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| [ Senate Amendment 002 ] |
90_SB1528sam001
LRB9009866JSgcam01
1 AMENDMENT TO SENATE BILL 1528
2 AMENDMENT NO. . Amend Senate Bill 1528 by replacing
3 the title with the following:
4 "AN ACT concerning financial regulation, amending named
5 Acts."; and
6 by replacing everything after the enacting clause with the
7 following:
8 "Section 5. The Illinois Bank Examiners' Education
9 Foundation Act is amended by changing Section 6 as follows:
10 (20 ILCS 3210/6) (from Ch. 17, par. 406)
11 Sec. 6. The Board shall have the power:
12 (1) To promulgate reasonable rules for the purpose of
13 administering the provisions of this Act.
14 (2) To issue orders for the purpose of administering the
15 provisions of this Act and any rule promulgated in accordance
16 with this Act.
17 (3) To require the Commissioner to furnish the Board
18 space for meetings to be held by the Board as well as to
19 require the Commissioner to provide the technical assistance
20 and clerical and professional support as the Board may
21 require.
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1 (4) To adopt its own bylaws with respect to board
2 meetings and procedures. The bylaws shall provide that:
3 (A) A majority of the whole Board constitutes a
4 quorum.
5 (B) A majority of the quorum shall constitute
6 effective action except that a vote of a majority of the
7 whole Board shall be necessary for the approval of rules
8 and regulations proposed for adoption by the Commissioner
9 under paragraph (1) of this Section and shall be
10 necessary for recommendations made to the Commissioner
11 with regard to proposed amendments to this Act or to the
12 administrative practices hereunder.
13 (C) The Board shall meet at least once in each
14 calendar year and upon the call of the Commissioner or a
15 majority of the Board quarter. The Commissioner or a
16 majority of the Board may call such special or additional
17 meetings as may be deemed he or they deem necessary or
18 desirable.
19 (5) To authorize the transfer of funds from the Illinois
20 Bank Examiners' Education Fund to the Bank and Trust Company
21 Fund. Any amount so transferred shall be retransferred to
22 the Illinois Bank Examiners' Education Fund from the Bank and
23 Trust Company Fund within a period not to exceed 3 years.
24 (6) To maintain and direct the investments of the
25 Illinois Bank Examiners' Education Fund as provided in the
26 Illinois Banking Act and to issue an annual report to the
27 Governor, the General Assembly and all State-chartered banks
28 on the activities of the Foundation during the preceding year
29 which shall include, but is not limited to, detailing the
30 monies generated and deposited into the Illinois Bank
31 Examiners' Education Fund by the special education fee,
32 voluntary contributions, and income from investments and the
33 expenditures from the Fund.
34 (Source: P.A. 86-1449; 87-1038.)
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1 Section 10. The Illinois Banking Act is amended by
2 changing Sections 5, 9, 10, 13, 21.1, 24, 48, and 48.1 as
3 follows:
4 (205 ILCS 5/5) (from Ch. 17, par. 311)
5 Sec. 5. General corporate powers. A bank organized
6 under this Act or subject hereto shall be a body corporate
7 and politic and shall, without specific mention thereof in
8 the charter, have all the powers conferred by this Act and
9 the following additional general corporate powers:
10 (1) To sue and be sued, complain, and defend in its
11 corporate name.
12 (2) To have a corporate seal, which may be altered at
13 pleasure, and to use the same by causing it or a facsimile
14 thereof to be impressed or affixed or in any manner
15 reproduced, provided that the affixing of a corporate seal to
16 an instrument shall not give the instrument additional force
17 or effect, or change the construction thereof, and the use of
18 a corporate seal is not mandatory.
19 (3) To make, alter, amend, and repeal bylaws, not
20 inconsistent with its charter or with law, for the
21 administration of the affairs of the bank.
22 (4) To elect or appoint and remove officers and agents
23 of the bank and define their duties and fix their
24 compensation.
25 (5) To adopt and operate reasonable bonus plans,
26 profit-sharing plans, stock-bonus plans, stock-option plans,
27 pension plans and similar incentive plans for its directors,
28 officers and employees.
29 (5.1) To manage, operate and administer a fund for the
30 investment of funds by a public agency or agencies, including
31 any unit of local government or school district, or any
32 person. The fund for a public agency shall invest in the
33 same type of investments and be subject to the same
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1 limitations provided for the investment of public funds. The
2 fund for public agencies shall maintain a separate ledger
3 showing the amount of investment for each public agency in
4 the fund. "Public funds" and "public agency" as used in this
5 Section shall have the meanings ascribed to them in Section 1
6 of the Public Funds Investment Act.
7 (6) To make reasonable donations for the public welfare
8 or for charitable, scientific, religious or educational
9 purposes.
10 (7) To borrow or incur an obligation; and to pledge its
11 assets:
12 (a) to secure its borrowings, its lease of personal
13 or real property or its other nondeposit obligations;
14 (b) to enable it to act as agent for the sale of
15 obligations of the United States;
16 (c) to secure deposits of public money of the
17 United States, whenever required by the laws of the
18 United States, including without being limited to,
19 revenues and funds the deposit of which is subject to the
20 control or regulation of the United States or any of its
21 officers, agents, or employees and Postal Savings funds;
22 (d) to secure deposits of public money of any state
23 or of any political corporation or subdivision thereof
24 including, without being limited to, revenues and funds
25 the deposit of which is subject to the control or
26 regulation of any state or of any political corporation
27 or subdivisions thereof or of any of their officers,
28 agents, or employees;
29 (e) to secure deposits of money whenever required
30 by the National Bankruptcy Act;
31 (f) (blank); and
32 (g) to secure trust funds commingled with the
33 bank's funds, whether deposited by the bank or an
34 affiliate of the bank, pursuant to Section 2-8 of the
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1 Corporate Fiduciary Act.
2 (8) To own, possess, and carry as assets all or part of
3 the real estate necessary in or with which to do its banking
4 business, either directly or indirectly through the ownership
5 of all or part of the capital stock, shares or interests in
6 any corporation, association, trust engaged in holding any
7 part or parts or all of the bank premises, engaged in such
8 business and in conducting a safe deposit business in the
9 premises or part of them, or engaged in any activity that the
10 bank is permitted to conduct in a subsidiary pursuant to
11 paragraph (12) of this Section 5.
12 (9) To own, possess, and carry as assets other real
13 estate to which it may obtain title in the collection of its
14 debts or that was formerly used as a part of the bank
15 premises, but title to any real estate except as herein
16 permitted shall not be retained by the bank, either directly
17 or by or through a subsidiary, as permitted by subsection
18 (12) of this Section for a total period of more than 10 years
19 after acquiring title, either directly or indirectly.
20 (10) To do any act, including the acquisition of stock,
21 necessary to obtain insurance of its deposits, or part
22 thereof, and any act necessary to obtain a guaranty, in whole
23 or in part, of any of its loans or investments by the United
24 States or any agency thereof, and any act necessary to sell
25 or otherwise dispose of any of its loans or investments to
26 the United States or any agency thereof, and to acquire and
27 hold membership in the Federal Reserve System.
28 (11) (a) Notwithstanding any other provisions of this
29 Act or any other law, to do any act and to own, possess, and
30 carry as assets property of the character, including stock,
31 that is at the time authorized or permitted to national banks
32 by an Act of Congress, but subject always to the same
33 limitations and restrictions as are applicable to national
34 banks by the pertinent federal law and subject to applicable
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1 provisions of the Financial Institutions Insurance Sales Law.
2 (b) Notwithstanding any other provision of this Act or
3 any other law, to offer any product or service that is at the
4 time authorized or permitted to any insured savings
5 association by applicable law, but subject always to the same
6 limitations and restrictions that are applicable to the
7 insured savings association for the product or service by
8 such applicable law and subject to applicable provisions of
9 the Financial Institutions Insurance Sales Law. The powers
10 conferred by this paragraph (b) shall not be construed to
11 include the establishment or maintenance of a branch, nor
12 shall they be construed to limit the establishment or
13 maintenance of a branch pursuant to paragraph (a) of this
14 subsection.
15 (12) To own, possess, and carry as assets stock of one
16 or more corporations that is, or are, engaged in one or more
17 of the following businesses:
18 (a) holding title to and administering assets
19 acquired as a result of the collection or liquidating of
20 loans, investments, or discounts; or
21 (b) holding title to and administering personal
22 property acquired by the bank, directly or indirectly
23 through a subsidiary, for the purpose of leasing to
24 others, provided the lease or leases and the investment
25 of the bank, directly or through a subsidiary, in that
26 personal property otherwise comply with Section 35.1 of
27 this Act; or
28 (c) carrying on or administering any of the
29 activities excepting the receipt of deposits or the
30 payment of checks or other orders for the payment of
31 money in which a bank may engage in carrying on its
32 general banking business; provided, however, that nothing
33 contained in this paragraph (c) shall be deemed to permit
34 a bank organized under this Act or subject hereto to do,
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1 either directly or indirectly through any subsidiary, any
2 act, including the making of any loan or investment, or
3 to own, possess, or carry as assets any property that if
4 done by or owned, possessed, or carried by the State bank
5 would be in violation of or prohibited by any provision
6 of this Act.
7 The provisions of this subsection (12) shall not apply to
8 and shall not be deemed to limit the powers of a State bank
9 with respect to the ownership, possession, and carrying of
10 stock that a State bank is permitted to own, possess, or
11 carry under this Act.
12 Any bank intending to establish a subsidiary under this
13 subsection (12) shall give written notice to the Commissioner
14 60 days prior to the subsidiary's commencing of business or,
15 as the case may be, prior to acquiring stock in a corporation
16 that has already commenced business. After receiving the
17 notice, the Commissioner may waive or reduce the balance of
18 the 60 day notice period. The Commissioner may specify the
19 form of the notice and may promulgate rules and regulations
20 to administer this subsection (12).
21 (13) To accept for payment at a future date not
22 exceeding one year from the date of acceptance, drafts drawn
23 upon it by its customers; and to issue, advise, or confirm
24 letters of credit authorizing the holders thereof to draw
25 drafts upon it or its correspondents.
26 (14) To own and lease personal property acquired by the
27 bank at the request of a prospective lessee and upon the
28 agreement of that person to lease the personal property
29 provided that the lease, the agreement with respect thereto,
30 and the amount of the investment of the bank in the property
31 comply with Section 35.1 of this Act.
32 (15) (a) To establish and maintain, in addition to the
33 main banking premises, branches offering any banking services
34 permitted at the main banking premises of a State bank.
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1 (b) To establish and maintain, after May 31, 1997,
2 branches in another state that may conduct any activity in
3 that state that is authorized or permitted for any bank that
4 has a banking charter issued by that state, subject to the
5 same limitations and restrictions that are applicable to
6 banks chartered by that state.
7 (16) (Blank).
8 (17) To establish and maintain terminals, as authorized
9 by the Electronic Fund Transfer Act.
10 (18) To establish and maintain temporary service booths
11 at any International Fair held in this State which is
12 approved by the United States Department of Commerce, for the
13 duration of the international fair for the sole purpose of
14 providing a convenient place for foreign trade customers at
15 the fair to exchange their home countries' currency into
16 United States currency or the converse. This power shall not
17 be construed as establishing a new place or change of
18 location for the bank providing the service booth.
19 (19) To indemnify its officers, directors, employees,
20 and agents, as authorized for corporations under Section 8.75
21 of the Business Corporation Act of 1983.
22 (20) To own, possess, and carry as assets stock of, or
23 be or become a member of, any corporation, mutual company,
24 association, trust, or other entity formed exclusively for
25 the purpose of providing directors' and officers' liability
26 and bankers' blanket bond insurance or reinsurance to and for
27 the benefit of the stockholders, members, or beneficiaries,
28 or their assets or businesses, or their officers, directors,
29 employees, or agents, and not to or for the benefit of any
30 other person or entity or the public generally.
31 (21) To make debt or equity investments in corporations
32 or projects, whether for profit or not for profit, designed
33 to promote the development of the community and its welfare,
34 provided that the aggregate investment in all of these
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1 corporations and in all of these projects does not exceed 10%
2 of the unimpaired capital and unimpaired surplus of the bank
3 and provided that this limitation shall not apply to
4 creditworthy loans by the bank to those corporations or
5 projects. Upon written application to the Commissioner, a
6 bank may make an investment that would, when aggregated with
7 all other such investments, exceed 10% of the unimpaired
8 capital and unimpaired surplus of the bank. The Commissioner
9 may approve the investment if he is of the opinion and finds
10 that the proposed investment will not have a material adverse
11 effect on the safety and soundness of the bank.
12 (22) To own, possess, and carry as assets the stock of a
13 corporation engaged in the ownership or operation of a travel
14 agency or to operate a travel agency as a part of its
15 business, provided that the bank either owned, possessed, and
16 carried as assets the stock of such a corporation or operated
17 a travel agency as part of its business before July 1, 1991.
18 (23) With respect to affiliate facilities:
19 (a) to conduct at affiliate facilities any of the
20 following transactions for and on behalf of another
21 commonly owned bank, if so authorized by the other bank:
22 receiving deposits; cashing and issuing checks, drafts,
23 and money orders; changing money; and receiving payments
24 on existing indebtedness; and
25 (b) to authorize a commonly owned bank to conduct
26 for and on behalf of it any of the transactions listed in
27 this paragraph (23) at one or more affiliate facilities.
28 Any bank intending to conduct or to authorize a commonly
29 owned bank to conduct at an affiliate facility any of the
30 transactions specified in this paragraph (23) shall give
31 written notice to the Commissioner at least 30 days before
32 any such transaction is conducted at the affiliate facility.
33 (24) To act as the agent for any fire, life, or other
34 insurance company authorized by the State of Illinois, by
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1 soliciting and selling insurance and collecting premiums on
2 policies issued by such company; and to may receive for
3 services so rendered such fees or commissions as may be
4 agreed upon between the said bank and the insurance company
5 for which it may act as agent; provided, however, that no
6 such bank shall in any case assume or guarantee the payment
7 of any premium on insurance policies issued through its
8 agency by its principal; and provided further, that the bank
9 shall not guarantee the truth of any statement made by an
10 assured in filing his application for insurance.
11 (Source: P.A. 89-208, eff. 9-29-95; 89-310, eff. 1-1-96;
12 89-364, eff. 8-18-95; 89-626, eff. 8-9-96; 90-41, eff.
13 10-1-97; 90-301, eff. 8-1-97; revised 10-22-97.)
14 (205 ILCS 5/9) (from Ch. 17, par. 316)
15 Sec. 9. Contents of application. The application for a
16 permit to organize shall be in a form specified by the
17 Commissioner and shall be filed with the Commissioner signed
18 by each of the applicants and shall be acknowledged before
19 some officer authorized by law to acknowledge deeds. It shall
20 state:
21 (1) The name, residence, business or occupation and
22 address of each applicant, and a statement of the proposed
23 management;
24 (2) The name for the proposed bank;
25 (3) The location of the proposed bank;
26 (4) The amount of capital and, surplus and reserve for
27 operating expenses for the proposed bank;
28 (5) The number of shares of capital stock, the number of
29 shares and classes of preferred stock, if any, the par value
30 of the capital stock and preferred stock, and the amount for
31 which each share of capital stock and preferred stock is to
32 be sold;
33 (6) A statement of the financial worth of each of the
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1 applicants;
2 (7) (Blank);
3 (8) Such other relevant information as the Commissioner
4 may require.
5 (Source: P.A. 90-301, eff. 8-1-97.)
6 (205 ILCS 5/10) (from Ch. 17, par. 317)
7 Sec. 10. Permit to organize. Upon the filing of an
8 application for a permit to organize, the Commissioner shall
9 investigate the truth of the statements therein and shall
10 consider the proposed bank's capital structure, its future
11 earnings prospects, the general character, experience, and
12 qualifications of its proposed management, its proposed plan
13 of operation, and the convenience and needs of the area
14 sought to be served and notwithstanding the provisions of
15 Section 7 of this Act, the Commissioner shall not approve the
16 application and issue a permit to organize unless he shall be
17 of the opinion and finds:
18 (1) That the proposed capital at least meets the minimum
19 requirements of this Act determined by the Commissioner
20 pursuant to Section 7 of this Act including additional
21 capital necessitated by the circumstances of the proposed
22 bank including its size, scope of operations and market in
23 which it proposes to operate;
24 (2) That the future earnings prospects are favorable;
25 (3) That the general character, experience, and
26 qualifications of its proposed management and its proposed
27 plan of operation are is such as to assure reasonable promise
28 of successful, safe and sound operation;
29 (4) That the name of the proposed bank is not the same
30 as or deceptively similar to the name of any other bank then
31 operating in this State; and
32 (5) That the convenience and needs of the area sought to
33 be served by the proposed bank will be promoted.
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1 (Source: P.A. 86-368.)
