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92_HB1089eng HB1089 Engrossed LRB9206828JSpc 1 AN ACT concerning banking. 2 Be it enacted by the People of the State of Illinois, 3 represented in the General Assembly: 4 Section 5. The Illinois Banking Act is amended by 5 changing Section 32 as follows: 6 (205 ILCS 5/32) (from Ch. 17, par. 339) 7 Sec. 32. Basic loaning limits. The liabilities 8 outstanding at one time to a state bank of a person for money 9 borrowed, including the liabilities of a partnership or joint 10 venture in the liabilities of the several members thereof, 11 shall not exceed 25%20%of the amount of the unimpaired 12 capital and unimpaired surplus of the bank. 13 The liabilities to any state bank of a person may exceed 14 25%20%of the unimpaired capital and unimpaired surplus of 15 the bank, provided that (i) the excess amount from time to 16 time outstanding is fully secured by readily marketable 17 collateral having a market value, as determined by reliable 18 and continuously available quotations, at least equal to the 19 excess amount outstanding; and (ii) the total liabilities 20 shall not exceed 30% of the unimpaired capital and unimpaired 21 surplus of the bank. 22 The following shall not be considered as money borrowed 23 within the meaning of this Section: 24 (1) The purchase orofdiscount of bills of 25 exchange drawn in good faith against actually existing 26 values. 27 (2) The purchase or discount of commercial or 28 business paper actually owned by the person negotiating 29 the same. 30 (3) The purchase of or loaning money in exchange 31 for evidences of indebtedness which shall be secured by HB1089 Engrossed -2- LRB9206828JSpc 1 mortgage or trust deed upon productive real estate the 2 value of which, as ascertained by the oath of 2 qualified 3 appraisers, neither of whom shall be an officer, 4 director, or employee of the bank or of any subsidiary or 5 affiliate of the bank, is double the amount of the 6 principal debt secured at the time of the original 7 purchase of evidence of indebtedness or loan of money and 8 which is still double the amount of the principal debt 9 secured at the time of any renewal of the indebtedness or 10 loan, and which mortgage or trust deed is shown, either 11 by a guaranty policy of a title guaranty company approved 12 by the Commissioner or by a registrar's certificate of 13 title in any county having adopted the provisions of the 14 Registered Titles (Torrens) Act, or by the opinion of an 15 attorney-at-law, to be a first lien upon the real estate 16 therein described, and real estate shall not be deemed to 17 be encumbered within the meaning of this subsection (3) 18 by reason of the existence of instruments reserving 19 rights-of-way, sewer rights and rights in wells, building 20 restrictions or other restrictive covenants, nor by 21 reason of the fact it is subject to lease under which 22 rents or profits are reserved by the owners. 23 (4) The purchase of marketable investment 24 securities. 25 (5) The liability to a state bank of a person who 26 is an accommodation party to, or guarantor of payment 27 for, any evidence of indebtedness of another person who 28 obtains a loan from or discounts paper with or sells 29 paper to the state bank; but the total liability to a 30 state bank of a person as an accommodation party or 31 guarantor of payment in respect of such evidences of 32 indebtedness shall not exceed 20% of the amount of the 33 unimpaired capital and unimpaired surplus of the bank; 34 provided however that the liability of an accommodation HB1089 Engrossed -3- LRB9206828JSpc 1 party to paper excepted under subsection 2 of this 2 Section shall not be included in the computation of this 3 limitation. 4 (6) The liability to a state bank of a person, who 5 as a guarantor, guarantees collection of the obligation 6 or indebtedness of another person. 7 The total liabilities of any one person, for money 8 borrowed, or otherwise, shall not exceed 25% of the deposits 9 of the bank, and those total liabilities shall at no time 10 exceed 50% of the amount of the unimpaired capital and 11 unimpaired surplus of the bank. Absent an actual unremedied 12 breach, the obligation or responsibility for breach of 13 warranties or representations, express or implied, of a 14 person transferring negotiable or non-negotiable paper to a 15 bank without recourse and without guaranty of payment, shall 16 not be included in determining the amount of liabilities of 17 the person to the bank for borrowed money or otherwise; and 18 in the event of and to the extent of an unremedied breach, 19 the amount remaining unpaid for principal and interest on the 20 paper in respect of which the unremedied breach exists shall 21 thereafter for the purpose of determining whether subsequent 22 transactions giving rise to additional liability of the 23 person to the state bank for borrowed money or otherwise are 24 within the limitations of Sections 32 through 34 of this Act, 25 be included in computing the amount of liabilities of the 26 person for borrowed money or otherwise. 27 The liability of a person to a state bank on account of 28 acceptances made or issued by the state bank on behalf of the 29 person shall be included in the computation of the total 30 liabilities of the person for money borrowed except to the 31 extent the acceptances grow out of transactions of the 32 character described in subsection (6) of Section 34 of this 33 Act and are otherwise within the limitations of that 34 subsection; provided nevertheless that any such excepted HB1089 Engrossed -4- LRB9206828JSpc 1 acceptances acquired by the state bank which accepted the 2 same shall be included in the computation of the liabilities 3 of the person to the state bank for money borrowed. 4 (Source: P.A. 89-364, eff. 8-18-95; 90-301, eff. 8-1-97.) 5 Section 99. Effective date. This Act takes effect upon 6 becoming law.