Public Act 90-0665 of the 90th General Assembly
Public Act 90-0665
SB1528 Enrolled LRB9009866JSmg
AN ACT concerning financial regulation, amending named
Acts.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Illinois Bank Examiners' Education
Foundation Act is amended by changing Section 6 as follows:
(20 ILCS 3210/6) (from Ch. 17, par. 406)
Sec. 6. The Board shall have the power:
(1) To promulgate reasonable rules for the purpose of
administering the provisions of this Act.
(2) To issue orders for the purpose of administering the
provisions of this Act and any rule promulgated in accordance
with this Act.
(3) To require the Commissioner to furnish the Board
space for meetings to be held by the Board as well as to
require the Commissioner to provide the technical assistance
and clerical and professional support as the Board may
require.
(4) To adopt its own bylaws with respect to board
meetings and procedures. The bylaws shall provide that:
(A) A majority of the whole Board constitutes a
quorum.
(B) A majority of the quorum shall constitute
effective action except that a vote of a majority of the
whole Board shall be necessary for the approval of rules
and regulations proposed for adoption by the Commissioner
under paragraph (1) of this Section and shall be
necessary for recommendations made to the Commissioner
with regard to proposed amendments to this Act or to the
administrative practices hereunder.
(C) The Board shall meet at least once in each
calendar year and upon the call of the Commissioner or a
majority of the Board quarter. The Commissioner or a
majority of the Board may call such special or additional
meetings as may be deemed he or they deem necessary or
desirable.
(5) To authorize the transfer of funds from the Illinois
Bank Examiners' Education Fund to the Bank and Trust Company
Fund. Any amount so transferred shall be retransferred to
the Illinois Bank Examiners' Education Fund from the Bank and
Trust Company Fund within a period not to exceed 3 years.
(6) To maintain and direct the investments of the
Illinois Bank Examiners' Education Fund as provided in the
Illinois Banking Act and to issue an annual report to the
Governor, the General Assembly and all State-chartered banks
on the activities of the Foundation during the preceding year
which shall include, but is not limited to, detailing the
monies generated and deposited into the Illinois Bank
Examiners' Education Fund by the special education fee,
voluntary contributions, and income from investments and the
expenditures from the Fund.
(Source: P.A. 86-1449; 87-1038.)
Section 10. The Illinois Banking Act is amended by
changing Sections 5, 9, 10, 13, 21.1, 24, 48, and 48.1 as
follows:
(205 ILCS 5/5) (from Ch. 17, par. 311)
Sec. 5. General corporate powers. A bank organized
under this Act or subject hereto shall be a body corporate
and politic and shall, without specific mention thereof in
the charter, have all the powers conferred by this Act and
the following additional general corporate powers:
(1) To sue and be sued, complain, and defend in its
corporate name.
(2) To have a corporate seal, which may be altered at
pleasure, and to use the same by causing it or a facsimile
thereof to be impressed or affixed or in any manner
reproduced, provided that the affixing of a corporate seal to
an instrument shall not give the instrument additional force
or effect, or change the construction thereof, and the use of
a corporate seal is not mandatory.
(3) To make, alter, amend, and repeal bylaws, not
inconsistent with its charter or with law, for the
administration of the affairs of the bank.
(4) To elect or appoint and remove officers and agents
of the bank and define their duties and fix their
compensation.
(5) To adopt and operate reasonable bonus plans,
profit-sharing plans, stock-bonus plans, stock-option plans,
pension plans and similar incentive plans for its directors,
officers and employees.
(5.1) To manage, operate and administer a fund for the
investment of funds by a public agency or agencies, including
any unit of local government or school district, or any
person. The fund for a public agency shall invest in the
same type of investments and be subject to the same
limitations provided for the investment of public funds. The
fund for public agencies shall maintain a separate ledger
showing the amount of investment for each public agency in
the fund. "Public funds" and "public agency" as used in this
Section shall have the meanings ascribed to them in Section 1
of the Public Funds Investment Act.
(6) To make reasonable donations for the public welfare
or for charitable, scientific, religious or educational
purposes.
(7) To borrow or incur an obligation; and to pledge its
assets:
(a) to secure its borrowings, its lease of personal
or real property or its other nondeposit obligations;
(b) to enable it to act as agent for the sale of
obligations of the United States;
(c) to secure deposits of public money of the
United States, whenever required by the laws of the
United States, including without being limited to,
revenues and funds the deposit of which is subject to the
control or regulation of the United States or any of its
officers, agents, or employees and Postal Savings funds;
(d) to secure deposits of public money of any state
or of any political corporation or subdivision thereof
including, without being limited to, revenues and funds
the deposit of which is subject to the control or
regulation of any state or of any political corporation
or subdivisions thereof or of any of their officers,
agents, or employees;
(e) to secure deposits of money whenever required
by the National Bankruptcy Act;
(f) (blank); and
(g) to secure trust funds commingled with the
bank's funds, whether deposited by the bank or an
affiliate of the bank, pursuant to Section 2-8 of the
Corporate Fiduciary Act.
(8) To own, possess, and carry as assets all or part of
the real estate necessary in or with which to do its banking
business, either directly or indirectly through the ownership
of all or part of the capital stock, shares or interests in
any corporation, association, trust engaged in holding any
part or parts or all of the bank premises, engaged in such
business and in conducting a safe deposit business in the
premises or part of them, or engaged in any activity that the
bank is permitted to conduct in a subsidiary pursuant to
paragraph (12) of this Section 5.
(9) To own, possess, and carry as assets other real
estate to which it may obtain title in the collection of its
debts or that was formerly used as a part of the bank
premises, but title to any real estate except as herein
permitted shall not be retained by the bank, either directly
or by or through a subsidiary, as permitted by subsection
(12) of this Section for a total period of more than 10 years
after acquiring title, either directly or indirectly.
(10) To do any act, including the acquisition of stock,
necessary to obtain insurance of its deposits, or part
thereof, and any act necessary to obtain a guaranty, in whole
or in part, of any of its loans or investments by the United
States or any agency thereof, and any act necessary to sell
or otherwise dispose of any of its loans or investments to
the United States or any agency thereof, and to acquire and
hold membership in the Federal Reserve System.
(11) Notwithstanding any other provisions of this Act or
any other law, to do any act and to own, possess, and carry
as assets property of the character, including stock, that is
at the time authorized or permitted to national banks by an
Act of Congress, but subject always to the same limitations
and restrictions as are applicable to national banks by the
pertinent federal law and subject to applicable provisions of
the Financial Institutions Insurance Sales Law.
(12) To own, possess, and carry as assets stock of one
or more corporations that is, or are, engaged in one or more
of the following businesses:
(a) holding title to and administering assets
acquired as a result of the collection or liquidating of
loans, investments, or discounts; or
(b) holding title to and administering personal
property acquired by the bank, directly or indirectly
through a subsidiary, for the purpose of leasing to
others, provided the lease or leases and the investment
of the bank, directly or through a subsidiary, in that
personal property otherwise comply with Section 35.1 of
this Act; or
(c) carrying on or administering any of the
activities excepting the receipt of deposits or the
payment of checks or other orders for the payment of
money in which a bank may engage in carrying on its
general banking business; provided, however, that nothing
contained in this paragraph (c) shall be deemed to permit
a bank organized under this Act or subject hereto to do,
either directly or indirectly through any subsidiary, any
act, including the making of any loan or investment, or
to own, possess, or carry as assets any property that if
done by or owned, possessed, or carried by the State bank
would be in violation of or prohibited by any provision
of this Act.
The provisions of this subsection (12) shall not apply to
and shall not be deemed to limit the powers of a State bank
with respect to the ownership, possession, and carrying of
stock that a State bank is permitted to own, possess, or
carry under this Act.
Any bank intending to establish a subsidiary under this
subsection (12) shall give written notice to the Commissioner
60 days prior to the subsidiary's commencing of business or,
as the case may be, prior to acquiring stock in a corporation
that has already commenced business. After receiving the
notice, the Commissioner may waive or reduce the balance of
the 60 day notice period. The Commissioner may specify the
form of the notice and may promulgate rules and regulations
to administer this subsection (12).
(13) To accept for payment at a future date not
exceeding one year from the date of acceptance, drafts drawn
upon it by its customers; and to issue, advise, or confirm
letters of credit authorizing the holders thereof to draw
drafts upon it or its correspondents.
(14) To own and lease personal property acquired by the
bank at the request of a prospective lessee and upon the
agreement of that person to lease the personal property
provided that the lease, the agreement with respect thereto,
and the amount of the investment of the bank in the property
comply with Section 35.1 of this Act.
(15) (a) To establish and maintain, in addition to the
main banking premises, branches offering any banking services
permitted at the main banking premises of a State bank.
(b) To establish and maintain, after May 31, 1997,
branches in another state that may conduct any activity in
that state that is authorized or permitted for any bank that
has a banking charter issued by that state, subject to the
same limitations and restrictions that are applicable to
banks chartered by that state.
(16) (Blank).
(17) To establish and maintain terminals, as authorized
by the Electronic Fund Transfer Act.
(18) To establish and maintain temporary service booths
at any International Fair held in this State which is
approved by the United States Department of Commerce, for the
duration of the international fair for the sole purpose of
providing a convenient place for foreign trade customers at
the fair to exchange their home countries' currency into
United States currency or the converse. This power shall not
be construed as establishing a new place or change of
location for the bank providing the service booth.
(19) To indemnify its officers, directors, employees,
and agents, as authorized for corporations under Section 8.75
of the Business Corporation Act of 1983.
(20) To own, possess, and carry as assets stock of, or
be or become a member of, any corporation, mutual company,
association, trust, or other entity formed exclusively for
the purpose of providing directors' and officers' liability
and bankers' blanket bond insurance or reinsurance to and for
the benefit of the stockholders, members, or beneficiaries,
or their assets or businesses, or their officers, directors,
employees, or agents, and not to or for the benefit of any
other person or entity or the public generally.
(21) To make debt or equity investments in corporations
or projects, whether for profit or not for profit, designed
to promote the development of the community and its welfare,
provided that the aggregate investment in all of these
corporations and in all of these projects does not exceed 10%
of the unimpaired capital and unimpaired surplus of the bank
and provided that this limitation shall not apply to
creditworthy loans by the bank to those corporations or
projects. Upon written application to the Commissioner, a
bank may make an investment that would, when aggregated with
all other such investments, exceed 10% of the unimpaired
capital and unimpaired surplus of the bank. The Commissioner
may approve the investment if he is of the opinion and finds
that the proposed investment will not have a material adverse
effect on the safety and soundness of the bank.
(22) To own, possess, and carry as assets the stock of a
corporation engaged in the ownership or operation of a travel
agency or to operate a travel agency as a part of its
business, provided that the bank either owned, possessed, and
carried as assets the stock of such a corporation or operated
a travel agency as part of its business before July 1, 1991.
(23) With respect to affiliate facilities:
(a) to conduct at affiliate facilities any of the
following transactions for and on behalf of another
commonly owned bank, if so authorized by the other bank:
receiving deposits; cashing and issuing checks, drafts,
and money orders; changing money; and receiving payments
on existing indebtedness; and
(b) to authorize a commonly owned bank to conduct
for and on behalf of it any of the transactions listed in
this paragraph (23) at one or more affiliate facilities.
