capital stock and the
33 preferred stock, if any, together with a surplus of not less
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1 than 50% of the capital, has been all fully paid in and a
2 record of the same filed with the Commissioner, the
3 Commissioner or some competent person of the Commissioner's
4 appointment shall make a thorough examination into the
5 affairs of the proposed bank, and if satisfied (i) that all
6 the requirements of this Act have been complied with, (ii)
7 and that no intervening circumstance has occurred to change
8 the Commissioner's findings made pursuant to Section 10 of
9 this Act, and (iii) that the prior involvement by any
10 stockholder who will own a sufficient amount of stock to have
11 control, as defined in Section 18 of this Act, of the
12 proposed bank with any other financial institution, whether
13 as stockholder, director, officer, or customer, was conducted
14 in a safe and sound manner, upon payment into the
15 Commissioner's office of the reasonable expenses of the
16 examination, as determined by the Commissioner, the
17 Commissioner shall issue a charter authorizing the bank to
18 commence business as authorized in this Act. All charters
19 issued by the Commissioner or any predecessor agency which
20 chartered State banks, including any charter outstanding as
21 of September 1, 1989, shall be perpetual. For the 2 years
22 after the Commissioner has issued a charter to a bank, the
23 bank shall request and obtain from the Commissioner prior
24 written approval before it may change senior management
25 personnel or directors.
26 The original charter, duly certified by the Commissioner,
27 or a certified copy shall be evidence in all courts and
28 places of the existence and authority of the bank to do
29 business. Upon the issuance of the charter by the
30 Commissioner, the bank shall be deemed fully organized and
31 may proceed to do business. The Commissioner may, in the
32 Commissioner's discretion, withhold the issuing of the
33 charter when the Commissioner has reason to believe that the
34 bank is organized for any purpose other than that
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1 contemplated by this Act or that a commission or fee has been
2 paid in connection with the sale of the stock of the bank.
3 The Commissioner shall revoke the charter and order
4 liquidation in the event that the bank does not commence a
5 general banking business within one year from the date of the
6 issuance of the charter, unless a request has been submitted,
7 in writing, to the Commissioner for an extension and the
8 request has been approved. After commencing a general
9 banking business, a bank, upon written notice to the
10 Commissioner, may change its name.
11 (b) (1) The Commissioner may also issue a charter to a
12 bank that is owned exclusively by other depository
13 institutions or depository institution holding companies and
14 is organized to engage exclusively in providing services to
15 or for other depository institutions, their holding
16 companies, and the officers, directors, and employees of such
17 institutions and companies, and in providing correspondent
18 banking services at the request of other depository
19 institutions or their holding companies (also referred to as
20 a "bankers' bank").
21 (2) A bank chartered pursuant to paragraph (1) shall,
22 except as otherwise specifically determined by the
23 Commissioner, be vested with the same rights and privileges
24 and subject to the same duties, restrictions, penalties, and
25 liabilities now or hereafter imposed under this Act.
26 (c) A bank chartered under this Act after November 1,
27 1985, and an out-of-state bank that merges with a State bank
28 and establishes or maintains a branch in this State after May
29 31, 1997, shall obtain from and, at all times while it
30 accepts or retains deposits, maintain with the Federal
31 Deposit Insurance Corporation, or such other instrumentality
32 of or corporation chartered by the United States, deposit
33 insurance as authorized under federal law.
34 (d) (i) A bank that has a banking charter issued by the
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1 Commissioner under this Act may, pursuant to a written
2 purchase and assumption agreement, transfer substantially all
3 of its assets to another State bank or national bank in
4 consideration, in whole or in part, for the transferee banks'
5 assumption of any part or all of its liabilities. Such a
6 transfer shall in no way be deemed to impair the charter of
7 the transferor bank or cause the transferor bank to forfeit
8 any of its rights, powers, interests, franchises, or
9 privileges as a State bank, nor shall any voluntary reduction
10 in the transferor bank's activities resulting from the
11 transfer have any such effect; provided, however, that a
12 State bank that transfers substantially all of its assets
13 pursuant to this subsection (d) and following the transfer
14 does not accept deposits and make loans, shall not have any
15 rights, powers, interests, franchises, or privileges under
16 subsection (15) of Section 5 of this Act until the bank has
17 resumed accepting deposits and making loans.
18 (ii) The fact that a State bank does not resume
19 accepting deposits and making loans for a period of 24 months
20 commencing on September 11, 1989 or on a date of the transfer
21 of substantially all of a State bank's assets, whichever is
22 later, or such longer period as the Commissioner may allow in
23 writing, may be the basis for a finding by the Commissioner
24 under Section 51 of this Act that the bank is unable to
25 continue operations.
26 (iii) The authority provided by subdivision (i) of this
27 subsection (d) shall terminate on May 31, 1997, and no bank
28 that has transferred substantially all of its assets pursuant
29 to this subsection (d) shall continue in existence after May
30 31, 1997.
31 (Source: P.A. 89-208, eff. 9-29-95; 89-567, eff. 7-26-96;
32 89-603, eff. 8-2-96; 90-14, eff. 7-1-97; 90-301, eff.
33 8-1-97.)
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1 (205 ILCS 5/21.1)
2 Sec. 21.1. Application for certificate of authority.
3 (a) On or after June 1, 1997, an out-of-state bank may,
4 in order to procure a certificate of authority to merge with
5 a State bank after executing, shall execute and filing file
6 in duplicate not less than 60 days before the proposed
7 effective date of the merger an application therefor with the
8 Commissioner and after shall also filing with the
9 Commissioner file a copy of its charter, articles of
10 association or articles of incorporation, and all amendments
11 thereto, duly authenticated by the proper officer of the
12 state wherein it is chartered or incorporated and the last
13 quarterly statement of condition filed by the out-of-state
14 bank with the appropriate federal banking regulator. The
15 Commissioner shall specify the form of the application which
16 shall set forth, to the extent applicable, the same
17 information required in an application by a foreign
18 corporation pursuant to Section 13.15 of the Business
19 Corporation Act of 1983. Subject to Sections 21.2 and 21.3 of
20 this Act, receipt by the Commissioner of a copy of an
21 application filed with and approved by the out-of-state
22 bank's chartering authority authorizing the out-of-state bank
23 to merge with a State bank shall satisfy the filing
24 requirements of this subsection (a).
25 When the provisions of this Section have been complied
26 with, the Commissioner shall issue a certificate of authority
27 to merge. If the merger is not consummated within one year,
28 the Commissioner may cancel the certificate of authority.
29 (b) An out-of-state bank that is the resulting bank in a
30 merger with a State bank may, after the merger, establish and
31 maintain a branch or branches in Illinois at the locations
32 where the State bank had its main office and branches
33 immediately before the merger.
34 (c) An out-of-state bank that establishes and maintains
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1 a branch or branches in Illinois pursuant to subsection (b)
2 of this Section may, after the merger, establish and maintain
3 additional branches in this State to the same extent as a
4 State bank.
5 (d) A branch of an out-of-state bank may not conduct any
6 activity that is not authorized for a State bank.
7 (e) An out-of-state bank shall provide written notice to
8 the Commissioner of its intent to establish an additional
9 branch or branches in this State within 30 days after
10 approval of the appropriate federal banking agency to
11 establish the branch or branches. The notice form shall be
12 specified by the Commissioner and may include any of the
13 information required for a similar notice by a State bank.
14 Receipt by the Commissioner of notice of the out-of-state
15 bank's intent to establish such additional branch or branches
16 in this State from the out-of-state bank's chartering
17 authority shall satisfy the requirements of this subsection
18 (e).
19 (Source: P.A. 89-208, eff. 9-29-95.)
20 (205 ILCS 5/24) (from Ch. 17, par. 331)
21 Sec. 24. Effective date of merger; filing. The executed
22 merger agreement together with copies of the resolutions of
23 the stockholders of each merging bank or insured savings
24 association approving it, certified by the bank's or insured
25 savings association's president or vice-president or the
26 cashier, shall be filed with the Commissioner. A merger that
27 is to result in a State bank shall, unless a later date is
28 specified in the agreement, become effective when the
29 Commissioner has approved the agreement and issued a
30 certificate of merger to the continuing bank. The charters of
31 the merging banks or insured savings association, other than
32 the continuing bank, shall thereupon automatically terminate.
33 If, after May 31, 1997, the merger will result in an
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1 out-of-state bank, the charter of a merging State bank shall
2 terminate upon notice to the Commissioner that the merger is
3 effective. The certificate of merger shall specify the name
4 of each merging bank or insured savings association and the
5 name of the continuing bank, and the amendments to the
6 charter of the continuing bank provided for by the merger
7 agreement. The certificate shall be conclusive evidence of
8 the merger and of the correctness of all proceedings therefor
9 in all courts and places, and the certificate shall be
10 recorded.
11 (Source: P.A. 89-208, eff. 9-29-95.)
12 (205 ILCS 5/48) (from Ch. 17, par. 359)
13 Sec. 48. Commissioner's powers; duties. The Commissioner
14 shall have the powers and authority, and is charged with the
15 duties and responsibilities designated in this Act, and a
16 State bank shall not be subject to any other visitorial power
17 other than as authorized by this Act, except those vested in
18 the courts, or upon prior consultation with the Commissioner,
19 a foreign bank regulator with an appropriate supervisory
20 interest in the parent or affiliate of a state bank. In the
21 performance of the Commissioner's duties:
22 (1) The Commissioner shall call for statements from all
23 State banks as provided in Section 47 at least one time
24 during each calendar quarter.
25 (2) (a) The Commissioner, as often as the Commissioner
26 shall deem necessary or proper, and no less frequently than
27 18 months following the preceding examination, shall appoint
28 a suitable person or persons to make an examination of the
29 affairs of every State bank, except that for every eligible
30 State bank, as defined by regulation, the Commissioner in
31 lieu of the examination may accept on an alternating basis
32 the examination made by the eligible State bank's appropriate
33 federal banking agency pursuant to Section 111 of the Federal
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1 Deposit Insurance Corporation Improvement Act of 1991,
2 provided the appropriate federal banking agency has made such
3 an examination. A person so appointed shall not be a
4 stockholder or officer or employee of any bank which that
5 person may be directed to examine, and shall have powers to
6 make a thorough examination into all the affairs of the bank
7 and in so doing to examine any of the officers or agents or
8 employees thereof on oath and shall make a full and detailed
9 report of the condition of the bank to the Commissioner. In
10 making the examination the examiners shall include an
11 examination of the affairs of all the affiliates of the bank,
12 as defined in subsection (b) of Section 35.2 of this Act, as
13 shall be necessary to disclose fully the conditions of the
14 affiliates, the relations between the bank and the affiliates
15 and the effect of those relations upon the affairs of the
16 bank, and in connection therewith shall have power to examine
17 any of the officers, directors, agents, or employees of the
18 affiliates on oath. After May 31, 1997, the Commissioner may
19 enter into cooperative agreements with state regulatory
20 authorities of other states to provide for examination of
21 State bank branches in those states, and the Commissioner may
22 accept reports of examinations of State bank branches from
23 those state regulatory authorities. These cooperative
24 agreements may set forth the manner in which the other state
25 regulatory authorities may be compensated for examinations
26 prepared for and submitted to the Commissioner.
27 (b) After May 31, 1997, the Commissioner is authorized
28 to examine, as often as the Commissioner shall deem necessary
29 or proper, branches of out-of-state banks. The Commissioner
30 may establish and may assess fees to be paid to the
31 Commissioner for examinations under this subsection (b). The
32 fees shall be borne by the out-of-state bank, unless the fees
33 are borne by the state regulatory authority that chartered
34 the out-of-state bank, as determined by a cooperative
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1 agreement between the Commissioner and the state regulatory
2 authority that chartered the out-of-state bank.
3 (2.5) Whenever any State bank, any subsidiary or
4 affiliate of a State bank, or after May 31, 1997, any branch
5 of an out-of-state bank causes to be performed, by contract
6 or otherwise, any bank services for itself, whether on or off
7 its premises:
8 (a) that performance shall be subject to
9 examination by the Commissioner to the same extent as if
10 services were being performed by the bank or, after May
11 31, 1997, branch of the out-of-state bank itself on its
12 own premises; and
13 (b) the bank or, after May 31, 1997, branch of the
14 out-of-state bank shall notify the Commissioner of the
15 existence of a service relationship. The notification
16 shall be submitted with the first statement of condition
17 (as required by Section 47 of this Act) due after the
18 making of the service contract or the performance of the
19 service, whichever occurs first. The Commissioner shall
20 be notified of each subsequent contract in the same
21 manner.
22 For purposes of this subsection (2.5), the term "bank
23 services" means services such as sorting and posting of
24 checks and deposits, computation and posting of interest and
25 other credits and charges, preparation and mailing of checks,
26 statements, notices, and similar items, or any other
27 clerical, bookkeeping, accounting, statistical, or similar
28 functions performed for a State bank, including but not
29 limited to electronic data processing related to those bank
30 services.
31 (3) The expense of administering this Act, including the
32 expense of the examinations of State banks as provided in
33 this Act, shall to the extent of the amounts resulting from
34 the fees provided for in paragraphs (a), (a-2), and (b) of
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1 this subsection (3) be assessed against and borne by the
2 State banks:
3 (a) Each bank shall pay to the Commissioner a Call
4 Report Fee which shall be paid in quarterly installments
5 equal to one-fourth of the sum of the annual fixed fee of
6 $800, plus a variable fee based on the assets shown on
7 the quarterly statement of condition delivered to the
8 Commissioner in accordance with Section 47 for the
9 preceding quarter according to the following schedule:
10 16¢ per $1,000 of the first $5,000,000 of total assets,
11 15¢ per $1,000 of the next $20,000,000 of total assets,
12 13¢ per $1,000 of the next $75,000,000 of total assets,
13 9¢ per $1,000 of the next $400,000,000 of total assets,
14 7¢ per $1,000 of the next $500,000,000 of total assets,
15 and 5¢ per $1,000 of all assets in excess of
16 $1,000,000,000, of the State bank. The Call Report Fee
17 shall be calculated by the Commissioner and billed to the
18 banks for remittance at the time of the quarterly
19 statements of condition provided for in Section 47. The
20 Commissioner may require payment of the fees provided in
21 this Section by an electronic transfer of funds or an
22 automatic debit of an account of each of the State banks.
23 In case more than one examination of any bank is deemed
24 by the Commissioner to be necessary in any examination
25 frequency cycle specified in subsection 2(a) of this
26 Section, and is performed at his direction, the
27 Commissioner may assess a reasonable additional fee to
28 recover the cost of the additional examination. In lieu
29 of the method and amounts set forth in this paragraph (a)
30 for the calculation of the Call Report Fee, the
31 Commissioner may specify by rule that the Call Report
32 Fees provided by this Section may be assessed
33 semiannually or some other period and may provide in the
34 rule the formula to be used for calculating and assessing
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1 the periodic Call Report Fees to be paid by State banks.
2 (a-1) If in the opinion of the Commissioner an
3 emergency exists or appears likely, the Commissioner may
4 assign an examiner or examiners to monitor the affairs of
5 a State bank with whatever frequency he deems
6 appropriate, including but not limited to a daily basis.
7 The reasonable and necessary expenses of the Commissioner
8 during the period of the monitoring shall be borne by the
9 subject bank. The Commissioner shall furnish the State
10 bank a statement of time and expenses if requested to do
11 so within 30 days of the conclusion of the monitoring
12 period.
13 (a-2) On and after January 1, 1990, the reasonable
14 and necessary expenses of the Commissioner during
15 examination of the performance of electronic data
16 processing services under subsection (2.5) shall be borne
17 by the banks for which the services are provided. An
18 amount, based upon a fee structure prescribed by the
19 Commissioner, shall be paid by the banks or, after May
20 31, 1997, branches of out-of-state banks receiving the
21 electronic data processing services along with the Call
22 Report Fee assessed under paragraph (a) of this
23 subsection (3).