2 (205 ILCS 5/13) (from Ch. 17, par. 320)
3 Sec. 13. Issuance of charter.
4 (a) When the directors have organized as provided in
5 Section 12 of this Act, and the capital stock and the
6 preferred stock, if any, together with a surplus of not less
7 than 50% of the capital, has been all fully paid in and a
8 record of the same filed with the Commissioner, the
9 Commissioner or some competent person of the Commissioner's
10 appointment shall make a thorough examination into the
11 affairs of the proposed bank, and if satisfied (i) that all
12 the requirements of this Act have been complied with, (ii)
13 and that no intervening circumstance has occurred to change
14 the Commissioner's findings made pursuant to Section 10 of
15 this Act, and (iii) that the prior involvement by any
16 stockholder who will own a sufficient amount of stock to have
17 control, as defined in Section 18 of this Act, of the
18 proposed bank with any other financial institution, whether
19 as stockholder, director, officer, or customer, was conducted
20 in a safe and sound manner, upon payment into the
21 Commissioner's office of the reasonable expenses of the
22 examination, as determined by the Commissioner, the
23 Commissioner shall issue a charter authorizing the bank to
24 commence business as authorized in this Act. All charters
25 issued by the Commissioner or any predecessor agency which
26 chartered State banks, including any charter outstanding as
27 of September 1, 1989, shall be perpetual. For the 2 years
28 after the Commissioner has issued a charter to a bank, the
29 bank shall request and obtain from the Commissioner prior
30 written approval before it may change senior management
31 personnel or directors.
32 The original charter, duly certified by the Commissioner,
33 or a certified copy shall be evidence in all courts and
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1 places of the existence and authority of the bank to do
2 business. Upon the issuance of the charter by the
3 Commissioner, the bank shall be deemed fully organized and
4 may proceed to do business. The Commissioner may, in the
5 Commissioner's discretion, withhold the issuing of the
6 charter when the Commissioner has reason to believe that the
7 bank is organized for any purpose other than that
8 contemplated by this Act or that a commission or fee has been
9 paid in connection with the sale of the stock of the bank.
10 The Commissioner shall revoke the charter and order
11 liquidation in the event that the bank does not commence a
12 general banking business within one year from the date of the
13 issuance of the charter, unless a request has been submitted,
14 in writing, to the Commissioner for an extension and the
15 request has been approved. After commencing a general
16 banking business, a bank, upon written notice to the
17 Commissioner, may change its name.
18 (b) (1) The Commissioner may also issue a charter to a
19 bank that is owned exclusively by other depository
20 institutions or depository institution holding companies and
21 is organized to engage exclusively in providing services to
22 or for other depository institutions, their holding
23 companies, and the officers, directors, and employees of such
24 institutions and companies, and in providing correspondent
25 banking services at the request of other depository
26 institutions or their holding companies (also referred to as
27 a "bankers' bank").
28 (2) A bank chartered pursuant to paragraph (1) shall,
29 except as otherwise specifically determined by the
30 Commissioner, be vested with the same rights and privileges
31 and subject to the same duties, restrictions, penalties, and
32 liabilities now or hereafter imposed under this Act.
33 (c) A bank chartered under this Act after November 1,
34 1985, and an out-of-state bank that merges with a State bank
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1 and establishes or maintains a branch in this State after May
2 31, 1997, shall obtain from and, at all times while it
3 accepts or retains deposits, maintain with the Federal
4 Deposit Insurance Corporation, or such other instrumentality
5 of or corporation chartered by the United States, deposit
6 insurance as authorized under federal law.
7 (d) (i) A bank that has a banking charter issued by the
8 Commissioner under this Act may, pursuant to a written
9 purchase and assumption agreement, transfer substantially all
10 of its assets to another State bank or national bank in
11 consideration, in whole or in part, for the transferee banks'
12 assumption of any part or all of its liabilities. Such a
13 transfer shall in no way be deemed to impair the charter of
14 the transferor bank or cause the transferor bank to forfeit
15 any of its rights, powers, interests, franchises, or
16 privileges as a State bank, nor shall any voluntary reduction
17 in the transferor bank's activities resulting from the
18 transfer have any such effect; provided, however, that a
19 State bank that transfers substantially all of its assets
20 pursuant to this subsection (d) and following the transfer
21 does not accept deposits and make loans, shall not have any
22 rights, powers, interests, franchises, or privileges under
23 subsection (15) of Section 5 of this Act until the bank has
24 resumed accepting deposits and making loans.
25 (ii) The fact that a State bank does not resume
26 accepting deposits and making loans for a period of 24 months
27 commencing on September 11, 1989 or on a date of the transfer
28 of substantially all of a State bank's assets, whichever is
29 later, or such longer period as the Commissioner may allow in
30 writing, may be the basis for a finding by the Commissioner
31 under Section 51 of this Act that the bank is unable to
32 continue operations.
33 (iii) The authority provided by subdivision (i) of this
34 subsection (d) shall terminate on May 31, 1997, and no bank
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1 that has transferred substantially all of its assets pursuant
2 to this subsection (d) shall continue in existence after May
3 31, 1997.
4 (Source: P.A. 89-208, eff. 9-29-95; 89-567, eff. 7-26-96;
5 89-603, eff. 8-2-96; 90-14, eff. 7-1-97; 90-301, eff.
6 8-1-97.)
7 (205 ILCS 5/21.1)
8 Sec. 21.1. Application for certificate of authority.
9 (a) On or after June 1, 1997, an out-of-state bank may,
10 in order to procure a certificate of authority to merge with
11 a State bank after executing , shall execute and filing file
12 in duplicate not less than 60 days before the proposed
13 effective date of the merger an application therefor with the
14 Commissioner and after shall also filing with the
15 Commissioner file a copy of its charter, articles of
16 association or articles of incorporation, and all amendments
17 thereto, duly authenticated by the proper officer of the
18 state wherein it is chartered or incorporated and the last
19 quarterly statement of condition filed by the out-of-state
20 bank with the appropriate federal banking regulator. The
21 Commissioner shall specify the form of the application which
22 shall set forth, to the extent applicable, the same
23 information required in an application by a foreign
24 corporation pursuant to Section 13.15 of the Business
25 Corporation Act of 1983. Subject to Sections 21.2 and 21.3 of
26 this Act, receipt by the Commissioner of a copy of an
27 application filed with and approved by the out-of-state
28 bank's chartering authority authorizing the out-of-state bank
29 to merge with a State bank shall satisfy the filing
30 requirements of this subsection (a).
31 When the provisions of this Section have been complied
32 with, the Commissioner shall issue a certificate of authority
33 to merge. If the merger is not consummated within one year,
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1 the Commissioner may cancel the certificate of authority.
2 (b) An out-of-state bank that is the resulting bank in a
3 merger with a State bank may, after the merger, establish and
4 maintain a branch or branches in Illinois at the locations
5 where the State bank had its main office and branches
6 immediately before the merger.
7 (c) An out-of-state bank that establishes and maintains
8 a branch or branches in Illinois pursuant to subsection (b)
9 of this Section may, after the merger, establish and maintain
10 additional branches in this State to the same extent as a
11 State bank.
12 (d) A branch of an out-of-state bank may not conduct any
13 activity that is not authorized for a State bank.
14 (e) An out-of-state bank shall provide written notice to
15 the Commissioner of its intent to establish an additional
16 branch or branches in this State within 30 days after
17 approval of the appropriate federal banking agency to
18 establish the branch or branches. The notice form shall be
19 specified by the Commissioner and may include any of the
20 information required for a similar notice by a State bank.
21 Receipt by the Commissioner of notice of the out-of-state
22 bank's intent to establish such additional branch or branches
23 in this State from the out-of-state bank's chartering
24 authority shall satisfy the requirements of this subsection
25 (e).
26 (Source: P.A. 89-208, eff. 9-29-95.)
27 (205 ILCS 5/24) (from Ch. 17, par. 331)
28 Sec. 24. Effective date of merger; filing. The executed
29 merger agreement together with copies of the resolutions of
30 the stockholders of each merging bank or insured savings
31 association approving it, certified by the bank's or insured
32 savings association's president or vice-president or the
33 cashier, shall be filed with the Commissioner. A merger that
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1 is to result in a State bank shall, unless a later date is
2 specified in the agreement, become effective when the
3 Commissioner has approved the agreement and issued a
4 certificate of merger to the continuing bank. The charters of
5 the merging banks or insured savings association, other than
6 the continuing bank, shall thereupon automatically terminate.
7 If, after May 31, 1997, the merger will result in an
8 out-of-state bank, the charter of a merging State bank shall
9 terminate upon notice to the Commissioner that the merger is
10 effective. The certificate of merger shall specify the name
11 of each merging bank or insured savings association and the
12 name of the continuing bank, and the amendments to the
13 charter of the continuing bank provided for by the merger
14 agreement. The certificate shall be conclusive evidence of
15 the merger and of the correctness of all proceedings therefor
16 in all courts and places, and the certificate shall be
17 recorded.
18 (Source: P.A. 89-208, eff. 9-29-95.)
19 (205 ILCS 5/48) (from Ch. 17, par. 359)
20 Sec. 48. Commissioner's powers; duties. The Commissioner
21 shall have the powers and authority, and is charged with the
22 duties and responsibilities designated in this Act, and a
23 State bank shall not be subject to any other visitorial power
24 other than as authorized by this Act, except those vested in
25 the courts. In the performance of the Commissioner's duties:
26 (1) The Commissioner shall call for statements from all
27 State banks as provided in Section 47 at least one time
28 during each calendar quarter.
29 (2) (a) The Commissioner, as often as the Commissioner
30 shall deem necessary or proper, and at least once in each
31 year, shall appoint a suitable person or persons to make an
32 examination of the affairs of every State bank, except that
33 for every eligible State bank, as defined by regulation, the
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1 Commissioner in lieu of an annual examination every other
2 year shall accept the examination made by the eligible State
3 bank's appropriate federal banking agency pursuant to Section
4 111 of the Federal Deposit Insurance Corporation Improvement
5 Act of 1991, provided the appropriate federal banking agency
6 has made such an examination. A person so appointed shall not
7 be a stockholder or officer or employee of any bank which
8 that person may be directed to examine, and shall have powers
9 to make a thorough examination into all the affairs of the
10 bank and in so doing to examine any of the officers or agents
11 or employees thereof on oath and shall make a full and
12 detailed report of the condition of the bank to the
13 Commissioner. In making the examination the examiners shall
14 include an examination of the affairs of all the affiliates
15 of the bank, as defined in subsection (b) of Section 35.2 of
16 this Act, as shall be necessary to disclose fully the
17 conditions of the affiliates, the relations between the bank
18 and the affiliates and the effect of those relations upon the
19 affairs of the bank, and in connection therewith shall have
20 power to examine any of the officers, directors, agents, or
21 employees of the affiliates on oath. After May 31, 1997, the
22 Commissioner may enter into cooperative agreements with state
23 regulatory authorities of other states to provide for
24 examination of State bank branches in those states, and the
25 Commissioner may accept reports of examinations of State bank
26 branches from those state regulatory authorities. These
27 cooperative agreements may set forth the manner in which the
28 other state regulatory authorities may be compensated for
29 examinations prepared for and submitted to the Commissioner.
30 (b) After May 31, 1997, the Commissioner is authorized
31 to examine, as often as the Commissioner shall deem necessary
32 or proper, branches of out-of-state banks. The Commissioner
33 may establish and may assess fees to be paid to the
34 Commissioner for examinations under this subsection (b). The
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1 fees shall be borne by the out-of-state bank, unless the fees
2 are borne by the state regulatory authority that chartered
3 the out-of-state bank, as determined by a cooperative
4 agreement between the Commissioner and the state regulatory
5 authority that chartered the out-of-state bank.
6 (2.5) Whenever any State bank, any subsidiary or
7 affiliate of a State bank, or after May 31, 1997, any branch
8 of an out-of-state bank causes to be performed, by contract
9 or otherwise, any bank services for itself, whether on or off
10 its premises:
11 (a) that performance shall be subject to
12 examination by the Commissioner to the same extent as if
13 services were being performed by the bank or, after May
14 31, 1997, branch of the out-of-state bank itself on its
15 own premises; and
16 (b) the bank or, after May 31, 1997, branch of the
17 out-of-state bank shall notify the Commissioner of the
18 existence of a service relationship. The notification
19 shall be submitted with the first statement of condition
20 (as required by Section 47 of this Act) due after the
21 making of the service contract or the performance of the
22 service, whichever occurs first. The Commissioner shall
23 be notified of each subsequent contract in the same
24 manner.
25 For purposes of this subsection (2.5), the term "bank
26 services" means services such as sorting and posting of
27 checks and deposits, computation and posting of interest and
28 other credits and charges, preparation and mailing of checks,
29 statements, notices, and similar items, or any other
30 clerical, bookkeeping, accounting, statistical, or similar
31 functions performed for a State bank, including but not
32 limited to electronic data processing related to those bank
33 services.
34 (3) The expense of administering this Act, including the
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1 expense of the examinations of State banks as provided in
2 this Act, shall to the extent of the amounts resulting from
3 the fees provided for in paragraphs (a), (a-2), and (b) of
4 this subsection (3) be assessed against and borne by the
5 State banks:
6 (a) Each bank shall pay to the Commissioner a Call
7 Report Fee which shall be paid in quarterly installments
8 equal to one-fourth of the sum of the annual fixed fee of
9 $800, plus a variable fee based on the assets shown on
10 the quarterly statement of condition delivered to the
11 Commissioner in accordance with Section 47 for the
12 preceding quarter according to the following schedule:
13 16¢ per $1,000 of the first $5,000,000 of total assets,
14 15¢ per $1,000 of the next $20,000,000 of total assets,
15 13¢ per $1,000 of the next $75,000,000 of total assets,
16 9¢ per $1,000 of the next $400,000,000 of total assets,
17 7¢ per $1,000 of the next $500,000,000 of total assets,
18 and 5¢ per $1,000 of all assets in excess of
19 $1,000,000,000, of the State bank. The Call Report Fee
20 shall be calculated by the Commissioner and billed to the
21 banks for remittance at the time of the quarterly
22 statements of condition provided for in Section 47. The
23 Commissioner may require payment of the fees provided in
24 this Section by an electronic transfer of funds or an
25 automatic debit of an account of each of the State banks.
26 In case more than one examination of any bank is deemed
27 by the Commissioner to be necessary in any fiscal year
28 and is performed at his direction, the Commissioner may
29 assess a reasonable additional fee to recover the cost of
30 the additional examination, but the additional fee shall
31 not exceed the sum of the remittances from the Call
32 Report Fees applicable to the 4 consecutive quarterly
33 statements of condition immediately preceding the date of
34 the additional examination. In lieu of the method and
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1 amounts set forth in this paragraph (a) for the
2 calculation of the Call Report Fee, the Commissioner may
3 specify by rule that the Call Report Fees provided by
4 this Section may be assessed semiannually or some other
5 period and may provide in the rule the formula to be used
6 for calculating and assessing the periodic Call Report
7 Fees to be paid by State banks.
8 (a-1) If in the opinion of the Commissioner an
9 emergency exists or appears likely, the Commissioner may
10 assign an examiner or examiners to monitor the affairs of
11 a State bank with whatever frequency he deems
12 appropriate, including but not limited to a daily basis.
13 The reasonable and necessary expenses of the Commissioner
14 during the period of the monitoring shall be borne by the
15 subject bank. The Commissioner shall furnish the State
16 bank a statement of time and expenses if requested to do
17 so within 30 days of the conclusion of the monitoring
18 period.
19 (a-2) On and after January 1, 1990, the reasonable
20 and necessary expenses of the Commissioner during
21 examination of the performance of electronic data
22 processing services under subsection (2.5) shall be borne
23 by the banks for which the services are provided. An
24 amount, based upon a fee structure prescribed by the
25 Commissioner, shall be paid by the banks or, after May
26 31, 1997, branches of out-of-state banks receiving the
27 electronic data processing services along with the Call
28 Report Fee assessed under paragraph (a) of this
29 subsection (3).
30 (a-3) After May 31, 1997, the reasonable and
31 necessary expenses of the Commissioner during examination
32 of the performance of electronic data processing services
33 under subsection (2.5) at or on behalf of branches of
34 out-of-state banks shall be borne by the out-of-state
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1 banks, unless those expenses are borne by the state
2 regulatory authorities that chartered the out-of-state
3 banks, as determined by cooperative agreements between
4 the Commissioner and the state regulatory authorities
5 that chartered the out-of-state banks.
6 (b) "Fiscal year" for purposes of this Section 48
7 is defined as a period beginning July 1 of any year and
8 ending June 30 of the next year. The Commissioner shall
9 receive for each fiscal year, commencing with the fiscal
10 year ending June 30, 1987, a contingent fee equal to the
11 lesser of the aggregate of the fees paid by all State
12 banks under paragraph (a) of subsection (3) for that
13 year, or the amount, if any, whereby the aggregate of the
14 administration expenses, as defined in paragraph (c), for
15 that fiscal year exceeds the sum of the aggregate of the
16 fees payable by all State banks for that year under
17 paragraph (a) of subsection (3), plus all other amounts
18 collected by the Commissioner for that year under any
19 other provision of this Act, plus the aggregate of all
20 fees collected for that year by the Commissioner under
21 the Corporate Fiduciary Act, excluding the receivership
22 fees provided for in Section 5-10 of the Corporate
23 Fiduciary Act, and the Foreign Banking Office Act. The
24 aggregate amount of the contingent fee thus arrived at
25 for any fiscal year shall be apportioned amongst,
26 assessed upon, and paid by the State banks and foreign
27 banking corporations, respectively, in the same
28 proportion that the fee of each under paragraph (a) of
29 subsection (3), respectively, for that year bears to the
30 aggregate for that year of the fees collected under
31 paragraph (a) of subsection (3). The aggregate amount of
32 the contingent fee, and the portion thereof to be
33 assessed upon each State bank and foreign banking
34 corporation, respectively, shall be determined by the
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1 Commissioner and shall be paid by each, respectively,
2 within 120 days of the close of the period for which the
3 contingent fee is computed and is payable, and the
4 Commissioner shall give 20 days advance notice of the
5 amount of the contingent fee payable by the State bank
6 and of the date fixed by the Commissioner for payment of
7 the fee.