Any bank intending to conduct or to authorize a commonly
owned bank to conduct at an affiliate facility any of the
transactions specified in this paragraph (23) shall give
written notice to the Commissioner at least 30 days before
any such transaction is conducted at the affiliate facility.
(24) To act as the agent for any fire, life, or other
insurance company authorized by the State of Illinois, by
soliciting and selling insurance and collecting premiums on
policies issued by such company; and to may receive for
services so rendered such fees or commissions as may be
agreed upon between the said bank and the insurance company
for which it may act as agent; provided, however, that no
such bank shall in any case assume or guarantee the payment
of any premium on insurance policies issued through its
agency by its principal; and provided further, that the bank
shall not guarantee the truth of any statement made by an
assured in filing his application for insurance.
(25) Notwithstanding any other provisions of this Act or
any other law, to offer any product or service that is at the
time authorized or permitted to any insured savings
association by applicable law, provided that powers conferred
only by this subsection (25):
(a) shall always be subject to the same limitations
and restrictions that are applicable to the insured
savings association for the product or service by such
applicable law;
(b) shall be subject to applicable provisions of
the Financial Institutions Insurance Sales Law;
(c) shall not include the right to own or conduct a
real estate brokerage business for which a license would
be required under the laws of this State; and
(d) shall not be construed to include the
establishment or maintenance of a branch, nor shall they
be construed to limit the establishment or maintenance of
a branch pursuant to subsection (11).
(Source: P.A. 89-208, eff. 9-29-95; 89-310, eff. 1-1-96;
89-364, eff. 8-18-95; 89-626, eff. 8-9-96; 90-41, eff.
10-1-97; 90-301, eff. 8-1-97; revised 10-22-97.)
(205 ILCS 5/9) (from Ch. 17, par. 316)
Sec. 9. Contents of application. The application for a
permit to organize shall be in a form specified by the
Commissioner and shall be filed with the Commissioner signed
by each of the applicants and shall be acknowledged before
some officer authorized by law to acknowledge deeds. It shall
state:
(1) The name, residence, business or occupation and
address of each applicant, and a statement of the proposed
management;
(2) The name for the proposed bank;
(3) The location of the proposed bank;
(4) The amount of capital and, surplus and reserve for
operating expenses for the proposed bank;
(5) The number of shares of capital stock, the number of
shares and classes of preferred stock, if any, the par value
of the capital stock and preferred stock, and the amount for
which each share of capital stock and preferred stock is to
be sold;
(6) A statement of the financial worth of each of the
applicants;
(7) (Blank);
(8) Such other relevant information as the Commissioner
may require.
(Source: P.A. 90-301, eff. 8-1-97.)
(205 ILCS 5/10) (from Ch. 17, par. 317)
Sec. 10. Permit to organize. Upon the filing of an
application for a permit to organize, the Commissioner shall
investigate the truth of the statements therein and shall
consider the proposed bank's capital structure, its future
earnings prospects, the general character, experience, and
qualifications of its proposed management, its proposed plan
of operation, and the convenience and needs of the area
sought to be served and notwithstanding the provisions of
Section 7 of this Act, the Commissioner shall not approve the
application and issue a permit to organize unless he shall be
of the opinion and finds:
(1) That the proposed capital at least meets the minimum
requirements of this Act determined by the Commissioner
pursuant to Section 7 of this Act including additional
capital necessitated by the circumstances of the proposed
bank including its size, scope of operations and market in
which it proposes to operate;
(2) That the future earnings prospects are favorable;
(3) That the general character, experience, and
qualifications of its proposed management and its proposed
plan of operation are is such as to assure reasonable promise
of successful, safe and sound operation;
(4) That the name of the proposed bank is not the same
as or deceptively similar to the name of any other bank then
operating in this State; and
(5) That the convenience and needs of the area sought to
be served by the proposed bank will be promoted.
(Source: P.A. 86-368.)
(205 ILCS 5/13) (from Ch. 17, par. 320)
Sec. 13. Issuance of charter.
(a) When the directors have organized as provided in
Section 12 of this Act, and the capital stock and the
preferred stock, if any, together with a surplus of not less
than 50% of the capital, has been all fully paid in and a
record of the same filed with the Commissioner, the
Commissioner or some competent person of the Commissioner's
appointment shall make a thorough examination into the
affairs of the proposed bank, and if satisfied (i) that all
the requirements of this Act have been complied with, (ii)
and that no intervening circumstance has occurred to change
the Commissioner's findings made pursuant to Section 10 of
this Act, and (iii) that the prior involvement by any
stockholder who will own a sufficient amount of stock to have
control, as defined in Section 18 of this Act, of the
proposed bank with any other financial institution, whether
as stockholder, director, officer, or customer, was conducted
in a safe and sound manner, upon payment into the
Commissioner's office of the reasonable expenses of the
examination, as determined by the Commissioner, the
Commissioner shall issue a charter authorizing the bank to
commence business as authorized in this Act. All charters
issued by the Commissioner or any predecessor agency which
chartered State banks, including any charter outstanding as
of September 1, 1989, shall be perpetual. For the 2 years
after the Commissioner has issued a charter to a bank, the
bank shall request and obtain from the Commissioner prior
written approval before it may change senior management
personnel or directors.
The original charter, duly certified by the Commissioner,
or a certified copy shall be evidence in all courts and
places of the existence and authority of the bank to do
business. Upon the issuance of the charter by the
Commissioner, the bank shall be deemed fully organized and
may proceed to do business. The Commissioner may, in the
Commissioner's discretion, withhold the issuing of the
charter when the Commissioner has reason to believe that the
bank is organized for any purpose other than that
contemplated by this Act or that a commission or fee has been
paid in connection with the sale of the stock of the bank.
The Commissioner shall revoke the charter and order
liquidation in the event that the bank does not commence a
general banking business within one year from the date of the
issuance of the charter, unless a request has been submitted,
in writing, to the Commissioner for an extension and the
request has been approved. After commencing a general
banking business, a bank, upon written notice to the
Commissioner, may change its name.
(b) (1) The Commissioner may also issue a charter to a
bank that is owned exclusively by other depository
institutions or depository institution holding companies and
is organized to engage exclusively in providing services to
or for other depository institutions, their holding
companies, and the officers, directors, and employees of such
institutions and companies, and in providing correspondent
banking services at the request of other depository
institutions or their holding companies (also referred to as
a "bankers' bank").
(2) A bank chartered pursuant to paragraph (1) shall,
except as otherwise specifically determined by the
Commissioner, be vested with the same rights and privileges
and subject to the same duties, restrictions, penalties, and
liabilities now or hereafter imposed under this Act.
(c) A bank chartered under this Act after November 1,
1985, and an out-of-state bank that merges with a State bank
and establishes or maintains a branch in this State after May
31, 1997, shall obtain from and, at all times while it
accepts or retains deposits, maintain with the Federal
Deposit Insurance Corporation, or such other instrumentality
of or corporation chartered by the United States, deposit
insurance as authorized under federal law.
(d) (i) A bank that has a banking charter issued by the
Commissioner under this Act may, pursuant to a written
purchase and assumption agreement, transfer substantially all
of its assets to another State bank or national bank in
consideration, in whole or in part, for the transferee banks'
assumption of any part or all of its liabilities. Such a
transfer shall in no way be deemed to impair the charter of
the transferor bank or cause the transferor bank to forfeit
any of its rights, powers, interests, franchises, or
privileges as a State bank, nor shall any voluntary reduction
in the transferor bank's activities resulting from the
transfer have any such effect; provided, however, that a
State bank that transfers substantially all of its assets
pursuant to this subsection (d) and following the transfer
does not accept deposits and make loans, shall not have any
rights, powers, interests, franchises, or privileges under
subsection (15) of Section 5 of this Act until the bank has
resumed accepting deposits and making loans.
(ii) The fact that a State bank does not resume
accepting deposits and making loans for a period of 24 months
commencing on September 11, 1989 or on a date of the transfer
of substantially all of a State bank's assets, whichever is
later, or such longer period as the Commissioner may allow in
writing, may be the basis for a finding by the Commissioner
under Section 51 of this Act that the bank is unable to
continue operations.
(iii) The authority provided by subdivision (i) of this
subsection (d) shall terminate on May 31, 1997, and no bank
that has transferred substantially all of its assets pursuant
to this subsection (d) shall continue in existence after May
31, 1997.
(Source: P.A. 89-208, eff. 9-29-95; 89-567, eff. 7-26-96;
89-603, eff. 8-2-96; 90-14, eff. 7-1-97; 90-301, eff.
8-1-97.)
(205 ILCS 5/21.1)
Sec. 21.1. Application for certificate of authority.
(a) On or after June 1, 1997, an out-of-state bank may,
in order to procure a certificate of authority to merge with
a State bank after executing, shall execute and filing file
in duplicate not less than 60 days before the proposed
effective date of the merger an application therefor with the
Commissioner and after shall also filing with the
Commissioner file a copy of its charter, articles of
association or articles of incorporation, and all amendments
thereto, duly authenticated by the proper officer of the
state wherein it is chartered or incorporated and the last
quarterly statement of condition filed by the out-of-state
bank with the appropriate federal banking regulator. The
Commissioner shall specify the form of the application which
shall set forth, to the extent applicable, the same
information required in an application by a foreign
corporation pursuant to Section 13.15 of the Business
Corporation Act of 1983. Subject to Sections 21.2 and 21.3 of
this Act, receipt by the Commissioner of a copy of an
application filed with and approved by the out-of-state
bank's chartering authority authorizing the out-of-state bank
to merge with a State bank shall satisfy the filing
requirements of this subsection (a).
When the provisions of this Section have been complied
with, the Commissioner shall issue a certificate of authority
to merge. If the merger is not consummated within one year,
the Commissioner may cancel the certificate of authority.
(b) An out-of-state bank that is the resulting bank in a
merger with a State bank may, after the merger, establish and
maintain a branch or branches in Illinois at the locations
where the State bank had its main office and branches
immediately before the merger.
(c) An out-of-state bank that establishes and maintains
a branch or branches in Illinois pursuant to subsection (b)
of this Section may, after the merger, establish and maintain
additional branches in this State to the same extent as a
State bank.
(d) A branch of an out-of-state bank may not conduct any
activity that is not authorized for a State bank.
(e) An out-of-state bank shall provide written notice to
the Commissioner of its intent to establish an additional
branch or branches in this State within 30 days after
approval of the appropriate federal banking agency to
establish the branch or branches. The notice form shall be
specified by the Commissioner and may include any of the
information required for a similar notice by a State bank.
Receipt by the Commissioner of notice of the out-of-state
bank's intent to establish such additional branch or branches
in this State from the out-of-state bank's chartering
authority shall satisfy the requirements of this subsection
(e).
(Source: P.A. 89-208, eff. 9-29-95.)
(205 ILCS 5/24) (from Ch. 17, par. 331)
Sec. 24. Effective date of merger; filing. The executed
merger agreement together with copies of the resolutions of
the stockholders of each merging bank or insured savings
association approving it, certified by the bank's or insured
savings association's president or vice-president or the
cashier, shall be filed with the Commissioner. A merger that
is to result in a State bank shall, unless a later date is
specified in the agreement, become effective when the
Commissioner has approved the agreement and issued a
certificate of merger to the continuing bank. The charters of
the merging banks or insured savings association, other than
the continuing bank, shall thereupon automatically terminate.