24 (a-3) After May 31, 1997, the reasonable and
25 necessary expenses of the Commissioner during examination
26 of the performance of electronic data processing services
27 under subsection (2.5) at or on behalf of branches of
28 out-of-state banks shall be borne by the out-of-state
29 banks, unless those expenses are borne by the state
30 regulatory authorities that chartered the out-of-state
31 banks, as determined by cooperative agreements between
32 the Commissioner and the state regulatory authorities
33 that chartered the out-of-state banks.
34 (b) "Fiscal year" for purposes of this Section 48
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1 is defined as a period beginning July 1 of any year and
2 ending June 30 of the next year. The Commissioner shall
3 receive for each fiscal year, commencing with the fiscal
4 year ending June 30, 1987, a contingent fee equal to the
5 lesser of the aggregate of the fees paid by all State
6 banks under paragraph (a) of subsection (3) for that
7 year, or the amount, if any, whereby the aggregate of the
8 administration expenses, as defined in paragraph (c), for
9 that fiscal year exceeds the sum of the aggregate of the
10 fees payable by all State banks for that year under
11 paragraph (a) of subsection (3), plus all other amounts
12 collected by the Commissioner for that year under any
13 other provision of this Act, plus the aggregate of all
14 fees collected for that year by the Commissioner under
15 the Corporate Fiduciary Act, excluding the receivership
16 fees provided for in Section 5-10 of the Corporate
17 Fiduciary Act, and the Foreign Banking Office Act. The
18 aggregate amount of the contingent fee thus arrived at
19 for any fiscal year shall be apportioned amongst,
20 assessed upon, and paid by the State banks and foreign
21 banking corporations, respectively, in the same
22 proportion that the fee of each under paragraph (a) of
23 subsection (3), respectively, for that year bears to the
24 aggregate for that year of the fees collected under
25 paragraph (a) of subsection (3). The aggregate amount of
26 the contingent fee, and the portion thereof to be
27 assessed upon each State bank and foreign banking
28 corporation, respectively, shall be determined by the
29 Commissioner and shall be paid by each, respectively,
30 within 120 days of the close of the period for which the
31 contingent fee is computed and is payable, and the
32 Commissioner shall give 20 days advance notice of the
33 amount of the contingent fee payable by the State bank
34 and of the date fixed by the Commissioner for payment of
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1 the fee.
2 (c) The "administration expenses" for any fiscal
3 year shall mean the ordinary and contingent expenses for
4 that year incident to making the examinations provided
5 for by, and for otherwise administering, this Act, the
6 Corporate Fiduciary Act, excluding the expenses paid from
7 the Corporate Fiduciary Receivership account in the Bank
8 and Trust Company Fund, the Foreign Banking Office Act,
9 the Electronic Fund Transfer Act, and the Illinois Bank
10 Examiners' Education Foundation Act, including all
11 salaries and other compensation paid for personal
12 services rendered for the State by officers or employees
13 of the State, including the Commissioner and the Deputy
14 Commissioners, all expenditures for telephone and
15 telegraph charges, postage and postal charges, office
16 stationery, supplies and services, and office furniture
17 and equipment, including typewriters and copying and
18 duplicating machines and filing equipment, surety bond
19 premiums, and travel expenses of those officers and
20 employees, employees, expenditures or charges for the
21 acquisition, enlargement or improvement of, or for the
22 use of, any office space, building, or structure, or
23 expenditures for the maintenance thereof or for
24 furnishing heat, light, or power with respect thereto,
25 all to the extent that those expenditures are directly
26 incidental to such examinations or administration. The
27 Commissioner shall not be required by paragraphs (c) or
28 (d-1) of this subsection (3) to maintain in any fiscal
29 year's budget appropriated reserves for accrued vacation
30 and accrued sick leave that is required to be paid to
31 employees of the Commissioner upon termination of their
32 service with the Commissioner in an amount that is more
33 than is reasonably anticipated to be necessary for any
34 anticipated turnover in employees, whether due to normal
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1 attrition or due to layoffs, terminations, or
2 resignations.
3 (d) The aggregate of all fees collected by the
4 Commissioner under this Act, the Corporate Fiduciary Act,
5 or the Foreign Banking Office Act on and after July 1,
6 1979, shall be paid promptly after receipt of the same,
7 accompanied by a detailed statement thereof, into the
8 State treasury and shall be set apart in a special fund
9 to be known as the "Bank and Trust Company Fund", except
10 as provided in paragraph (c) of subsection (11) of this
11 Section. The amount from time to time deposited into the
12 Bank and Trust Company Fund shall be used to offset the
13 ordinary administrative expenses of the Commissioner of
14 Banks and Real Estate as defined in this Section. Nothing
15 in this amendatory Act of 1979 shall prevent continuing
16 the practice of paying expenses involving salaries,
17 retirement, social security, and State-paid insurance
18 premiums of State officers by appropriations from the
19 General Revenue Fund. However, the General Revenue Fund
20 shall be reimbursed for those payments made on and after
21 July 1, 1979, by an annual transfer of funds from the
22 Bank and Trust Company Fund.
23 (d-1) Adequate funds shall be available in the Bank
24 and Trust Company Fund to permit the timely payment of
25 administration expenses. In each fiscal year the total
26 administration expenses shall be deducted from the total
27 fees collected by the Commissioner and the remainder
28 transferred into the Cash Flow Reserve Account, unless
29 the balance of the Cash Flow Reserve Account prior to the
30 transfer equals or exceeds one-fourth of the total
31 initial appropriations from the Bank and Trust Company
32 Fund for the subsequent year, in which case the remainder
33 shall be credited to State banks and foreign banking
34 corporations and applied against their fees for the
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1 subsequent year. The amount credited to each State bank
2 and foreign banking corporation shall be in the same
3 proportion as the Call Report Fees paid by each for the
4 year bear to the total Call Report Fees collected for the
5 year. If, after a transfer to the Cash Flow Reserve
6 Account is made or if no remainder is available for
7 transfer, the balance of the Cash Flow Reserve Account is
8 less than one-fourth of the total initial appropriations
9 for the subsequent year and the amount transferred is
10 less than 5% of the total Call Report Fees for the year,
11 additional amounts needed to make the transfer equal to
12 5% of the total Call Report Fees for the year shall be
13 apportioned amongst, assessed upon, and paid by the State
14 banks and foreign banking corporations in the same
15 proportion that the Call Report Fees of each,
16 respectively, for the year bear to the total Call Report
17 Fees collected for the year. The additional amounts
18 assessed shall be transferred into the Cash Flow Reserve
19 Account. For purposes of this paragraph (d-1), the
20 calculation of the fees collected by the Commissioner
21 shall exclude the receivership fees provided for in
22 Section 5-10 of the Corporate Fiduciary Act.
23 (e) The Commissioner may upon request certify to
24 any public record in his keeping and shall have authority
25 to levy a reasonable charge for issuing certifications of
26 any public record in his keeping.
27 (f) In addition to fees authorized elsewhere in
28 this Act, the Commissioner may, in connection with a
29 review, approval, or provision of a service, levy a
30 reasonable charge to recover the cost of the review,
31 approval, or service.
32 (4) Nothing contained in this Act shall be construed to
33 limit the obligation relative to examinations and reports of
34 any State bank, deposits in which are to any extent insured
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1 by the United States or any agency thereof, nor to limit in
2 any way the powers of the Commissioner with reference to
3 examinations and reports of that bank.
4 (5) The nature and condition of the assets in or
5 investment of any bonus, pension, or profit sharing plan for
6 officers or employees of every State bank or, after May 31,
7 1997, branch of an out-of-state bank shall be deemed to be
8 included in the affairs of that State bank or branch of an
9 out-of-state bank subject to examination by the Commissioner
10 under the provisions of subsection (2) of this Section, and
11 if the Commissioner shall find from an examination that the
12 condition of or operation of the investments or assets of the
13 plan is unlawful, fraudulent, or unsafe, or that any trustee
14 has abused his trust, the Commissioner shall, if the
15 situation so found by the Commissioner shall not be corrected
16 to his satisfaction within 60 days after the Commissioner has
17 given notice to the board of directors of the State bank or
18 out-of-state bank of his findings, report the facts to the
19 Attorney General who shall thereupon institute proceedings
20 against the State bank or out-of-state bank, the board of
21 directors thereof, or the trustees under such plan as the
22 nature of the case may require.
23 (6) The Commissioner shall have the power:
24 (a) To promulgate reasonable rules for the purpose
25 of administering the provisions of this Act.
26 (b) To issue orders for the purpose of
27 administering the provisions of this Act and any rule
28 promulgated in accordance with this Act.
29 (c) To appoint hearing officers to execute any of
30 the powers granted to the Commissioner under this Section
31 for the purpose of administering this Act and any rule
32 promulgated in accordance with this Act.
33 (d) To subpoena witnesses, to compel their
34 attendance, to administer an oath, to examine any person
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1 under oath, and to require the production of any relevant
2 books, papers, accounts, and documents in the course of
3 and pursuant to any investigation being conducted, or any
4 action being taken, by the Commissioner in respect of any
5 matter relating to the duties imposed upon, or the powers
6 vested in, the Commissioner under the provisions of this
7 Act or any rule promulgated in accordance with this Act.
8 (e) To conduct hearings.
9 (7) Whenever, in the opinion of the Commissioner, any
10 director, officer, employee, or agent of a State bank or,
11 after May 31, 1997, of any branch of an out-of-state bank
12 shall have violated any law, rule, or order relating to that
13 bank or shall have engaged in an unsafe or unsound practice
14 in conducting the business of that bank or shall have
15 violated any law or engaged or participated in any unsafe or
16 unsound practice in connection with any financial institution
17 or other business entity such that the character and fitness
18 of the director, officer, employee, or agent does not assure
19 reasonable promise of safe and sound operation of the State
20 bank, the Commissioner may issue an order of removal. If, in
21 the opinion of the Commissioner, any former director,
22 officer, employee, or agent of a State bank, prior to the
23 termination of his or her service with that bank, violated
24 any law, rule, or order relating to that State bank or
25 engaged in an unsafe or unsound practice in conducting the
26 business of that bank or violated any law or engaged or
27 participated in any unsafe or unsound practice in connection
28 with any financial institution or other business entity such
29 that the character and fitness of the director, officer,
30 employee, or agent would not have assured reasonable promise
31 of safe and sound operation of the State bank prior to the
32 termination of his or her service with that bank, the
33 Commissioner may issue an order prohibiting that person from
34 further service with a bank as a director, officer, employee,
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1 or agent. An order issued pursuant to this subsection shall
2 be served upon the director, officer, employee, or agent. A
3 copy of the order shall be sent to each director of the bank
4 affected by registered mail. The person affected by the
5 action may request a hearing before the State Banking Board
6 within 10 days after receipt of the order of removal. The
7 hearing shall be held by the Board within 30 days after the
8 request has been received by the Board. The Board shall make
9 a determination approving, modifying, or disapproving the
10 order of the Commissioner as its final administrative
11 decision. If a hearing is held by the Board, the Board shall
12 make its determination within 60 days from the conclusion of
13 the hearing. Any person affected by a decision of the Board
14 under this subsection (7) of Section 48 of this Act may have
15 the decision reviewed only under and in accordance with the
16 Administrative Review Law and the rules adopted pursuant
17 thereto. A copy of the order shall also be served upon the
18 bank of which he is a director, officer, employee, or agent,
19 whereupon he shall cease to be a director, officer, employee,
20 or agent of that bank. The Commissioner may institute a
21 civil action against the director, officer, or agent of the
22 State bank or, after May 31, 1997, of the branch of the
23 out-of-state bank against whom any order provided for by this
24 subsection (7) of this Section 48 has been issued, and
25 against the State bank or, after May 31, 1997, out-of-state
26 bank, to enforce compliance with or to enjoin any violation
27 of the terms of the order. Any person who has been the
28 subject of an order of removal or an order of prohibition
29 issued by the Commissioner under this subsection or Section
30 5-6 of the Corporate Fiduciary Act may not thereafter serve
31 as director, officer, employee, or agent of any State bank or
32 of any branch of any out-of-state bank, or of any corporate
33 fiduciary, as defined in Section 1-5.05 of the Corporate
34 Fiduciary Act, or of any other entity that is subject to
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1 licensure or regulation by the Commissioner or the Office of
2 Banks and Real Estate unless the Commissioner has granted
3 prior approval in writing.
4 (8) The Commissioner may impose civil penalties of up to
5 $10,000 against any person for each violation of any
6 provision of this Act, any rule promulgated in accordance
7 with this Act, any order of the Commissioner, or any other
8 action which in the Commissioner's discretion is an unsafe or
9 unsound banking practice.
10 (9) The Commissioner may impose civil penalties of up to
11 $100 against any person for the first failure to comply with
12 reporting requirements set forth in the report of examination
13 of the bank and up to $200 for the second and subsequent
14 failures to comply with those reporting requirements.
15 (10) All final administrative decisions of the
16 Commissioner hereunder shall be subject to judicial review
17 pursuant to the provisions of the Administrative Review Law.
18 For matters involving administrative review, venue shall be
19 in either Sangamon County or Cook County.
20 (11) The endowment fund for the Illinois Bank Examiners'
21 Education Foundation shall be administered as follows:
22 (a) (Blank).
23 (b) The Foundation is empowered to receive
24 voluntary contributions, gifts, grants, bequests, and
25 donations on behalf of the Illinois Bank Examiners'
26 Education Foundation from national banks and other
27 persons for the purpose of funding the endowment of the
28 Illinois Bank Examiners' Education Foundation.
29 (c) The aggregate of all special educational fees
30 collected by the Commissioner and property received by
31 the Commissioner on behalf of the Illinois Bank
32 Examiners' Education Foundation under this subsection
33 (11) on or after June 30, 1986, shall be either (i)
34 promptly paid after receipt of the same, accompanied by a
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1 detailed statement thereof, into the State Treasury and
2 shall be set apart in a special fund to be known as "The
3 Illinois Bank Examiners' Education Fund" to be invested
4 by either the Treasurer of the State of Illinois in the
5 Public Treasurers' Investment Pool or in any other
6 investment he is authorized to make or by the Illinois
7 State Board of Investment as the board of trustees of the
8 Illinois Bank Examiners' Education Foundation may direct
9 or (ii) deposited into an account maintained in a
10 commercial bank or corporate fiduciary in the name of the
11 Illinois Bank Examiners' Education Foundation pursuant to
12 the order and direction of the Board of Trustees of the
13 Illinois Bank Examiners' Education Foundation.
14 (12) (Blank).
15 (Source: P.A. 89-208, eff. 9-29-95; 89-317, eff. 8-11-95;
16 89-508, eff. 7-3-96; 89-567, eff. 7-26-96; 89-626, eff.
17 8-9-96; 90-14, eff. 7-1-97; 90-301, eff. 8-1-97.)
18 (205 ILCS 5/48.1) (from Ch. 17, par. 360)
19 Sec. 48.1. Customer financial records; confidentiality.
20 (a) For the purpose of this Section, the term "financial
21 records" means any original, any copy, or any summary of (1)
22 a document granting signature authority over a deposit or
23 account, (2) a statement, ledger card or other record on any
24 deposit or account, which shows each transaction in or with
25 respect to that account, (3) a check, draft or money order
26 drawn on a bank or issued and payable by a bank, or (4) any
27 other item containing information pertaining to any
28 relationship established in the ordinary course of a bank's
29 business between a bank and its customer.
30 (b) This Section does not prohibit:
31 (1) The preparation, examination, handling or
32 maintenance of any financial records by any officer,
33 employee or agent of a bank having custody of the
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1 records, or the examination of the records by a certified
2 public accountant engaged by the bank to perform an
3 independent audit.
4 (2) The examination of any financial records by, or
5 the furnishing of financial records by a bank to, any
6 officer, employee or agent of (i) the Commissioner of
7 Banks and Real Estate, (ii) after May 31, 1997, a state
8 regulatory authority authorized to examine a branch of a
9 State bank located in another state, (iii) the
10 Comptroller of the Currency, (iv) the Federal Reserve
11 Board, or (v) the Federal Deposit Insurance Corporation
12 for use solely in the exercise of his duties as an
13 officer, employee, or agent.
14 (3) The publication of data furnished from
15 financial records relating to customers where the data
16 cannot be identified to any particular customer or
17 account.