8 (c) The "administration expenses" for any fiscal
9 year shall mean the ordinary and contingent expenses for
10 that year incident to making the examinations provided
11 for by, and for otherwise administering, this Act, the
12 Corporate Fiduciary Act, excluding the expenses paid from
13 the Corporate Fiduciary Receivership account in the Bank
14 and Trust Company Fund, the Foreign Banking Office Act,
15 the Electronic Fund Transfer Act, and the Illinois Bank
16 Examiners' Education Foundation Act, including all
17 salaries and other compensation paid for personal
18 services rendered for the State by officers or employees
19 of the State, including the Commissioner and the Deputy
20 Commissioners, all expenditures for telephone and
21 telegraph charges, postage and postal charges, office
22 stationery, supplies and services, and office furniture
23 and equipment, including typewriters and copying and
24 duplicating machines and filing equipment, surety bond
25 premiums, and travel expenses of those officers and
26 employees, employees, expenditures or charges for the
27 acquisition, enlargement or improvement of, or for the
28 use of, any office space, building, or structure, or
29 expenditures for the maintenance thereof or for
30 furnishing heat, light, or power with respect thereto,
31 all to the extent that those expenditures are directly
32 incidental to such examinations or administration. The
33 Commissioner shall not be required by paragraphs (c) or
34 (d-1) of this subsection (3) to maintain in any fiscal
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1 year's budget appropriated reserves for accrued vacation
2 and accrued sick leave that is required to be paid to
3 employees of the Commissioner upon termination of their
4 service with the Commissioner in an amount that is more
5 than is reasonably anticipated to be necessary for any
6 anticipated turnover in employees, whether due to normal
7 attrition or due to layoffs, terminations, or
8 resignations.
9 (d) The aggregate of all fees collected by the
10 Commissioner under this Act, the Corporate Fiduciary Act,
11 or the Foreign Banking Office Act on and after July 1,
12 1979, shall be paid promptly after receipt of the same,
13 accompanied by a detailed statement thereof, into the
14 State treasury and shall be set apart in a special fund
15 to be known as the "Bank and Trust Company Fund", except
16 as provided in paragraph (c) of subsection (11) of this
17 Section. The amount from time to time deposited into the
18 Bank and Trust Company Fund shall be used to offset the
19 ordinary administrative expenses of the Commissioner of
20 Banks and Real Estate as defined in this Section. Nothing
21 in this amendatory Act of 1979 shall prevent continuing
22 the practice of paying expenses involving salaries,
23 retirement, social security, and State-paid insurance
24 premiums of State officers by appropriations from the
25 General Revenue Fund. However, the General Revenue Fund
26 shall be reimbursed for those payments made on and after
27 July 1, 1979, by an annual transfer of funds from the
28 Bank and Trust Company Fund.
29 (d-1) Adequate funds shall be available in the Bank
30 and Trust Company Fund to permit the timely payment of
31 administration expenses. In each fiscal year the total
32 administration expenses shall be deducted from the total
33 fees collected by the Commissioner and the remainder
34 transferred into the Cash Flow Reserve Account, unless
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1 the balance of the Cash Flow Reserve Account prior to the
2 transfer equals or exceeds one-fourth of the total
3 initial appropriations from the Bank and Trust Company
4 Fund for the subsequent year, in which case the remainder
5 shall be credited to State banks and foreign banking
6 corporations and applied against their fees for the
7 subsequent year. The amount credited to each State bank
8 and foreign banking corporation shall be in the same
9 proportion as the Call Report Fees paid by each for the
10 year bear to the total Call Report Fees collected for the
11 year. If, after a transfer to the Cash Flow Reserve
12 Account is made or if no remainder is available for
13 transfer, the balance of the Cash Flow Reserve Account is
14 less than one-fourth of the total initial appropriations
15 for the subsequent year and the amount transferred is
16 less than 5% of the total Call Report Fees for the year,
17 additional amounts needed to make the transfer equal to
18 5% of the total Call Report Fees for the year shall be
19 apportioned amongst, assessed upon, and paid by the State
20 banks and foreign banking corporations in the same
21 proportion that the Call Report Fees of each,
22 respectively, for the year bear to the total Call Report
23 Fees collected for the year. The additional amounts
24 assessed shall be transferred into the Cash Flow Reserve
25 Account. For purposes of this paragraph (d-1), the
26 calculation of the fees collected by the Commissioner
27 shall exclude the receivership fees provided for in
28 Section 5-10 of the Corporate Fiduciary Act.
29 (e) The Commissioner may upon request certify to
30 any public record in his keeping and shall have authority
31 to levy a reasonable charge for issuing certifications of
32 any public record in his keeping.
33 (f) In addition to fees authorized elsewhere in
34 this Act, the Commissioner may, in connection with a
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1 review, approval, or provision of a service, levy a
2 reasonable charge to recover the cost of the review,
3 approval, or service.
4 (4) Nothing contained in this Act shall be construed to
5 limit the obligation relative to examinations and reports of
6 any State bank, deposits in which are to any extent insured
7 by the United States or any agency thereof, nor to limit in
8 any way the powers of the Commissioner with reference to
9 examinations and reports of that bank.
10 (5) The nature and condition of the assets in or
11 investment of any bonus, pension, or profit sharing plan for
12 officers or employees of every State bank or, after May 31,
13 1997, branch of an out-of-state bank shall be deemed to be
14 included in the affairs of that State bank or branch of an
15 out-of-state bank subject to examination by the Commissioner
16 under the provisions of subsection (2) of this Section, and
17 if the Commissioner shall find from an examination that the
18 condition of or operation of the investments or assets of the
19 plan is unlawful, fraudulent, or unsafe, or that any trustee
20 has abused his trust, the Commissioner shall, if the
21 situation so found by the Commissioner shall not be corrected
22 to his satisfaction within 60 days after the Commissioner has
23 given notice to the board of directors of the State bank or
24 out-of-state bank of his findings, report the facts to the
25 Attorney General who shall thereupon institute proceedings
26 against the State bank or out-of-state bank, the board of
27 directors thereof, or the trustees under such plan as the
28 nature of the case may require.
29 (6) The Commissioner shall have the power:
30 (a) To promulgate reasonable rules for the purpose
31 of administering the provisions of this Act.
32 (b) To issue orders for the purpose of
33 administering the provisions of this Act and any rule
34 promulgated in accordance with this Act.
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1 (c) To appoint hearing officers to execute any of
2 the powers granted to the Commissioner under this Section
3 for the purpose of administering this Act and any rule
4 promulgated in accordance with this Act.
5 (d) To subpoena witnesses, to compel their
6 attendance, to administer an oath, to examine any person
7 under oath, and to require the production of any relevant
8 books, papers, accounts, and documents in the course of
9 and pursuant to any investigation being conducted, or any
10 action being taken, by the Commissioner in respect of any
11 matter relating to the duties imposed upon, or the powers
12 vested in, the Commissioner under the provisions of this
13 Act or any rule promulgated in accordance with this Act.
14 (e) To conduct hearings.
15 (7) Whenever, in the opinion of the Commissioner, any
16 director, officer, employee, or agent of a State bank or,
17 after May 31, 1997, of any branch of an out-of-state bank
18 shall have violated any law, rule, or order relating to that
19 bank or shall have engaged in an unsafe or unsound practice
20 in conducting the business of that bank or shall have
21 violated any law or engaged or participated in any unsafe or
22 unsound practice in connection with any financial institution
23 or other business entity such that the character and fitness
24 of the director, officer, employee, or agent does not assure
25 reasonable promise of safe and sound operation of the State
26 bank, the Commissioner may issue an order of removal. If in
27 the opinion of the Commissioner any former director, officer,
28 employee, or agent of a State bank, prior to the termination
29 of his or her service with that bank, violated any law, rule,
30 or order relating to that State bank, engaged in an unsafe or
31 unsound practice in conducting the business of that bank, or
32 violated any law or engaged or participated in any unsafe or
33 unsound practice in connection with any financial institution
34 or other business entity such that the character and fitness
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1 of the director, officer, employee, or agent would not have
2 assured reasonable promise of safe and sound operation of the
3 State bank, the Commissioner may issue an order prohibiting
4 that person from further service with a bank as a director,
5 officer, employee, or agent. The order shall be served upon
6 the director, officer, employee, or agent. A copy of the
7 order shall be sent to each director of the bank affected by
8 registered mail. The person affected by the action may
9 request a hearing before the State Banking Board within 10
10 days after receipt of the order of removal. The hearing
11 shall be held by the Board within 30 days after the request
12 has been received by the Board. The Board shall make a
13 determination approving, modifying, or disapproving the order
14 of the Commissioner as its final administrative decision. If
15 a hearing is held by the Board, the Board shall make its
16 determination within 60 days from the conclusion of the
17 hearing. Any person affected by a decision of the Board under
18 this subsection (7) of Section 48 of this Act may have the
19 decision reviewed only under and in accordance with the
20 Administrative Review Law and the rules adopted pursuant
21 thereto. A copy of the order shall also be served upon the
22 bank of which he is a director, officer, employee, or agent,
23 whereupon he shall cease to be a director, officer, employee,
24 or agent of that bank. The order and the findings of fact
25 upon which it is based shall not be made public or disclosed
26 to anyone except the director, officer, employee, or agent
27 involved and the directors of the bank involved, otherwise
28 than in connection with proceedings for a violation of or
29 failure to comply with this Section. The Commissioner may
30 institute a civil action against the director, officer, or
31 agent of the State bank or, after May 31, 1997, of the branch
32 of the out-of-state bank against whom any order provided for
33 by this subsection (7) of this Section 48 has been issued,
34 and against the State bank or, after May 31, 1997,
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1 out-of-state bank, to enforce compliance with or to enjoin
2 any violation of the terms of the order. Any person who has
3 been removed by an order of the Commissioner under this
4 subsection or Section 5-6 of the Corporate Fiduciary Act may
5 not thereafter serve as director, officer, employee, or agent
6 of any State bank or of any branch of any out-of-state bank,
7 or of any corporate fiduciary, as defined in Section 1-5.05
8 of the Corporate Fiduciary Act, unless the Commissioner has
9 granted prior approval in writing.
10 (8) The Commissioner may impose civil penalties of up to
11 $10,000 against any person for each violation of any
12 provision of this Act, any rule promulgated in accordance
13 with this Act, any order of the Commissioner, or any other
14 action which in the Commissioner's discretion is an unsafe or
15 unsound banking practice.
16 (9) The Commissioner may impose civil penalties of up to
17 $100 against any person for the first failure to comply with
18 reporting requirements set forth in the report of examination
19 of the bank and up to $200 for the second and subsequent
20 failures to comply with those reporting requirements.
21 (10) All final administrative decisions of the
22 Commissioner hereunder shall be subject to judicial review
23 pursuant to the provisions of the Administrative Review Law.
24 For matters involving administrative review, venue shall be
25 in either Sangamon County or Cook County.
26 (11) The endowment fund for the Illinois Bank Examiners'
27 Education Foundation shall be administered as follows:
28 (a) (Blank).
29 (b) The Foundation is empowered to receive
30 voluntary contributions, gifts, grants, bequests, and
31 donations on behalf of the Illinois Bank Examiners'
32 Education Foundation from national banks and other
33 persons for the purpose of funding the endowment of the
34 Illinois Bank Examiners' Education Foundation.
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1 (c) The aggregate of all special educational fees
2 collected by the Commissioner and property received by
3 the Commissioner on behalf of the Illinois Bank
4 Examiners' Education Foundation under this subsection
5 (11) on or after June 30, 1986, shall be either (i)
6 promptly paid after receipt of the same, accompanied by a
7 detailed statement thereof, into the State Treasury and
8 shall be set apart in a special fund to be known as "The
9 Illinois Bank Examiners' Education Fund" to be invested
10 by either the Treasurer of the State of Illinois in the
11 Public Treasurers' Investment Pool or in any other
12 investment he is authorized to make or by the Illinois
13 State Board of Investment as the board of trustees of the
14 Illinois Bank Examiners' Education Foundation may direct
15 or (ii) deposited into an account maintained in a
16 commercial bank or corporate fiduciary in the name of the
17 Illinois Bank Examiners' Education Foundation pursuant to
18 the order and direction of the Board of Trustees of the
19 Illinois Bank Examiners' Education Foundation.
20 (12) (Blank).
21 (Source: P.A. 89-208, eff. 9-29-95; 89-317, eff. 8-11-95;
22 89-508, eff. 7-3-96; 89-567, eff. 7-26-96; 89-626, eff.
23 8-9-96; 90-14, eff. 7-1-97.)
24 (205 ILCS 5/48.1) (from Ch. 17, par. 360)
25 Sec. 48.1. Customer financial records; confidentiality.
26 (a) For the purpose of this Section, the term "financial
27 records" means any original, any copy, or any summary of (1)
28 a document granting signature authority over a deposit or
29 account, (2) a statement, ledger card or other record on any
30 deposit or account, which shows each transaction in or with
31 respect to that account, (3) a check, draft or money order
32 drawn on a bank or issued and payable by a bank, or (4) any
33 other item containing information pertaining to any
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1 relationship established in the ordinary course of a bank's
2 business between a bank and its customer.
3 (b) This Section does not prohibit:
4 (1) The preparation, examination, handling or
5 maintenance of any financial records by any officer,
6 employee or agent of a bank having custody of the
7 records, or the examination of the records by a certified
8 public accountant engaged by the bank to perform an
9 independent audit.
10 (2) The examination of any financial records by, or
11 the furnishing of financial records by a bank to, any
12 officer, employee or agent of (i) the Commissioner of
13 Banks and Real Estate, (ii) after May 31, 1997, a state
14 regulatory authority authorized to examine a branch of a
15 State bank located in another state, (iii) the
16 Comptroller of the Currency, (iv) the Federal Reserve
17 Board, or (v) the Federal Deposit Insurance Corporation
18 for use solely in the exercise of his duties as an
19 officer, employee, or agent.
20 (3) The publication of data furnished from
21 financial records relating to customers where the data
22 cannot be identified to any particular customer or
23 account.
24 (4) The making of reports or returns required under
25 Chapter 61 of the Internal Revenue Code of 1986.
26 (5) Furnishing information concerning the dishonor
27 of any negotiable instrument permitted to be disclosed
28 under the Uniform Commercial Code.
29 (6) The exchange in the regular course of business
30 of credit information between a bank and other banks or
31 financial institutions or commercial enterprises,
32 directly or through a consumer reporting agency.
33 (7) The furnishing of information to the
34 appropriate law enforcement authorities where the bank
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1 reasonably believes it has been the victim of a crime.
2 (8) The furnishing of information under the Uniform
3 Disposition of Unclaimed Property Act.
4 (9) The furnishing of information under the
5 Illinois Income Tax Act and the Illinois Estate and
6 Generation-Skipping Transfer Tax Act.
7 (10) The furnishing of information under the
8 federal Currency and Foreign Transactions Reporting Act
9 Title 31, United States Code, Section 1051 et seq.
10 (11) The furnishing of information under any other
11 statute that by its terms or by regulations promulgated
12 thereunder requires the disclosure of financial records
13 other than by subpoena, summons, warrant, or court order.
14 (12) The furnishing of information about the
15 existence of an account of a person to a judgment
16 creditor of that person who has made a written request
17 for that information.
18 (13) The exchange in the regular course of business
19 of information between commonly owned banks in connection
20 with a transaction authorized under paragraph (23) of
21 Section 5 and conducted at an affiliate facility.
22 (14) The furnishing of information in accordance
23 with the federal Personal Responsibility and Work
24 Opportunity Reconciliation Act of 1996. Any bank governed
25 by this Act shall enter into an agreement for data
26 exchanges with a State agency provided the State agency
27 pays to the bank a reasonable fee not to exceed its
28 actual cost incurred. A bank providing information in
29 accordance with this item shall not be liable to any
30 account holder or other person for any disclosure of
31 information to a State agency, for encumbering or
32 surrendering any assets held by the bank in response to a
33 lien or order to withhold and deliver issued by a State
34 agency, or for any other action taken pursuant to this
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1 item, including individual or mechanical errors, provided
2 the action does not constitute gross negligence or
3 willful misconduct. A bank shall have no obligation to
4 hold, encumber, or surrender assets until it has been
5 served with a subpoena, summons, warrant, court or
6 administrative order, lien, or levy.