If, after May 31, 1997, the merger will result in an
out-of-state bank, the charter of a merging State bank shall
terminate upon notice to the Commissioner that the merger is
effective. The certificate of merger shall specify the name
of each merging bank or insured savings association and the
name of the continuing bank, and the amendments to the
charter of the continuing bank provided for by the merger
agreement. The certificate shall be conclusive evidence of
the merger and of the correctness of all proceedings therefor
in all courts and places, and the certificate shall be
recorded.
(Source: P.A. 89-208, eff. 9-29-95.)
(205 ILCS 5/48) (from Ch. 17, par. 359)
Sec. 48. Commissioner's powers; duties. The Commissioner
shall have the powers and authority, and is charged with the
duties and responsibilities designated in this Act, and a
State bank shall not be subject to any other visitorial power
other than as authorized by this Act, except those vested in
the courts, or upon prior consultation with the Commissioner,
a foreign bank regulator with an appropriate supervisory
interest in the parent or affiliate of a state bank. In the
performance of the Commissioner's duties:
(1) The Commissioner shall call for statements from all
State banks as provided in Section 47 at least one time
during each calendar quarter.
(2) (a) The Commissioner, as often as the Commissioner
shall deem necessary or proper, and no less frequently than
18 months following the preceding examination, shall appoint
a suitable person or persons to make an examination of the
affairs of every State bank, except that for every eligible
State bank, as defined by regulation, the Commissioner in
lieu of the examination may accept on an alternating basis
the examination made by the eligible State bank's appropriate
federal banking agency pursuant to Section 111 of the Federal
Deposit Insurance Corporation Improvement Act of 1991,
provided the appropriate federal banking agency has made such
an examination. A person so appointed shall not be a
stockholder or officer or employee of any bank which that
person may be directed to examine, and shall have powers to
make a thorough examination into all the affairs of the bank
and in so doing to examine any of the officers or agents or
employees thereof on oath and shall make a full and detailed
report of the condition of the bank to the Commissioner. In
making the examination the examiners shall include an
examination of the affairs of all the affiliates of the bank,
as defined in subsection (b) of Section 35.2 of this Act, as
shall be necessary to disclose fully the conditions of the
affiliates, the relations between the bank and the affiliates
and the effect of those relations upon the affairs of the
bank, and in connection therewith shall have power to examine
any of the officers, directors, agents, or employees of the
affiliates on oath. After May 31, 1997, the Commissioner may
enter into cooperative agreements with state regulatory
authorities of other states to provide for examination of
State bank branches in those states, and the Commissioner may
accept reports of examinations of State bank branches from
those state regulatory authorities. These cooperative
agreements may set forth the manner in which the other state
regulatory authorities may be compensated for examinations
prepared for and submitted to the Commissioner.
(b) After May 31, 1997, the Commissioner is authorized
to examine, as often as the Commissioner shall deem necessary
or proper, branches of out-of-state banks. The Commissioner
may establish and may assess fees to be paid to the
Commissioner for examinations under this subsection (b). The
fees shall be borne by the out-of-state bank, unless the fees
are borne by the state regulatory authority that chartered
the out-of-state bank, as determined by a cooperative
agreement between the Commissioner and the state regulatory
authority that chartered the out-of-state bank.
(2.5) Whenever any State bank, any subsidiary or
affiliate of a State bank, or after May 31, 1997, any branch
of an out-of-state bank causes to be performed, by contract
or otherwise, any bank services for itself, whether on or off
its premises:
(a) that performance shall be subject to
examination by the Commissioner to the same extent as if
services were being performed by the bank or, after May
31, 1997, branch of the out-of-state bank itself on its
own premises; and
(b) the bank or, after May 31, 1997, branch of the
out-of-state bank shall notify the Commissioner of the
existence of a service relationship. The notification
shall be submitted with the first statement of condition
(as required by Section 47 of this Act) due after the
making of the service contract or the performance of the
service, whichever occurs first. The Commissioner shall
be notified of each subsequent contract in the same
manner.
For purposes of this subsection (2.5), the term "bank
services" means services such as sorting and posting of
checks and deposits, computation and posting of interest and
other credits and charges, preparation and mailing of checks,
statements, notices, and similar items, or any other
clerical, bookkeeping, accounting, statistical, or similar
functions performed for a State bank, including but not
limited to electronic data processing related to those bank
services.
(3) The expense of administering this Act, including the
expense of the examinations of State banks as provided in
this Act, shall to the extent of the amounts resulting from
the fees provided for in paragraphs (a), (a-2), and (b) of
this subsection (3) be assessed against and borne by the
State banks:
(a) Each bank shall pay to the Commissioner a Call
Report Fee which shall be paid in quarterly installments
equal to one-fourth of the sum of the annual fixed fee of
$800, plus a variable fee based on the assets shown on
the quarterly statement of condition delivered to the
Commissioner in accordance with Section 47 for the
preceding quarter according to the following schedule:
16¢ per $1,000 of the first $5,000,000 of total assets,
15¢ per $1,000 of the next $20,000,000 of total assets,
13¢ per $1,000 of the next $75,000,000 of total assets,
9¢ per $1,000 of the next $400,000,000 of total assets,
7¢ per $1,000 of the next $500,000,000 of total assets,
and 5¢ per $1,000 of all assets in excess of
$1,000,000,000, of the State bank. The Call Report Fee
shall be calculated by the Commissioner and billed to the
banks for remittance at the time of the quarterly
statements of condition provided for in Section 47. The
Commissioner may require payment of the fees provided in
this Section by an electronic transfer of funds or an
automatic debit of an account of each of the State banks.
In case more than one examination of any bank is deemed
by the Commissioner to be necessary in any examination
frequency cycle specified in subsection 2(a) of this
Section, and is performed at his direction, the
Commissioner may assess a reasonable additional fee to
recover the cost of the additional examination. In lieu
of the method and amounts set forth in this paragraph (a)
for the calculation of the Call Report Fee, the
Commissioner may specify by rule that the Call Report
Fees provided by this Section may be assessed
semiannually or some other period and may provide in the
rule the formula to be used for calculating and assessing
the periodic Call Report Fees to be paid by State banks.
(a-1) If in the opinion of the Commissioner an
emergency exists or appears likely, the Commissioner may
assign an examiner or examiners to monitor the affairs of
a State bank with whatever frequency he deems
appropriate, including but not limited to a daily basis.
The reasonable and necessary expenses of the Commissioner
during the period of the monitoring shall be borne by the
subject bank. The Commissioner shall furnish the State
bank a statement of time and expenses if requested to do
so within 30 days of the conclusion of the monitoring
period.
(a-2) On and after January 1, 1990, the reasonable
and necessary expenses of the Commissioner during
examination of the performance of electronic data
processing services under subsection (2.5) shall be borne
by the banks for which the services are provided. An
amount, based upon a fee structure prescribed by the
Commissioner, shall be paid by the banks or, after May
31, 1997, branches of out-of-state banks receiving the
electronic data processing services along with the Call
Report Fee assessed under paragraph (a) of this
subsection (3).
(a-3) After May 31, 1997, the reasonable and
necessary expenses of the Commissioner during examination
of the performance of electronic data processing services
under subsection (2.5) at or on behalf of branches of
out-of-state banks shall be borne by the out-of-state
banks, unless those expenses are borne by the state
regulatory authorities that chartered the out-of-state
banks, as determined by cooperative agreements between
the Commissioner and the state regulatory authorities
that chartered the out-of-state banks.
(b) "Fiscal year" for purposes of this Section 48
is defined as a period beginning July 1 of any year and
ending June 30 of the next year. The Commissioner shall
receive for each fiscal year, commencing with the fiscal
year ending June 30, 1987, a contingent fee equal to the
lesser of the aggregate of the fees paid by all State
banks under paragraph (a) of subsection (3) for that
year, or the amount, if any, whereby the aggregate of the
administration expenses, as defined in paragraph (c), for
that fiscal year exceeds the sum of the aggregate of the
fees payable by all State banks for that year under
paragraph (a) of subsection (3), plus all other amounts
collected by the Commissioner for that year under any
other provision of this Act, plus the aggregate of all
fees collected for that year by the Commissioner under
the Corporate Fiduciary Act, excluding the receivership
fees provided for in Section 5-10 of the Corporate
Fiduciary Act, and the Foreign Banking Office Act. The
aggregate amount of the contingent fee thus arrived at
for any fiscal year shall be apportioned amongst,
assessed upon, and paid by the State banks and foreign
banking corporations, respectively, in the same
proportion that the fee of each under paragraph (a) of
subsection (3), respectively, for that year bears to the
aggregate for that year of the fees collected under
paragraph (a) of subsection (3). The aggregate amount of
the contingent fee, and the portion thereof to be
assessed upon each State bank and foreign banking
corporation, respectively, shall be determined by the
Commissioner and shall be paid by each, respectively,
within 120 days of the close of the period for which the
contingent fee is computed and is payable, and the
Commissioner shall give 20 days advance notice of the
amount of the contingent fee payable by the State bank
and of the date fixed by the Commissioner for payment of
the fee.
(c) The "administration expenses" for any fiscal
year shall mean the ordinary and contingent expenses for
that year incident to making the examinations provided
for by, and for otherwise administering, this Act, the
Corporate Fiduciary Act, excluding the expenses paid from
the Corporate Fiduciary Receivership account in the Bank
and Trust Company Fund, the Foreign Banking Office Act,
the Electronic Fund Transfer Act, and the Illinois Bank
Examiners' Education Foundation Act, including all
salaries and other compensation paid for personal
services rendered for the State by officers or employees
of the State, including the Commissioner and the Deputy
Commissioners, all expenditures for telephone and
telegraph charges, postage and postal charges, office
stationery, supplies and services, and office furniture
and equipment, including typewriters and copying and
duplicating machines and filing equipment, surety bond
premiums, and travel expenses of those officers and
employees, employees, expenditures or charges for the
acquisition, enlargement or improvement of, or for the
use of, any office space, building, or structure, or
expenditures for the maintenance thereof or for
furnishing heat, light, or power with respect thereto,
all to the extent that those expenditures are directly
incidental to such examinations or administration. The
Commissioner shall not be required by paragraphs (c) or
(d-1) of this subsection (3) to maintain in any fiscal
year's budget appropriated reserves for accrued vacation
and accrued sick leave that is required to be paid to
employees of the Commissioner upon termination of their
service with the Commissioner in an amount that is more
than is reasonably anticipated to be necessary for any
anticipated turnover in employees, whether due to normal
attrition or due to layoffs, terminations, or
resignations.
(d) The aggregate of all fees collected by the
Commissioner under this Act, the Corporate Fiduciary Act,
or the Foreign Banking Office Act on and after July 1,
1979, shall be paid promptly after receipt of the same,
accompanied by a detailed statement thereof, into the
State treasury and shall be set apart in a special fund
to be known as the "Bank and Trust Company Fund", except
as provided in paragraph (c) of subsection (11) of this
Section. The amount from time to time deposited into the
Bank and Trust Company Fund shall be used to offset the
ordinary administrative expenses of the Commissioner of
Banks and Real Estate as defined in this Section. Nothing
in this amendatory Act of 1979 shall prevent continuing
the practice of paying expenses involving salaries,
retirement, social security, and State-paid insurance
premiums of State officers by appropriations from the
General Revenue Fund. However, the General Revenue Fund
shall be reimbursed for those payments made on and after
July 1, 1979, by an annual transfer of funds from the
Bank and Trust Company Fund.