18 (4) The making of reports or returns required under
19 Chapter 61 of the Internal Revenue Code of 1986.
20 (5) Furnishing information concerning the dishonor
21 of any negotiable instrument permitted to be disclosed
22 under the Uniform Commercial Code.
23 (6) The exchange in the regular course of business
24 of credit information between a bank and other banks or
25 financial institutions or commercial enterprises,
26 directly or through a consumer reporting agency.
27 (7) The furnishing of information to the
28 appropriate law enforcement authorities where the bank
29 reasonably believes it has been the victim of a crime.
30 (8) The furnishing of information under the Uniform
31 Disposition of Unclaimed Property Act.
32 (9) The furnishing of information under the
33 Illinois Income Tax Act and the Illinois Estate and
34 Generation-Skipping Transfer Tax Act.
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1 (10) The furnishing of information under the
2 federal Currency and Foreign Transactions Reporting Act
3 Title 31, United States Code, Section 1051 et seq.
4 (11) The furnishing of information under any other
5 statute that by its terms or by regulations promulgated
6 thereunder requires the disclosure of financial records
7 other than by subpoena, summons, warrant, or court order.
8 (12) The furnishing of information about the
9 existence of an account of a person to a judgment
10 creditor of that person who has made a written request
11 for that information.
12 (13) The exchange in the regular course of business
13 of information between commonly owned banks in connection
14 with a transaction authorized under paragraph (23) of
15 Section 5 and conducted at an affiliate facility.
16 (14) The furnishing of information in accordance
17 with the federal Personal Responsibility and Work
18 Opportunity Reconciliation Act of 1996. Any bank governed
19 by this Act shall enter into an agreement for data
20 exchanges with a State agency provided the State agency
21 pays to the bank a reasonable fee not to exceed its
22 actual cost incurred. A bank providing information in
23 accordance with this item shall not be liable to any
24 account holder or other person for any disclosure of
25 information to a State agency, for encumbering or
26 surrendering any assets held by the bank in response to a
27 lien or order to withhold and deliver issued by a State
28 agency, or for any other action taken pursuant to this
29 item, including individual or mechanical errors, provided
30 the action does not constitute gross negligence or
31 willful misconduct. A bank shall have no obligation to
32 hold, encumber, or surrender assets until it has been
33 served with a subpoena, summons, warrant, court or
34 administrative order, lien, or levy.
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1 (15) The exchange in the regular course of business
2 of information between a bank and any commonly owned
3 affiliate of the bank, subject to the provisions of the
4 Financial Institutions Insurance Sales Law.
5 (c) A bank may not disclose to any person, except to the
6 customer or his duly authorized agent, any financial records
7 relating to that customer of that bank unless:
8 (1) the customer has authorized disclosure to the
9 person;
10 (2) the financial records are disclosed in response
11 to a lawful subpoena, summons, warrant or court order
12 which meets the requirements of subsection (d) of this
13 Section; or
14 (3) the bank is attempting to collect an obligation
15 owed to the bank and the bank complies with the
16 provisions of Section 2I of the Consumer Fraud and
17 Deceptive Business Practices Act.
18 (d) A bank shall disclose financial records under
19 paragraph (2) of subsection (c) of this Section under a
20 lawful subpoena, summons, warrant, or court order only after
21 the bank mails a copy of the subpoena, summons, warrant, or
22 court order to the person establishing the relationship with
23 the bank, if living, and, otherwise his personal
24 representative, if known, at his last known address by first
25 class mail, postage prepaid, unless the bank is specifically
26 prohibited from notifying the person by order of court or by
27 applicable State or federal law. A bank shall not mail a
28 copy of a subpoena to any person pursuant to this subsection
29 if the subpoena was issued by a grand jury under the
30 Statewide Grand Jury Act.
31 (e) Any officer or employee of a bank who knowingly and
32 willfully furnishes financial records in violation of this
33 Section is guilty of a business offense and, upon conviction,
34 shall be fined not more than $1,000.
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1 (f) Any person who knowingly and willfully induces or
2 attempts to induce any officer or employee of a bank to
3 disclose financial records in violation of this Section is
4 guilty of a business offense and, upon conviction, shall be
5 fined not more than $1,000.
6 (g) A bank shall be reimbursed for costs that are
7 reasonably necessary and that have been directly incurred in
8 searching for, reproducing, or transporting books, papers,
9 records, or other data of a customer required or requested to
10 be produced pursuant to a lawful subpoena, summons, warrant,
11 or court order. The Commissioner shall determine the rates
12 and conditions under which payment may be made.
13 (Source: P.A. 89-208, eff. 9-29-95; 89-364, eff. 8-18-95;
14 89-508, eff. 7-3-96; 89-626, eff. 8-9-96; 90-18, eff.
15 7-1-97.)
16 Section 15. The Savings Bank Act is amended by changing
17 Sections 1006, 1008, 6001, 6003, and 6013 as follows:
18 (205 ILCS 205/1006) (from Ch. 17, par. 7301-6)
19 Sec. 1006. Parity.
20 (a) Subject to the regulation of the Commissioner and in
21 addition to the powers granted by this Act, each savings
22 bank operating under this Act shall possess those powers
23 granted by regulation promulgated under the Federal Deposit
24 Insurance Act for state savings banks.
25 (b) A savings bank may establish branches or offices at
26 which savings or investments are regularly received or loans
27 approved as follows:
28 (1) to the extent branch powers and offices are
29 granted to State banks under the Illinois Banking Act;
30 (2) within the geographic area defined in Article 2
31 of this Act and subject to the provisions of Article 2 of
32 this Act;
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1 (3) within the same geographic areas or states as
2 those states from which a holding company is permitted to
3 acquire an Illinois savings bank or an Illinois savings
4 bank holding company;
5 (4) to the same extent that holding companies and
6 savings and loan associations headquartered outside the
7 State of Illinois are allowed to operate in Illinois by
8 virtue of Articles 1A and 2B of the Illinois Savings and
9 Loan Act of 1985;
10 (5) as the result of mergers, consolidations, or
11 bulk sales of facilities in the case of relocations.
12 (c) The Commissioner may adopt regulations that provide
13 for the establishment of branches as defined by the
14 Commissioner.
15 (d) Notwithstanding any other provision of this Act, a
16 savings bank that purchases or assumes all or any part of the
17 assets or liabilities of a bank, savings bank, or savings and
18 loan association or merges or consolidates with a bank,
19 savings bank, or savings and loan association may retain and
20 maintain the main premises or branches of the former bank,
21 savings bank, or savings and loan association as branches of
22 the purchasing, merging, or consolidating savings bank,
23 provided it assumes the deposit liabilities of the bank,
24 savings bank, or savings and loan association maintained at
25 the main premises or branches.
26 (e) A savings bank has any power reasonably incident,
27 convenient, or useful to the accomplishment of the express
28 powers conferred upon the savings bank by this Act.
29 (Source: P.A. 89-74, eff. 6-30-95; 90-301, eff. 8-1-97.)
30 (205 ILCS 205/1008) (from Ch. 17, par. 7301-8)
31 Sec. 1008. General corporate powers.
32 (a) A savings bank operating under this Act shall be a
33 body corporate and politic and shall have all of the specific
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1 powers conferred by this Act and in addition thereto, the
2 following general powers:
3 (1) To sue and be sued, complain, and defend in its
4 corporate name and to have a common seal, which it may
5 alter or renew at pleasure.
6 (2) To obtain and maintain insurance by a deposit
7 insurance corporation as defined in this Act.
8 (3) To act as a fiscal agent for the United States,
9 the State of Illinois or any department, branch, arm, or
10 agency of the State or any unit of local government or
11 school district in the State, when duly designated for
12 that purpose, and as agent to perform reasonable
13 functions as may be required of it.
14 (4) To become a member of or deal with any
15 corporation or agency of the United States or the State
16 of Illinois, to the extent that the agency assists in
17 furthering or facilitating its purposes or powers and to
18 that end to purchase stock or securities thereof or
19 deposit money therewith, and to comply with any other
20 conditions of membership or credit.
21 (5) To make donations in reasonable amounts for the
22 public welfare or for charitable, scientific, religious,
23 or educational purposes.
24 (6) To adopt and operate reasonable insurance,
25 bonus, profit sharing, and retirement plans for officers
26 and employees and for directors including, but not
27 limited to, advisory, honorary, and emeritus directors,
28 who are not officers or employees.
29 (7) To reject any application for membership; to
30 retire deposit accounts by enforced retirement as
31 provided in this Act and the bylaws; and to limit the
32 issuance of, or payments on, deposit accounts, subject,
33 however, to contractual obligations.
34 (8) To purchase stock in service corporations and
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1 to invest in any form of indebtedness of any service
2 corporation as defined in this Act, subject to
3 regulations of the Commissioner.
4 (9) To purchase stock of a corporation whose
5 principal purpose is to operate a safe deposit company or
6 escrow service company.
7 (10) To exercise all the powers necessary to
8 qualify as a trustee or custodian under federal or State
9 law, provided that the authority to accept and execute
10 trusts is subject to the provisions of the Corporate
11 Fiduciary Act and to the supervision of those activities
12 by the Commissioner of Banks and Real Estate.
13 (11) (Blank).
14 (12) To establish, maintain, and operate terminals
15 as authorized by the Electronic Fund Transfer Act. The
16 establishment, maintenance, operation, and location of
17 those terminals shall be subject to the approval of the
18 Commissioner.
19 (13) Pledge its assets:
20 (A) to enable it to act as agent for the sale
21 of obligations of the United States;
22 (B) to secure deposits;
23 (C) to secure deposits of money whenever
24 required by the National Bankruptcy Act;
25 (D) to qualify under Section 2-9 of the
26 Corporate Fiduciary Act; and
27 (E) to secure trust funds commingled with the
28 savings bank's funds, whether deposited by the
29 savings bank or an affiliate of the savings bank, as
30 required under Section 2-8 of the Corporate
31 Fiduciary Act.
32 (14) To accept for payment at a future date not to
33 exceed one year from the date of acceptance, drafts drawn
34 upon it by its customers; and to issue, advise, or
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1 confirm letters of credit authorizing holders thereof to
2 draw drafts upon it or its correspondents.
3 (15) Subject to the regulations of the
4 Commissioner, to own and lease personal property acquired
5 by the savings bank at the request of a prospective
6 lessee and, upon the agreement of that person, to lease
7 the personal property.
8 (16) To establish temporary service booths at any
9 International Fair in this State that is approved by the
10 United States Department of Commerce for the duration of
11 the international fair for the purpose of providing a
12 convenient place for foreign trade customers to exchange
13 their home countries' currency into United States
14 currency or the converse. To provide temporary periodic
15 service to persons residing in a bona fide nursing home,
16 senior citizens' retirement home, or long-term care
17 facility. These powers shall not be construed as
18 establishing a new place or change of location for the
19 savings bank providing the service booth.
20 (17) To indemnify its officers, directors,
21 employees, and agents, as authorized for corporations
22 under Section 8.75 of the Business Corporations Act of
23 1983.
24 (18) To provide data processing services to others
25 on a for-profit basis.
26 (19) To utilize any electronic technology to
27 provide customers with home banking services.
28 (20) Subject to the regulations of the
29 Commissioner, to enter into an agreement to act as a
30 surety.
31 (21) Subject to the regulations of the
32 Commissioner, to issue credit cards, extend credit
33 therewith, and otherwise engage in or participate in
34 credit card operations.
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1 (22) To purchase for its own account shares of
2 stock of a bankers' bank, described in Section 13(b)(1)
3 of the Illinois Banking Act, on the same terms and
4 conditions as a bank may purchase such shares. In no
5 event shall the total amount of such stock held by a
6 savings bank in such bankers' bank exceed 10% of its
7 capital and surplus (including undivided profits) and in
8 no event shall a savings bank acquire more than 5% of any
9 class of voting securities of such bankers' bank.
10 (23) With respect to affiliate facilities:
11 (A) to conduct at affiliate facilities any of
12 the following transactions for and on behalf of any
13 affiliated depository institution, if so authorized
14 by the affiliate or affiliates: receiving deposits;
15 renewing deposits; cashing and issuing checks,
16 drafts, money orders, travelers checks, or similar
17 instruments; changing money; receiving payments on
18 existing indebtedness; and conducting ministerial
19 functions with respect to loan applications,
20 servicing loans, and providing loan account
21 information; and
22 (B) to authorize an affiliated depository
23 institution to conduct for and on behalf of it, any
24 of the transactions listed in this subsection at one
25 or more affiliate facilities.
26 A savings bank intending to conduct or to authorize
27 an affiliated depository institution to conduct at an
28 affiliate facility any of the transactions specified in
29 this subsection shall give written notice to the
30 Commissioner at least 30 days before any such transaction
31 is conducted at an affiliate facility. All conduct under
32 this subsection shall be on terms consistent with safe
33 and sound banking practices and applicable law.
34 (24) (23) Subject to Article XLIV of the Illinois
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1 Insurance Code, to act as the agent for any fire, life,
2 or other insurance company authorized by the State of
3 Illinois, by soliciting and selling insurance and
4 collecting premiums on policies issued by such company;
5 and may receive for services so rendered such fees or
6 commissions as may be agreed upon between the said
7 savings bank and the insurance company for which it may
8 act as agent; provided, however, that no such savings
9 bank shall in any case assume or guarantee the payment of
10 any premium on insurance policies issued through its
11 agency by its principal; and provided further, that the
12 savings bank shall not guarantee the truth of any
13 statement made by an assured in filing his application
14 for insurance.
15 (25) (23) To become a member of the Federal Home
16 Loan Bank Board and to have the powers granted to a
17 savings association organized under the Illinois Savings
18 and Loan Act of 1985 or the laws of the United States,
19 subject to regulations of the Commissioner.
20 (26) To offer any product or service that is at the
21 time authorized or permitted to a bank by applicable law,
22 but subject always to the same limitations and
23 restrictions that are applicable to the bank for the
24 product or service by such applicable law and subject to
25 the applicable provisions of the Financial Institutions
26 Insurance Sales Law and rules of the Commissioner.
27 (b) If this Act or the regulations adopted under this
28 Act fail to provide specific guidance in matters of corporate
29 governance, the provisions of the Business Corporation Act of
30 1983 may be used.
31 (Source: P.A. 89-74, eff. 6-30-95; 89-310, eff. 1-1-96;
32 89-317, eff. 8-11-95; 89-355, eff. 8-17-95; 89-508, eff.
33 7-3-96; 89-603, eff. 8-2-96; 89-626, eff. 8-9-96; 90-14, eff.
34 7-1-97; 90-41, eff. 10-1-97; 90-270, eff. 7-30-97; 90-301,
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1 eff. 8-1-97; revised 10-21-97.)
2 (205 ILCS 205/6001) (from Ch. 17, par. 7306-1)
3 Sec. 6001. General provisions.
4 (a) No savings bank shall make any loan or investment
5 authorized by this Article unless the savings bank first has
6 determined that the type, amount, purpose, and repayment
7 provisions of the loan or investment in relation to the
8 borrower's or issuer's resources and credit standing support
9 the reasonable belief that the loan or investment will be
10 financially sound and will be repaid according to its terms
11 and that the loan or investment is not otherwise unlawful.
12 (b) Each loan or investment that a savings bank makes or
13 purchases, whether wholly or in part, must be adequately
14 underwritten, reviewed periodically, and reserved against as
15 necessary in accordance with its payment performance, all in
16 accordance with the regulations and directives of the
17 Commissioner.
18 (c) Every appraisal or reappraisal of property that a
19 savings bank is required to make shall be made as follows:
20 (1) By an independent qualified appraiser,
21 designated by the board of directors, who is properly
22 licensed or and certified by the entity authorized to
23 govern his licensure or and certification and who meets
24 the requirements of the Appraisal Subcommittee and of the
25 Federal Act.
26 (2) In the case of an insured or guaranteed loan,
27 by any appraiser appointed by any lending, insuring, or
28 guaranteeing agency of the United States or the State of
29 Illinois that insures or guarantees the loan, wholly or
30 in part.