7 (15) The exchange in the regular course of business
8 of information between a bank and any commonly owned
9 affiliate of the bank, subject to the provisions of the
10 Financial Institutions Insurance Sales Law.
11 (c) A bank may not disclose to any person, except to the
12 customer or his duly authorized agent, any financial records
13 relating to that customer of that bank unless:
14 (1) the customer has authorized disclosure to the
15 person;
16 (2) the financial records are disclosed in response
17 to a lawful subpoena, summons, warrant or court order
18 which meets the requirements of subsection (d) of this
19 Section; or
20 (3) the bank is attempting to collect an obligation
21 owed to the bank and the bank complies with the
22 provisions of Section 2I of the Consumer Fraud and
23 Deceptive Business Practices Act.
24 (d) A bank shall disclose financial records under
25 paragraph (2) of subsection (c) of this Section under a
26 lawful subpoena, summons, warrant, or court order only after
27 the bank mails a copy of the subpoena, summons, warrant, or
28 court order to the person establishing the relationship with
29 the bank, if living, and, otherwise his personal
30 representative, if known, at his last known address by first
31 class mail, postage prepaid, unless the bank is specifically
32 prohibited from notifying the person by order of court or by
33 applicable State or federal law. A bank shall not mail a
34 copy of a subpoena to any person pursuant to this subsection
-34- LRB9009866JSgcam01
1 if the subpoena was issued by a grand jury under the
2 Statewide Grand Jury Act.
3 (e) Any officer or employee of a bank who knowingly and
4 willfully furnishes financial records in violation of this
5 Section is guilty of a business offense and, upon conviction,
6 shall be fined not more than $1,000.
7 (f) Any person who knowingly and willfully induces or
8 attempts to induce any officer or employee of a bank to
9 disclose financial records in violation of this Section is
10 guilty of a business offense and, upon conviction, shall be
11 fined not more than $1,000.
12 (g) A bank shall be reimbursed for costs that are
13 reasonably necessary and that have been directly incurred in
14 searching for, reproducing, or transporting books, papers,
15 records, or other data of a customer required or requested to
16 be produced pursuant to a lawful subpoena, summons, warrant,
17 or court order. The Commissioner shall determine the rates
18 and conditions under which payment may be made.
19 (Source: P.A. 89-208, eff. 9-29-95; 89-364, eff. 8-18-95;
20 89-508, eff. 7-3-96; 89-626, eff. 8-9-96; 90-18, eff.
21 7-1-97.)
22 Section 15. The Savings Bank Act is amended by changing
23 Sections 1006, 1008, 6001, 6003, and 6013 as follows:
24 (205 ILCS 205/1006) (from Ch. 17, par. 7301-6)
25 Sec. 1006. Parity.
26 (a) Subject to the regulation of the Commissioner and in
27 addition to the powers granted by this Act, each savings
28 bank operating under this Act shall possess those powers
29 granted by regulation promulgated under the Federal Deposit
30 Insurance Act for state savings banks.
31 (b) A savings bank may establish branches or offices at
32 which savings or investments are regularly received or loans
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1 approved as follows:
2 (1) to the extent branch powers and offices are
3 granted to State banks under the Illinois Banking Act;
4 (2) within the geographic area defined in Article 2
5 of this Act and subject to the provisions of Article 2 of
6 this Act;
7 (3) within the same geographic areas or states as
8 those states from which a holding company is permitted to
9 acquire an Illinois savings bank or an Illinois savings
10 bank holding company;
11 (4) to the same extent that holding companies and
12 savings and loan associations headquartered outside the
13 State of Illinois are allowed to operate in Illinois by
14 virtue of Articles 1A and 2B of the Illinois Savings and
15 Loan Act of 1985;
16 (5) as the result of mergers, consolidations, or
17 bulk sales of facilities in the case of relocations.
18 (c) The Commissioner may adopt regulations that provide
19 for the establishment of branches as defined by the
20 Commissioner.
21 (d) Notwithstanding any other provision of this Act, a
22 savings bank that purchases or assumes all or any part of the
23 assets or liabilities of a bank, savings bank, or savings and
24 loan association or merges or consolidates with a bank,
25 savings bank, or savings and loan association may retain and
26 maintain the main premises or branches of the former bank,
27 savings bank, or savings and loan association as branches of
28 the purchasing, merging, or consolidating savings bank,
29 provided it assumes the deposit liabilities of the bank,
30 savings bank, or savings and loan association maintained at
31 the main premises or branches.
32 (e) A savings bank has any power reasonably incident,
33 convenient, or useful to the accomplishment of the express
34 powers conferred upon the savings bank by this Act.
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1 (Source: P.A. 89-74, eff. 6-30-95; 90-301, eff. 8-1-97.)
2 (205 ILCS 205/1008) (from Ch. 17, par. 7301-8)
3 Sec. 1008. General corporate powers.
4 (a) A savings bank operating under this Act shall be a
5 body corporate and politic and shall have all of the specific
6 powers conferred by this Act and in addition thereto, the
7 following general powers:
8 (1) To sue and be sued, complain, and defend in its
9 corporate name and to have a common seal, which it may
10 alter or renew at pleasure.
11 (2) To obtain and maintain insurance by a deposit
12 insurance corporation as defined in this Act.
13 (3) To act as a fiscal agent for the United States,
14 the State of Illinois or any department, branch, arm, or
15 agency of the State or any unit of local government or
16 school district in the State, when duly designated for
17 that purpose, and as agent to perform reasonable
18 functions as may be required of it.
19 (4) To become a member of or deal with any
20 corporation or agency of the United States or the State
21 of Illinois, to the extent that the agency assists in
22 furthering or facilitating its purposes or powers and to
23 that end to purchase stock or securities thereof or
24 deposit money therewith, and to comply with any other
25 conditions of membership or credit.
26 (5) To make donations in reasonable amounts for the
27 public welfare or for charitable, scientific, religious,
28 or educational purposes.
29 (6) To adopt and operate reasonable insurance,
30 bonus, profit sharing, and retirement plans for officers
31 and employees and for directors including, but not
32 limited to, advisory, honorary, and emeritus directors,
33 who are not officers or employees.
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1 (7) To reject any application for membership; to
2 retire deposit accounts by enforced retirement as
3 provided in this Act and the bylaws; and to limit the
4 issuance of, or payments on, deposit accounts, subject,
5 however, to contractual obligations.
6 (8) To purchase stock in service corporations and
7 to invest in any form of indebtedness of any service
8 corporation as defined in this Act, subject to
9 regulations of the Commissioner.
10 (9) To purchase stock of a corporation whose
11 principal purpose is to operate a safe deposit company or
12 escrow service company.
13 (10) To exercise all the powers necessary to
14 qualify as a trustee or custodian under federal or State
15 law, provided that the authority to accept and execute
16 trusts is subject to the provisions of the Corporate
17 Fiduciary Act and to the supervision of those activities
18 by the Commissioner of Banks and Real Estate.
19 (11) (Blank).
20 (12) To establish, maintain, and operate terminals
21 as authorized by the Electronic Fund Transfer Act. The
22 establishment, maintenance, operation, and location of
23 those terminals shall be subject to the approval of the
24 Commissioner.
25 (13) Pledge its assets:
26 (A) to enable it to act as agent for the sale
27 of obligations of the United States;
28 (B) to secure deposits;
29 (C) to secure deposits of money whenever
30 required by the National Bankruptcy Act;
31 (D) to qualify under Section 2-9 of the
32 Corporate Fiduciary Act; and
33 (E) to secure trust funds commingled with the
34 savings bank's funds, whether deposited by the
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1 savings bank or an affiliate of the savings bank, as
2 required under Section 2-8 of the Corporate
3 Fiduciary Act.
4 (14) To accept for payment at a future date not to
5 exceed one year from the date of acceptance, drafts drawn
6 upon it by its customers; and to issue, advise, or
7 confirm letters of credit authorizing holders thereof to
8 draw drafts upon it or its correspondents.
9 (15) Subject to the regulations of the
10 Commissioner, to own and lease personal property acquired
11 by the savings bank at the request of a prospective
12 lessee and, upon the agreement of that person, to lease
13 the personal property.
14 (16) To establish temporary service booths at any
15 International Fair in this State that is approved by the
16 United States Department of Commerce for the duration of
17 the international fair for the purpose of providing a
18 convenient place for foreign trade customers to exchange
19 their home countries' currency into United States
20 currency or the converse. To provide temporary periodic
21 service to persons residing in a bona fide nursing home,
22 senior citizens' retirement home, or long-term care
23 facility. These powers shall not be construed as
24 establishing a new place or change of location for the
25 savings bank providing the service booth.
26 (17) To indemnify its officers, directors,
27 employees, and agents, as authorized for corporations
28 under Section 8.75 of the Business Corporations Act of
29 1983.
30 (18) To provide data processing services to others
31 on a for-profit basis.
32 (19) To utilize any electronic technology to
33 provide customers with home banking services.
34 (20) Subject to the regulations of the
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1 Commissioner, to enter into an agreement to act as a
2 surety.
3 (21) Subject to the regulations of the
4 Commissioner, to issue credit cards, extend credit
5 therewith, and otherwise engage in or participate in
6 credit card operations.
7 (22) To purchase for its own account shares of
8 stock of a bankers' bank, described in Section 13(b)(1)
9 of the Illinois Banking Act, on the same terms and
10 conditions as a bank may purchase such shares. In no
11 event shall the total amount of such stock held by a
12 savings bank in such bankers' bank exceed 10% of its
13 capital and surplus (including undivided profits) and in
14 no event shall a savings bank acquire more than 5% of any
15 class of voting securities of such bankers' bank.
16 (23) With respect to affiliate facilities:
17 (A) to conduct at affiliate facilities any of
18 the following transactions for and on behalf of any
19 affiliated depository institution, if so authorized
20 by the affiliate or affiliates: receiving deposits;
21 renewing deposits; cashing and issuing checks,
22 drafts, money orders, travelers checks, or similar
23 instruments; changing money; receiving payments on
24 existing indebtedness; and conducting ministerial
25 functions with respect to loan applications,
26 servicing loans, and providing loan account
27 information; and
28 (B) to authorize an affiliated depository
29 institution to conduct for and on behalf of it, any
30 of the transactions listed in this subsection at one
31 or more affiliate facilities.
32 A savings bank intending to conduct or to authorize
33 an affiliated depository institution to conduct at an
34 affiliate facility any of the transactions specified in
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1 this subsection shall give written notice to the
2 Commissioner at least 30 days before any such transaction
3 is conducted at an affiliate facility. All conduct under
4 this subsection shall be on terms consistent with safe
5 and sound banking practices and applicable law.
6 (24) (23) Subject to Article XLIV of the Illinois
7 Insurance Code, to act as the agent for any fire, life,
8 or other insurance company authorized by the State of
9 Illinois, by soliciting and selling insurance and
10 collecting premiums on policies issued by such company;
11 and may receive for services so rendered such fees or
12 commissions as may be agreed upon between the said
13 savings bank and the insurance company for which it may
14 act as agent; provided, however, that no such savings
15 bank shall in any case assume or guarantee the payment of
16 any premium on insurance policies issued through its
17 agency by its principal; and provided further, that the
18 savings bank shall not guarantee the truth of any
19 statement made by an assured in filing his application
20 for insurance.
21 (25) (23) To become a member of the Federal Home
22 Loan Bank Board and to have the powers granted to a
23 savings association organized under the Illinois Savings
24 and Loan Act of 1985 or the laws of the United States,
25 subject to regulations of the Commissioner.
26 (26) To offer any product or service that is at the
27 time authorized or permitted to a bank by applicable law,
28 but subject always to the same limitations and
29 restrictions that are applicable to the bank for the
30 product or service by such applicable law and subject to
31 the applicable provisions of the Financial Institutions
32 Insurance Sales Law and rules of the Commissioner.
33 (b) If this Act or the regulations adopted under this
34 Act fail to provide specific guidance in matters of corporate
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1 governance, the provisions of the Business Corporation Act of
2 1983 may be used.
3 (Source: P.A. 89-74, eff. 6-30-95; 89-310, eff. 1-1-96;
4 89-317, eff. 8-11-95; 89-355, eff. 8-17-95; 89-508, eff.
5 7-3-96; 89-603, eff. 8-2-96; 89-626, eff. 8-9-96; 90-14, eff.
6 7-1-97; 90-41, eff. 10-1-97; 90-270, eff. 7-30-97; 90-301,
7 eff. 8-1-97; revised 10-21-97.)
8 (205 ILCS 205/6001) (from Ch. 17, par. 7306-1)
9 Sec. 6001. General provisions.
10 (a) No savings bank shall make any loan or investment
11 authorized by this Article unless the savings bank first has
12 determined that the type, amount, purpose, and repayment
13 provisions of the loan or investment in relation to the
14 borrower's or issuer's resources and credit standing support
15 the reasonable belief that the loan or investment will be
16 financially sound and will be repaid according to its terms
17 and that the loan or investment is not otherwise unlawful.
18 (b) Each loan or investment that a savings bank makes or
19 purchases, whether wholly or in part, must be adequately
20 underwritten, reviewed periodically, and reserved against as
21 necessary in accordance with its payment performance, all in
22 accordance with the regulations and directives of the
23 Commissioner.
24 (c) Every appraisal or reappraisal of property that a
25 savings bank is required to make shall be made as follows:
26 (1) By an independent qualified appraiser,
27 designated by the board of directors, who is properly
28 licensed or and certified by the entity authorized to
29 govern his licensure or and certification and who meets
30 the requirements of the Appraisal Subcommittee and of the
31 Federal Act.
32 (2) In the case of an insured or guaranteed loan,
33 by any appraiser appointed by any lending, insuring, or
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1 guaranteeing agency of the United States or the State of
2 Illinois that insures or guarantees the loan, wholly or
3 in part.
4 (3) Each appraisal shall be in writing prepared at
5 the request of the lender for the lender's use; disclose
6 the market value of the security offered; contain
7 sufficient information and data concerning the appraised
8 property to substantiate the market value thereof; be
9 certified and signed by the appraiser or appraisers; and
10 state that the appraiser or appraisers have personally
11 examined the described property. The appraisal shall be
12 filed and preserved by the savings bank. In addition, the
13 appraisal shall be prepared and reported in accordance
14 with the Standards of Professional Practice and the
15 ethical rules of the Appraisal Foundation as adopted and
16 promulgated by the Appraisal Subcommittee.
17 (d) If appraisals of real estate securing a savings
18 bank's loans are obtained as part of an examination by the
19 Commissioner, the cost of those appraisals shall promptly be
20 paid by the savings bank directly to the appraiser or
21 appraisers.
22 (e) Any violation of this Article shall constitute an
23 unsafe or unsound practice. Any person who knowingly
24 violates any provision of this Article shall be subject to
25 enforcement action or civil money penalties as provided for
26 in this Act.
27 (f) For purposes of this Article, "underwriting" shall
28 mean the process of compiling information to support a
29 determination as to whether an investment or extension of
30 credit shall be made by a savings bank. It shall include,
31 but not be limited to, evaluating a borrower's
32 creditworthiness, determination of the value of the
33 underlying collateral, market factors, and the
34 appropriateness of the investment or loan for the savings
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1 bank. Underwriting as used herein does not include the
2 agreement to purchase unsold portions of public offerings of
3 stocks or bonds as commonly used in corporate securities
4 issuances and sales.
5 (g) For purposes of this Section, the following
6 definitions shall apply:
7 (1) "Federal Act" means Title XI of the Financial
8 Institutions Reform, Recovery and Enforcement Act of 1989
9 and regulations adopted pursuant thereto.
10 (2) "Appraisal Subcommittee" means the designee of
11 the heads of the Federal Financial Institutions
12 Examination Council Act of 1978 (12 U.S.C. 3301 et seq.).
13 (3) "Appraisal Foundation" means the Appraisal
14 Foundation that was incorporated as an Illinois
15 not-for-profit corporation on November 30, 1987.
16 (Source: P.A. 86-1213.)
17 (205 ILCS 205/6003) (from Ch. 17, par. 7306-3)
18 Sec. 6003. Other investments. If the board of directors
19 determines at any time that funds are available in excess of
20 the demands and needs for loans, maturities, and withdrawals,
21 A savings bank may invest funds as provided in this Section:
22 (1) In demand, time, or savings deposits or
23 accounts, withdrawable accounts, or other insured
24 obligations of any financial institution the accounts of
25 which are insured by a federal agency.
26 (2) In participating interests in loans of a type
27 that the savings bank would be authorized to make, but
28 only if the other participants are (A) savings banks
29 organized under this Act, (B) savings and loan
30 associations, banks, credit unions, and licensees under
31 the Consumer Installment Loan Act or the Sales Finance
32 Agency Act, organized under the laws of this State, (C)
33 associations or corporations insured by an
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1 instrumentality of the United States, (D)
2 instrumentalities of or corporations owned wholly or in
3 part by the United States or this State, or, (E) subject
4 to regulations of the Commissioner, service corporations
5 of a savings bank organized under this Act or
6 subsidiaries of a savings and loan association, bank, or
7 credit union organized under the laws of this State or
8 the United States.