(d-1) Adequate funds shall be available in the Bank
and Trust Company Fund to permit the timely payment of
administration expenses. In each fiscal year the total
administration expenses shall be deducted from the total
fees collected by the Commissioner and the remainder
transferred into the Cash Flow Reserve Account, unless
the balance of the Cash Flow Reserve Account prior to the
transfer equals or exceeds one-fourth of the total
initial appropriations from the Bank and Trust Company
Fund for the subsequent year, in which case the remainder
shall be credited to State banks and foreign banking
corporations and applied against their fees for the
subsequent year. The amount credited to each State bank
and foreign banking corporation shall be in the same
proportion as the Call Report Fees paid by each for the
year bear to the total Call Report Fees collected for the
year. If, after a transfer to the Cash Flow Reserve
Account is made or if no remainder is available for
transfer, the balance of the Cash Flow Reserve Account is
less than one-fourth of the total initial appropriations
for the subsequent year and the amount transferred is
less than 5% of the total Call Report Fees for the year,
additional amounts needed to make the transfer equal to
5% of the total Call Report Fees for the year shall be
apportioned amongst, assessed upon, and paid by the State
banks and foreign banking corporations in the same
proportion that the Call Report Fees of each,
respectively, for the year bear to the total Call Report
Fees collected for the year. The additional amounts
assessed shall be transferred into the Cash Flow Reserve
Account. For purposes of this paragraph (d-1), the
calculation of the fees collected by the Commissioner
shall exclude the receivership fees provided for in
Section 5-10 of the Corporate Fiduciary Act.
(e) The Commissioner may upon request certify to
any public record in his keeping and shall have authority
to levy a reasonable charge for issuing certifications of
any public record in his keeping.
(f) In addition to fees authorized elsewhere in
this Act, the Commissioner may, in connection with a
review, approval, or provision of a service, levy a
reasonable charge to recover the cost of the review,
approval, or service.
(4) Nothing contained in this Act shall be construed to
limit the obligation relative to examinations and reports of
any State bank, deposits in which are to any extent insured
by the United States or any agency thereof, nor to limit in
any way the powers of the Commissioner with reference to
examinations and reports of that bank.
(5) The nature and condition of the assets in or
investment of any bonus, pension, or profit sharing plan for
officers or employees of every State bank or, after May 31,
1997, branch of an out-of-state bank shall be deemed to be
included in the affairs of that State bank or branch of an
out-of-state bank subject to examination by the Commissioner
under the provisions of subsection (2) of this Section, and
if the Commissioner shall find from an examination that the
condition of or operation of the investments or assets of the
plan is unlawful, fraudulent, or unsafe, or that any trustee
has abused his trust, the Commissioner shall, if the
situation so found by the Commissioner shall not be corrected
to his satisfaction within 60 days after the Commissioner has
given notice to the board of directors of the State bank or
out-of-state bank of his findings, report the facts to the
Attorney General who shall thereupon institute proceedings
against the State bank or out-of-state bank, the board of
directors thereof, or the trustees under such plan as the
nature of the case may require.
(6) The Commissioner shall have the power:
(a) To promulgate reasonable rules for the purpose
of administering the provisions of this Act.
(b) To issue orders for the purpose of
administering the provisions of this Act and any rule
promulgated in accordance with this Act.
(c) To appoint hearing officers to execute any of
the powers granted to the Commissioner under this Section
for the purpose of administering this Act and any rule
promulgated in accordance with this Act.
(d) To subpoena witnesses, to compel their
attendance, to administer an oath, to examine any person
under oath, and to require the production of any relevant
books, papers, accounts, and documents in the course of
and pursuant to any investigation being conducted, or any
action being taken, by the Commissioner in respect of any
matter relating to the duties imposed upon, or the powers
vested in, the Commissioner under the provisions of this
Act or any rule promulgated in accordance with this Act.
(e) To conduct hearings.
(7) Whenever, in the opinion of the Commissioner, any
director, officer, employee, or agent of a State bank or,
after May 31, 1997, of any branch of an out-of-state bank
shall have violated any law, rule, or order relating to that
bank or shall have engaged in an unsafe or unsound practice
in conducting the business of that bank or shall have
violated any law or engaged or participated in any unsafe or
unsound practice in connection with any financial institution
or other business entity such that the character and fitness
of the director, officer, employee, or agent does not assure
reasonable promise of safe and sound operation of the State
bank, the Commissioner may issue an order of removal. If, in
the opinion of the Commissioner, any former director,
officer, employee, or agent of a State bank, prior to the
termination of his or her service with that bank, violated
any law, rule, or order relating to that State bank or
engaged in an unsafe or unsound practice in conducting the
business of that bank or violated any law or engaged or
participated in any unsafe or unsound practice in connection
with any financial institution or other business entity such
that the character and fitness of the director, officer,
employee, or agent would not have assured reasonable promise
of safe and sound operation of the State bank prior to the
termination of his or her service with that bank, the
Commissioner may issue an order prohibiting that person from
further service with a bank as a director, officer, employee,
or agent. An order issued pursuant to this subsection shall
be served upon the director, officer, employee, or agent. A
copy of the order shall be sent to each director of the bank
affected by registered mail. The person affected by the
action may request a hearing before the State Banking Board
within 10 days after receipt of the order of removal. The
hearing shall be held by the Board within 30 days after the
request has been received by the Board. The Board shall make
a determination approving, modifying, or disapproving the
order of the Commissioner as its final administrative
decision. If a hearing is held by the Board, the Board shall
make its determination within 60 days from the conclusion of
the hearing. Any person affected by a decision of the Board
under this subsection (7) of Section 48 of this Act may have
the decision reviewed only under and in accordance with the
Administrative Review Law and the rules adopted pursuant
thereto. A copy of the order shall also be served upon the
bank of which he is a director, officer, employee, or agent,
whereupon he shall cease to be a director, officer, employee,
or agent of that bank. The Commissioner may institute a
civil action against the director, officer, or agent of the
State bank or, after May 31, 1997, of the branch of the
out-of-state bank against whom any order provided for by this
subsection (7) of this Section 48 has been issued, and
against the State bank or, after May 31, 1997, out-of-state
bank, to enforce compliance with or to enjoin any violation
of the terms of the order. Any person who has been the
subject of an order of removal or an order of prohibition
issued by the Commissioner under this subsection or Section
5-6 of the Corporate Fiduciary Act may not thereafter serve
as director, officer, employee, or agent of any State bank or
of any branch of any out-of-state bank, or of any corporate
fiduciary, as defined in Section 1-5.05 of the Corporate
Fiduciary Act, or of any other entity that is subject to
licensure or regulation by the Commissioner or the Office of
Banks and Real Estate unless the Commissioner has granted
prior approval in writing.
(8) The Commissioner may impose civil penalties of up to
$10,000 against any person for each violation of any
provision of this Act, any rule promulgated in accordance
with this Act, any order of the Commissioner, or any other
action which in the Commissioner's discretion is an unsafe or
unsound banking practice.
(9) The Commissioner may impose civil penalties of up to
$100 against any person for the first failure to comply with
reporting requirements set forth in the report of examination
of the bank and up to $200 for the second and subsequent
failures to comply with those reporting requirements.
(10) All final administrative decisions of the
Commissioner hereunder shall be subject to judicial review
pursuant to the provisions of the Administrative Review Law.
For matters involving administrative review, venue shall be
in either Sangamon County or Cook County.
(11) The endowment fund for the Illinois Bank Examiners'
Education Foundation shall be administered as follows:
(a) (Blank).
(b) The Foundation is empowered to receive
voluntary contributions, gifts, grants, bequests, and
donations on behalf of the Illinois Bank Examiners'
Education Foundation from national banks and other
persons for the purpose of funding the endowment of the
Illinois Bank Examiners' Education Foundation.
(c) The aggregate of all special educational fees
collected by the Commissioner and property received by
the Commissioner on behalf of the Illinois Bank
Examiners' Education Foundation under this subsection
(11) on or after June 30, 1986, shall be either (i)
promptly paid after receipt of the same, accompanied by a
detailed statement thereof, into the State Treasury and
shall be set apart in a special fund to be known as "The
Illinois Bank Examiners' Education Fund" to be invested
by either the Treasurer of the State of Illinois in the
Public Treasurers' Investment Pool or in any other
investment he is authorized to make or by the Illinois
State Board of Investment as the board of trustees of the
Illinois Bank Examiners' Education Foundation may direct
or (ii) deposited into an account maintained in a
commercial bank or corporate fiduciary in the name of the
Illinois Bank Examiners' Education Foundation pursuant to
the order and direction of the Board of Trustees of the
Illinois Bank Examiners' Education Foundation.
(12) (Blank).
(Source: P.A. 89-208, eff. 9-29-95; 89-317, eff. 8-11-95;
89-508, eff. 7-3-96; 89-567, eff. 7-26-96; 89-626, eff.
8-9-96; 90-14, eff. 7-1-97; 90-301, eff. 8-1-97.)
(205 ILCS 5/48.1) (from Ch. 17, par. 360)
Sec. 48.1. Customer financial records; confidentiality.
(a) For the purpose of this Section, the term "financial
records" means any original, any copy, or any summary of (1)
a document granting signature authority over a deposit or
account, (2) a statement, ledger card or other record on any
deposit or account, which shows each transaction in or with
respect to that account, (3) a check, draft or money order
drawn on a bank or issued and payable by a bank, or (4) any
other item containing information pertaining to any
relationship established in the ordinary course of a bank's
business between a bank and its customer.
(b) This Section does not prohibit:
(1) The preparation, examination, handling or
maintenance of any financial records by any officer,
employee or agent of a bank having custody of the
records, or the examination of the records by a certified
public accountant engaged by the bank to perform an
independent audit.
(2) The examination of any financial records by, or
the furnishing of financial records by a bank to, any
officer, employee or agent of (i) the Commissioner of
Banks and Real Estate, (ii) after May 31, 1997, a state
regulatory authority authorized to examine a branch of a
State bank located in another state, (iii) the
Comptroller of the Currency, (iv) the Federal Reserve
Board, or (v) the Federal Deposit Insurance Corporation
for use solely in the exercise of his duties as an
officer, employee, or agent.
(3) The publication of data furnished from
financial records relating to customers where the data
cannot be identified to any particular customer or
account.
(4) The making of reports or returns required under
Chapter 61 of the Internal Revenue Code of 1986.
(5) Furnishing information concerning the dishonor
of any negotiable instrument permitted to be disclosed
under the Uniform Commercial Code.
(6) The exchange in the regular course of business
of credit information between a bank and other banks or
financial institutions or commercial enterprises,
directly or through a consumer reporting agency.
(7) The furnishing of information to the
appropriate law enforcement authorities where the bank
reasonably believes it has been the victim of a crime.
(8) The furnishing of information under the Uniform
Disposition of Unclaimed Property Act.
(9) The furnishing of information under the
Illinois Income Tax Act and the Illinois Estate and
Generation-Skipping Transfer Tax Act.
(10) The furnishing of information under the
federal Currency and Foreign Transactions Reporting Act
Title 31, United States Code, Section 1051 et seq.
(11) The furnishing of information under any other
statute that by its terms or by regulations promulgated
thereunder requires the disclosure of financial records
other than by subpoena, summons, warrant, or court order.
(12) The furnishing of information about the
existence of an account of a person to a judgment
creditor of that person who has made a written request
for that information.