31 (3) Each appraisal shall be in writing prepared at
32 the request of the lender for the lender's use; disclose
33 the market value of the security offered; contain
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1 sufficient information and data concerning the appraised
2 property to substantiate the market value thereof; be
3 certified and signed by the appraiser or appraisers; and
4 state that the appraiser or appraisers have personally
5 examined the described property. The appraisal shall be
6 filed and preserved by the savings bank. In addition, the
7 appraisal shall be prepared and reported in accordance
8 with the Standards of Professional Practice and the
9 ethical rules of the Appraisal Foundation as adopted and
10 promulgated by the Appraisal Subcommittee.
11 (d) If appraisals of real estate securing a savings
12 bank's loans are obtained as part of an examination by the
13 Commissioner, the cost of those appraisals shall promptly be
14 paid by the savings bank directly to the appraiser or
15 appraisers.
16 (e) Any violation of this Article shall constitute an
17 unsafe or unsound practice. Any person who knowingly
18 violates any provision of this Article shall be subject to
19 enforcement action or civil money penalties as provided for
20 in this Act.
21 (f) For purposes of this Article, "underwriting" shall
22 mean the process of compiling information to support a
23 determination as to whether an investment or extension of
24 credit shall be made by a savings bank. It shall include,
25 but not be limited to, evaluating a borrower's
26 creditworthiness, determination of the value of the
27 underlying collateral, market factors, and the
28 appropriateness of the investment or loan for the savings
29 bank. Underwriting as used herein does not include the
30 agreement to purchase unsold portions of public offerings of
31 stocks or bonds as commonly used in corporate securities
32 issuances and sales.
33 (g) For purposes of this Section, the following
34 definitions shall apply:
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1 (1) "Federal Act" means Title XI of the Financial
2 Institutions Reform, Recovery and Enforcement Act of 1989
3 and regulations adopted pursuant thereto.
4 (2) "Appraisal Subcommittee" means the designee of
5 the heads of the Federal Financial Institutions
6 Examination Council Act of 1978 (12 U.S.C. 3301 et seq.).
7 (3) "Appraisal Foundation" means the Appraisal
8 Foundation that was incorporated as an Illinois
9 not-for-profit corporation on November 30, 1987.
10 (Source: P.A. 86-1213.)
11 (205 ILCS 205/6003) (from Ch. 17, par. 7306-3)
12 Sec. 6003. Other investments. If the board of directors
13 determines at any time that funds are available in excess of
14 the demands and needs for loans, maturities, and withdrawals,
15 A savings bank may invest funds as provided in this Section:
16 (1) In demand, time, or savings deposits or
17 accounts, withdrawable accounts, or other insured
18 obligations of any financial institution the accounts of
19 which are insured by a federal agency.
20 (2) In participating interests in loans of a type
21 that the savings bank would be authorized to make, but
22 only if the other participants are (A) savings banks
23 organized under this Act, (B) savings and loan
24 associations, banks, credit unions, and licensees under
25 the Consumer Installment Loan Act or the Sales Finance
26 Agency Act, organized under the laws of this State, (C)
27 associations or corporations insured by an
28 instrumentality of the United States, (D)
29 instrumentalities of or corporations owned wholly or in
30 part by the United States or this State, or, (E) subject
31 to regulations of the Commissioner, service corporations
32 of a savings bank organized under this Act or
33 subsidiaries of a savings and loan association, bank, or
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1 credit union organized under the laws of this State or
2 the United States.
3 (3) In obligations of, or obligations that are
4 fully guaranteed by the United States and in stocks or
5 obligations of any Federal Reserve Bank, Federal Home
6 Loan Bank, the Student Loan Market Association, the
7 Government National Mortgage Association, the Federal
8 National Mortgage Association, The Federal Home Loan
9 Mortgage Corporation, the Federal Deposit Insurance
10 Corporation, or any other agency of the United States.
11 (4) In bonds or other direct obligations of, or
12 guaranteed as to principal and interest by, this State.
13 (5) In obligations that by the laws of this State
14 are made legal investments for savings banks.
15 (6) In bonds or other evidences of indebtedness
16 that are direct general obligations of any unit of local
17 government of this State or in bonds or other evidences
18 of indebtedness that are payable from revenues or
19 earnings specifically pledged therefor of a unit of local
20 government, but in no event shall the total amount of the
21 securities of any one maker or obligor exceed 15% of the
22 savings bank's total capital, nor shall the aggregate
23 amount of investments under this paragraph exceed 15% of
24 the savings bank's total assets.
25 (7) Equity investments in real estate. With the
26 prior written consent of the Commissioner, a savings bank
27 may invest in the initial purchase and development, or
28 the purchase or commitment to purchase after completion,
29 of home sites and housing for sale or rental, including,
30 but not limited to, projects for the reconstruction,
31 rehabilitation, or rebuilding of residential properties
32 to meet the minimum standards of health and occupancy
33 prescribed by appropriate local authorities, the
34 provision of accommodations for retail stores, shops, and
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1 other community services that are reasonably incident to
2 that housing or in the shares of a corporation that owns
3 one or more of those projects and that is wholly owned by
4 one or more financial institutions whose investments are
5 regulated by the laws of this State or of the United
6 States. In no event shall the total investment in any
7 one project exceed 15% of the savings bank's total
8 capital, nor shall the aggregate investment under this
9 paragraph exceed 50% of its total capital. No savings
10 bank may make an investment of this type unless it is in
11 compliance with the capital requirements of this Act and
12 with the capital maintenance requirements of its insurer
13 of deposit accounts. The Commissioner shall approve the
14 investment only if the savings bank shows:
15 (A) that the savings bank has adequate assets
16 available for the investment;
17 (B) that the proposed investment does not
18 exceed the reasonable market value of the property
19 or interest therein as determined in accordance with
20 the appraisal requirements of this Act; and
21 (C) that all other requirements of this
22 Section have been met.
23 Nothing contained in this paragraph prohibits a
24 savings bank from developing or building on land acquired
25 by it under any other provision of this Act nor from
26 completing the construction of buildings in accordance
27 with any construction loan contract where the borrower
28 has failed to comply with the terms of the contract.
29 (8) In obligations of the State of Israel or
30 obligations fully guaranteed by the State of Israel as to
31 payment of principal and interest, but in no event shall
32 the total amount of that investment exceed 15% of the
33 savings bank's total capital.
34 (9) In stocks or obligations of business
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1 development corporations chartered by this State or by
2 the United States or an agency thereof, but in no event
3 shall the aggregate amount of stock exceed 2.5% of the
4 savings bank's total capital or $250,000, whichever is
5 greater.
6 (10) In obligations of urban renewal investment
7 corporations chartered under the laws of this State, or
8 the United States, or in certificates of beneficial
9 interest of urban renewal investment trusts, but in no
10 event shall the aggregate amount of the stock,
11 obligations or beneficial interest certificates of any
12 one maker exceed 2.5% of the savings bank's total
13 capital, nor shall the aggregate amount of investments
14 under this paragraph exceed 15% of its total capital.
15 (11) Subject to the regulations of the
16 Commissioner, in loans deemed sufficiently secured by the
17 board of directors of the savings bank. However, if the
18 security is stock or equity securities of any kind other
19 than those of a financial institution, the stock or
20 securities must be listed on a national exchange or
21 actively traded and quoted on an over-the-counter market
22 or their value must be ascertainable in accordance with
23 regulations promulgated by the Commissioner.
24 (12) In commercial paper. As used in this Section,
25 the term "commercial paper" means short term obligations
26 having a maturity ranging from 2 to 270 days issued by
27 banks, corporations, or other borrowers. Investments in
28 commercial paper under this Section must be in securities
29 rated in one of the 4 highest categories by a nationally
30 recognized rating service.
31 (13) Purchase of stock in insurance companies.
32 Notwithstanding any provision of this Act to the
33 contrary, a savings bank may purchase shares of, or
34 otherwise acquire equity interests in, insurance
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1 companies and insurance holding companies organized to
2 provide insurance for savings institutions and
3 corporations and individuals affiliated with savings
4 institutions, provided ownership of equity interests is a
5 prerequisite to obtaining directors and officers' and
6 blanket bond insurance through the company or companies.
7 The Commissioner may promulgate regulations concerning
8 the size of each savings bank's investment and manner of
9 holding those investments.
10 (14) Subject to the regulation of the Commissioner,
11 in equity or debt securities or instruments of a service
12 corporation subsidiary of the savings bank.
13 (15) Through advances of federal funds to
14 designated depositories, provided that the advances are
15 made on the condition that they be repaid on the next
16 business day following the date on which the advance is
17 made. For the purposes of this paragraph, the term
18 "federal funds" means funds that a savings bank has on
19 deposit at a depository that are exchangeable for funds
20 on deposit at a federal reserve bank; the term "business
21 day" means any day on which the savings bank, the
22 depository, and the federal reserve bank where the funds
23 are on deposit are all open for general business.
24 (16) In financial futures or options transactions
25 subject to the regulations of the Commissioner.
26 (17) In a subsidiary chartered for the purpose of
27 exercising all powers necessary to act as a corporate
28 fiduciary under the Corporate Fiduciary Act.
29 (18) In marketable investment securities, but in no
30 event shall the total amount of those securities of any
31 one maker or obligor exceed 15% of the savings bank's
32 total capital nor shall the aggregate amount of
33 investments under this Section exceed 15% of total
34 assets. As used in this Section, the term "marketable
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1 investment securities" does not include stocks, but means
2 investment grade marketable obligations evidencing
3 indebtedness of any person in the form of bonds, notes,
4 or debentures commonly known as investment securities,
5 and of a type customarily sold on recognized exchanges or
6 traded over the counter and investment grade marketable
7 obligations of the International Bank for Reconstruction
8 and Development, the Inter-American Development Bank, the
9 Asian Development Bank, the African Development Bank, or
10 the International Finance Corporation. As used in this
11 Section, the term "investment grade" means being rated in
12 one of the 4 highest categories by at least one
13 nationally recognized rating service.
14 (19) In investment grade marketable obligations of
15 any other state, territory, or possession or political
16 subdivision thereof to the same extent that it may invest
17 in marketable investment securities under paragraph (18)
18 of this Section.
19 (Source: P.A. 88-481; 89-317, eff. 8-11-95.)
20 (205 ILCS 205/6013) (from Ch. 17, par. 7306-13)
21 Sec. 6013. Loans to one borrower.
22 (a) Except as provided in subsection (c), the total
23 loans and extensions of credit, both direct and indirect, by
24 a savings bank to any person, other than a municipal
25 corporation for money borrowed, outstanding at one time shall
26 not exceed 20% of the savings bank's total capital plus
27 general loan loss reserves.
28 (b) Except as provided in subsection (c), the total
29 loans and extensions of credit, both direct and indirect, by
30 a savings bank to any person outstanding at one time and at
31 least 100% secured by readily marketable collateral having a
32 market value, as determined by reliable and continuously
33 available price quotations, shall not exceed 10% of the
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1 savings bank's total capital plus general loan loss reserves.
2 This limitation shall be separate from and in addition to the
3 limitation contained in subsection (a).
4 (c) If the limit under subsection (a) or (b) on total
5 loans to one borrower is less than $500,000, a savings bank
6 that meets its minimum capital requirement under this Act may
7 have loan and extensions of credit, both direct and indirect,
8 outstanding to any person at one time not to exceed $500,000.
9 With the prior written approval of the Commissioner, a
10 savings bank that has capital in excess of 6% of assets may
11 make loans and extensions of credit to one borrower for the
12 development of residential housing properties, located or to
13 be located in this State, not to exceed 30% of the savings
14 bank's total capital plus general loan loss reserves.
15 (d) For purposes of this Section, the term "person"
16 shall be deemed to include an individual, firm, corporation,
17 business trust, partnership, trust, estate, association,
18 joint venture, pool, syndicate, sole proprietorship,
19 unincorporated association, any political subdivision, or any
20 similar entity or organization.
21 (e) For the purposes of this Section any loan or
22 extension of credit granted to one person, the proceeds of
23 which are used for the direct benefit of a second person,
24 shall be deemed a loan or extension of credit to the second
25 person as well as the first person.
26 (f) For the purposes of this Section, the total
27 liabilities of a firm, partnership, pool, syndicate, or joint
28 venture shall include the liabilities of the members of the
29 entity.
30 (g) For the purposes of this Section, the term "readily
31 marketable collateral" means financial instruments or bullion
32 that are salable under ordinary circumstances with reasonable
33 promptness at a fair market value on an auction or a
34 similarly available daily bid-and-ask price market.
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1 "Financial instruments" include stocks, bonds, notes,
2 debentures traded on a national exchange or over the counter,
3 commercial paper, negotiable certificates of deposit,
4 bankers' acceptances, and shares in money market or mutual
5 funds.
6 (h) Each savings bank shall institute adequate
7 procedures to ensure that collateral fully secures the
8 outstanding loan or extension of credit at all times.
9 (i) If collateral values fall below 100% of the
10 outstanding loan or extension of credit to the extent that
11 the loan or extension of credit no longer is in conformance
12 with subsection (b) and exceeds the 20% limitation of
13 subsection (a), the loan must be brought into conformance
14 with this Section within 5 business days except where
15 judicial proceedings or other similar extraordinary
16 occurrences prevent the savings bank from taking action.
17 (j) This Section shall not apply to loans or extensions
18 of credit to the United States of America or its agencies or
19 this State or its agencies or to any loan, investment, or
20 extension of credit made pursuant to Section 6003 of this
21 Act.
22 (Source: P.A. 89-74, eff. 6-30-95.)
23 Section 20. The Illinois Credit Union Act is amended by
24 changing Sections 1.1 and 61 and adding Section 34.1 as
25 follows:
26 (205 ILCS 305/1.1) (from Ch. 17, par. 4402)
27 Sec. 1.1. Definitions. Credit Union - The term "credit
28 union" means a cooperative, non-profit association,
29 incorporated under this Act, under the laws of the United
30 States of America or under the laws of another state, for the
31 purposes of encouraging thrift among its members, creating a
32 source of credit at a reasonable rate of interest, and
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1 providing an opportunity for its members to use and control
2 their own money in order to improve their economic and social
3 conditions. The membership of a credit union shall consist of
4 a group or groups each having a common bond as set forth in
5 this Act.
6 Common Bond - The term "common bond" refers to groups of
7 people who meet one of the following qualifications:
8 (1) Persons belonging to a specific association, group
9 or organization, such as a church, labor union, club or
10 society and members of their immediate families which shall
11 include any relative by blood or marriage or foster and
12 adopted children.
13 (2) Persons who reside in a reasonably compact and well
14 defined neighborhood or community, and members of their
15 immediate families which shall include any relative by blood
16 or marriage or foster and adopted children.
17 (3) Persons who have a common employer or who are
18 members of an organized labor union or an organized
19 occupational or professional group within a defined
20 geographical area, and members of their immediate families
21 which shall include any relative by blood or marriage or
22 foster and adopted children.
23 Shares - The term "shares" or "share accounts" means any
24 form of shares issued by a credit union and established by a
25 member in accordance with standards specified by a credit
26 union, including but not limited to common shares, share
27 draft accounts, classes of shares, share certificates,
28 special purpose share accounts, shares issued in trust,
29 custodial accounts, and individual retirement accounts or
30 other plans established pursuant to Section 401(d) or (f) or
31 Section 408(a) of the Internal Revenue Code, as now or
32 hereafter amended, or similar provisions of any tax laws of
33 the United States that may hereafter exist.
34 Credit Union Organization - The term "credit union
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1 organization" means any organization established to serve the
2 needs of credit unions, the business of which relates to the
3 daily operations of credit unions.
4 Department - The term "Department" means the Illinois
5 Department of Financial Institutions.
6 Director - The term "Director" means the Director of the
7 Illinois Department of Financial Institutions.
8 NCUA - The term "NCUA" means the National Credit Union
9 Administration, an agency of the United States Government
10 charged with the supervision of credit unions chartered under
11 the laws of the United States of America.
12 Central Credit Union - The term "central credit union"
13 means a credit union incorporated primarily to receive shares
14 from and make loans to credit unions and Directors, Officers,
15 committee members and employees of credit unions. A central
16 credit union may also accept as members persons who were
17 members of credit unions which were liquidated and persons
18 from occupational groups not otherwise served by another
19 credit union.