9 (3) In obligations of, or obligations that are
10 fully guaranteed by the United States and in stocks or
11 obligations of any Federal Reserve Bank, Federal Home
12 Loan Bank, the Student Loan Market Association, the
13 Government National Mortgage Association, the Federal
14 National Mortgage Association, The Federal Home Loan
15 Mortgage Corporation, the Federal Deposit Insurance
16 Corporation, or any other agency of the United States.
17 (4) In bonds or other direct obligations of, or
18 guaranteed as to principal and interest by, this State.
19 (5) In obligations that by the laws of this State
20 are made legal investments for savings banks.
21 (6) In bonds or other evidences of indebtedness
22 that are direct general obligations of any unit of local
23 government of this State or in bonds or other evidences
24 of indebtedness that are payable from revenues or
25 earnings specifically pledged therefor of a unit of local
26 government, but in no event shall the total amount of the
27 securities of any one maker or obligor exceed 15% of the
28 savings bank's total capital, nor shall the aggregate
29 amount of investments under this paragraph exceed 15% of
30 the savings bank's total assets.
31 (7) Equity investments in real estate. With the
32 prior written consent of the Commissioner, a savings bank
33 may invest in the initial purchase and development, or
34 the purchase or commitment to purchase after completion,
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1 of home sites and housing for sale or rental, including,
2 but not limited to, projects for the reconstruction,
3 rehabilitation, or rebuilding of residential properties
4 to meet the minimum standards of health and occupancy
5 prescribed by appropriate local authorities, the
6 provision of accommodations for retail stores, shops, and
7 other community services that are reasonably incident to
8 that housing or in the shares of a corporation that owns
9 one or more of those projects and that is wholly owned by
10 one or more financial institutions whose investments are
11 regulated by the laws of this State or of the United
12 States. In no event shall the total investment in any
13 one project exceed 15% of the savings bank's total
14 capital, nor shall the aggregate investment under this
15 paragraph exceed 50% of its total capital. No savings
16 bank may make an investment of this type unless it is in
17 compliance with the capital requirements of this Act and
18 with the capital maintenance requirements of its insurer
19 of deposit accounts. The Commissioner shall approve the
20 investment only if the savings bank shows:
21 (A) that the savings bank has adequate assets
22 available for the investment;
23 (B) that the proposed investment does not
24 exceed the reasonable market value of the property
25 or interest therein as determined in accordance with
26 the appraisal requirements of this Act; and
27 (C) that all other requirements of this
28 Section have been met.
29 Nothing contained in this paragraph prohibits a
30 savings bank from developing or building on land acquired
31 by it under any other provision of this Act nor from
32 completing the construction of buildings in accordance
33 with any construction loan contract where the borrower
34 has failed to comply with the terms of the contract.
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1 (8) In obligations of the State of Israel or
2 obligations fully guaranteed by the State of Israel as to
3 payment of principal and interest, but in no event shall
4 the total amount of that investment exceed 15% of the
5 savings bank's total capital.
6 (9) In stocks or obligations of business
7 development corporations chartered by this State or by
8 the United States or an agency thereof, but in no event
9 shall the aggregate amount of stock exceed 2.5% of the
10 savings bank's total capital or $250,000, whichever is
11 greater.
12 (10) In obligations of urban renewal investment
13 corporations chartered under the laws of this State, or
14 the United States, or in certificates of beneficial
15 interest of urban renewal investment trusts, but in no
16 event shall the aggregate amount of the stock,
17 obligations or beneficial interest certificates of any
18 one maker exceed 2.5% of the savings bank's total
19 capital, nor shall the aggregate amount of investments
20 under this paragraph exceed 15% of its total capital.
21 (11) Subject to the regulations of the
22 Commissioner, in loans deemed sufficiently secured by the
23 board of directors of the savings bank. However, if the
24 security is stock or equity securities of any kind other
25 than those of a financial institution, the stock or
26 securities must be listed on a national exchange or
27 actively traded and quoted on an over-the-counter market
28 or their value must be ascertainable in accordance with
29 regulations promulgated by the Commissioner.
30 (12) In commercial paper. As used in this Section,
31 the term "commercial paper" means short term obligations
32 having a maturity ranging from 2 to 270 days issued by
33 banks, corporations, or other borrowers. Investments in
34 commercial paper under this Section must be in securities
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1 rated in one of the 4 highest categories by a nationally
2 recognized rating service.
3 (13) Purchase of stock in insurance companies.
4 Notwithstanding any provision of this Act to the
5 contrary, a savings bank may purchase shares of, or
6 otherwise acquire equity interests in, insurance
7 companies and insurance holding companies organized to
8 provide insurance for savings institutions and
9 corporations and individuals affiliated with savings
10 institutions, provided ownership of equity interests is a
11 prerequisite to obtaining directors and officers' and
12 blanket bond insurance through the company or companies.
13 The Commissioner may promulgate regulations concerning
14 the size of each savings bank's investment and manner of
15 holding those investments.
16 (14) Subject to the regulation of the Commissioner,
17 in equity or debt securities or instruments of a service
18 corporation subsidiary of the savings bank.
19 (15) Through advances of federal funds to
20 designated depositories, provided that the advances are
21 made on the condition that they be repaid on the next
22 business day following the date on which the advance is
23 made. For the purposes of this paragraph, the term
24 "federal funds" means funds that a savings bank has on
25 deposit at a depository that are exchangeable for funds
26 on deposit at a federal reserve bank; the term "business
27 day" means any day on which the savings bank, the
28 depository, and the federal reserve bank where the funds
29 are on deposit are all open for general business.
30 (16) In financial futures or options transactions
31 subject to the regulations of the Commissioner.
32 (17) In a subsidiary chartered for the purpose of
33 exercising all powers necessary to act as a corporate
34 fiduciary under the Corporate Fiduciary Act.
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1 (18) In marketable investment securities, but in no
2 event shall the total amount of those securities of any
3 one maker or obligor exceed 15% of the savings bank's
4 total capital nor shall the aggregate amount of
5 investments under this Section exceed 15% of total
6 assets. As used in this Section, the term "marketable
7 investment securities" does not include stocks, but means
8 investment grade marketable obligations evidencing
9 indebtedness of any person in the form of bonds, notes,
10 or debentures commonly known as investment securities,
11 and of a type customarily sold on recognized exchanges or
12 traded over the counter and investment grade marketable
13 obligations of the International Bank for Reconstruction
14 and Development, the Inter-American Development Bank, the
15 Asian Development Bank, the African Development Bank, or
16 the International Finance Corporation. As used in this
17 Section, the term "investment grade" means being rated in
18 one of the 4 highest categories by at least one
19 nationally recognized rating service.
20 (19) In investment grade marketable obligations of
21 any other state, territory, or possession or political
22 subdivision thereof to the same extent that it may invest
23 in marketable investment securities under paragraph (18)
24 of this Section.
25 (Source: P.A. 88-481; 89-317, eff. 8-11-95.)
26 (205 ILCS 205/6013) (from Ch. 17, par. 7306-13)
27 Sec. 6013. Loans to one borrower.
28 (a) 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, other than a municipal
31 corporation for money borrowed, outstanding at one time shall
32 not exceed 20% of the savings bank's total capital plus
33 general loan loss reserves.
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1 (b) Except as provided in subsection (c), the total
2 loans and extensions of credit, both direct and indirect, by
3 a savings bank to any person outstanding at one time and at
4 least 100% secured by readily marketable collateral having a
5 market value, as determined by reliable and continuously
6 available price quotations, shall not exceed 10% of the
7 savings bank's total capital plus general loan loss reserves.
8 This limitation shall be separate from and in addition to the
9 limitation contained in subsection (a).
10 (c) If the limit under subsection (a) or (b) on total
11 loans to one borrower is less than $500,000, a savings bank
12 that meets its minimum capital requirement under this Act may
13 have loan and extensions of credit, both direct and indirect,
14 outstanding to any person at one time not to exceed $500,000.
15 With the prior written approval of the Commissioner, a
16 savings bank that has capital in excess of 6% of assets may
17 make loans and extensions of credit to one borrower for the
18 development of residential housing properties, located or to
19 be located in this State, not to exceed 30% of the savings
20 bank's total capital plus general loan loss reserves.
21 (d) For purposes of this Section, the term "person"
22 shall be deemed to include an individual, firm, corporation,
23 business trust, partnership, trust, estate, association,
24 joint venture, pool, syndicate, sole proprietorship,
25 unincorporated association, any political subdivision, or any
26 similar entity or organization.
27 (e) For the purposes of this Section any loan or
28 extension of credit granted to one person, the proceeds of
29 which are used for the direct benefit of a second person,
30 shall be deemed a loan or extension of credit to the second
31 person as well as the first person.
32 (f) For the purposes of this Section, the total
33 liabilities of a firm, partnership, pool, syndicate, or joint
34 venture shall include the liabilities of the members of the
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1 entity.
2 (g) For the purposes of this Section, the term "readily
3 marketable collateral" means financial instruments or bullion
4 that are salable under ordinary circumstances with reasonable
5 promptness at a fair market value on an auction or a
6 similarly available daily bid-and-ask price market.
7 "Financial instruments" include stocks, bonds, notes,
8 debentures traded on a national exchange or over the counter,
9 commercial paper, negotiable certificates of deposit,
10 bankers' acceptances, and shares in money market or mutual
11 funds.
12 (h) Each savings bank shall institute adequate
13 procedures to ensure that collateral fully secures the
14 outstanding loan or extension of credit at all times.
15 (i) If collateral values fall below 100% of the
16 outstanding loan or extension of credit to the extent that
17 the loan or extension of credit no longer is in conformance
18 with subsection (b) and exceeds the 20% limitation of
19 subsection (a), the loan must be brought into conformance
20 with this Section within 5 business days except where
21 judicial proceedings or other similar extraordinary
22 occurrences prevent the savings bank from taking action.
23 (j) This Section shall not apply to loans or extensions
24 of credit to the United States of America or its agencies or
25 this State or its agencies or to any loan, investment, or
26 extension of credit made pursuant to Section 6003 of this
27 Act.
28 (Source: P.A. 89-74, eff. 6-30-95.)
29 Section 20. The Illinois Credit Union Act is amended by
30 changing Sections 1.1 and 61 and adding Section 34.1 as
31 follows:
32 (205 ILCS 305/1.1) (from Ch. 17, par. 4402)
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1 Sec. 1.1. Definitions. Credit Union - The term "credit
2 union" means a cooperative, non-profit association,
3 incorporated under this Act, under the laws of the United
4 States of America or under the laws of another state, for the
5 purposes of encouraging thrift among its members, creating a
6 source of credit at a reasonable rate of interest, and
7 providing an opportunity for its members to use and control
8 their own money in order to improve their economic and social
9 conditions. The membership of a credit union shall consist of
10 a group or groups each having a common bond as set forth in
11 this Act.
12 Common Bond - The term "common bond" refers to groups of
13 people who meet one of the following qualifications:
14 (1) Persons belonging to a specific association, group
15 or organization, such as a church, labor union, club or
16 society and members of their immediate families which shall
17 include any relative by blood or marriage or foster and
18 adopted children.
19 (2) Persons who reside in a reasonably compact and well
20 defined neighborhood or community, and members of their
21 immediate families which shall include any relative by blood
22 or marriage or foster and adopted children.
23 (3) Persons who have a common employer or who are
24 members of an organized labor union or an organized
25 occupational or professional group within a defined
26 geographical area, and members of their immediate families
27 which shall include any relative by blood or marriage or
28 foster and adopted children.
29 Shares - The term "shares" or "share accounts" means any
30 form of shares issued by a credit union and established by a
31 member in accordance with standards specified by a credit
32 union, including but not limited to common shares, share
33 draft accounts, classes of shares, share certificates,
34 special purpose share accounts, shares issued in trust,
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1 custodial accounts, and individual retirement accounts or
2 other plans established pursuant to Section 401(d) or (f) or
3 Section 408(a) of the Internal Revenue Code, as now or
4 hereafter amended, or similar provisions of any tax laws of
5 the United States that may hereafter exist.
6 Credit Union Organization - The term "credit union
7 organization" means any organization established to serve the
8 needs of credit unions, the business of which relates to the
9 daily operations of credit unions.
10 Department - The term "Department" means the Illinois
11 Department of Financial Institutions.
12 Director - The term "Director" means the Director of the
13 Illinois Department of Financial Institutions.
14 NCUA - The term "NCUA" means the National Credit Union
15 Administration, an agency of the United States Government
16 charged with the supervision of credit unions chartered under
17 the laws of the United States of America.
18 Central Credit Union - The term "central credit union"
19 means a credit union incorporated primarily to receive shares
20 from and make loans to credit unions and Directors, Officers,
21 committee members and employees of credit unions. A central
22 credit union may also accept as members persons who were
23 members of credit unions which were liquidated and persons
24 from occupational groups not otherwise served by another
25 credit union.
26 Corporate Credit Union - The term "corporate credit
27 union" means a credit union which is a cooperative,
28 non-profit association, the membership of which is limited
29 primarily to other credit unions.
30 Insolvent - "Insolvent" means the condition that results
31 when the total of all liabilities and shares exceeds net
32 assets of the credit union.
33 Danger of insolvency - The term "Danger of insolvency" as
34 used in Section 61 means when a credit union falls below a 2%
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1 capital to asset ratio.
2 (Source: P.A. 86-432.)
3 (205 ILCS 305/34.1 new)
4 Sec. 34.1. Compliance review.
5 (a) As used in this Section:
6 "Affiliate" means an organization established to serve
7 the needs of credit unions, the business of which relates to
8 the daily operations of credit unions.
9 "Compliance review committee" means:
10 (1) one or more persons appointed by the board of
11 directors or supervisory committee of a credit union for
12 the purposes set forth in subsection (b); or
13 (2) any other person to the extent the person acts
14 in an investigatory capacity at the direction of a
15 compliance review committee.
16 "Compliance review documents" means documents prepared in
17 connection with a review or evaluation conducted by or for a
18 compliance review committee.
19 "Person means an individual, a group of individuals, a
20 board committee, a partnership, a firm, an association, a
21 corporation, or any other entity.
22 (b) This Section applies to compliance review committees
23 whose functions are to evaluate and seek to improve any of
24 the following:
25 (1) loan policies or underwriting standards;
26 (2) asset quality;
27 (3) financial reporting to federal or State
28 governmental or regulatory agencies; or
29 (4) compliance with federal or State statutory or
30 regulatory requirements.
31 (c) Except as provided in subsection (d), compliance
32 review documents and the deliberations of the compliance
33 review committee are privileged and confidential and are
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1 nondiscoverable and nonadmissible.
2 (1) Compliance review documents are privileged and
3 confidential and are not subject to discovery or
4 admissible in evidence in any civil action.
5 (2) Individuals serving on compliance review
6 committees or acting under the direction of a compliance
7 review committee shall not be required to testify in any
8 civil action about the contents of any compliance review
9 document or conclusions of any compliance review
10 committee or about the actions taken by a compliance
11 review committee.
12 (3) An affiliate of a credit union, a credit union
13 regulatory agency, and the insurer of credit union share
14 accounts shall have access to compliance review
15 documents, provided that (i) the documents shall remain
16 confidential and are not subject to discovery from such
17 entity and (ii) delivery of compliance review documents
18 to an affiliate or pursuant to the requirements of a
19 credit union regulatory agency or an insurer of credit
20 union share accounts shall not constitute a waiver of the
21 privilege granted in this Section.
22 (d) This Section does not apply to: (1) compliance
23 review committees on which individuals serving on or at the
24 direction of the compliance review committee have management
25 responsibility for the operations, records, employees, or
26 activities being examined or evaluated by the compliance
27 review committee and (2) any civil or administrative action
28 initiated by a credit union regulatory agency or an insurer
29 of credit of credit union share accounts.
30 (e) This Section shall not be construed to limit the
31 discovery or admissibility in any civil action of any
32 documents other than compliance review documents or to
33 require the appointment of a compliance review committee.
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1 (205 ILCS 305/61) (from Ch. 17, par. 4462)
2 Sec. 61. Suspension.
3 (1) If the Director determines that any credit union is
4 bankrupt, insolvent, impaired or that it has willfully
5 violated this Act, or is operating in an unsafe or unsound
6 manner, he shall issue an order temporarily suspending the
7 credit union's operations for not more than 60 days. The
8 Board of Directors shall be given notice by registered or
9 certified mail of such suspension, which notice shall include
10 the reasons for such suspension and a list of specific
11 violations of the Act, or a list of the specific violations
12 of this Act, or both such reasons and list. The Director
13 shall also notify the members of the Credit Union Board of
14 Advisors of any suspension. The Director may assess to the
15 credit union a penalty, not to exceed the examination fee as
16 set forth in this Act, $50 to offset costs incurred in
17 determining the condition of the credit union's books and
18 records.
19 (2) Upon receipt of such suspension notice, the credit
20 union shall cease all operations, except those authorized by
21 the Director, or the Director may appoint a Manager-Trustee
22 to operate the credit union during the suspension period.
23 The Board of Directors shall, within 10 days of the receipt
24 of the suspension notice, file with the Director a reply to
25 the suspension notice, either by submitting one or more of
26 the following: a corrective plan of action or a request for
27 formal hearing on said action pursuant to the Department's
28 rules and regulations. or by a request that the credit union
29 be declared insolvent and a Liquidating Agent be appointed.