(13) The exchange in the regular course of business
of information between commonly owned banks in connection
with a transaction authorized under paragraph (23) of
Section 5 and conducted at an affiliate facility.
(14) The furnishing of information in accordance
with the federal Personal Responsibility and Work
Opportunity Reconciliation Act of 1996. Any bank governed
by this Act shall enter into an agreement for data
exchanges with a State agency provided the State agency
pays to the bank a reasonable fee not to exceed its
actual cost incurred. A bank providing information in
accordance with this item shall not be liable to any
account holder or other person for any disclosure of
information to a State agency, for encumbering or
surrendering any assets held by the bank in response to a
lien or order to withhold and deliver issued by a State
agency, or for any other action taken pursuant to this
item, including individual or mechanical errors, provided
the action does not constitute gross negligence or
willful misconduct. A bank shall have no obligation to
hold, encumber, or surrender assets until it has been
served with a subpoena, summons, warrant, court or
administrative order, lien, or levy.
(15) The exchange in the regular course of business
of information between a bank and any commonly owned
affiliate of the bank, subject to the provisions of the
Financial Institutions Insurance Sales Law.
(c) A bank may not disclose to any person, except to the
customer or his duly authorized agent, any financial records
relating to that customer of that bank unless:
(1) the customer has authorized disclosure to the
person;
(2) the financial records are disclosed in response
to a lawful subpoena, summons, warrant or court order
which meets the requirements of subsection (d) of this
Section; or
(3) the bank is attempting to collect an obligation
owed to the bank and the bank complies with the
provisions of Section 2I of the Consumer Fraud and
Deceptive Business Practices Act.
(d) A bank shall disclose financial records under
paragraph (2) of subsection (c) of this Section under a
lawful subpoena, summons, warrant, or court order only after
the bank mails a copy of the subpoena, summons, warrant, or
court order to the person establishing the relationship with
the bank, if living, and, otherwise his personal
representative, if known, at his last known address by first
class mail, postage prepaid, unless the bank is specifically
prohibited from notifying the person by order of court or by
applicable State or federal law. A bank shall not mail a
copy of a subpoena to any person pursuant to this subsection
if the subpoena was issued by a grand jury under the
Statewide Grand Jury Act.
(e) Any officer or employee of a bank who knowingly and
willfully furnishes financial records in violation of this
Section is guilty of a business offense and, upon conviction,
shall be fined not more than $1,000.
(f) Any person who knowingly and willfully induces or
attempts to induce any officer or employee of a bank to
disclose financial records in violation of this Section is
guilty of a business offense and, upon conviction, shall be
fined not more than $1,000.
(g) A bank shall be reimbursed for costs that are
reasonably necessary and that have been directly incurred in
searching for, reproducing, or transporting books, papers,
records, or other data of a customer required or requested to
be produced pursuant to a lawful subpoena, summons, warrant,
or court order. The Commissioner shall determine the rates
and conditions under which payment may be made.
(Source: P.A. 89-208, eff. 9-29-95; 89-364, eff. 8-18-95;
89-508, eff. 7-3-96; 89-626, eff. 8-9-96; 90-18, eff.
7-1-97.)
Section 15. The Savings Bank Act is amended by changing
Sections 1006, 1008, 6001, 6003, and 6013 as follows:
(205 ILCS 205/1006) (from Ch. 17, par. 7301-6)
Sec. 1006. Parity.
(a) Subject to the regulation of the Commissioner and in
addition to the powers granted by this Act, each savings
bank operating under this Act shall possess those powers
granted by regulation promulgated under the Federal Deposit
Insurance Act for state savings banks.
(b) A savings bank may establish branches or offices at
which savings or investments are regularly received or loans
approved as follows:
(1) to the extent branch powers and offices are
granted to State banks under the Illinois Banking Act;
(2) within the geographic area defined in Article 2
of this Act and subject to the provisions of Article 2 of
this Act;
(3) within the same geographic areas or states as
those states from which a holding company is permitted to
acquire an Illinois savings bank or an Illinois savings
bank holding company;
(4) to the same extent that holding companies and
savings and loan associations headquartered outside the
State of Illinois are allowed to operate in Illinois by
virtue of Articles 1A and 2B of the Illinois Savings and
Loan Act of 1985;
(5) as the result of mergers, consolidations, or
bulk sales of facilities in the case of relocations.
(c) The Commissioner may adopt regulations that provide
for the establishment of branches as defined by the
Commissioner.
(d) Notwithstanding any other provision of this Act, a
savings bank that purchases or assumes all or any part of the
assets or liabilities of a bank, savings bank, or savings and
loan association or merges or consolidates with a bank,
savings bank, or savings and loan association may retain and
maintain the main premises or branches of the former bank,
savings bank, or savings and loan association as branches of
the purchasing, merging, or consolidating savings bank,
provided it assumes the deposit liabilities of the bank,
savings bank, or savings and loan association maintained at
the main premises or branches.
(e) A savings bank has any power reasonably incident,
convenient, or useful to the accomplishment of the express
powers conferred upon the savings bank by this Act.
(Source: P.A. 89-74, eff. 6-30-95; 90-301, eff. 8-1-97.)
(205 ILCS 205/1008) (from Ch. 17, par. 7301-8)
Sec. 1008. General corporate powers.
(a) A savings bank operating under this Act shall be a
body corporate and politic and shall have all of the specific
powers conferred by this Act and in addition thereto, the
following general powers:
(1) To sue and be sued, complain, and defend in its
corporate name and to have a common seal, which it may
alter or renew at pleasure.
(2) To obtain and maintain insurance by a deposit
insurance corporation as defined in this Act.
(3) To act as a fiscal agent for the United States,
the State of Illinois or any department, branch, arm, or
agency of the State or any unit of local government or
school district in the State, when duly designated for
that purpose, and as agent to perform reasonable
functions as may be required of it.
(4) To become a member of or deal with any
corporation or agency of the United States or the State
of Illinois, to the extent that the agency assists in
furthering or facilitating its purposes or powers and to
that end to purchase stock or securities thereof or
deposit money therewith, and to comply with any other
conditions of membership or credit.
(5) To make donations in reasonable amounts for the
public welfare or for charitable, scientific, religious,
or educational purposes.
(6) To adopt and operate reasonable insurance,
bonus, profit sharing, and retirement plans for officers
and employees and for directors including, but not
limited to, advisory, honorary, and emeritus directors,
who are not officers or employees.
(7) To reject any application for membership; to
retire deposit accounts by enforced retirement as
provided in this Act and the bylaws; and to limit the
issuance of, or payments on, deposit accounts, subject,
however, to contractual obligations.
(8) To purchase stock in service corporations and
to invest in any form of indebtedness of any service
corporation as defined in this Act, subject to
regulations of the Commissioner.
(9) To purchase stock of a corporation whose
principal purpose is to operate a safe deposit company or
escrow service company.
(10) To exercise all the powers necessary to
qualify as a trustee or custodian under federal or State
law, provided that the authority to accept and execute
trusts is subject to the provisions of the Corporate
Fiduciary Act and to the supervision of those activities
by the Commissioner of Banks and Real Estate.
(11) (Blank).
(12) To establish, maintain, and operate terminals
as authorized by the Electronic Fund Transfer Act. The
establishment, maintenance, operation, and location of
those terminals shall be subject to the approval of the
Commissioner.
(13) Pledge its assets:
(A) to enable it to act as agent for the sale
of obligations of the United States;
(B) to secure deposits;
(C) to secure deposits of money whenever
required by the National Bankruptcy Act;
(D) to qualify under Section 2-9 of the
Corporate Fiduciary Act; and
(E) to secure trust funds commingled with the
savings bank's funds, whether deposited by the
savings bank or an affiliate of the savings bank, as
required under Section 2-8 of the Corporate
Fiduciary Act.
(14) To accept for payment at a future date not to
exceed one year from the date of acceptance, drafts drawn
upon it by its customers; and to issue, advise, or
confirm letters of credit authorizing holders thereof to
draw drafts upon it or its correspondents.
(15) Subject to the regulations of the
Commissioner, to own and lease personal property acquired
by the savings bank at the request of a prospective
lessee and, upon the agreement of that person, to lease
the personal property.
(16) To establish temporary service booths at any
International Fair in this State that is approved by the
United States Department of Commerce for the duration of
the international fair for the purpose of providing a
convenient place for foreign trade customers to exchange
their home countries' currency into United States
currency or the converse. To provide temporary periodic
service to persons residing in a bona fide nursing home,
senior citizens' retirement home, or long-term care
facility. These powers shall not be construed as
establishing a new place or change of location for the
savings bank providing the service booth.
(17) To indemnify its officers, directors,
employees, and agents, as authorized for corporations
under Section 8.75 of the Business Corporations Act of
1983.
(18) To provide data processing services to others
on a for-profit basis.
(19) To utilize any electronic technology to
provide customers with home banking services.
(20) Subject to the regulations of the
Commissioner, to enter into an agreement to act as a
surety.
(21) Subject to the regulations of the
Commissioner, to issue credit cards, extend credit
therewith, and otherwise engage in or participate in
credit card operations.
(22) To purchase for its own account shares of
stock of a bankers' bank, described in Section 13(b)(1)
of the Illinois Banking Act, on the same terms and
conditions as a bank may purchase such shares. In no
event shall the total amount of such stock held by a
savings bank in such bankers' bank exceed 10% of its
capital and surplus (including undivided profits) and in
no event shall a savings bank acquire more than 5% of any
class of voting securities of such bankers' bank.
(23) With respect to affiliate facilities:
(A) to conduct at affiliate facilities any of
the following transactions for and on behalf of any
affiliated depository institution, if so authorized
by the affiliate or affiliates: receiving deposits;
renewing deposits; cashing and issuing checks,
drafts, money orders, travelers checks, or similar
instruments; changing money; receiving payments on
existing indebtedness; and conducting ministerial
functions with respect to loan applications,
servicing loans, and providing loan account
information; and
(B) to authorize an affiliated depository
institution to conduct for and on behalf of it, any
of the transactions listed in this subsection at one
or more affiliate facilities.
A savings bank intending to conduct or to authorize
an affiliated depository institution to conduct at an
affiliate facility any of the transactions specified in
this subsection shall give written notice to the
Commissioner at least 30 days before any such transaction
is conducted at an affiliate facility. All conduct under
this subsection shall be on terms consistent with safe
and sound banking practices and applicable law.
(24) (23) Subject to Article XLIV of the Illinois
Insurance Code, to act as the agent for any fire, life,
or other insurance company authorized by the State of
Illinois, by soliciting and selling insurance and
collecting premiums on policies issued by such company;
and may receive for services so rendered such fees or
commissions as may be agreed upon between the said
savings bank and the insurance company for which it may
act as agent; provided, however, that no such savings
bank shall in any case assume or guarantee the payment of
any premium on insurance policies issued through its
agency by its principal; and provided further, that the
savings bank shall not guarantee the truth of any
statement made by an assured in filing his application
for insurance.
(25) (23) To become a member of the Federal Home
Loan Bank Board and to have the powers granted to a
savings association organized under the Illinois Savings
and Loan Act of 1985 or the laws of the United States,
subject to regulations of the Commissioner.
(26) To offer any product or service that is at the
time authorized or permitted to a bank by applicable law,
but subject always to the same limitations and
restrictions that are applicable to the bank for the
product or service by such applicable law and subject to
the applicable provisions of the Financial Institutions
Insurance Sales Law and rules of the Commissioner.