20 Corporate Credit Union - The term "corporate credit
21 union" means a credit union which is a cooperative,
22 non-profit association, the membership of which is limited
23 primarily to other credit unions.
24 Insolvent - "Insolvent" means the condition that results
25 when the total of all liabilities and shares exceeds net
26 assets of the credit union.
27 Danger of insolvency - The term "Danger of insolvency" as
28 used in Section 61 means when a credit union falls below a 2%
29 capital to asset ratio.
30 (Source: P.A. 86-432.)
31 (205 ILCS 305/34.1 new)
32 Sec. 34.1. Compliance review.
33 (a) As used in this Section:
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1 "Affiliate" means an organization established to serve
2 the needs of credit unions, the business of which relates to
3 the daily operations of credit unions.
4 "Compliance review committee" means:
5 (1) one or more persons appointed by the board of
6 directors or supervisory committee of a credit union for
7 the purposes set forth in subsection (b); or
8 (2) any other person to the extent the person acts
9 in an investigatory capacity at the direction of a
10 compliance review committee.
11 "Compliance review documents" means documents prepared in
12 connection with a review or evaluation conducted by or for a
13 compliance review committee.
14 "Person means an individual, a group of individuals, a
15 board committee, a partnership, a firm, an association, a
16 corporation, or any other entity.
17 (b) This Section applies to compliance review committees
18 whose functions are to evaluate and seek to improve any of
19 the following:
20 (1) loan policies or underwriting standards;
21 (2) asset quality;
22 (3) financial reporting to federal or State
23 governmental or regulatory agencies; or
24 (4) compliance with federal or State statutory or
25 regulatory requirements.
26 (c) Except as provided in subsection (d), compliance
27 review documents and the deliberations of the compliance
28 review committee are privileged and confidential and are
29 nondiscoverable and nonadmissible.
30 (1) Compliance review documents are privileged and
31 confidential and are not subject to discovery or
32 admissible in evidence in any civil action.
33 (2) Individuals serving on compliance review
34 committees or acting under the direction of a compliance
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1 review committee shall not be required to testify in any
2 civil action about the contents of any compliance review
3 document or conclusions of any compliance review
4 committee or about the actions taken by a compliance
5 review committee.
6 (3) An affiliate of a credit union, a credit union
7 regulatory agency, and the insurer of credit union share
8 accounts shall have access to compliance review
9 documents, provided that (i) the documents shall remain
10 confidential and are not subject to discovery from such
11 entity and (ii) delivery of compliance review documents
12 to an affiliate or pursuant to the requirements of a
13 credit union regulatory agency or an insurer of credit
14 union share accounts shall not constitute a waiver of the
15 privilege granted in this Section.
16 (d) This Section does not apply to: (1) compliance
17 review committees on which individuals serving on or at the
18 direction of the compliance review committee have management
19 responsibility for the operations, records, employees, or
20 activities being examined or evaluated by the compliance
21 review committee and (2) any civil or administrative action
22 initiated by a credit union regulatory agency or an insurer
23 of credit union share accounts.
24 (e) This Section shall not be construed to limit the
25 discovery or admissibility in any civil action of any
26 documents other than compliance review documents or to
27 require the appointment of a compliance review committee.
28 (205 ILCS 305/61) (from Ch. 17, par. 4462)
29 Sec. 61. Suspension.
30 (1) If the Director determines that any credit union is
31 bankrupt, insolvent, impaired or that it has willfully
32 violated this Act, or is operating in an unsafe or unsound
33 manner, he shall issue an order temporarily suspending the
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1 credit union's operations for not more than 60 days. The
2 Board of Directors shall be given notice by registered or
3 certified mail of such suspension, which notice shall include
4 the reasons for such suspension and a list of specific
5 violations of the Act, or a list of the specific violations
6 of this Act, or both such reasons and list. The Director
7 shall also notify the members of the Credit Union Board of
8 Advisors of any suspension. The Director may assess to the
9 credit union a penalty, not to exceed the examination fee as
10 set forth in this Act, $50 to offset costs incurred in
11 determining the condition of the credit union's books and
12 records.
13 (2) Upon receipt of such suspension notice, the credit
14 union shall cease all operations, except those authorized by
15 the Director, or the Director may appoint a Manager-Trustee
16 to operate the credit union during the suspension period.
17 The Board of Directors shall, within 10 days of the receipt
18 of the suspension notice, file with the Director a reply to
19 the suspension notice, either by submitting one or more of
20 the following: a corrective plan of action or a request for
21 formal hearing on said action pursuant to the Department's
22 rules and regulations. or by a request that the credit union
23 be declared insolvent and a Liquidating Agent be appointed.
24 (3) Upon receipt from the suspended credit union of
25 evidence that the conditions causing the order of suspension
26 have been corrected, and after determining that the proposed
27 corrective plan of action submitted is factual, the Director
28 shall revoke the suspension notice, permit the credit union
29 to resume normal operations, and notify the Board of Credit
30 Union Advisors of such action.
31 (4) If the Director determines that the proposed
32 corrective plan of action will not correct such conditions
33 and that the credit union cannot be reorganized, he may take
34 possession and control of the credit union its office,
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1 furniture, fixtures, books, records and other assets and upon
2 examination, determine whether it is practicable and feasible
3 to reorganize the credit union to continue its business. The
4 Director may permit the credit union to operate under his
5 direction and control, and may appoint a Manager-Trustee to
6 manage its affairs until such time as the condition requiring
7 such action has been remedied, or in the case of insolvency
8 or danger of insolvency where an emergency requiring
9 expeditious action exists, the Director may involuntarily
10 merge the credit union without the vote of the suspended
11 credit union's Board of Directors or members (hereafter
12 involuntary merger) subject to rules promulgated by the
13 Director. No credit union shall be required to serve as a
14 surviving credit union in any involuntary merger. Upon the
15 request of the Director, a credit union by a vote of a
16 majority of its Board of Directors may elect to serve as a
17 surviving credit union in an involuntary merger. If the
18 Director he determines that the suspended credit union should
19 be liquidated, he may appoint a Liquidating Agent and require
20 of that person such bond and security as he considers proper.
21 (5) Upon receipt of a request for a formal hearing, the
22 Director shall conduct proceedings pursuant to rules and
23 regulations of the Department and take necessary action
24 subsequent to the hearing officer's decision; whether it be
25 revocation of the suspension notice, issuance of an
26 involuntary liquidation or appointment of a Manager-Trustee..
27 The credit union may request the appropriate court to stay
28 execution of such action. Involuntary liquidation or
29 involuntary merger may not be ordered prior to the conclusion
30 of suspension procedures outlined in this Section.
31 (6) If, within the suspension period, the credit union
32 fails to answer the suspension notice or fails to request a
33 formal hearing, or both, the Director may then (i)
34 involuntarily merge the credit union if the credit union is
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1 insolvent or in danger of insolvency and an emergency
2 requiring expeditious action exists or (ii) revoke the credit
3 union's charter, appoint a Liquidating Agent and liquidate
4 the credit union.
5 (Source: P.A. 86-432.)
6 Section 25. The Electronic Fund Transfer Act is amended
7 by adding Section 85 as follows:
8 (205 ILCS 616/85 new)
9 Sec. 85. Reliance on Commissioner. No person shall be
10 liable under this Act for any act done or omitted in good
11 faith in conformity with any rule, interpretation, or opinion
12 issued by the Commissioner of Banks and Real Estate,
13 notwithstanding that after the act or omission has occurred,
14 the rule, interpretation, or opinion upon which reliance is
15 placed is amended, rescinded, or determined by judicial or
16 other authority to be invalid for any reason.
17 Section 30. The Corporate Fiduciary Act is amended by
18 changing Sections 1-7, 4-4, and 5-6 as follows:
19 (205 ILCS 620/1-7) (from Ch. 17, par. 1551-7)
20 Sec. 1-7. Office locations corporate fiduciaries.
21 (a) Any corporate fiduciary may establish branch offices
22 at any location. Any corporate fiduciary that seeks to
23 establish a branch office shall, if it is a trust company,
24 apply for and obtain approval for the branch office from the
25 Commissioner or, if it is a bank, savings and loan
26 association, or savings bank, give notice of its intent to
27 establish a branch office to the Commissioner, 30 days prior
28 to the purchasing or leasing of land, building, or equipment
29 for the branch office under the terms and conditions as the
30 Commissioner shall specify by rule.
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1 (b) Any trust company that proposes to establish a
2 subsidiary, whether by incorporating the subsidiary or by
3 acquiring the subsidiary, shall apply for and obtain prior
4 approval from the Commissioner 60 days prior to commencing
5 business by the subsidiary, if newly incorporated, or prior
6 to its acquisition, if it is acquired, provided the
7 Commissioner may specify circumstances and conditions when a
8 trust company may directly or indirectly acquire a subsidiary
9 without prior approval.
10 (Source: P.A. 86-754; 87-506.)
11 (205 ILCS 620/4-4) (from Ch. 17, par. 1554-4)
12 Sec. 4-4. Place of business not to be established in
13 State; not deemed transacting business.
14 (a) A foreign corporation, as defined in Section 1-5.08
15 of this Act, shall not establish in this State a place of
16 business, branch office, or agency for the conduct of
17 business as a fiduciary and because it is not permitted to
18 establish in this State a place of business, branch office or
19 agency, a foreign corporation insofar as it acts in a
20 fiduciary capacity in this State pursuant to the provisions
21 of this Act shall not be deemed to be transacting business in
22 this State. The foreign corporation may apply for, and
23 procure from the Commissioner, a license to establish a
24 representative office pursuant to the Foreign Bank
25 Representative Office Act.
26 (b) Notwithstanding subsection (a) of this Section 4-4,
27 after May 31, 1997, a branch of an out-of-state bank, as
28 defined in Section 2 of the Illinois Banking Act, may
29 establish an office in this State for the conduct of business
30 as a fiduciary, provided:; (i) the branch of the out-of-state
31 bank obtains a certificate of authority pursuant to this
32 Section; (ii) fiduciary business conducted in this State by a
33 branch of an out-of-state bank is subject to examination by
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1 the Commissioner; and (ii) (iii) the trust activities of the
2 branch of the out-of-state bank are subject to regulation,
3 including enforcement actions, by the Commissioner to the
4 same extent as Illinois corporate fiduciaries.
5 (c) The application for a certificate of authority
6 pursuant to this Section shall be filed with the Commissioner
7 on forms prescribed by the Commissioner and shall contain
8 such relevant information as the Commissioner may specify to
9 determine that the fiduciary business will be conducted by
10 the branch of the out-of-state bank in a safe and sound
11 manner.
12 (Source: P.A. 89-208, eff. 9-29-95; 89-364, eff. 8-18-95;
13 89-626, eff. 8-9-96.)
14 (205 ILCS 620/5-6) (from Ch. 17, par. 1555-6)
15 Sec. 5-6. Removal orders. Whenever, in the opinion of
16 the Commissioner, any director, officer, employee, or agent
17 of a corporate fiduciary shall have violated any law, rule,
18 or order relating to the corporate fiduciary, or shall have
19 engaged in an unsafe or unsound practice in conducting the
20 business of the corporate fiduciary, or shall have violated
21 any law or engaged or participated in any unsafe or unsound
22 practice in connection with any financial institution or
23 other business entity such that the character and fitness of
24 the director, officer, employee, or agent does not assure
25 reasonable promise of safe and sound operation of the
26 corporate fiduciary, the Commissioner may issue an order of
27 removal. If in the opinion of the Commissioner, any former
28 director, officer, employee, or agent of a corporate
29 fiduciary, prior to the termination of his or her service
30 with the corporate fiduciary, violated any law, rule, or
31 order relating to the corporate fiduciary or engaged in an
32 unsafe or unsound practice in conducting the business of the
33 corporate fiduciary or violated any law or engaged or
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1 participated in any unsafe or unsound practice in connection
2 with any financial institution or other business entity such
3 that the character and fitness of the director, officer,
4 employee, or agent would not have assured reasonable promise
5 of safe and sound operation of the corporate fiduciary prior
6 to the termination of his or her service with the corporate
7 fiduciary, the Commissioner may issue an order prohibiting
8 that person from further service with a corporate fiduciary
9 as a director, officer, employee, or agent. An order issued
10 pursuant to this Section shall be served upon the director,
11 officer, employee, or agent. A copy of the order shall be
12 sent to each director of the corporate fiduciary affected by
13 personal service, certified mail return receipt requested, or
14 any other method that provides proof of service and receipt.
15 The person affected by the action may request a hearing
16 before the State Banking Board of Illinois, hereafter "the
17 Board", within 10 days after receipt of the order of removal
18 or prohibition. The hearing shall be held by the Board
19 according to the same procedures used pursuant to Section 48
20 of the Illinois Banking Act, and the hearing shall be held
21 within 30 days after the request has been received by the
22 Board. After concluding the hearing, the Board shall make a
23 determination approving, modifying, or disapproving the order
24 of the Commissioner as its final administrative decision. A
25 copy of the order shall be served upon the corporate
26 fiduciary of which the person is a director, officer,
27 employee, or agent, whereupon the person shall cease to be a
28 director, officer, employee, or agent of the corporate
29 fiduciary. Any person who has been removed or prohibited by
30 an order of the Commissioner under this Section or subsection
31 (7) of Section 48 of the Illinois Banking Act may not
32 thereafter serve as director, officer, employee, or agent of
33 any State bank or corporate fiduciary, or of any other entity
34 that is subject to licensure or regulation by the
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1 Commissioner or the Office of Banks and Real Estate unless
2 the Commissioner has granted prior approval in writing. The
3 Commissioner may institute a civil action against the
4 director, officer, employee, or agent subject to an order
5 issued under this Section and against the corporate fiduciary
6 to enforce compliance with or to enjoin any violation of the
7 terms of the order.
8 (Source: P.A. 90-301, eff. 8-1-97.)
9 Section 35. The Consumer Installment Loan Act is amended
10 by changing Section 19.1 as follows:
11 (205 ILCS 670/19.1) (from Ch. 17, par. 5425.1)
12 Sec. 19.1. Where the licensee repossesses a motor vehicle
13 that was used as collateral and which is used primarily for
14 the obligor's personal, family or household purposes, the
15 licensee shall be subject to the requirements of and shall
16 transfer the certificate of title pursuant to Section 3-114
17 of the Illinois Vehicle Code and the obligor at the time of
18 repossession has paid an amount equal to 30% or more of the
19 total of payments due, the obligor may, within 15 days,
20 reinstate the contract and recover the motor vehicle from the
21 licensee by tendering:
22 (a) the total of all unpaid amounts, including any
23 unpaid delinquency or deferral charges due, without
24 acceleration; and
25 (b) performance necessary to cure any default other than
26 nonpayment of the amounts due; and
27 (c) any reasonable cost or fees incurred by the licensee
28 in the retaking of the goods. Tender of payment and
29 performance pursuant to this Section restores to the obligor
30 his rights under the loan as though no default had occurred.
31 The obligor has a right to reinstate the contract and recover
32 the collateral from the licensee only once under this
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1 Section.
2 The licensee must give written notice to the obligor,
3 within 3 days of the repossession, of the obligor's right to
4 reinstate the contract and recover the collateral pursuant to
5 this Section. The Written notice shall be in substantially
6 the following form:
7 NOTICE OF RIGHT TO RECOVER VEHICLE
8 Your car was repossessed on (specify date) for failure to
9 make payments on the loan (or other reason).
10 Under Illinois law, because you have paid at least 30% of
11 the loan before repossession, you may be able to get the car
12 back. To recover the car and reinstate the loan you must do
13 the following within 15 days of the date of repossession:
14 1. Make payment of all back payments as
15 of the date of this notice
16 . $...........
17 2. Pay any late charge due. $...........
18 3. Pay the costs of repossession. $...........
19 Total due as of the date of this
20 notice
21 plus any additional amounts which may become
22 due
23 between the date of the notice and the date of
24 reinstatement. $...........
25 Bring cash, a certified check or money order for the
26 total amount plus any amounts which may become due between
27 the date of the notice and the date of reinstatement to our
28 office located at (specify address) by (specify date) to get
29 your car back.