30 (3) Upon receipt from the suspended credit union of
31 evidence that the conditions causing the order of suspension
32 have been corrected, and after determining that the proposed
33 corrective plan of action submitted is factual, the Director
34 shall revoke the suspension notice, permit the credit union
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1 to resume normal operations, and notify the Board of Credit
2 Union Advisors of such action.
3 (4) If the Director determines that the proposed
4 corrective plan of action will not correct such conditions
5 and that the credit union cannot be reorganized, he may take
6 possession and control of the credit union its office,
7 furniture, fixtures, books, records and other assets and upon
8 examination, determine whether it is practicable and feasible
9 to reorganize the credit union to continue its business. The
10 Director may permit the credit union to operate under his
11 direction and control, and may appoint a Manager-Trustee to
12 manage its affairs until such time as the condition requiring
13 such action has been remedied, or in the case of insolvency
14 or danger of insolvency where an emergency requiring
15 expeditious action exists, the Director may involuntarily
16 merge the credit union without the vote of the Board of
17 Directors or members (hereafter involuntary merger) subject
18 to rules promulgated by the Director. If he determines that
19 the credit union should be liquidated, he may appoint a
20 Liquidating Agent and require of that person such bond and
21 security as he considers proper.
22 (5) Upon receipt of a request for a formal hearing, the
23 Director shall conduct proceedings pursuant to rules and
24 regulations of the Department and take necessary action
25 subsequent to the hearing officer's decision; whether it be
26 revocation of the suspension notice, issuance of an
27 involuntary liquidation or appointment of a Manager-Trustee..
28 The credit union may request the appropriate court to stay
29 execution of such action. Involuntary liquidation or
30 involuntary merger may not be ordered prior to the conclusion
31 of suspension procedures outlined in this Section.
32 (6) If, within the suspension period, the credit union
33 fails to answer the suspension notice or fails to request a
34 formal hearing, or both, the Director may then (i)
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1 involuntarily merge the credit union if the credit union is
2 insolvent or in danger of insolvency and an emergency
3 requiring expeditious action exists or (ii) revoke the credit
4 union's charter, appoint a Liquidating Agent and liquidate
5 the credit union.
6 (Source: P.A. 86-432.)
7 Section 25. The Electronic Fund Transfer Act is amended
8 by adding Section 85 as follows:
9 (205 ILCS 616/85 new)
10 Sec. 85. Reliance on Commissioner. No person shall be
11 liable under this Act for any act done or omitted in good
12 faith in conformity with any rule, interpretation, or opinion
13 issued by the Commissioner of Banks and Real Estate,
14 notwithstanding that after the act or omission has occurred,
15 the rule, interpretation, or opinion upon which reliance is
16 placed is amended, rescinded, or determined by judicial or
17 other authority to be invalid for any reason.
18 Section 30. The Corporate Fiduciary Act is amended by
19 changing Sections 1-7, 4-4, and 5-6 as follows:
20 (205 ILCS 620/1-7) (from Ch. 17, par. 1551-7)
21 Sec. 1-7. Office locations corporate fiduciaries.
22 (a) Any corporate fiduciary may establish branch offices
23 at any location. Any corporate fiduciary that seeks to
24 establish a branch office shall, if it is a trust company,
25 apply for and obtain approval for the branch office from the
26 Commissioner or, if it is a bank, savings and loan
27 association, or savings bank, give notice of its intent to
28 establish a branch office to the Commissioner, 30 days prior
29 to the purchasing or leasing of land, building, or equipment
30 for the branch office under the terms and conditions as the
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1 Commissioner shall specify by rule.
2 (b) Any trust company that proposes to establish a
3 subsidiary, whether by incorporating the subsidiary or by
4 acquiring the subsidiary, shall apply for and obtain prior
5 approval from the Commissioner 60 days prior to commencing
6 business by the subsidiary, if newly incorporated, or prior
7 to its acquisition, if it is acquired, provided the
8 Commissioner may specify circumstances and conditions when a
9 trust company may directly or indirectly acquire a subsidiary
10 without prior approval.
11 (Source: P.A. 86-754; 87-506.)
12 (205 ILCS 620/4-4) (from Ch. 17, par. 1554-4)
13 Sec. 4-4. Place of business not to be established in
14 State; not deemed transacting business.
15 (a) A foreign corporation, as defined in Section 1-5.08
16 of this Act, shall not establish in this State a place of
17 business, branch office, or agency for the conduct of
18 business as a fiduciary and because it is not permitted to
19 establish in this State a place of business, branch office or
20 agency, a foreign corporation insofar as it acts in a
21 fiduciary capacity in this State pursuant to the provisions
22 of this Act shall not be deemed to be transacting business in
23 this State. The foreign corporation may apply for, and
24 procure from the Commissioner, a license to establish a
25 representative office pursuant to the Foreign Bank
26 Representative Office Act.
27 (b) Notwithstanding subsection (a) of this Section 4-4,
28 after May 31, 1997, a branch of an out-of-state bank, as
29 defined in Section 2 of the Illinois Banking Act, may
30 establish an office in this State for the conduct of business
31 as a fiduciary, provided:; (i) the branch of the out-of-state
32 bank obtains a certificate of authority pursuant to this
33 Section; (ii) fiduciary business conducted in this State by a
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1 branch of an out-of-state bank is subject to examination by
2 the Commissioner; and (ii) (iii) the trust activities of the
3 branch of the out-of-state bank are subject to regulation,
4 including enforcement actions, by the Commissioner to the
5 same extent as Illinois corporate fiduciaries.
6 (c) The application for a certificate of authority
7 pursuant to this Section shall be filed with the Commissioner
8 on forms prescribed by the Commissioner and shall contain
9 such relevant information as the Commissioner may specify to
10 determine that the fiduciary business will be conducted by
11 the branch of the out-of-state bank in a safe and sound
12 manner.
13 (Source: P.A. 89-208, eff. 9-29-95; 89-364, eff. 8-18-95;
14 89-626, eff. 8-9-96.)
15 (205 ILCS 620/5-6) (from Ch. 17, par. 1555-6)
16 Sec. 5-6. Removal orders. Whenever, in the opinion of
17 the Commissioner, any director, officer, employee, or agent
18 of a corporate fiduciary shall have violated any law, rule,
19 or order relating to the corporate fiduciary, or shall have
20 engaged in an unsafe or unsound practice in conducting the
21 business of the corporate fiduciary, or shall have violated
22 any law or engaged or participated in any unsafe or unsound
23 practice in connection with any financial institution or
24 other business entity such that the character and fitness of
25 the director, officer, employee, or agent does not assure
26 reasonable promise of safe and sound operation of the
27 corporate fiduciary, the Commissioner may issue an order of
28 removal. If in the opinion of the Commissioner, any former
29 director, officer, employee, or agent of a corporate
30 fiduciary, prior to the termination of his or her service
31 with the corporate fiduciary, violated any law, rule, or
32 order relating to the corporate fiduciary or engaged in an
33 unsafe or unsound practice in conducting the business of the
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1 corporate fiduciary or violated any law or engaged or
2 participated in any unsafe or unsound practice in connection
3 with any financial institution or other business entity such
4 that the character and fitness of the director, officer,
5 employee, or agent would not have assured reasonable promise
6 of safe and sound operation of the corporate fiduciary prior
7 to the termination of his or her service with the corporate
8 fiduciary, the Commissioner may issue an order prohibiting
9 that person from further service with a corporate fiduciary
10 as a director, officer, employee, or agent. An order issued
11 pursuant to this Section shall be served upon the director,
12 officer, employee, or agent. A copy of the order shall be
13 sent to each director of the corporate fiduciary affected by
14 personal service, certified mail return receipt requested, or
15 any other method that provides proof of service and receipt.
16 The person affected by the action may request a hearing
17 before the State Banking Board of Illinois, hereafter "the
18 Board", within 10 days after receipt of the order of removal
19 or prohibition. The hearing shall be held by the Board
20 according to the same procedures used pursuant to Section 48
21 of the Illinois Banking Act, and the hearing shall be held
22 within 30 days after the request has been received by the
23 Board. After concluding the hearing, the Board shall make a
24 determination approving, modifying, or disapproving the order
25 of the Commissioner as its final administrative decision. A
26 copy of the order shall be served upon the corporate
27 fiduciary of which the person is a director, officer,
28 employee, or agent, whereupon the person shall cease to be a
29 director, officer, employee, or agent of the corporate
30 fiduciary. Any person who has been removed or prohibited by
31 an order of the Commissioner under this Section or subsection
32 (7) of Section 48 of the Illinois Banking Act may not
33 thereafter serve as director, officer, employee, or agent of
34 any State bank or corporate fiduciary, or of any other entity
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1 that is subject to licensure or regulation by the
2 Commissioner or the Office of Banks and Real Estate unless
3 the Commissioner has granted prior approval in writing. The
4 Commissioner may institute a civil action against the
5 director, officer, employee, or agent subject to an order
6 issued under this Section and against the corporate fiduciary
7 to enforce compliance with or to enjoin any violation of the
8 terms of the order.
9 (Source: P.A. 90-301, eff. 8-1-97.)
10 Section 35. The Consumer Installment Loan Act is amended
11 by changing Section 19.1 as follows:
12 (205 ILCS 670/19.1) (from Ch. 17, par. 5425.1)
13 Sec. 19.1. Where the licensee repossesses a motor vehicle
14 that was used as collateral and which is used primarily for
15 the obligor's personal, family or household purposes, the
16 licensee shall transfer the certificate of title pursuant to
17 Section 3-114 of the Illinois Vehicle Code and the obligor at
18 the time of repossession has paid an amount equal to 30% or
19 more of the total of payments due, the obligor may, within 15
20 days, reinstate the contract and recover the motor vehicle
21 from the 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 40. The Illinois Financial Services Development
32 Act is amended by adding Section 12 as follows:
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1 (205 ILCS 675/12 new)
2 Sec. 12. Good faith reliance. No bank, savings bank, or
3 savings and loan association shall be liable under this Act
4 for any act done or omitted in good faith in conformity with
5 any rule, interpretation, or opinion issued by the
6 Commissioner of Banks and Real Estate, and no credit union
7 shall be liable under this Act for any act done or omitted in
8 good faith in conformity with any rule, interpretation, or
9 opinion issued by the Department of Financial Institutions,
10 notwithstanding that after the act or omission has occurred,
11 the rule, interpretation, or opinion upon which reliance is
12 placed is amended, rescinded, or determined by judicial or
13 other authority to be invalid for any reason.
14 Section 45. The Illinois Vehicle Code is amended by
15 changing Sections 3-114 and 3-117.1 as follows:
16 (625 ILCS 5/3-114) (from Ch. 95 1/2, par. 3-114)
17 Sec. 3-114. Transfer by operation of law.
18 (a) If the interest of an owner in a vehicle passes to
19 another other than by voluntary transfer, the transferee
20 shall, except as provided in paragraph (b), promptly mail or
21 deliver within 20 days to the Secretary of State the last
22 certificate of title, if available, proof of the transfer,
23 and his application for a new certificate in the form the
24 Secretary of State prescribes. It shall be unlawful for any
25 person having possession of a certificate of title for a
26 motor vehicle, semi-trailer, or house car by reason of his
27 having a lien or encumbrance on such vehicle, to fail or
28 refuse to deliver such certificate to the owner, upon the
29 satisfaction or discharge of the lien or encumbrance,
30 indicated upon such certificate of title.
31 (b) If the interest of an owner in a vehicle passes to
32 another under the provisions of the Small Estates provisions
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1 of the Probate Act of 1975 the transferee shall promptly mail
2 or deliver to the Secretary of State, within 120 days, the
3 last certificate of title, if available, the documentation
4 required under the provisions of the Probate Act of 1975, and
5 an application for certificate of title. The Small Estate
6 Affidavit form shall be furnished by the Secretary of State.
7 The transfer may be to the transferee or to the nominee of
8 the transferee.
9 (c) If the interest of an owner in a vehicle passes to
10 another under other provisions of the Probate Act of 1975, as
11 amended, and the transfer is made by a representative or
12 guardian, such transferee shall promptly mail or deliver to
13 the Secretary of State, the last certificate of title, if
14 available, and a certified copy of the letters of office or
15 guardianship, and an application for certificate of title.
16 Such application shall be made before the estate is closed.
17 The transfer may be to the transferee or to the nominee of
18 the transferee.
19 (d) If the interest of an owner in joint tenancy passes
20 to the other joint tenant with survivorship rights as
21 provided by law, the transferee shall promptly mail or
22 deliver to the Secretary of State, the last certificate of
23 title, if available, proof of death of the one joint tenant
24 and survivorship of the surviving joint tenant, and an
25 application for certificate of title. Such application shall
26 be made within 120 days after the death of the joint tenant.
27 The transfer may be to the transferee or to the nominee of
28 the transferee.
29 (e) The Secretary of State shall transfer a decedent's
30 vehicle title to any legatee, representative or heir of the
31 decedent who submits to the Secretary a death certificate and
32 an affidavit by an attorney at law on the letterhead
33 stationery of the attorney at law stating the facts of the
34 transfer.
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1 (f) In all cases wherein a lienholder has repossessed a
2 vehicle by other than judicial process and holds it for
3 resale under a security agreement, and the owner of record
4 has executed an assignment of the existing certificate of
5 title, the lienholder may proceed to sell or otherwise
6 dispose of the vehicle as authorized under the Uniform
7 Commercial Code. Upon selling the vehicle to another person,
8 the lienholder need not send the certificate of title to the
9 Secretary of State, but shall promptly and within 20 days
10 mail or deliver to the purchaser as transferee the existing
11 certificate of title for the repossessed vehicle, reflecting
12 the release of the lienholder's security interest in the
13 vehicle. The application for a certificate of title made by
14 the purchaser shall comply with subsection (a) of Section
15 3-104 and be accompanied by the existing certificate of title
16 for the repossessed vehicle. The lienholder shall execute the
17 assignment and warranty of title showing the name and address
18 of the purchaser in the spaces provided therefor on the
19 certificate of title or as the Secretary of State prescribes.
20 The lienholder shall complete the assignment of title in the
21 certificate of title to reflect the transfer of the vehicle
22 to the lienholder and also a reassignment to reflect the
23 transfer from the lienholder to the purchaser. For this
24 purpose, the lienholder is specifically authorized to execute
25 the assignment on behalf of the owner as seller if the owner
26 has not done so and to complete and execute the space
27 reserved in the certificate of title for a dealer
28 reassignment, notwithstanding that the lienholder is not a
29 licensed dealer. Nothing herein shall be construed to mean
30 that the lienholder is taking title to the repossessed
31 vehicle for purposes of liability for retailer occupation,
32 vehicle use, or other tax with respect to the proceeds from
33 the repossession sale. Delivery of the existing certificate
34 of title to the purchaser shall be deemed disclosure to the
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1 purchaser of the owner of the vehicle.
2 (f-5) In all cases wherein a lienholder has repossessed
3 a vehicle by other than judicial process and holds it for
4 resale under a security agreement, and the owner of record
5 has not executed an assignment of the existing certificate of
6 title, the lienholder shall comply with the following
7 provisions:
8 (1) Prior to sale, the lienholder shall deliver or
9 mail to the owner at the owner's last known address and
10 to any other lienholder of record, a notice of redemption
11 setting forth (i) the name of the owner of record, (ii) a
12 description of the vehicle subject to the lien sufficient
13 to identify it, (iii) the right of the owner to redeem
14 the vehicle, (iv) the lienholder's intent to sell or
15 otherwise dispose of the vehicle after the expiration of
16 21 days from the date of mailing or delivery of the
17 notice, and (v) the name, address, and telephone number
18 of the lienholder from whom the vehicle may be redeemed
19 under Section 9-506 of the Uniform Commercial Code. At
20 the lienholder's option, this notice may be made a part
21 of the notification of sale or other disposition required
22 under subsection (3) of Section 9-504 of the Uniform
23 Commercial Code.
24 (2) With respect to the repossession of a vehicle
25 used primarily for personal, family, or household
26 purposes, the lienholder shall also deliver or mail to
27 the owner at the owner's last known address an affidavit
28 of defense. The affidavit shall accompany the notice
29 required in subdivision (f-5)(1) of this Section. The
30 affidavit shall (i) identify the lienholder, owner, and
31 the vehicle; (ii) provide space for the owner to state
32 the defense claimed by the owner; and (iii) include an
33 acknowledgment by the owner that the owner may be liable
34 to the lienholder for fees, charges, and costs incurred
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1 by the lienholder in establishing the insufficiency or
2 invalidity of the owner's defense. To stop the transfer
3 of title, the affidavit must be received by the
4 lienholder no later than 21 days after the date of
5 mailing or delivery of the notice required in subdivision
6 (f-5)(1) of this Section. If the lienholder receives the
7 affidavit from the owner in a timely manner, the
8 lienholder must apply to a court of competent
9 jurisdiction to determine if the lienholder is entitled
10 to possession of the vehicle.