(b) If this Act or the regulations adopted under this
Act fail to provide specific guidance in matters of corporate
governance, the provisions of the Business Corporation Act of
1983 may be used.
(Source: P.A. 89-74, eff. 6-30-95; 89-310, eff. 1-1-96;
89-317, eff. 8-11-95; 89-355, eff. 8-17-95; 89-508, eff.
7-3-96; 89-603, eff. 8-2-96; 89-626, eff. 8-9-96; 90-14, eff.
7-1-97; 90-41, eff. 10-1-97; 90-270, eff. 7-30-97; 90-301,
eff. 8-1-97; revised 10-21-97.)
(205 ILCS 205/6001) (from Ch. 17, par. 7306-1)
Sec. 6001. General provisions.
(a) No savings bank shall make any loan or investment
authorized by this Article unless the savings bank first has
determined that the type, amount, purpose, and repayment
provisions of the loan or investment in relation to the
borrower's or issuer's resources and credit standing support
the reasonable belief that the loan or investment will be
financially sound and will be repaid according to its terms
and that the loan or investment is not otherwise unlawful.
(b) Each loan or investment that a savings bank makes or
purchases, whether wholly or in part, must be adequately
underwritten, reviewed periodically, and reserved against as
necessary in accordance with its payment performance, all in
accordance with the regulations and directives of the
Commissioner.
(c) Every appraisal or reappraisal of property that a
savings bank is required to make shall be made as follows:
(1) By an independent qualified appraiser,
designated by the board of directors, who is properly
licensed or and certified by the entity authorized to
govern his licensure or and certification and who meets
the requirements of the Appraisal Subcommittee and of the
Federal Act.
(2) In the case of an insured or guaranteed loan,
by any appraiser appointed by any lending, insuring, or
guaranteeing agency of the United States or the State of
Illinois that insures or guarantees the loan, wholly or
in part.
(3) Each appraisal shall be in writing prepared at
the request of the lender for the lender's use; disclose
the market value of the security offered; contain
sufficient information and data concerning the appraised
property to substantiate the market value thereof; be
certified and signed by the appraiser or appraisers; and
state that the appraiser or appraisers have personally
examined the described property. The appraisal shall be
filed and preserved by the savings bank. In addition, the
appraisal shall be prepared and reported in accordance
with the Standards of Professional Practice and the
ethical rules of the Appraisal Foundation as adopted and
promulgated by the Appraisal Subcommittee.
(d) If appraisals of real estate securing a savings
bank's loans are obtained as part of an examination by the
Commissioner, the cost of those appraisals shall promptly be
paid by the savings bank directly to the appraiser or
appraisers.
(e) Any violation of this Article shall constitute an
unsafe or unsound practice. Any person who knowingly
violates any provision of this Article shall be subject to
enforcement action or civil money penalties as provided for
in this Act.
(f) For purposes of this Article, "underwriting" shall
mean the process of compiling information to support a
determination as to whether an investment or extension of
credit shall be made by a savings bank. It shall include,
but not be limited to, evaluating a borrower's
creditworthiness, determination of the value of the
underlying collateral, market factors, and the
appropriateness of the investment or loan for the savings
bank. Underwriting as used herein does not include the
agreement to purchase unsold portions of public offerings of
stocks or bonds as commonly used in corporate securities
issuances and sales.
(g) For purposes of this Section, the following
definitions shall apply:
(1) "Federal Act" means Title XI of the Financial
Institutions Reform, Recovery and Enforcement Act of 1989
and regulations adopted pursuant thereto.
(2) "Appraisal Subcommittee" means the designee of
the heads of the Federal Financial Institutions
Examination Council Act of 1978 (12 U.S.C. 3301 et seq.).
(3) "Appraisal Foundation" means the Appraisal
Foundation that was incorporated as an Illinois
not-for-profit corporation on November 30, 1987.
(Source: P.A. 86-1213.)
(205 ILCS 205/6003) (from Ch. 17, par. 7306-3)
Sec. 6003. Other investments. If the board of directors
determines at any time that funds are available in excess of
the demands and needs for loans, maturities, and withdrawals,
A savings bank may invest funds as provided in this Section:
(1) In demand, time, or savings deposits or
accounts, withdrawable accounts, or other insured
obligations of any financial institution the accounts of
which are insured by a federal agency.
(2) In participating interests in loans of a type
that the savings bank would be authorized to make, but
only if the other participants are (A) savings banks
organized under this Act, (B) savings and loan
associations, banks, credit unions, and licensees under
the Consumer Installment Loan Act or the Sales Finance
Agency Act, organized under the laws of this State, (C)
associations or corporations insured by an
instrumentality of the United States, (D)
instrumentalities of or corporations owned wholly or in
part by the United States or this State, or, (E) subject
to regulations of the Commissioner, service corporations
of a savings bank organized under this Act or
subsidiaries of a savings and loan association, bank, or
credit union organized under the laws of this State or
the United States.
(3) In obligations of, or obligations that are
fully guaranteed by the United States and in stocks or
obligations of any Federal Reserve Bank, Federal Home
Loan Bank, the Student Loan Market Association, the
Government National Mortgage Association, the Federal
National Mortgage Association, The Federal Home Loan
Mortgage Corporation, the Federal Deposit Insurance
Corporation, or any other agency of the United States.
(4) In bonds or other direct obligations of, or
guaranteed as to principal and interest by, this State.
(5) In obligations that by the laws of this State
are made legal investments for savings banks.
(6) In bonds or other evidences of indebtedness
that are direct general obligations of any unit of local
government of this State or in bonds or other evidences
of indebtedness that are payable from revenues or
earnings specifically pledged therefor of a unit of local
government, but in no event shall the total amount of the
securities of any one maker or obligor exceed 15% of the
savings bank's total capital, nor shall the aggregate
amount of investments under this paragraph exceed 15% of
the savings bank's total assets.
(7) Equity investments in real estate. With the
prior written consent of the Commissioner, a savings bank
may invest in the initial purchase and development, or
the purchase or commitment to purchase after completion,
of home sites and housing for sale or rental, including,
but not limited to, projects for the reconstruction,
rehabilitation, or rebuilding of residential properties
to meet the minimum standards of health and occupancy
prescribed by appropriate local authorities, the
provision of accommodations for retail stores, shops, and
other community services that are reasonably incident to
that housing or in the shares of a corporation that owns
one or more of those projects and that is wholly owned by
one or more financial institutions whose investments are
regulated by the laws of this State or of the United
States. In no event shall the total investment in any
one project exceed 15% of the savings bank's total
capital, nor shall the aggregate investment under this
paragraph exceed 50% of its total capital. No savings
bank may make an investment of this type unless it is in
compliance with the capital requirements of this Act and
with the capital maintenance requirements of its insurer
of deposit accounts. The Commissioner shall approve the
investment only if the savings bank shows:
(A) that the savings bank has adequate assets
available for the investment;
(B) that the proposed investment does not
exceed the reasonable market value of the property
or interest therein as determined in accordance with
the appraisal requirements of this Act; and
(C) that all other requirements of this
Section have been met.
Nothing contained in this paragraph prohibits a
savings bank from developing or building on land acquired
by it under any other provision of this Act nor from
completing the construction of buildings in accordance
with any construction loan contract where the borrower
has failed to comply with the terms of the contract.
(8) In obligations of the State of Israel or
obligations fully guaranteed by the State of Israel as to
payment of principal and interest, but in no event shall
the total amount of that investment exceed 15% of the
savings bank's total capital.
(9) In stocks or obligations of business
development corporations chartered by this State or by
the United States or an agency thereof, but in no event
shall the aggregate amount of stock exceed 2.5% of the
savings bank's total capital or $250,000, whichever is
greater.
(10) In obligations of urban renewal investment
corporations chartered under the laws of this State, or
the United States, or in certificates of beneficial
interest of urban renewal investment trusts, but in no
event shall the aggregate amount of the stock,
obligations or beneficial interest certificates of any
one maker exceed 2.5% of the savings bank's total
capital, nor shall the aggregate amount of investments
under this paragraph exceed 15% of its total capital.
(11) Subject to the regulations of the
Commissioner, in loans deemed sufficiently secured by the
board of directors of the savings bank. However, if the
security is stock or equity securities of any kind other
than those of a financial institution, the stock or
securities must be listed on a national exchange or
actively traded and quoted on an over-the-counter market
or their value must be ascertainable in accordance with
regulations promulgated by the Commissioner.
(12) In commercial paper. As used in this Section,
the term "commercial paper" means short term obligations
having a maturity ranging from 2 to 270 days issued by
banks, corporations, or other borrowers. Investments in
commercial paper under this Section must be in securities
rated in one of the 4 highest categories by a nationally
recognized rating service.
(13) Purchase of stock in insurance companies.
Notwithstanding any provision of this Act to the
contrary, a savings bank may purchase shares of, or
otherwise acquire equity interests in, insurance
companies and insurance holding companies organized to
provide insurance for savings institutions and
corporations and individuals affiliated with savings
institutions, provided ownership of equity interests is a
prerequisite to obtaining directors and officers' and
blanket bond insurance through the company or companies.
The Commissioner may promulgate regulations concerning
the size of each savings bank's investment and manner of
holding those investments.
(14) Subject to the regulation of the Commissioner,
in equity or debt securities or instruments of a service
corporation subsidiary of the savings bank.
(15) Through advances of federal funds to
designated depositories, provided that the advances are
made on the condition that they be repaid on the next
business day following the date on which the advance is
made. For the purposes of this paragraph, the term
"federal funds" means funds that a savings bank has on
deposit at a depository that are exchangeable for funds
on deposit at a federal reserve bank; the term "business
day" means any day on which the savings bank, the
depository, and the federal reserve bank where the funds
are on deposit are all open for general business.
(16) In financial futures or options transactions
subject to the regulations of the Commissioner.
(17) In a subsidiary chartered for the purpose of
exercising all powers necessary to act as a corporate
fiduciary under the Corporate Fiduciary Act.
(18) In marketable investment securities, but in no
event shall the total amount of those securities of any
one maker or obligor exceed 15% of the savings bank's
total capital nor shall the aggregate amount of
investments under this Section exceed 15% of total
assets. As used in this Section, the term "marketable
investment securities" does not include stocks, but means
investment grade marketable obligations evidencing
indebtedness of any person in the form of bonds, notes,
or debentures commonly known as investment securities,
and of a type customarily sold on recognized exchanges or
traded over the counter and investment grade marketable
obligations of the International Bank for Reconstruction
and Development, the Inter-American Development Bank, the
Asian Development Bank, the African Development Bank, or
the International Finance Corporation. As used in this
Section, the term "investment grade" means being rated in
one of the 4 highest categories by at least one
nationally recognized rating service.
(19) In investment grade marketable obligations of
any other state, territory, or possession or political
subdivision thereof to the same extent that it may invest
in marketable investment securities under paragraph (18)
of this Section.
(Source: P.A. 88-481; 89-317, eff. 8-11-95.)
(205 ILCS 205/6013) (from Ch. 17, par. 7306-13)
Sec. 6013. Loans to one borrower.
(a) Except as provided in subsection (c), the total
loans and extensions of credit, both direct and indirect, by
a savings bank to any person, other than a municipal
corporation for money borrowed, outstanding at one time shall
not exceed 20% of the savings bank's total capital plus
general loan loss reserves.