30 (Source: P.A. 90-437, eff. 1-1-98.)
31 Section 45. The Illinois Vehicle Code is amended by
32 changing Sections 3-114 and 3-117.1 as follows:
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1 (625 ILCS 5/3-114) (from Ch. 95 1/2, par. 3-114)
2 Sec. 3-114. Transfer by operation of law.
3 (a) If the interest of an owner in a vehicle passes to
4 another other than by voluntary transfer, the transferee
5 shall, except as provided in paragraph (b), promptly mail or
6 deliver within 20 days to the Secretary of State the last
7 certificate of title, if available, proof of the transfer,
8 and his application for a new certificate in the form the
9 Secretary of State prescribes. It shall be unlawful for any
10 person having possession of a certificate of title for a
11 motor vehicle, semi-trailer, or house car by reason of his
12 having a lien or encumbrance on such vehicle, to fail or
13 refuse to deliver such certificate to the owner, upon the
14 satisfaction or discharge of the lien or encumbrance,
15 indicated upon such certificate of title.
16 (b) If the interest of an owner in a vehicle passes to
17 another under the provisions of the Small Estates provisions
18 of the Probate Act of 1975 the transferee shall promptly mail
19 or deliver to the Secretary of State, within 120 days, the
20 last certificate of title, if available, the documentation
21 required under the provisions of the Probate Act of 1975, and
22 an application for certificate of title. The Small Estate
23 Affidavit form shall be furnished by the Secretary of State.
24 The transfer may be to the transferee or to the nominee of
25 the transferee.
26 (c) If the interest of an owner in a vehicle passes to
27 another under other provisions of the Probate Act of 1975, as
28 amended, and the transfer is made by a representative or
29 guardian, such transferee shall promptly mail or deliver to
30 the Secretary of State, the last certificate of title, if
31 available, and a certified copy of the letters of office or
32 guardianship, and an application for certificate of title.
33 Such application shall be made before the estate is closed.
34 The transfer may be to the transferee or to the nominee of
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1 the transferee.
2 (d) If the interest of an owner in joint tenancy passes
3 to the other joint tenant with survivorship rights as
4 provided by law, the transferee shall promptly mail or
5 deliver to the Secretary of State, the last certificate of
6 title, if available, proof of death of the one joint tenant
7 and survivorship of the surviving joint tenant, and an
8 application for certificate of title. Such application shall
9 be made within 120 days after the death of the joint tenant.
10 The transfer may be to the transferee or to the nominee of
11 the transferee.
12 (e) The Secretary of State shall transfer a decedent's
13 vehicle title to any legatee, representative or heir of the
14 decedent who submits to the Secretary a death certificate and
15 an affidavit by an attorney at law on the letterhead
16 stationery of the attorney at law stating the facts of the
17 transfer.
18 (f) Repossession with assignment of title. In all cases
19 wherein a lienholder has repossessed a vehicle by other than
20 judicial process and holds it for resale under a security
21 agreement, and the owner of record has executed an assignment
22 of the existing certificate of title after default, the
23 lienholder may proceed to sell or otherwise dispose of the
24 vehicle as authorized under the Uniform Commercial Code.
25 Upon selling the vehicle to another person, the lienholder
26 need not send the certificate of title to the Secretary of
27 State, but shall promptly and within 20 days mail or deliver
28 to the purchaser as transferee the existing certificate of
29 title for the repossessed vehicle, reflecting the release of
30 the lienholder's security interest in the vehicle. The
31 application for a certificate of title made by the purchaser
32 shall comply with subsection (a) of Section 3-104 and be
33 accompanied by the existing certificate of title for the
34 repossessed vehicle. The lienholder shall execute the
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1 assignment and warranty of title showing the name and address
2 of the purchaser in the spaces provided therefor on the
3 certificate of title or as the Secretary of State prescribes.
4 The lienholder shall complete the assignment of title in the
5 certificate of title to reflect the transfer of the vehicle
6 to the lienholder and also a reassignment to reflect the
7 transfer from the lienholder to the purchaser. For this
8 purpose, the lienholder is specifically authorized to
9 complete and execute the space reserved in the certificate of
10 title for a dealer reassignment, notwithstanding that the
11 lienholder is not a licensed dealer. Nothing herein shall be
12 construed to mean that the lienholder is taking title to the
13 repossessed vehicle for purposes of liability for retailer
14 occupation, vehicle use, or other tax with respect to the
15 proceeds from the repossession sale. Delivery of the
16 existing certificate of title to the purchaser shall be
17 deemed disclosure to the purchaser of the owner of the
18 vehicle.
19 (f-5) Repossession without assignment of title. In all
20 cases wherein a lienholder has repossessed a vehicle by other
21 than judicial process and holds it for resale under a
22 security agreement, and the owner of record has not executed
23 an assignment of the existing certificate of title, the
24 lienholder shall comply with the following provisions:
25 (1) Prior to sale, the lienholder shall deliver or
26 mail to the owner at the owner's last known address and
27 to any other lienholder of record, a notice of redemption
28 setting forth the following information: (i) the name of
29 the owner of record and in bold type at or near the top
30 of the notice a statement that the owner's vehicle was
31 repossessed on a specified date for failure to make
32 payments on the loan (or other reason), (ii) a
33 description of the vehicle subject to the lien sufficient
34 to identify it, (iii) the right of the owner to redeem
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1 the vehicle, (iv) the lienholder's intent to sell or
2 otherwise dispose of the vehicle after the expiration of
3 21 days from the date of mailing or delivery of the
4 notice, and (v) the name, address, and telephone number
5 of the lienholder from whom information may be obtained
6 concerning the amount due to redeem the vehicle and from
7 whom the vehicle may be redeemed under Section 9-506 of
8 the Uniform Commercial Code. At the lienholder's option,
9 the information required to be set forth in this notice
10 of redemption may be made a part of or accompany the
11 notification of sale or other disposition required under
12 subsection (3) of Section 9-504 of the Uniform Commercial
13 Code, but none of the information required by this notice
14 shall be construed to impose any requirement under
15 Article 9 of the Uniform Commercial Code.
16 (2) With respect to the repossession of a vehicle
17 used primarily for personal, family, or household
18 purposes, the lienholder shall also deliver or mail to
19 the owner at the owner's last known address an affidavit
20 of defense. The affidavit of defense shall accompany the
21 notice of redemption required in subdivision (f-5)(1) of
22 this Section. The affidavit of defense shall (i) identify
23 the lienholder, owner, and the vehicle; (ii) provide
24 space for the owner to state the defense claimed by the
25 owner; and (iii) include an acknowledgment by the owner
26 that the owner may be liable to the lienholder for fees,
27 charges, and costs incurred by the lienholder in
28 establishing the insufficiency or invalidity of the
29 owner's defense. To stop the transfer of title, the
30 affidavit of defense must be received by the lienholder
31 no later than 21 days after the date of mailing or
32 delivery of the notice required in subdivision (f-5)(1)
33 of this Section. If the lienholder receives the affidavit
34 from the owner in a timely manner, the lienholder must
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1 apply to a court of competent jurisdiction to determine
2 if the lienholder is entitled to possession of the
3 vehicle.
4 (3) Upon selling the vehicle to another person, the
5 lienholder need not send the certificate of title to the
6 Secretary of State, but shall promptly and within 20 days
7 mail or deliver to the purchaser as transferee (i) the
8 existing certificate of title for the repossessed
9 vehicle, reflecting the release of the lienholder's
10 security interest in the vehicle; and (ii) an affidavit
11 of repossession made by or on behalf of the lienholder
12 which provides the following information: that the
13 vehicle was repossessed, a description of the vehicle
14 sufficient to identify it, whether the vehicle has been
15 damaged in excess of 33 1/3% of its fair market value as
16 required under subdivision (b)(3) of Section 3-117.1,
17 that the owner and any other lienholder of record were
18 given the notice required in subdivision (f-5)(1) of this
19 Section, that the owner of record was given the affidavit
20 of defense required in subdivision (f-5)(2) of this
21 Section, that the interest of the owner was lawfully
22 terminated or sold pursuant to the terms of the security
23 agreement, and the purchaser's name and address. If the
24 vehicle is damaged in excess of 33 1/3% of its fair
25 market value, the lienholder shall make application for a
26 salvage certificate under Section 3-117.1 and transfer
27 the vehicle to a person eligible to receive assignments
28 of salvage certificates identified in Section 3-118.
29 (4) The application for a certificate of title made
30 by the purchaser shall comply with subsection (a) of
31 Section 3-104 and be accompanied by the affidavit of
32 repossession furnished by the lienholder and the existing
33 certificate of title for the repossessed vehicle. The
34 lienholder shall execute the assignment and warranty of
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1 title showing the name and address of the purchaser in
2 the spaces provided therefor on the certificate of title
3 or as the Secretary of State prescribes. The lienholder
4 shall complete the assignment of title in the certificate
5 of title to reflect the transfer of the vehicle to the
6 lienholder and also a reassignment to reflect the
7 transfer from the lienholder to the purchaser. For this
8 purpose, the lienholder is specifically authorized to
9 execute the assignment on behalf of the owner as seller
10 if the owner has not done so and to complete and execute
11 the space reserved in the certificate of title for a
12 dealer reassignment, notwithstanding that the lienholder
13 is not a licensed dealer. Nothing herein shall be
14 construed to mean that the lienholder is taking title to
15 the repossessed vehicle for purposes of liability for
16 retailer occupation, vehicle use, or other tax with
17 respect to the proceeds from the repossession sale.
18 Delivery of the existing certificate of title to the
19 purchaser shall be deemed disclosure to the purchaser of
20 the owner of the vehicle. In the event the lienholder
21 does not hold the certificate of title for the
22 repossessed vehicle, the lienholder shall make
23 application for and may obtain a new certificate of title
24 in the name of the lienholder upon furnishing information
25 satisfactory to the Secretary of State. Upon receiving
26 the new certificate of title, the lienholder may proceed
27 with the sale described in subdivision (f-5)(3), except
28 that upon selling the vehicle the lienholder shall
29 promptly and within 20 days mail or deliver to the
30 purchaser the new certificate of title reflecting the
31 assignment and transfer of title to the purchaser.
32 (5) Neither the lienholder nor the owner shall file
33 with the Office of the Secretary of State the notice of
34 redemption or affidavit of defense described in
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1 subdivisions (f-5)(1) and (f-5)(2) of this Section. The
2 Office of the Secretary of State shall not determine the
3 merits of an owner's affidavit of defense, nor consider
4 any allegations or assertions regarding the validity or
5 invalidity of a lienholder's claim to the vehicle or an
6 owner's asserted defenses to the repossession action.
7 (f-7) Notice of reinstatement in certain cases.
8 (1) If, at the time of repossession by a lienholder
9 that is seeking to transfer title pursuant to subsection
10 (f-5), the owner has paid an amount equal to 30% or more
11 of the deferred payment price or total of payments due,
12 the owner may, within 21 days of the date of
13 repossession, reinstate the contract or loan agreement
14 and recover the vehicle from the lienholder by tendering
15 in a lump sum (i) the total of all unpaid amounts,
16 including any unpaid delinquency or deferral charges due
17 at the date of reinstatement, without acceleration; and
18 (ii) performance necessary to cure any default other than
19 nonpayment of the amounts due; and (iii) all reasonable
20 costs and fees incurred by the lienholder in retaking,
21 holding, and preparing the vehicle for disposition and in
22 arranging for the sale of the vehicle. Reasonable costs
23 and fees incurred by the lienholder include without
24 limitation repossession and storage expenses and, if
25 authorized by the contract or loan agreement, reasonable
26 attorneys' fees and collection agency charges.
27 (2) Tender of payment and performance pursuant to
28 this limited right of reinstatement restores to the owner
29 his rights under the contract or loan agreement as though
30 no default had occurred. The owner has the right to
31 reinstate the contract or loan agreement and recover the
32 vehicle from the lienholder only once under this
33 subsection. The lienholder may, in the lienholder's sole
34 discretion, extend the period during which the owner may
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1 reinstate the contract or loan agreement and recover the
2 vehicle beyond the 21 days allowed under this subsection,
3 and the extension shall not subject the lienholder to
4 liability to the owner under the laws of this State.
5 (3) The lienholder shall deliver or mail written
6 notice to the owner at the owner's last known address,
7 within 3 business days of the date of repossession, of
8 the owner's right to reinstate the contract or loan
9 agreement and recover the vehicle pursuant to the limited
10 right of reinstatement described in this subsection. At
11 the lienholder's option, the information required to be
12 set forth in this notice of reinstatement may be made
13 part of or accompany the notice of redemption required in
14 subdivision (f-5)(1) of this Section and the notification
15 of sale or other disposition required under subsection
16 (3) of Section 9-504 of the Uniform Commercial Code, but
17 none of the information required by this notice of
18 reinstatement shall be construed to impose any
19 requirement under Article 9 of the Uniform Commercial
20 Code.
21 (4) The reinstatement period, if applicable, and
22 the redemption period described in subdivision (f-5)(1)
23 of this Section, shall run concurrently if the
24 information required to be set forth in the notice of
25 reinstatement is part of or accompanies the notice of
26 redemption. In any event, the 21 day redemption period
27 described in subdivision (f-5)(1) of this Section shall
28 commence on the date of mailing or delivery to the owner
29 of the information required to be set forth in the notice
30 of redemption, and the 21 day reinstatement period
31 described in this subdivision, if applicable, shall
32 commence on the date of mailing or delivery to the owner
33 of the information required to be set forth in the notice
34 of reinstatement.
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1 (5) The Office of the Secretary of State shall not
2 determine the merits of an owner's claim of right to
3 reinstatement, nor consider any allegations or assertions
4 regarding the validity or invalidity of a lienholder's
5 claim to the vehicle or an owner's asserted right to
6 reinstatement. Where a lienholder is subject to
7 licensing and regulatory supervision by the State of
8 Illinois, the lienholder shall be subject to all of the
9 powers and authority of the lienholder's primary State
10 regulator to enforce compliance with the procedures set
11 forth in this subsection (f-7).
12 (f-10) Repossession by judicial process. In all cases
13 wherein a lienholder has repossessed a vehicle by judicial
14 process and holds it for resale under a security agreement,
15 order for replevin, or other court order establishing the
16 lienholder's right to possession of the vehicle, the
17 lienholder may proceed to sell or otherwise dispose of the
18 vehicle as authorized under the Uniform Commercial Code or
19 the court order. Upon selling the vehicle to another person,
20 the lienholder need not send the certificate of title to the
21 Secretary of State, but shall promptly and within 20 days
22 mail or deliver to the purchaser as transferee (i) the
23 existing certificate of title for the repossessed vehicle
24 reflecting the release of the lienholder's security interest
25 in the vehicle; (ii) a certified copy of the court order; and
26 (iii) a bill of sale identifying the new owner's name and
27 address and the year, make, model, and vehicle identification
28 number of the vehicle. The application for a certificate of
29 title made by the purchaser shall comply with subsection (a)
30 of Section 3-104 and be accompanied by the certified copy of
31 the court order furnished by the lienholder and the existing
32 certificate of title for the repossessed vehicle. The
33 lienholder shall execute the assignment and warranty of title
34 showing the name and address of the purchaser in the spaces
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1 provided therefor on the certificate of title or as the
2 Secretary of State prescribes. The lienholder shall complete
3 the assignment of title in the certificate of title to
4 reflect the transfer of the vehicle to the lienholder and
5 also a reassignment to reflect the transfer from the
6 lienholder to the purchaser. For this purpose, the
7 lienholder is specifically authorized to execute the
8 assignment on behalf of the owner as seller if the owner has
9 not done so and to complete and execute the space reserved in
10 the certificate of title for a dealer reassignment,
11 notwithstanding that the lienholder is not a licensed dealer.
12 Nothing herein shall be construed to mean that the lienholder
13 is taking title to the repossessed vehicle for purposes of
14 liability for retailer occupation, vehicle use, or other tax
15 with respect to the proceeds from the repossession sale.