11 (3) Upon selling the vehicle to another person, the
12 lienholder need not send the certificate of title to the
13 Secretary of State, but shall promptly and within 20 days
14 mail or deliver to the purchaser as transferee (i) the
15 existing certificate of title for the repossessed
16 vehicle, reflecting the release of the lienholder's
17 security interest in the vehicle; and (ii) an affidavit
18 of repossession made by or on behalf of the lienholder
19 which provides the following information: that the
20 vehicle was repossessed, a description of the vehicle
21 sufficient to identify it, whether the vehicle has been
22 damaged in excess of 33 1/3% of its fair market value as
23 required under subdivision (b)(3) of Section 3-117.1,
24 that the owner and any other lienholder of record were
25 given the notice required in subdivision (f-5)(1) of this
26 Section, that the owner of record was given the affidavit
27 of defense required in subdivision (f-5)(2) of this
28 Section, that the interest of the owner was lawfully
29 terminated or sold pursuant to the terms of the security
30 agreement, and the purchaser's name and address. If the
31 vehicle is damaged in excess of 33 1/3% of its fair
32 market value, the lienholder shall make application for a
33 salvage certificate under Section 3-117.1 and transfer
34 the vehicle to a person eligible to receive assignments
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1 of salvage certificates identified in Section 3-118.
2 (4) The application for a certificate of title made
3 by the purchaser shall comply with subsection (a) of
4 Section 3-104 and be accompanied by the affidavit of
5 repossession furnished by the lienholder and the existing
6 certificate of title for the repossessed vehicle. The
7 lienholder shall execute the assignment and warranty of
8 title showing the name and address of the purchaser in
9 the spaces provided therefor on the certificate of title
10 or as the Secretary of State prescribes. The lienholder
11 shall complete the assignment of title in the certificate
12 of title to reflect the transfer of the vehicle to the
13 lienholder and also a reassignment to reflect the
14 transfer from the lienholder to the purchaser. For this
15 purpose, the lienholder is specifically authorized to
16 execute the assignment on behalf of the owner as seller
17 if the owner has not done so and to complete and execute
18 the space reserved in the certificate of title for a
19 dealer reassignment, notwithstanding that the lienholder
20 is not a licensed dealer. Nothing herein shall be
21 construed to mean that the lienholder is taking title to
22 the repossessed vehicle for purposes of liability for
23 retailer occupation, vehicle use, or other tax with
24 respect to the proceeds from the repossession sale.
25 Delivery of the existing certificate of title to the
26 purchaser shall be deemed disclosure to the purchaser of
27 the owner of the vehicle. In the event the lienholder
28 does not hold the certificate of title for the
29 repossessed vehicle, the lienholder shall make
30 application for and may obtain a new certificate of title
31 in the name of the lienholder upon furnishing information
32 satisfactory to the Secretary of State. Upon receiving
33 the new certificate of title, the lienholder may proceed
34 with the sale described in subdivision (f-5)(3), except
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1 that upon selling the vehicle the lienholder shall
2 promptly and within 20 days mail or deliver to the
3 purchaser the new certificate of title reflecting the
4 assignment and transfer of title to the purchaser.
5 (5) Neither the lienholder nor the owner shall file
6 with the Office of the Secretary of State the notice or
7 affidavit of defense respectively described in
8 subdivision (f-5)(1) and (f-5)(2) of this Section. The
9 Office of the Secretary of State shall not determine the
10 merits of an owner's affidavit of defense, nor consider
11 any allegations or assertions regarding the validity or
12 invalidity of a lienholder's claim to the vehicle or an
13 owner's asserted defenses to the repossession action.
14 (f-10) In all cases wherein a lienholder has repossessed
15 a vehicle by judicial process and holds it for resale under a
16 security agreement, order for replevin, or other court order
17 establishing the lienholder's right to possession of the
18 vehicle, the lienholder may proceed to sell or otherwise
19 dispose of the vehicle as authorized under the Uniform
20 Commercial Code or the court order. Upon selling the vehicle
21 to another person, the lienholder need not send the
22 certificate of title to the Secretary of State, but shall
23 promptly and within 20 days mail or deliver to the purchaser
24 as transferee (i) the existing certificate of title for the
25 repossessed vehicle reflecting the release of the
26 lienholder's security interest in the vehicle; (ii) a
27 certified copy of the court order; and (iii) a bill of sale
28 identifying the new owner's name and address and the year,
29 make, model, and vehicle identification number of the
30 vehicle. The application for a certificate of title made by
31 the purchaser shall comply with subsection (a) of Section
32 3-104 and be accompanied by the certified copy of the court
33 order furnished by the lienholder and the existing
34 certificate of title for the repossessed vehicle. The
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1 lienholder shall execute the assignment and warranty of title
2 showing the name and address of the purchaser in the spaces
3 provided therefor on the certificate of title or as the
4 Secretary of State prescribes. The lienholder shall complete
5 the assignment of title in the certificate of title to
6 reflect the transfer of the vehicle to the lienholder and
7 also a reassignment to reflect the transfer from the
8 lienholder to the purchaser. For this purpose, the
9 lienholder is specifically authorized to execute the
10 assignment on behalf of the owner as seller if the owner has
11 not done so and to complete and execute the space reserved in
12 the certificate of title for a dealer reassignment,
13 notwithstanding that the lienholder is not a licensed dealer.
14 Nothing herein shall be construed to mean that the lienholder
15 is taking title to the repossessed vehicle for purposes of
16 liability for retailer occupation, vehicle use, or other tax
17 with 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 the
20 owner of the vehicle. In the event the lienholder does not
21 hold the certificate of title for the repossessed vehicle,
22 the lienholder shall make application for and may obtain a
23 new certificate of title in the name of the lienholder upon
24 furnishing information satisfactory to the Secretary of
25 State. Upon receiving the new certificate of title, the
26 lienholder may proceed with the sale described in this
27 subsection, except that upon selling the vehicle the
28 lienholder shall promptly and within 20 days mail or deliver
29 to the purchaser the new certificate of title reflecting the
30 assignment and transfer of title to the purchaser.
31 (f-15) The Secretary of State shall not issue a
32 certificate of title to a purchaser under subsection (f),
33 (f-5), or (f-10) of this Section, unless the person from whom
34 the vehicle has been repossessed by the lienholder is shown
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1 to be the last registered owner of the motor vehicle. The
2 Secretary of State may provide by rule for the standards to
3 be followed by a lienholder in assigning and transferring
4 certificates of title with respect to repossessed vehicles.
5 (f-20) If applying for a salvage certificate or a
6 junking certificate, after the original 21 day notice to the
7 debtor has been fulfilled, the lienholder shall within 20
8 days make an application to the Secretary of State for a
9 certificate of title, a salvage certificate or a junking
10 certificate, as set forth in this Code. In all cases,
11 however, The Secretary of State shall not issue a certificate
12 of title, a salvage certificate or a junking certificate to
13 such lienholder unless the person from whom such vehicle has
14 been repossessed is shown to be the last registered owner of
15 such motor vehicle and such lienholder establishes to the
16 satisfaction of the Secretary of State that he is entitled to
17 such certificate of title, salvage certificate or junking
18 certificate. The Secretary of State may shall provide by rule
19 for the standards to be followed by a lienholder in order to
20 obtain a salvage certificate or junking certificate of title
21 for a repossessed vehicle.
22 (g) A person holding a certificate of title whose
23 interest in the vehicle has been extinguished or transferred
24 other than by voluntary transfer shall mail or deliver the
25 certificate, within 20 days upon request of the Secretary of
26 State. The delivery of the certificate pursuant to the
27 request of the Secretary of State does not affect the rights
28 of the person surrendering the certificate, and the action of
29 the Secretary of State in issuing a new certificate of title
30 as provided herein is not conclusive upon the rights of an
31 owner or lienholder named in the old certificate.
32 (h) The Secretary of State may decline to process any
33 application for a transfer of an interest in a vehicle
34 hereunder if any fees or taxes due under this Act from the
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1 transferor or the transferee have not been paid upon
2 reasonable notice and demand.
3 (i) The Secretary of State shall not be held civilly or
4 criminally liable to any person because any purported
5 transferor may not have had the power or authority to make a
6 transfer of any interest in any vehicle or because a
7 certificate of title issued in error is subsequently used to
8 commit a fraudulent act.
9 (Source: P.A. 90-212, eff. 1-1-98.)
10 (625 ILCS 5/3-117.1) (from Ch. 95 1/2, par. 3-117.1)
11 Sec. 3-117.1. When junking certificates or salvage
12 certificates must be obtained.
13 (a) Except as provided in Chapter 4 of this Code, a
14 person who possesses a junk vehicle shall within 15 days
15 cause the certificate of title, salvage certificate,
16 certificate of purchase, or a similarly acceptable out of
17 state document of ownership to be surrendered to the
18 Secretary of State along with an application for a junking
19 certificate, except as provided in Section 3-117.2, whereupon
20 the Secretary of State shall issue to such a person a junking
21 certificate, which shall authorize the holder thereof to
22 possess, transport, or, by an endorsement, transfer ownership
23 in such junked vehicle, and a certificate of title shall not
24 again be issued for such vehicle.
25 A licensee who possesses a junk vehicle and a Certificate
26 of Title, Salvage Certificate, Certificate of Purchase, or a
27 similarly acceptable out-of-state document of ownership for
28 such junk vehicle, may transport the junk vehicle to another
29 licensee prior to applying for or obtaining a junking
30 certificate, by executing a uniform invoice. The licensee
31 transferor shall furnish a copy of the uniform invoice to the
32 licensee transferee at the time of transfer. In any case,
33 the licensee transferor shall apply for a junking certificate
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1 in conformance with Section 3-117.1 of this Chapter. The
2 following information shall be contained on a uniform
3 invoice:
4 (1) The business name, address and dealer license
5 number of the person disposing of the vehicle, junk
6 vehicle or vehicle cowl;
7 (2) The name and address of the person acquiring
8 the vehicle, junk vehicle or vehicle cowl, and if that
9 person is a dealer, the Illinois or out-of-state dealer
10 license number of that dealer;
11 (3) The date of the disposition of the vehicle,
12 junk vehicle or vehicle cowl;
13 (4) The year, make, model, color and description of
14 each vehicle, junk vehicle or vehicle cowl disposed of by
15 such person;
16 (5) The manufacturer's vehicle identification
17 number, Secretary of State identification number or
18 Illinois Department of State Police number, for each
19 vehicle, junk vehicle or vehicle cowl part disposed of by
20 such person;
21 (6) The printed name and legible signature of the
22 person or agent disposing of the vehicle, junk vehicle or
23 vehicle cowl; and
24 (7) The printed name and legible signature of the
25 person accepting delivery of the vehicle, junk vehicle or
26 vehicle cowl.
27 The Secretary of State may certify a junking manifest in
28 a form prescribed by the Secretary of State that reflects
29 those vehicles for which junking certificates have been
30 applied or issued. A junking manifest may be issued to any
31 person and it shall constitute evidence of ownership for the
32 vehicle listed upon it. A junking manifest may be
33 transferred only to a person licensed under Section 5-301 of
34 this Code as a scrap processor. A junking manifest will
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1 allow the transportation of those vehicles to a scrap
2 processor prior to receiving the junk certificate from the
3 Secretary of State.
4 (b) An application for a salvage certificate shall be
5 submitted to the Secretary of State in any of the following
6 situations:
7 (1) When an insurance company makes a payment of
8 damages on a total loss claim for a vehicle, the
9 insurance company shall be deemed to be the owner of such
10 vehicle and the vehicle shall be considered to be salvage
11 except that ownership of a vehicle 9 model years of age
12 or older may, by agreement between the registered owner
13 and the insurance company, be retained by the registered
14 owner of such vehicle. The insurance company shall
15 promptly deliver or mail within 20 days the certificate
16 of title along with proper application and fee to the
17 Secretary of State, and a salvage certificate shall be
18 issued in the name of the insurance company. An insurer
19 making payment of damages on a total loss claim for the
20 theft of a vehicle may exchange the salvage certificate
21 for a certificate of title if the vehicle is recovered
22 without damage. In such a situation, the insurer shall
23 fill out and sign a form prescribed by the Secretary of
24 State which contains an affirmation under penalty of
25 perjury that the vehicle was recovered without damage and
26 the Secretary of State may, by rule or regulation,
27 require photographs to be submitted.
28 (2) When a vehicle the ownership of which has been
29 transferred to any person through a certificate of
30 purchase from acquisition of the vehicle at an auction,
31 other dispositions as set forth in Sections 4-208 and
32 4-209 of this Code, a lien arising under Section 18a-501
33 of this Code, or a public sale under the Abandoned Mobile
34 Home Act shall be deemed salvage or junk at the option of
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1 the purchaser. The person acquiring such vehicle in such
2 manner shall promptly deliver or mail, within 20 days
3 after the acquisition of the vehicle, the certificate of
4 purchase, the proper application and fee, and, if the
5 vehicle is an abandoned mobile home under the Abandoned
6 Mobile Home Act, a certification from a local law
7 enforcement agency that the vehicle was purchased or
8 acquired at a public sale under the Abandoned Mobile Home
9 Act to the Secretary of State and a salvage certificate
10 or junking certificate shall be issued in the name of
11 that person. The salvage certificate or junking
12 certificate issued by the Secretary of State under this
13 Section shall be free of any lien that existed against
14 the vehicle prior to the time the vehicle was acquired by
15 the applicant under this Code.
16 (3) A vehicle which has been repossessed by a
17 lienholder shall be considered to be salvage only when
18 the repossessed vehicle, on the date of repossession by
19 the lienholder, has sustained damage by collision, fire,
20 theft, rust corrosion, or other means so that the cost of
21 repairing such damage, including labor, would be greater
22 than 33 1/3% of its fair market value without such
23 damage. If the lienholder determines that such vehicle
24 is damaged in excess of 33 1/3% of such fair market
25 value, the lienholder shall, before sale, transfer or
26 assignment of the vehicle, make application for a salvage
27 certificate, and shall submit with such application the
28 proper fee and evidence of possession. If the facts
29 required to be shown in subsection (f) of Section 3-114
30 are satisfied, the Secretary of State shall issue a
31 salvage certificate in the name of the lienholder making
32 the application. In any case wherein the vehicle
33 repossessed is not damaged in excess of 33 1/3% of its
34 fair market value, the lienholder shall comply with the
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1 requirements of subsections (f), (f-5), and (f-10) of
2 Section 3-114, except that the affidavit of repossession
3 made by or on behalf of the lienholder, after the
4 original 21 day notice to the debtor has been fulfilled,
5 shall within 15 days make an application to the Secretary
6 of State for a certificate of title, submitting with such
7 application evidence of possession. The application
8 shall also contain an affirmation under penalty of
9 perjury that the vehicle on the date of sale such
10 application for certificate of title is not damaged in
11 excess of 33 1/3% of its fair market value. If the facts
12 required to be shown in subsection (f) of Section 3-114
13 are satisfied, the Secretary of State shall issue a
14 certificate of title as set forth in Section 3-116 of
15 this Code. The Secretary of State may by rule or
16 regulation require photographs to be submitted.
17 (4) A vehicle which is a part of a fleet of more
18 than 5 commercial vehicles registered in this State or
19 any other state or registered proportionately among
20 several states shall be considered to be salvage when
21 such vehicle has sustained damage by collision, fire,
22 theft, rust, corrosion or similar means so that the cost
23 of repairing such damage, including labor, would be
24 greater than 33 1/3% of the fair market value of the
25 vehicle without such damage. If the owner of a fleet
26 vehicle desires to sell, transfer, or assign his interest
27 in such vehicle to a person within this State other than
28 an insurance company licensed to do business within this
29 State, and the owner determines that such vehicle, at the
30 time of the proposed sale, transfer or assignment is
31 damaged in excess of 33 1/3% of its fair market value,
32 the owner shall, before such sale, transfer or
33 assignment, make application for a salvage certificate.
34 The application shall contain with it evidence of
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1 possession of the vehicle. If the fleet vehicle at the
2 time of its sale, transfer, or assignment is not damaged
3 in excess of 33 1/3% of its fair market value, the owner
4 shall so state in a written affirmation on a form
5 prescribed by the Secretary of State by rule or
6 regulation. The Secretary of State may by rule or
7 regulation require photographs to be submitted. Upon
8 sale, transfer or assignment of the fleet vehicle the
9 owner shall mail the affirmation to the Secretary of
10 State.
11 (5) A vehicle that has been submerged in water to
12 the point that rising water has reached over the door
13 sill and has entered the passenger or trunk compartment
14 is a "flood vehicle". A flood vehicle shall be
15 considered to be salvage only if the vehicle has
16 sustained damage so that the cost of repairing the
17 damage, including labor, would be greater than 33 1/3% of
18 the fair market value of the vehicle without that damage.
19 The salvage certificate issued under this Section shall
20 indicate the word "flood", and the word "flood" shall be
21 conspicuously entered on subsequent titles for the
22 vehicle. A person who possesses or acquires a flood
23 vehicle that is not damaged in excess of 33 1/3% of its
24 fair market value shall make application for title in
25 accordance with Section 3-116 of this Code, designating
26 the vehicle as "flood" in a manner prescribed by the
27 Secretary of State. The certificate of title issued
28 shall indicate the word "flood", and the word "flood"
29 shall be conspicuously entered on subsequent titles for
30 the vehicle.