(b) Except as provided in subsection (c), the total
loans and extensions of credit, both direct and indirect, by
a savings bank to any person outstanding at one time and at
least 100% secured by readily marketable collateral having a
market value, as determined by reliable and continuously
available price quotations, shall not exceed 10% of the
savings bank's total capital plus general loan loss reserves.
This limitation shall be separate from and in addition to the
limitation contained in subsection (a).
(c) If the limit under subsection (a) or (b) on total
loans to one borrower is less than $500,000, a savings bank
that meets its minimum capital requirement under this Act may
have loan and extensions of credit, both direct and indirect,
outstanding to any person at one time not to exceed $500,000.
With the prior written approval of the Commissioner, a
savings bank that has capital in excess of 6% of assets may
make loans and extensions of credit to one borrower for the
development of residential housing properties, located or to
be located in this State, not to exceed 30% of the savings
bank's total capital plus general loan loss reserves.
(d) For purposes of this Section, the term "person"
shall be deemed to include an individual, firm, corporation,
business trust, partnership, trust, estate, association,
joint venture, pool, syndicate, sole proprietorship,
unincorporated association, any political subdivision, or any
similar entity or organization.
(e) For the purposes of this Section any loan or
extension of credit granted to one person, the proceeds of
which are used for the direct benefit of a second person,
shall be deemed a loan or extension of credit to the second
person as well as the first person.
(f) For the purposes of this Section, the total
liabilities of a firm, partnership, pool, syndicate, or joint
venture shall include the liabilities of the members of the
entity.
(g) For the purposes of this Section, the term "readily
marketable collateral" means financial instruments or bullion
that are salable under ordinary circumstances with reasonable
promptness at a fair market value on an auction or a
similarly available daily bid-and-ask price market.
"Financial instruments" include stocks, bonds, notes,
debentures traded on a national exchange or over the counter,
commercial paper, negotiable certificates of deposit,
bankers' acceptances, and shares in money market or mutual
funds.
(h) Each savings bank shall institute adequate
procedures to ensure that collateral fully secures the
outstanding loan or extension of credit at all times.
(i) If collateral values fall below 100% of the
outstanding loan or extension of credit to the extent that
the loan or extension of credit no longer is in conformance
with subsection (b) and exceeds the 20% limitation of
subsection (a), the loan must be brought into conformance
with this Section within 5 business days except where
judicial proceedings or other similar extraordinary
occurrences prevent the savings bank from taking action.
(j) This Section shall not apply to loans or extensions
of credit to the United States of America or its agencies or
this State or its agencies or to any loan, investment, or
extension of credit made pursuant to Section 6003 of this
Act.
(Source: P.A. 89-74, eff. 6-30-95.)
Section 20. The Illinois Credit Union Act is amended by
changing Sections 1.1 and 61 and adding Section 34.1 as
follows:
(205 ILCS 305/1.1) (from Ch. 17, par. 4402)
Sec. 1.1. Definitions. Credit Union - The term "credit
union" means a cooperative, non-profit association,
incorporated under this Act, under the laws of the United
States of America or under the laws of another state, for the
purposes of encouraging thrift among its members, creating a
source of credit at a reasonable rate of interest, and
providing an opportunity for its members to use and control
their own money in order to improve their economic and social
conditions. The membership of a credit union shall consist of
a group or groups each having a common bond as set forth in
this Act.
Common Bond - The term "common bond" refers to groups of
people who meet one of the following qualifications:
(1) Persons belonging to a specific association, group
or organization, such as a church, labor union, club or
society and members of their immediate families which shall
include any relative by blood or marriage or foster and
adopted children.
(2) Persons who reside in a reasonably compact and well
defined neighborhood or community, and members of their
immediate families which shall include any relative by blood
or marriage or foster and adopted children.
(3) Persons who have a common employer or who are
members of an organized labor union or an organized
occupational or professional group within a defined
geographical area, and members of their immediate families
which shall include any relative by blood or marriage or
foster and adopted children.
Shares - The term "shares" or "share accounts" means any
form of shares issued by a credit union and established by a
member in accordance with standards specified by a credit
union, including but not limited to common shares, share
draft accounts, classes of shares, share certificates,
special purpose share accounts, shares issued in trust,
custodial accounts, and individual retirement accounts or
other plans established pursuant to Section 401(d) or (f) or
Section 408(a) of the Internal Revenue Code, as now or
hereafter amended, or similar provisions of any tax laws of
the United States that may hereafter exist.
Credit Union Organization - The term "credit union
organization" means any organization established to serve the
needs of credit unions, the business of which relates to the
daily operations of credit unions.
Department - The term "Department" means the Illinois
Department of Financial Institutions.
Director - The term "Director" means the Director of the
Illinois Department of Financial Institutions.
NCUA - The term "NCUA" means the National Credit Union
Administration, an agency of the United States Government
charged with the supervision of credit unions chartered under
the laws of the United States of America.
Central Credit Union - The term "central credit union"
means a credit union incorporated primarily to receive shares
from and make loans to credit unions and Directors, Officers,
committee members and employees of credit unions. A central
credit union may also accept as members persons who were
members of credit unions which were liquidated and persons
from occupational groups not otherwise served by another
credit union.
Corporate Credit Union - The term "corporate credit
union" means a credit union which is a cooperative,
non-profit association, the membership of which is limited
primarily to other credit unions.
Insolvent - "Insolvent" means the condition that results
when the total of all liabilities and shares exceeds net
assets of the credit union.
Danger of insolvency - The term "Danger of insolvency" as
used in Section 61 means when a credit union falls below a 2%
capital to asset ratio.
(Source: P.A. 86-432.)
(205 ILCS 305/34.1 new)
Sec. 34.1. Compliance review.
(a) As used in this Section:
"Affiliate" means an organization established to serve
the needs of credit unions, the business of which relates to
the daily operations of credit unions.
"Compliance review committee" means:
(1) one or more persons appointed by the board of
directors or supervisory committee of a credit union for
the purposes set forth in subsection (b); or
(2) any other person to the extent the person acts
in an investigatory capacity at the direction of a
compliance review committee.
"Compliance review documents" means documents prepared in
connection with a review or evaluation conducted by or for a
compliance review committee.
"Person means an individual, a group of individuals, a
board committee, a partnership, a firm, an association, a
corporation, or any other entity.
(b) This Section applies to compliance review committees
whose functions are to evaluate and seek to improve any of
the following:
(1) loan policies or underwriting standards;
(2) asset quality;
(3) financial reporting to federal or State
governmental or regulatory agencies; or
(4) compliance with federal or State statutory or
regulatory requirements.
(c) Except as provided in subsection (d), compliance
review documents and the deliberations of the compliance
review committee are privileged and confidential and are
nondiscoverable and nonadmissible.
(1) Compliance review documents are privileged and
confidential and are not subject to discovery or
admissible in evidence in any civil action.
(2) Individuals serving on compliance review
committees or acting under the direction of a compliance
review committee shall not be required to testify in any
civil action about the contents of any compliance review
document or conclusions of any compliance review
committee or about the actions taken by a compliance
review committee.
(3) An affiliate of a credit union, a credit union
regulatory agency, and the insurer of credit union share
accounts shall have access to compliance review
documents, provided that (i) the documents shall remain
confidential and are not subject to discovery from such
entity and (ii) delivery of compliance review documents
to an affiliate or pursuant to the requirements of a
credit union regulatory agency or an insurer of credit
union share accounts shall not constitute a waiver of the
privilege granted in this Section.
(d) This Section does not apply to: (1) compliance
review committees on which individuals serving on or at the
direction of the compliance review committee have management
responsibility for the operations, records, employees, or
activities being examined or evaluated by the compliance
review committee and (2) any civil or administrative action
initiated by a credit union regulatory agency or an insurer
of credit union share accounts.
(e) This Section shall not be construed to limit the
discovery or admissibility in any civil action of any
documents other than compliance review documents or to
require the appointment of a compliance review committee.
(205 ILCS 305/61) (from Ch. 17, par. 4462)
Sec. 61. Suspension.
(1) If the Director determines that any credit union is
bankrupt, insolvent, impaired or that it has willfully
violated this Act, or is operating in an unsafe or unsound
manner, he shall issue an order temporarily suspending the
credit union's operations for not more than 60 days. The
Board of Directors shall be given notice by registered or
certified mail of such suspension, which notice shall include
the reasons for such suspension and a list of specific
violations of the Act, or a list of the specific violations
of this Act, or both such reasons and list. The Director
shall also notify the members of the Credit Union Board of
Advisors of any suspension. The Director may assess to the
credit union a penalty, not to exceed the examination fee as
set forth in this Act, $50 to offset costs incurred in
determining the condition of the credit union's books and
records.
(2) Upon receipt of such suspension notice, the credit
union shall cease all operations, except those authorized by
the Director, or the Director may appoint a Manager-Trustee
to operate the credit union during the suspension period.
The Board of Directors shall, within 10 days of the receipt
of the suspension notice, file with the Director a reply to
the suspension notice, either by submitting one or more of
the following: a corrective plan of action or a request for
formal hearing on said action pursuant to the Department's
rules and regulations. or by a request that the credit union
be declared insolvent and a Liquidating Agent be appointed.
(3) Upon receipt from the suspended credit union of
evidence that the conditions causing the order of suspension
have been corrected, and after determining that the proposed
corrective plan of action submitted is factual, the Director
shall revoke the suspension notice, permit the credit union
to resume normal operations, and notify the Board of Credit
Union Advisors of such action.
(4) If the Director determines that the proposed
corrective plan of action will not correct such conditions
and that the credit union cannot be reorganized, he may take
possession and control of the credit union its office,
furniture, fixtures, books, records and other assets and upon
examination, determine whether it is practicable and feasible
to reorganize the credit union to continue its business. The
Director may permit the credit union to operate under his
direction and control, and may appoint a Manager-Trustee to
manage its affairs until such time as the condition requiring
such action has been remedied, or in the case of insolvency
or danger of insolvency where an emergency requiring
expeditious action exists, the Director may involuntarily
merge the credit union without the vote of the suspended
credit union's Board of Directors or members (hereafter
involuntary merger) subject to rules promulgated by the
Director. No credit union shall be required to serve as a
surviving credit union in any involuntary merger. Upon the
request of the Director, a credit union by a vote of a
majority of its Board of Directors may elect to serve as a
surviving credit union in an involuntary merger. If the
Director he determines that the suspended credit union should
be liquidated, he may appoint a Liquidating Agent and require
of that person such bond and security as he considers proper.
(5) Upon receipt of a request for a formal hearing, the
Director shall conduct proceedings pursuant to rules and
regulations of the Department and take necessary action
subsequent to the hearing officer's decision; whether it be
revocation of the suspension notice, issuance of an
involuntary liquidation or appointment of a Manager-Trustee..
The credit union may request the appropriate court to stay
execution of such action. Involuntary liquidation or
involuntary merger may not be ordered prior to the conclusion
of suspension procedures outlined in this Section.
(6) If, within the suspension period, the credit union
fails to answer the suspension notice or fails to request a
formal hearing, or both, the Director may then (i)
involuntarily merge the credit union if the credit union is
insolvent or in danger of insolvency and an emergency
requiring expeditious action exists or (ii) revoke the credit
union's charter, appoint a Liquidating Agent and liquidate
the credit union.
(Source: P.A. 86-432.)