16 Delivery of the existing certificate of title to the
17 purchaser shall be deemed disclosure to the purchaser of the
18 owner of the vehicle. In the event the lienholder does not
19 hold the certificate of title for the repossessed vehicle,
20 the lienholder shall make application for and may obtain a
21 new certificate of title in the name of the lienholder upon
22 furnishing information satisfactory to the Secretary of
23 State. Upon receiving the new certificate of title, the
24 lienholder may proceed with the sale described in this
25 subsection, except that upon selling the vehicle the
26 lienholder shall promptly and within 20 days mail or deliver
27 to the purchaser the new certificate of title reflecting the
28 assignment and transfer of title to the purchaser.
29 (f-15) The Secretary of State shall not issue a
30 certificate of title to a purchaser under subsection (f),
31 (f-5), or (f-10) of this Section, unless the person from whom
32 the vehicle has been repossessed by the lienholder is shown
33 to be the last registered owner of the motor vehicle. The
34 Secretary of State may provide by rule for the standards to
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1 be followed by a lienholder in assigning and transferring
2 certificates of title with respect to repossessed vehicles.
3 (f-20) If applying for a salvage certificate or a
4 junking certificate, after the original 21 day notice to the
5 debtor has been fulfilled, the lienholder shall within 20
6 days make an application to the Secretary of State for a
7 certificate of title, a salvage certificate or a junking
8 certificate, as set forth in this Code. In all cases,
9 however, The Secretary of State shall not issue a certificate
10 of title, a salvage certificate or a junking certificate to
11 such lienholder unless the person from whom such vehicle has
12 been repossessed is shown to be the last registered owner of
13 such motor vehicle and such lienholder establishes to the
14 satisfaction of the Secretary of State that he is entitled to
15 such certificate of title, salvage certificate or junking
16 certificate. The Secretary of State may shall provide by rule
17 for the standards to be followed by a lienholder in order to
18 obtain a salvage certificate or junking certificate of title
19 for a repossessed vehicle.
20 (g) A person holding a certificate of title whose
21 interest in the vehicle has been extinguished or transferred
22 other than by voluntary transfer shall mail or deliver the
23 certificate, within 20 days upon request of the Secretary of
24 State. The delivery of the certificate pursuant to the
25 request of the Secretary of State does not affect the rights
26 of the person surrendering the certificate, and the action of
27 the Secretary of State in issuing a new certificate of title
28 as provided herein is not conclusive upon the rights of an
29 owner or lienholder named in the old certificate.
30 (h) The Secretary of State may decline to process any
31 application for a transfer of an interest in a vehicle
32 hereunder if any fees or taxes due under this Act from the
33 transferor or the transferee have not been paid upon
34 reasonable notice and demand.
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1 (i) The Secretary of State shall not be held civilly or
2 criminally liable to any person because any purported
3 transferor may not have had the power or authority to make a
4 transfer of any interest in any vehicle or because a
5 certificate of title issued in error is subsequently used to
6 commit a fraudulent act.
7 (Source: P.A. 90-212, eff. 1-1-98.)
8 (625 ILCS 5/3-117.1) (from Ch. 95 1/2, par. 3-117.1)
9 Sec. 3-117.1. When junking certificates or salvage
10 certificates must be obtained.
11 (a) Except as provided in Chapter 4 of this Code, a
12 person who possesses a junk vehicle shall within 15 days
13 cause the certificate of title, salvage certificate,
14 certificate of purchase, or a similarly acceptable out of
15 state document of ownership to be surrendered to the
16 Secretary of State along with an application for a junking
17 certificate, except as provided in Section 3-117.2, whereupon
18 the Secretary of State shall issue to such a person a junking
19 certificate, which shall authorize the holder thereof to
20 possess, transport, or, by an endorsement, transfer ownership
21 in such junked vehicle, and a certificate of title shall not
22 again be issued for such vehicle.
23 A licensee who possesses a junk vehicle and a Certificate
24 of Title, Salvage Certificate, Certificate of Purchase, or a
25 similarly acceptable out-of-state document of ownership for
26 such junk vehicle, may transport the junk vehicle to another
27 licensee prior to applying for or obtaining a junking
28 certificate, by executing a uniform invoice. The licensee
29 transferor shall furnish a copy of the uniform invoice to the
30 licensee transferee at the time of transfer. In any case,
31 the licensee transferor shall apply for a junking certificate
32 in conformance with Section 3-117.1 of this Chapter. The
33 following information shall be contained on a uniform
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1 invoice:
2 (1) The business name, address and dealer license
3 number of the person disposing of the vehicle, junk
4 vehicle or vehicle cowl;
5 (2) The name and address of the person acquiring
6 the vehicle, junk vehicle or vehicle cowl, and if that
7 person is a dealer, the Illinois or out-of-state dealer
8 license number of that dealer;
9 (3) The date of the disposition of the vehicle,
10 junk vehicle or vehicle cowl;
11 (4) The year, make, model, color and description of
12 each vehicle, junk vehicle or vehicle cowl disposed of by
13 such person;
14 (5) The manufacturer's vehicle identification
15 number, Secretary of State identification number or
16 Illinois Department of State Police number, for each
17 vehicle, junk vehicle or vehicle cowl part disposed of by
18 such person;
19 (6) The printed name and legible signature of the
20 person or agent disposing of the vehicle, junk vehicle or
21 vehicle cowl; and
22 (7) The printed name and legible signature of the
23 person accepting delivery of the vehicle, junk vehicle or
24 vehicle cowl.
25 The Secretary of State may certify a junking manifest in
26 a form prescribed by the Secretary of State that reflects
27 those vehicles for which junking certificates have been
28 applied or issued. A junking manifest may be issued to any
29 person and it shall constitute evidence of ownership for the
30 vehicle listed upon it. A junking manifest may be
31 transferred only to a person licensed under Section 5-301 of
32 this Code as a scrap processor. A junking manifest will
33 allow the transportation of those vehicles to a scrap
34 processor prior to receiving the junk certificate from the
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1 Secretary of State.
2 (b) An application for a salvage certificate shall be
3 submitted to the Secretary of State in any of the following
4 situations:
5 (1) When an insurance company makes a payment of
6 damages on a total loss claim for a vehicle, the
7 insurance company shall be deemed to be the owner of such
8 vehicle and the vehicle shall be considered to be salvage
9 except that ownership of a vehicle 9 model years of age
10 or older may, by agreement between the registered owner
11 and the insurance company, be retained by the registered
12 owner of such vehicle. The insurance company shall
13 promptly deliver or mail within 20 days the certificate
14 of title along with proper application and fee to the
15 Secretary of State, and a salvage certificate shall be
16 issued in the name of the insurance company. An insurer
17 making payment of damages on a total loss claim for the
18 theft of a vehicle may exchange the salvage certificate
19 for a certificate of title if the vehicle is recovered
20 without damage. In such a situation, the insurer shall
21 fill out and sign a form prescribed by the Secretary of
22 State which contains an affirmation under penalty of
23 perjury that the vehicle was recovered without damage and
24 the Secretary of State may, by rule or regulation,
25 require photographs to be submitted.
26 (2) When a vehicle the ownership of which has been
27 transferred to any person through a certificate of
28 purchase from acquisition of the vehicle at an auction,
29 other dispositions as set forth in Sections 4-208 and
30 4-209 of this Code, a lien arising under Section 18a-501
31 of this Code, or a public sale under the Abandoned Mobile
32 Home Act shall be deemed salvage or junk at the option of
33 the purchaser. The person acquiring such vehicle in such
34 manner shall promptly deliver or mail, within 20 days
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1 after the acquisition of the vehicle, the certificate of
2 purchase, the proper application and fee, and, if the
3 vehicle is an abandoned mobile home under the Abandoned
4 Mobile Home Act, a certification from a local law
5 enforcement agency that the vehicle was purchased or
6 acquired at a public sale under the Abandoned Mobile Home
7 Act to the Secretary of State and a salvage certificate
8 or junking certificate shall be issued in the name of
9 that person. The salvage certificate or junking
10 certificate issued by the Secretary of State under this
11 Section shall be free of any lien that existed against
12 the vehicle prior to the time the vehicle was acquired by
13 the applicant under this Code.
14 (3) A vehicle which has been repossessed by a
15 lienholder shall be considered to be salvage only when
16 the repossessed vehicle, on the date of repossession by
17 the lienholder, has sustained damage by collision, fire,
18 theft, rust corrosion, or other means so that the cost of
19 repairing such damage, including labor, would be greater
20 than 33 1/3% of its fair market value without such
21 damage. If the lienholder determines that such vehicle
22 is damaged in excess of 33 1/3% of such fair market
23 value, the lienholder shall, before sale, transfer or
24 assignment of the vehicle, make application for a salvage
25 certificate, and shall submit with such application the
26 proper fee and evidence of possession. If the facts
27 required to be shown in subsection (f) of Section 3-114
28 are satisfied, the Secretary of State shall issue a
29 salvage certificate in the name of the lienholder making
30 the application. In any case wherein the vehicle
31 repossessed is not damaged in excess of 33 1/3% of its
32 fair market value, the lienholder shall comply with the
33 requirements of subsections (f), (f-5), and (f-10) of
34 Section 3-114, except that the affidavit of repossession
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1 made by or on behalf of the lienholder, after the
2 original 21 day notice to the debtor has been fulfilled,
3 shall within 15 days make an application to the Secretary
4 of State for a certificate of title, submitting with such
5 application evidence of possession. The application
6 shall also contain an affirmation under penalty of
7 perjury that the vehicle on the date of sale such
8 application for certificate of title is not damaged in
9 excess of 33 1/3% of its fair market value. If the facts
10 required to be shown in subsection (f) of Section 3-114
11 are satisfied, the Secretary of State shall issue a
12 certificate of title as set forth in Section 3-116 of
13 this Code. The Secretary of State may by rule or
14 regulation require photographs to be submitted.
15 (4) A vehicle which is a part of a fleet of more
16 than 5 commercial vehicles registered in this State or
17 any other state or registered proportionately among
18 several states shall be considered to be salvage when
19 such vehicle has sustained damage by collision, fire,
20 theft, rust, corrosion or similar means so that the cost
21 of repairing such damage, including labor, would be
22 greater than 33 1/3% of the fair market value of the
23 vehicle without such damage. If the owner of a fleet
24 vehicle desires to sell, transfer, or assign his interest
25 in such vehicle to a person within this State other than
26 an insurance company licensed to do business within this
27 State, and the owner determines that such vehicle, at the
28 time of the proposed sale, transfer or assignment is
29 damaged in excess of 33 1/3% of its fair market value,
30 the owner shall, before such sale, transfer or
31 assignment, make application for a salvage certificate.
32 The application shall contain with it evidence of
33 possession of the vehicle. If the fleet vehicle at the
34 time of its sale, transfer, or assignment is not damaged
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1 in excess of 33 1/3% of its fair market value, the owner
2 shall so state in a written affirmation on a form
3 prescribed by the Secretary of State by rule or
4 regulation. The Secretary of State may by rule or
5 regulation require photographs to be submitted. Upon
6 sale, transfer or assignment of the fleet vehicle the
7 owner shall mail the affirmation to the Secretary of
8 State.
9 (5) A vehicle that has been submerged in water to
10 the point that rising water has reached over the door
11 sill and has entered the passenger or trunk compartment
12 is a "flood vehicle". A flood vehicle shall be
13 considered to be salvage only if the vehicle has
14 sustained damage so that the cost of repairing the
15 damage, including labor, would be greater than 33 1/3% of
16 the fair market value of the vehicle without that damage.
17 The salvage certificate issued under this Section shall
18 indicate the word "flood", and the word "flood" shall be
19 conspicuously entered on subsequent titles for the
20 vehicle. A person who possesses or acquires a flood
21 vehicle that is not damaged in excess of 33 1/3% of its
22 fair market value shall make application for title in
23 accordance with Section 3-116 of this Code, designating
24 the vehicle as "flood" in a manner prescribed by the
25 Secretary of State. The certificate of title issued
26 shall indicate the word "flood", and the word "flood"
27 shall be conspicuously entered on subsequent titles for
28 the vehicle.
29 (c) Any person who without authority acquires, sells,
30 exchanges, gives away, transfers or destroys or offers to
31 acquire, sell, exchange, give away, transfer or destroy the
32 certificate of title to any vehicle which is a junk or
33 salvage vehicle shall be guilty of a Class 3 felony.
34 (d) Any person who knowingly fails to surrender to the
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1 Secretary of State a certificate of title, salvage
2 certificate, certificate of purchase or a similarly
3 acceptable out-of-state document of ownership as required
4 under the provisions of this Section is guilty of a Class A
5 misdemeanor for a first offense and a Class 4 felony for a
6 subsequent offense; except that a person licensed under this
7 Code who violates paragraph (5) of subsection (b) of this
8 Section is guilty of a business offense and shall be fined
9 not less than $1,000 nor more than $5,000 for a first offense
10 and is guilty of a Class 4 felony for a second or subsequent
11 violation.
12 (e) Any vehicle which is salvage or junk may not be
13 driven or operated on roads and highways within this State.
14 A violation of this subsection is a Class A misdemeanor. A
15 salvage vehicle displaying valid special plates issued under
16 Section 3-601(b) of this Code, which is being driven to or
17 from an inspection conducted under Section 3-308 of this
18 Code, is exempt from the provisions of this subsection. A
19 salvage vehicle for which a short term permit has been issued
20 under Section 3-307 of this Code is exempt from the
21 provisions of this subsection for the duration of the permit.
22 (Source: P.A. 88-516; 88-685, eff. 1-24-95; 89-669, eff.
23 1-1-97.)
24 (625 ILCS 5/3-104.1 rep.)
25 Section 50. The Illinois Vehicle Code is amended by
26 repealing Section 3-104.1.
27 Section 55. The Fiduciary Obligations Act is amended by
28 changing Section 9 as follows:
29 (760 ILCS 65/9) (from Ch. 17, par. 2009)
30 Sec. 9. Notwithstanding any other law, if a fiduciary
31 makes a deposit in a bank to his personal credit of checks
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1 drawn by him upon an account in his own name as fiduciary, or
2 of checks payable to him as fiduciary, or of checks drawn by
3 him upon an account in the name of his principal if he is
4 empowered to draw checks thereon, or of checks payable to his
5 principal and indorsed by him, if he is empowered to indorse
6 such checks, or if he otherwise makes a deposit of funds held
7 by him as fiduciary, the bank receiving such deposit is not
8 bound to inquire whether the fiduciary is committing thereby
9 a breach of his obligation as fiduciary; and the bank is
10 authorized to pay the amount of the deposit or any part
11 thereof upon the personal check of the fiduciary without
12 being liable to the principal, unless the bank receives the
13 deposit or pays the check with actual knowledge that the
14 fiduciary is committing a breach of his obligation as
15 fiduciary in making such deposit or in drawing such check, or
16 with knowledge of such facts that its action in receiving the
17 deposit or paying the check amounts to bad faith.
18 (Source: Laws 1931, p. 676.)