31 (c) Any person who without authority acquires, sells,
32 exchanges, gives away, transfers or destroys or offers to
33 acquire, sell, exchange, give away, transfer or destroy the
34 certificate of title to any vehicle which is a junk or
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1 salvage vehicle shall be guilty of a Class 3 felony.
2 (d) Any person who knowingly fails to surrender to the
3 Secretary of State a certificate of title, salvage
4 certificate, certificate of purchase or a similarly
5 acceptable out-of-state document of ownership as required
6 under the provisions of this Section is guilty of a Class A
7 misdemeanor for a first offense and a Class 4 felony for a
8 subsequent offense; except that a person licensed under this
9 Code who violates paragraph (5) of subsection (b) of this
10 Section is guilty of a business offense and shall be fined
11 not less than $1,000 nor more than $5,000 for a first offense
12 and is guilty of a Class 4 felony for a second or subsequent
13 violation.
14 (e) Any vehicle which is salvage or junk may not be
15 driven or operated on roads and highways within this State.
16 A violation of this subsection is a Class A misdemeanor. A
17 salvage vehicle displaying valid special plates issued under
18 Section 3-601(b) of this Code, which is being driven to or
19 from an inspection conducted under Section 3-308 of this
20 Code, is exempt from the provisions of this subsection. A
21 salvage vehicle for which a short term permit has been issued
22 under Section 3-307 of this Code is exempt from the
23 provisions of this subsection for the duration of the permit.
24 (Source: P.A. 88-516; 88-685, eff. 1-24-95; 89-669, eff.
25 1-1-97.)
26 (625 ILCS 5/3-104.1 rep.)
27 Section 50. The Illinois Vehicle Code is amended by
28 repealing Section 3-104.1.
29 Section 55. The Fiduciary Obligations Act is amended by
30 changing Section 9 as follows:
31 (760 ILCS 65/9) (from Ch. 17, par. 2009)
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1 Sec. 9. Notwithstanding any other law, if a fiduciary
2 makes a deposit in a bank to his personal credit of checks
3 drawn by him upon an account in his own name as fiduciary, or
4 of checks payable to him as fiduciary, or of checks drawn by
5 him upon an account in the name of his principal if he is
6 empowered to draw checks thereon, or of checks payable to his
7 principal and indorsed by him, if he is empowered to indorse
8 such checks, or if he otherwise makes a deposit of funds held
9 by him as fiduciary, the bank receiving such deposit is not
10 bound to inquire whether the fiduciary is committing thereby
11 a breach of his obligation as fiduciary; and the bank is
12 authorized to pay the amount of the deposit or any part
13 thereof upon the personal check of the fiduciary without
14 being liable to the principal, unless the bank receives the
15 deposit or pays the check with actual knowledge that the
16 fiduciary is committing a breach of his obligation as
17 fiduciary in making such deposit or in drawing such check, or
18 with knowledge of such facts that its action in receiving the
19 deposit or paying the check amounts to bad faith.
20 (Source: Laws 1931, p. 676.)
21 Section 60. The Uniform Commercial Code is amended by
22 changing Sections 9-105, 9-106, and 9-302 as follows:
23 (810 ILCS 5/9-105) (from Ch. 26, par. 9-105)
24 Sec. 9-105. Definitions and index of definitions.
25 (1) In this Article unless the context otherwise
26 requires:
27 (a) "Account debtor" means the person who is
28 obligated on an account, chattel paper or general
29 intangible;
30 (b) "Chattel paper" means a writing or writings
31 which evidence both a monetary obligation and a security
32 interest in or a lease of specific goods, but a charter
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1 or other contract involving the use or hire of a vessel
2 is not chattel paper. When a transaction is evidenced
3 both by such a security agreement or a lease and by an
4 instrument or a series of instruments, the group of
5 writings taken together constitutes chattel paper;
6 (c) "Collateral" means the property subject to a
7 security interest, and includes accounts and chattel
8 paper which have been sold;
9 (d) "Debtor" means the person who owes payment or
10 other performance of the obligation secured, whether or
11 not he owns or has rights in the collateral, and includes
12 the seller of accounts or chattel paper. Where the debtor
13 and the owner of the collateral are not the same person,
14 the term "debtor" means the owner of the collateral in
15 any provision of the Article dealing with the collateral,
16 the obligor in any provision dealing with the obligation,
17 and may include both where the context so requires;
18 (e) "Deposit account" means a demand, time,
19 savings, passbook or like account maintained with a bank,
20 as defined in subsection (1) of Section 4-105 savings and
21 loan association, credit union or like organization,
22 other than an account evidenced by a certificate of
23 deposit;
24 (f) "Document" means document of title as defined
25 in the general definitions of Article 1 (Section 1-201),
26 and a receipt of the kind described in subsection (2) of
27 Section 7-201;
28 (g) "Encumbrance" includes real estate mortgages
29 and other liens on real estate and all other rights in
30 real estate that are not ownership interests;
31 (h) "Goods" includes all things which are movable
32 at the time the security interest attaches or which are
33 fixtures (Section 9-313), but does not include money,
34 documents, instruments, investment property, commodity
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1 contracts, accounts, chattel paper, general intangibles,
2 or minerals or the like (including oil and gas) before
3 extraction. "Goods" also includes standing timber which
4 is to be cut and removed under a conveyance or contract
5 for sale, the unborn young of animals, and growing crops;
6 (i) "Instrument" means a negotiable instrument
7 (defined in Section 3-104), a non-transferable
8 certificate of deposit, a non-negotiable certificate of
9 deposit, or any other writing which evidences a right to
10 the payment of money and is not itself a security
11 agreement or lease and is of a type which is in ordinary
12 course of business transferred by delivery with any
13 necessary indorsement or assignment. The term does not
14 include investment property;
15 (j) "Mortgage" means a consensual interest created
16 by a real estate mortgage, a trust deed on real estate,
17 or the like;
18 (j-5) "Non-negotiable certificate of deposit" means
19 a written document issued by a bank, as defined in
20 subsection (1) of Section 4-105, that contains an
21 acknowledgement that a sum of money has been received by
22 the issuer and a promise by the issuer to repay the sum
23 of money, and is not a negotiable instrument as defined
24 in Section 3-104;
25 (j-7) "Non-transferable certificate of deposit"
26 means a non-negotiable certificate of deposit which may
27 not be transferred except on the books of the issuer,
28 with the consent of the issuer, or is subject to other
29 restrictions or conditions of the issuer on transfer;
30 (k) An advance is made "pursuant to commitment" if
31 the secured party has bound himself to make it, whether
32 or not a subsequent event of default or other event not
33 within his control has relieved or may relieve him from
34 his obligation;
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1 (l) "Security agreement" means an agreement which
2 creates or provides for a security interest;
3 (m) "Secured party" means a lender, seller or other
4 person in whose favor there is a security interest,
5 including a person to whom accounts or chattel paper have
6 been sold. When the holders of obligations issued under
7 an indenture of trust, equipment trust agreement or the
8 like are represented by a trustee or other person, the
9 representative is the secured party;
10 (n) "Transmitting utility" means any person
11 primarily engaged in the railroad, street railway or
12 trolley bus business, the electric or electronics
13 communications transmission business, the transmission of
14 goods by pipeline, or the distribution, transmission, or
15 the production and transmission of electricity, steam,
16 gas or water, or the provision of sewer service.
17 (o) "Uncertificated certificate of deposit" means an
18 obligation of a bank, as defined in subsection (1) of Section
19 4-105, to repay a sum of money it has received, that is not a
20 deposit account and is not represented by a writing, but only
21 by an entry on the books of the bank and any documentation
22 given to the customer by the bank.
23 (2) Other definitions applying to this Article and the
24 Sections in which they appear are:
25 "Account". Section 9-106.
26 "Attach". Section 9-203.
27 "Commodity contract". Section 9-115.
28 "Commodity customer". Section 9-115.
29 "Commodity intermediary". Section 9-115.
30 "Construction mortgage". Section 9-313 (1).
31 "Consumer goods". Section 9-109 (1).
32 "Control". Section 9-115.
33 "Equipment". Section 9-109 (2).
34 "Farm products". Section 9-109 (3).
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1 "Fixture". Section 9-313 (1).
2 "Fixture filing". Section 9-313 (1).
3 "General intangibles". Section 9-106.
4 "Inventory". Section 9-109 (4).
5 "Investment property". Section 9-115.
6 "Lien creditor". Section 9-301 (3).
7 "Proceeds". Section 9-306 (1).
8 "Purchase money security interest". Section 9-107.
9 "United States". Section 9-103.
10 (3) The following definitions in other Articles apply to
11 this Article:
12 "Bank". Section 4-105.
13 "Broker". Section 8-102.
14 "Certificated security". Section 8-102.
15 "Check". Section 3-104.
16 "Clearing corporation". Section 8-102.
17 "Contract for sale". Section 2-106.
18 "Control". Section 8-106.
19 "Delivery". Section 8-301.
20 "Entitlement holder". Section 8-102.
21 "Financial asset". Section 8-102.
22 "Holder in due course". Section 3-302.
23 "Letter of credit". Section 5-102.
24 "Note". Section 3-104.
25 "Proceeds of a letter of credit". Section 5-114(a).
26 "Sale". Section 2-106.
27 "Securities intermediary". Section 8-102.
28 "Security". Section 8-102.
29 "Security certificate". Section 8-102.
30 "Security entitlement". Section 8-102.
31 "Uncertificated security". Section 8-102.
32 (4) In addition Article 1 contains general definitions
33 and principles of construction and interpretation applicable
34 throughout this Article.
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1 (Source: P.A. 89-364, eff. 1-1-96; 89-534, eff. 1-1-97.)
2 (810 ILCS 5/9-106) (from Ch. 26, par. 9-106)
3 Sec. 9-106. Definitions: "account"; "general
4 intangibles". "Account" means any right to payment for goods
5 sold or leased or for services rendered which is not
6 evidenced by an instrument or chattel paper, whether or not
7 it has been earned by performance. "General intangibles"
8 means any personal property (including things in action)
9 other than goods, accounts, chattel paper, documents,
10 instruments, investment property, rights to proceeds of
11 written letters of credit, deposit accounts, uncertificated
12 certificates of deposit, and money. All rights to payment
13 earned or unearned under a charter or other contract
14 involving the use or hire of a vessel and all rights incident
15 to the charter or contract are accounts.
16 (Source: P.A. 89-364, eff. 1-1-96; 89-534, eff. 1-1-97.)
17 (810 ILCS 5/9-302) (from Ch. 26, par. 9-302)
18 Sec. 9-302. When filing is required to perfect security
19 interest; security interests to which filing provisions of
20 this Article do not apply.
21 (1) A financing statement must be filed to perfect all
22 security interests except the following:
23 (a) a security interest in collateral in possession
24 of the secured party under Section 9-305;
25 (b) a security interest temporarily perfected in
26 instruments, certificated securities, or documents
27 without delivery under Section 9-304 or in proceeds for a
28 20 day period under Section 9-306;
29 (c) a security interest created by an assignment of
30 a beneficial interest in a trust or a decedent's estate;
31 (d) a purchase money security interest in consumer
32 goods; but filing is required for a motor vehicle
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1 required to be registered; and fixture filing is required
2 for priority over conflicting interests in fixtures to
3 the extent provided in Section 9-313;
4 (e) an assignment of accounts which does not alone
5 or in conjunction with other assignments to the same
6 assignee transfer a significant part of the outstanding
7 accounts of the assignor;
8 (f) a security interest of a collecting bank
9 (Section 4-208) or arising under the Article on Sales
10 (see Section 9-113) or covered in subsection (3) of this
11 Section;
12 (g) an assignment for the benefit of all creditors
13 of the transferor, and subsequent transfers by the
14 assignee thereunder;
15 (h) a security interest in investment property
16 which is perfected without filing under Section 9-115 or
17 Section 9-116;
18 (i) a security interest in a deposit account. Such
19 a security interest is perfected:
20 (i) as to a deposit account maintained with
21 the secured party, when the security agreement is
22 executed;
23 (ii) as to a deposit account maintained with
24 any organization other than the secured party, when
25 notice thereof is given in writing to the
26 organization with whom the deposit account is
27 maintained and that organization provides written
28 acknowledgement of and consent to the notice of the
29 secured party.
30 (j) a security interest in an uncertificated
31 certificate of deposit. Such a security interest is
32 perfected;
33 (i) as to an uncertificated certificate of
34 deposit issued by the secured party, when the
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1 security agreement is executed;
2 (ii) as to an uncertificated certificate of
3 deposit issued by any organization other than the
4 secured party, when notice thereof is given in
5 writing to the issuer of the uncertificated
6 certificate of deposit and the issuer provides
7 written acknowledgement of and consent to the notice
8 of the secured party.
9 (2) If a secured party assigns a perfected security
10 interest, no filing under this Article is required in order
11 to continue the perfected status of the security interest
12 against creditors of and transferees from the original
13 debtor.
14 (3) The filing of a financing statement otherwise
15 required by this Article is not necessary or effective to
16 perfect a security interest in property subject to
17 (a) a statute or treaty of the United States which
18 provides for a national or international registration or
19 a national or international certificate of title or which
20 specifies a place of filing different from that specified
21 in this Article for filing of the security interest; or
22 (b) the following statutes of this State: the
23 Illinois Vehicle Code; the Boat Registration and Safety
24 Act; but during any period in which collateral is
25 inventory held for sale by a person who is in the
26 business of selling goods of that kind, the filing
27 provisions of this Article (Part 4) apply to a security
28 interest in that collateral created by him as debtor; or
29 (c) a certificate of title statute of another
30 jurisdiction under the law of which indication of a
31 security interest on the certificate is required as a
32 condition of perfection (subsection (2) of Section
33 9-103).
34 (4) Compliance with a statute or treaty described in
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1 subsection (3) is equivalent to the filing of a financing
2 statement under this Article, and a security interest in
3 property subject to the statute or treaty can be perfected
4 only by compliance therewith except as provided in Section
5 9-103 on multiple state transactions. Duration and renewal of
6 perfection of a security interest perfected by compliance
7 with the statute or treaty are governed by the provisions of
8 the statute or treaty; in other respects the security
9 interest is subject to this Article.
10 (Source: P.A. 89-364, eff. 1-1-96.)
11 Section 65. The Illinois Fairness in Lending Act is
12 amended by changing Section 6 as follows:
13 (815 ILCS 120/6) (from Ch. 17, par. 856)
14 Sec. 6. Where a financial institution, other than a
15 credit union, as defined in Section 1.1 of the Illinois
16 Credit Union Act, as now or hereafter amended, repossesses a
17 motor vehicle that was used as a collateral and which is
18 used primarily for the borrower's personal, family or
19 household purposes, the financial institution shall transfer
20 the certificate of title pursuant to Section 3-114 of the
21 Illinois Vehicle Code and the borrower at the time of
22 repossession has paid an amount equal to 30% or more of the
23 total of payments due, the borrower may, within 15 days,
24 redeem the motor vehicle from the financial institution by
25 tendering:
26 (a) the total of all unpaid amounts, including any
27 unpaid delinquency or deferral charges due without
28 acceleration, and
29 (b) performance necessary to cure any default other than
30 nonpayment of the amounts due; and
31 (c) any reasonable cost or fees incurred by the
32 financial institution in the retaking of the goods.
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1 Tender of payment and performance pursuant to this Section
2 restores to the borrower his rights under the loan as though
3 no default had occurred. The borrower has a right to redeem
4 the collateral from the financial institution only once under
5 this Section. The financial institution may, in the financial
6 institution's sole discretion, extend the period during which
7 the borrower may redeem the collateral beyond the 15 days
8 allowed under this Section, and the extension shall not
9 subject the financial institution to liability to the
10 borrower under the laws of this State.
11 The financial institution must give written notice to the
12 borrower, within 3 days of the repossession, of the
13 borrower's right to redeem the collateral pursuant to this
14 Section. The written notice shall be in substantially the
15 following form:
16 NOTICE OF RIGHT TO RECOVER VEHICLE
17 Your vehicle was repossessed on (specify date) for
18 failure to make payments on the loan (or other reason).
19 Under Illinois law, because you have paid at least 30% of
20 the loan before repossession, you may be able to get the
21 vehicle back. You have the right to recover the vehicle if
22 you do the following within 15 days of the date of
23 repossession:
24 1. Make payment of all back payments so
25 that you are current on the loan. $...........
26 2. Pay any late charge due. $...........
27 3. Pay the costs of repossession. $...........
28 Total Amount Now Due $...........
29 Bring cash, a certified check or money order for the
30 total amount now due that is listed above to our office
31 located at (specify address) by (specify date) to get your
32 vehicle back.
33 (Source: P.A. 90-343, eff. 8-8-97.)
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1 Section 70. The Motor Vehicle Retail Installment Sales
2 Act is amended by changing Section 20 as follows:
3 (815 ILCS 375/20) (from Ch. 121 1/2, par. 580)
4 Sec. 20. Unless otherwise limited by this Act, the
5 parties shall have the rights and remedies provided in
6 Article 9 of the Uniform Commercial Code with respect to
7 default and, disposition, and recovery redemption of
8 collateral. If the holder of a retail installment contract
9 repossesses a motor vehicle that was used as collateral, the
10 holder shall transfer the certificate of title pursuant to
11 Section 3-114 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.".