19 Section 60. The Uniform Commercial Code is amended by
20 changing Sections 9-105, 9-106, and 9-302 as follows:
21 (810 ILCS 5/9-105) (from Ch. 26, par. 9-105)
22 Sec. 9-105. Definitions and index of definitions.
23 (1) In this Article unless the context otherwise
24 requires:
25 (a) "Account debtor" means the person who is
26 obligated on an account, chattel paper or general
27 intangible;
28 (b) "Chattel paper" means a writing or writings
29 which evidence both a monetary obligation and a security
30 interest in or a lease of specific goods, but a charter
31 or other contract involving the use or hire of a vessel
32 is not chattel paper. When a transaction is evidenced
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1 both by such a security agreement or a lease and by an
2 instrument or a series of instruments, the group of
3 writings taken together constitutes chattel paper;
4 (c) "Collateral" means the property subject to a
5 security interest, and includes accounts and chattel
6 paper which have been sold;
7 (d) "Debtor" means the person who owes payment or
8 other performance of the obligation secured, whether or
9 not he owns or has rights in the collateral, and includes
10 the seller of accounts or chattel paper. Where the debtor
11 and the owner of the collateral are not the same person,
12 the term "debtor" means the owner of the collateral in
13 any provision of the Article dealing with the collateral,
14 the obligor in any provision dealing with the obligation,
15 and may include both where the context so requires;
16 (e) "Deposit account" means a demand, time,
17 savings, passbook or like account maintained with a bank,
18 as defined in subsection (1) of Section 4-105 savings and
19 loan association, credit union or like organization,
20 other than an account evidenced by a certificate of
21 deposit;
22 (f) "Document" means document of title as defined
23 in the general definitions of Article 1 (Section 1-201),
24 and a receipt of the kind described in subsection (2) of
25 Section 7-201;
26 (g) "Encumbrance" includes real estate mortgages
27 and other liens on real estate and all other rights in
28 real estate that are not ownership interests;
29 (h) "Goods" includes all things which are movable
30 at the time the security interest attaches or which are
31 fixtures (Section 9-313), but does not include money,
32 documents, instruments, investment property, commodity
33 contracts, accounts, chattel paper, general intangibles,
34 or minerals or the like (including oil and gas) before
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1 extraction. "Goods" also includes standing timber which
2 is to be cut and removed under a conveyance or contract
3 for sale, the unborn young of animals, and growing crops;
4 (i) "Instrument" means a negotiable instrument
5 (defined in Section 3-104), a non-transferable
6 certificate of deposit, a non-negotiable certificate of
7 deposit, or any other writing which evidences a right to
8 the payment of money and is not itself a security
9 agreement or lease and is of a type which is in ordinary
10 course of business transferred by delivery with any
11 necessary indorsement or assignment. The term does not
12 include investment property;
13 (j) "Mortgage" means a consensual interest created
14 by a real estate mortgage, a trust deed on real estate,
15 or the like;
16 (j-5) "Non-negotiable certificate of deposit" means
17 a written document issued by a bank, as defined in
18 subsection (1) of Section 4-105, that contains an
19 acknowledgement that a sum of money has been received by
20 the issuer and a promise by the issuer to repay the sum
21 of money, and is not a negotiable instrument as defined
22 in Section 3-104;
23 (j-7) "Non-transferable certificate of deposit"
24 means a non-negotiable certificate of deposit which may
25 not be transferred except on the books of the issuer,
26 with the consent of the issuer, or is subject to other
27 restrictions or conditions of the issuer on transfer;
28 (k) An advance is made "pursuant to commitment" if
29 the secured party has bound himself to make it, whether
30 or not a subsequent event of default or other event not
31 within his control has relieved or may relieve him from
32 his obligation;
33 (l) "Security agreement" means an agreement which
34 creates or provides for a security interest;
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1 (m) "Secured party" means a lender, seller or other
2 person in whose favor there is a security interest,
3 including a person to whom accounts or chattel paper have
4 been sold. When the holders of obligations issued under
5 an indenture of trust, equipment trust agreement or the
6 like are represented by a trustee or other person, the
7 representative is the secured party;
8 (n) "Transmitting utility" means any person
9 primarily engaged in the railroad, street railway or
10 trolley bus business, the electric or electronics
11 communications transmission business, the transmission of
12 goods by pipeline, or the distribution, transmission, or
13 the production and transmission of electricity, steam,
14 gas or water, or the provision of sewer service.
15 (o) "Uncertificated certificate of deposit" means an
16 obligation of a bank, as defined in subsection (1) of Section
17 4-105, to repay a sum of money it has received, that is not a
18 deposit account and is not represented by a writing, but only
19 by an entry on the books of the bank and any documentation
20 given to the customer by the bank.
21 (2) Other definitions applying to this Article and the
22 Sections in which they appear are:
23 "Account". Section 9-106.
24 "Attach". Section 9-203.
25 "Commodity contract". Section 9-115.
26 "Commodity customer". Section 9-115.
27 "Commodity intermediary". Section 9-115.
28 "Construction mortgage". Section 9-313 (1).
29 "Consumer goods". Section 9-109 (1).
30 "Control". Section 9-115.
31 "Equipment". Section 9-109 (2).
32 "Farm products". Section 9-109 (3).
33 "Fixture". Section 9-313 (1).
34 "Fixture filing". Section 9-313 (1).
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1 "General intangibles". Section 9-106.
2 "Inventory". Section 9-109 (4).
3 "Investment property". Section 9-115.
4 "Lien creditor". Section 9-301 (3).
5 "Proceeds". Section 9-306 (1).
6 "Purchase money security interest". Section 9-107.
7 "United States". Section 9-103.
8 (3) The following definitions in other Articles apply to
9 this Article:
10 "Bank". Section 4-105.
11 "Broker". Section 8-102.
12 "Certificated security". Section 8-102.
13 "Check". Section 3-104.
14 "Clearing corporation". Section 8-102.
15 "Contract for sale". Section 2-106.
16 "Control". Section 8-106.
17 "Delivery". Section 8-301.
18 "Entitlement holder". Section 8-102.
19 "Financial asset". Section 8-102.
20 "Holder in due course". Section 3-302.
21 "Letter of credit". Section 5-102.
22 "Note". Section 3-104.
23 "Proceeds of a letter of credit". Section 5-114(a).
24 "Sale". Section 2-106.
25 "Securities intermediary". Section 8-102.
26 "Security". Section 8-102.
27 "Security certificate". Section 8-102.
28 "Security entitlement". Section 8-102.
29 "Uncertificated security". Section 8-102.
30 (4) In addition Article 1 contains general definitions
31 and principles of construction and interpretation applicable
32 throughout this Article.
33 (Source: P.A. 89-364, eff. 1-1-96; 89-534, eff. 1-1-97.)
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1 (810 ILCS 5/9-106) (from Ch. 26, par. 9-106)
2 Sec. 9-106. Definitions: "account"; "general
3 intangibles". "Account" means any right to payment for goods
4 sold or leased or for services rendered which is not
5 evidenced by an instrument or chattel paper, whether or not
6 it has been earned by performance. "General intangibles"
7 means any personal property (including things in action)
8 other than goods, accounts, chattel paper, documents,
9 instruments, investment property, rights to proceeds of
10 written letters of credit, deposit accounts, uncertificated
11 certificates of deposit, and money. All rights to payment
12 earned or unearned under a charter or other contract
13 involving the use or hire of a vessel and all rights incident
14 to the charter or contract are accounts.
15 (Source: P.A. 89-364, eff. 1-1-96; 89-534, eff. 1-1-97.)
16 (810 ILCS 5/9-302) (from Ch. 26, par. 9-302)
17 Sec. 9-302. When filing is required to perfect security
18 interest; security interests to which filing provisions of
19 this Article do not apply.
20 (1) A financing statement must be filed to perfect all
21 security interests except the following:
22 (a) a security interest in collateral in possession
23 of the secured party under Section 9-305;
24 (b) a security interest temporarily perfected in
25 instruments, certificated securities, or documents
26 without delivery under Section 9-304 or in proceeds for a
27 20 day period under Section 9-306;
28 (c) a security interest created by an assignment of
29 a beneficial interest in a trust or a decedent's estate;
30 (d) a purchase money security interest in consumer
31 goods; but filing is required for a motor vehicle
32 required to be registered; and fixture filing is required
33 for priority over conflicting interests in fixtures to
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1 the extent provided in Section 9-313;
2 (e) an assignment of accounts which does not alone
3 or in conjunction with other assignments to the same
4 assignee transfer a significant part of the outstanding
5 accounts of the assignor;
6 (f) a security interest of a collecting bank
7 (Section 4-208) or arising under the Article on Sales
8 (see Section 9-113) or covered in subsection (3) of this
9 Section;
10 (g) an assignment for the benefit of all creditors
11 of the transferor, and subsequent transfers by the
12 assignee thereunder;
13 (h) a security interest in investment property
14 which is perfected without filing under Section 9-115 or
15 Section 9-116;
16 (i) a security interest in a deposit account. Such
17 a security interest is perfected:
18 (i) as to a deposit account maintained with
19 the secured party, when the security agreement is
20 executed;
21 (ii) as to a deposit account maintained with
22 any organization other than the secured party, when
23 notice thereof is given in writing to the
24 organization with whom the deposit account is
25 maintained and that organization provides written
26 acknowledgement of and consent to the notice of the
27 secured party.
28 (j) a security interest in an uncertificated
29 certificate of deposit. Such a security interest is
30 perfected;
31 (i) as to an uncertificated certificate of
32 deposit issued by the secured party, when the
33 security agreement is executed;
34 (ii) as to an uncertificated certificate of
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1 deposit issued by any organization other than the
2 secured party, when notice thereof is given in
3 writing to the issuer of the uncertificated
4 certificate of deposit and the issuer provides
5 written acknowledgement of and consent to the notice
6 of the secured party.
7 (2) If a secured party assigns a perfected security
8 interest, no filing under this Article is required in order
9 to continue the perfected status of the security interest
10 against creditors of and transferees from the original
11 debtor.
12 (3) The filing of a financing statement otherwise
13 required by this Article is not necessary or effective to
14 perfect a security interest in property subject to
15 (a) a statute or treaty of the United States which
16 provides for a national or international registration or
17 a national or international certificate of title or which
18 specifies a place of filing different from that specified
19 in this Article for filing of the security interest; or
20 (b) the following statutes of this State: the
21 Illinois Vehicle Code; the Boat Registration and Safety
22 Act; but during any period in which collateral is
23 inventory held for sale by a person who is in the
24 business of selling goods of that kind, the filing
25 provisions of this Article (Part 4) apply to a security
26 interest in that collateral created by him as debtor; or
27 (c) a certificate of title statute of another
28 jurisdiction under the law of which indication of a
29 security interest on the certificate is required as a
30 condition of perfection (subsection (2) of Section
31 9-103).
32 (4) Compliance with a statute or treaty described in
33 subsection (3) is equivalent to the filing of a financing
34 statement under this Article, and a security interest in
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1 property subject to the statute or treaty can be perfected
2 only by compliance therewith except as provided in Section
3 9-103 on multiple state transactions. Duration and renewal of
4 perfection of a security interest perfected by compliance
5 with the statute or treaty are governed by the provisions of
6 the statute or treaty; in other respects the security
7 interest is subject to this Article.
8 (Source: P.A. 89-364, eff. 1-1-96.)
9 Section 65. The Illinois Fairness in Lending Act is
10 amended by changing Section 6 as follows:
11 (815 ILCS 120/6) (from Ch. 17, par. 856)
12 Sec. 6. Where a financial institution, other than a
13 credit union, as defined in Section 1.1 of the Illinois
14 Credit Union Act, as now or hereafter amended, repossesses a
15 motor vehicle that was used as a collateral and which is
16 used primarily for the borrower's personal, family or
17 household purposes, the financial institution shall be
18 subject to the requirements of and shall transfer the
19 certificate of title pursuant to Section 3-114 of the
20 Illinois Vehicle Code and the borrower at the time of
21 repossession has paid an amount equal to 30% or more of the
22 total of payments due, the borrower may, within 15 days,
23 redeem the motor vehicle from the financial institution by
24 tendering:
25 (a) the total of all unpaid amounts, including any
26 unpaid delinquency or deferral charges due without
27 acceleration, and
28 (b) performance necessary to cure any default other than
29 nonpayment of the amounts due; and
30 (c) any reasonable cost or fees incurred by the
31 financial institution in the retaking of the goods.
32 Tender of payment and performance pursuant to this Section
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1 restores to the borrower his rights under the loan as though
2 no default had occurred. The borrower has a right to redeem
3 the collateral from the financial institution only once under
4 this Section. The financial institution may, in the financial
5 institution's sole discretion, extend the period during which
6 the borrower may redeem the collateral beyond the 15 days
7 allowed under this Section, and the extension shall not
8 subject the financial institution to liability to the
9 borrower under the laws of this State.
10 The financial institution must give written notice to the
11 borrower, within 3 days of the repossession, of the
12 borrower's right to redeem the collateral pursuant to this
13 Section. The written notice shall be in substantially the
14 following form:
15 NOTICE OF RIGHT TO RECOVER VEHICLE
16 Your vehicle was repossessed on (specify date) for
17 failure to make payments on the loan (or other reason).
18 Under Illinois law, because you have paid at least 30% of
19 the loan before repossession, you may be able to get the
20 vehicle back. You have the right to recover the vehicle if
21 you do the following within 15 days of the date of
22 repossession:
23 1. Make payment of all back payments so
24 that you are current on the loan. $...........
25 2. Pay any late charge due. $...........
26 3. Pay the costs of repossession. $...........
27 Total Amount Now Due $...........
28 Bring cash, a certified check or money order for the
29 total amount now due that is listed above to our office
30 located at (specify address) by (specify date) to get your
31 vehicle back.
32 (Source: P.A. 90-343, eff. 8-8-97.)
33 Section 70. The Motor Vehicle Retail Installment Sales
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1 Act is amended by changing Section 20 as follows:
2 (815 ILCS 375/20) (from Ch. 121 1/2, par. 580)
3 Sec. 20. Unless otherwise limited by this Act, the
4 parties shall have the rights and remedies provided in
5 Article 9 of the Uniform Commercial Code with respect to
6 default and, disposition, and recovery redemption of
7 collateral. If the holder of a retail installment contract
8 repossesses a motor vehicle that was used as collateral, the
9 holder shall be subject to the requirements of and shall
10 transfer the certificate of title pursuant to Section 3-114
11 of the Illinois Vehicle Code.
12 If the buyer has paid an amount equal to 60% or more of
13 the deferred payment price at the time of his default under
14 the contract and if the buyer, at the request of the holder
15 and without legal proceedings, surrenders the goods to the
16 holder in ordinary condition and free from malicious damage,
17 the holder must, within a period of 5 days from the date of
18 receipt of the goods at his place of business, elect either
19 (a) to retain the goods and release the buyer from further
20 obligation under the contract, or (b) to return the goods to
21 the buyer at the holder's expense and be limited to an action
22 to recover the balance of the indebtedness.
23 If the buyer has paid an amount equal to 30% or more of
24 the deferred payment price at the time of repossession, the
25 buyer shall have the right to reinstate the contract and
26 recover the collateral from the holder within 15 days from
27 the date of repossession by tendering (a) the total of all
28 unpaid amounts, including any unpaid delinquency or deferral
29 charges due at the time of tender, without acceleration, and
30 (b) performance necessary to cure any default other than
31 nonpayment of the amounts due; and (c) any reasonable cost or
32 fees incurred by the holder in the retaking of the goods.
33 Tender of payment and performance pursuant to this Section
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1 restores to the buyer his rights under the contract as though
2 no default had occurred. The buyer has a right to reinstate
3 the contract and recover the collateral from the holder only
4 once under this Section. The holder may, in the holder's sole
5 discretion, extend the period during which the buyer may
6 reinstate the contract and recover redeem the collateral
7 beyond the 15 days allowed under this Section, and the
8 extension shall not subject the holder to liability to the
9 buyer under the laws of this State.
10 The holder must give written notice to the buyer, within
11 3 days of the repossession, of the buyer's right to reinstate
12 the contract and recover the collateral pursuant to this
13 Section. The written notice shall be in substantially the
14 following form:
15 NOTICE OF RIGHT TO RECOVER VEHICLE
16 Your vehicle was repossessed on (specify date) for
17 failure to make payments on the contract (or other reason).
18 Under Illinois law, because you have paid at least 30% of
19 the deferred payment price before repossession, you may be
20 able to get the vehicle back. You have the right to recover
21 the vehicle if you do the following within 15 days of the
22 date of repossession:
23 1. Make payment of all back payments due as
24 of the date of this notice. $
25 2. Pay any late charges due. $
26 3. Pay the costs of repossession. $
27 TOTAL AMOUNT DUE as of the date of
28 this notice: $
29 4. Plus pay any additional amounts which
30 may become due between the date of this
31 the notice and the date of
32 reinstatement. $
33 AMOUNT NOW DUE
34 Bring cash, a certified check or a money order for the
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1 total amount now due that is plus any additional amounts
2 which may become due between the date of this notice and the
3 date of the reinstatement to our office located at (specify
4 address) by (specify date) to get your vehicle back.
5 (Source: P.A. 90-343, eff. 8-8-97; 90-437, eff. 1-1-98;
6 revised 2-7-98.)
7 Section 99. Effective date. This Act takes effect upon
8 becoming law, except that Sections 35, 45, 50, 65, and 70
9 take effect January 1, 1999.