Section 25. The Electronic Fund Transfer Act is amended
by adding Section 85 as follows:
(205 ILCS 616/85 new)
Sec. 85. Reliance on Commissioner. No person shall be
liable under this Act for any act done or omitted in good
faith in conformity with any rule, interpretation, or opinion
issued by the Commissioner of Banks and Real Estate,
notwithstanding that after the act or omission has occurred,
the rule, interpretation, or opinion upon which reliance is
placed is amended, rescinded, or determined by judicial or
other authority to be invalid for any reason.
Section 30. The Corporate Fiduciary Act is amended by
changing Sections 1-7, 4-4, and 5-6 as follows:
(205 ILCS 620/1-7) (from Ch. 17, par. 1551-7)
Sec. 1-7. Office locations corporate fiduciaries.
(a) Any corporate fiduciary may establish branch offices
at any location. Any corporate fiduciary that seeks to
establish a branch office shall, if it is a trust company,
apply for and obtain approval for the branch office from the
Commissioner or, if it is a bank, savings and loan
association, or savings bank, give notice of its intent to
establish a branch office to the Commissioner, 30 days prior
to the purchasing or leasing of land, building, or equipment
for the branch office under the terms and conditions as the
Commissioner shall specify by rule.
(b) Any trust company that proposes to establish a
subsidiary, whether by incorporating the subsidiary or by
acquiring the subsidiary, shall apply for and obtain prior
approval from the Commissioner 60 days prior to commencing
business by the subsidiary, if newly incorporated, or prior
to its acquisition, if it is acquired, provided the
Commissioner may specify circumstances and conditions when a
trust company may directly or indirectly acquire a subsidiary
without prior approval.
(Source: P.A. 86-754; 87-506.)
(205 ILCS 620/4-4) (from Ch. 17, par. 1554-4)
Sec. 4-4. Place of business not to be established in
State; not deemed transacting business.
(a) A foreign corporation, as defined in Section 1-5.08
of this Act, shall not establish in this State a place of
business, branch office, or agency for the conduct of
business as a fiduciary and because it is not permitted to
establish in this State a place of business, branch office or
agency, a foreign corporation insofar as it acts in a
fiduciary capacity in this State pursuant to the provisions
of this Act shall not be deemed to be transacting business in
this State. The foreign corporation may apply for, and
procure from the Commissioner, a license to establish a
representative office pursuant to the Foreign Bank
Representative Office Act.
(b) Notwithstanding subsection (a) of this Section 4-4,
after May 31, 1997, a branch of an out-of-state bank, as
defined in Section 2 of the Illinois Banking Act, may
establish an office in this State for the conduct of business
as a fiduciary, provided:; (i) the branch of the out-of-state
bank obtains a certificate of authority pursuant to this
Section; (ii) fiduciary business conducted in this State by a
branch of an out-of-state bank is subject to examination by
the Commissioner; and (ii) (iii) the trust activities of the
branch of the out-of-state bank are subject to regulation,
including enforcement actions, by the Commissioner to the
same extent as Illinois corporate fiduciaries.
(c) The application for a certificate of authority
pursuant to this Section shall be filed with the Commissioner
on forms prescribed by the Commissioner and shall contain
such relevant information as the Commissioner may specify to
determine that the fiduciary business will be conducted by
the branch of the out-of-state bank in a safe and sound
manner.
(Source: P.A. 89-208, eff. 9-29-95; 89-364, eff. 8-18-95;
89-626, eff. 8-9-96.)
(205 ILCS 620/5-6) (from Ch. 17, par. 1555-6)
Sec. 5-6. Removal orders. Whenever, in the opinion of
the Commissioner, any director, officer, employee, or agent
of a corporate fiduciary shall have violated any law, rule,
or order relating to the corporate fiduciary, or shall have
engaged in an unsafe or unsound practice in conducting the
business of the corporate fiduciary, or shall have violated
any law or engaged or participated in any unsafe or unsound
practice in connection with any financial institution or
other business entity such that the character and fitness of
the director, officer, employee, or agent does not assure
reasonable promise of safe and sound operation of the
corporate fiduciary, the Commissioner may issue an order of
removal. If in the opinion of the Commissioner, any former
director, officer, employee, or agent of a corporate
fiduciary, prior to the termination of his or her service
with the corporate fiduciary, violated any law, rule, or
order relating to the corporate fiduciary or engaged in an
unsafe or unsound practice in conducting the business of the
corporate fiduciary or violated any law or engaged or
participated in any unsafe or unsound practice in connection
with any financial institution or other business entity such
that the character and fitness of the director, officer,
employee, or agent would not have assured reasonable promise
of safe and sound operation of the corporate fiduciary prior
to the termination of his or her service with the corporate
fiduciary, the Commissioner may issue an order prohibiting
that person from further service with a corporate fiduciary
as a director, officer, employee, or agent. An order issued
pursuant to this Section shall be served upon the director,
officer, employee, or agent. A copy of the order shall be
sent to each director of the corporate fiduciary affected by
personal service, certified mail return receipt requested, or
any other method that provides proof of service and receipt.
The person affected by the action may request a hearing
before the State Banking Board of Illinois, hereafter "the
Board", within 10 days after receipt of the order of removal
or prohibition. The hearing shall be held by the Board
according to the same procedures used pursuant to Section 48
of the Illinois Banking Act, and the hearing shall be held
within 30 days after the request has been received by the
Board. After concluding the hearing, the Board shall make a
determination approving, modifying, or disapproving the order
of the Commissioner as its final administrative decision. A
copy of the order shall be served upon the corporate
fiduciary of which the person is a director, officer,
employee, or agent, whereupon the person shall cease to be a
director, officer, employee, or agent of the corporate
fiduciary. Any person who has been removed or prohibited by
an order of the Commissioner under this Section or subsection
(7) of Section 48 of the Illinois Banking Act may not
thereafter serve as director, officer, employee, or agent of
any State bank or corporate fiduciary, or of any other entity
that is subject to licensure or regulation by the
Commissioner or the Office of Banks and Real Estate unless
the Commissioner has granted prior approval in writing. The
Commissioner may institute a civil action against the
director, officer, employee, or agent subject to an order
issued under this Section and against the corporate fiduciary
to enforce compliance with or to enjoin any violation of the
terms of the order.
(Source: P.A. 90-301, eff. 8-1-97.)
Section 35. The Consumer Installment Loan Act is amended
by changing Section 19.1 as follows:
(205 ILCS 670/19.1) (from Ch. 17, par. 5425.1)
Sec. 19.1. Where the licensee repossesses a motor vehicle
that was used as collateral and which is used primarily for
the obligor's personal, family or household purposes, the
licensee shall be subject to the requirements of and shall
transfer the certificate of title pursuant to Section 3-114
of the Illinois Vehicle Code and the obligor at the time of
repossession has paid an amount equal to 30% or more of the
total of payments due, the obligor may, within 15 days,
reinstate the contract and recover the motor vehicle from the
licensee by tendering:
(a) the total of all unpaid amounts, including any
unpaid delinquency or deferral charges due, without
acceleration; and
(b) performance necessary to cure any default other than
nonpayment of the amounts due; and
(c) any reasonable cost or fees incurred by the licensee
in the retaking of the goods. Tender of payment and
performance pursuant to this Section restores to the obligor
his rights under the loan as though no default had occurred.
The obligor has a right to reinstate the contract and recover
the collateral from the licensee only once under this
Section.
The licensee must give written notice to the obligor,
within 3 days of the repossession, of the obligor's right to
reinstate the contract and recover the collateral pursuant to
this Section. The Written notice shall be in substantially
the following form:
NOTICE OF RIGHT TO RECOVER VEHICLE
Your car was repossessed on (specify date) for failure to
make payments on the loan (or other reason).
Under Illinois law, because you have paid at least 30% of
the loan before repossession, you may be able to get the car
back. To recover the car and reinstate the loan you must do
the following within 15 days of the date of repossession:
1. Make payment of all back payments as
of the date of this notice
. $...........
2. Pay any late charge due. $...........
3. Pay the costs of repossession. $...........
Total due as of the date of this
notice
plus any additional amounts which may become
due
between the date of the notice and the date of
reinstatement. $...........
Bring cash, a certified check or money order for the
total amount plus any amounts which may become due between
the date of the notice and the date of reinstatement to our
office located at (specify address) by (specify date) to get
your car back.
(Source: P.A. 90-437, eff. 1-1-98.)
Section 45. The Illinois Vehicle Code is amended by
changing Sections 3-114 and 3-117.1 as follows:
(625 ILCS 5/3-114) (from Ch. 95 1/2, par. 3-114)
Sec. 3-114. Transfer by operation of law.
(a) If the interest of an owner in a vehicle passes to
another other than by voluntary transfer, the transferee
shall, except as provided in paragraph (b), promptly mail or
deliver within 20 days to the Secretary of State the last
certificate of title, if available, proof of the transfer,
and his application for a new certificate in the form the
Secretary of State prescribes. It shall be unlawful for any
person having possession of a certificate of title for a
motor vehicle, semi-trailer, or house car by reason of his
having a lien or encumbrance on such vehicle, to fail or
refuse to deliver such certificate to the owner, upon the
satisfaction or discharge of the lien or encumbrance,
indicated upon such certificate of title.
(b) If the interest of an owner in a vehicle passes to
another under the provisions of the Small Estates provisions
of the Probate Act of 1975 the transferee shall promptly mail
or deliver to the Secretary of State, within 120 days, the
last certificate of title, if available, the documentation
required under the provisions of the Probate Act of 1975, and
an application for certificate of title. The Small Estate
Affidavit form shall be furnished by the Secretary of State.
The transfer may be to the transferee or to the nominee of
the transferee.
(c) If the interest of an owner in a vehicle passes to
another under other provisions of the Probate Act of 1975, as
amended, and the transfer is made by a representative or
guardian, such transferee shall promptly mail or deliver to
the Secretary of State, the last certificate of title, if
available, and a certified copy of the letters of office or
guardianship, and an application for certificate of title.
Such application shall be made before the estate is closed.
The transfer may be to the transferee or to the nominee of
the transferee.
(d) If the interest of an owner in joint tenancy passes
to the other joint tenant with survivorship rights as
provided by law, the transferee shall promptly mail or
deliver to the Secretary of State, the last certificate of
title, if available, proof of death of the one joint tenant
and survivorship of the surviving joint tenant, and an
application for certificate of title. Such application shall
be made within 120 days after the death of the joint tenant.
The transfer may be to the transferee or to the nominee of
the transferee.
(e) The Secretary of State shall transfer a decedent's
vehicle title to any legatee, representative or heir of the
decedent who submits to the Secretary a death certificate and
an affidavit by an attorney at law on the letterhead
stationery of the attorney at law stating the facts of the
transfer.
(f) Repossession with assignment of title. In all cases
wherein a lienholder has repossessed a vehicle by other than
judicial process and holds it for resale under a security
agreement, and the owner of record has executed an assignment
of the existing certificate of title after default, the
lienholder may proceed to sell or otherwise dispose of the
vehicle as authorized under the Uniform Commercial Code.
Upon selling the vehicle to another person, the lienholder
need not send the certificate of title to the Secretary of
State, but shall promptly and within 20 days mail or deliver
to the purchaser as transferee the existing certificate of
title for the repossessed vehicle, reflecting the release of
the lienholder's security interest in the vehicle. The
application for a certificate of title made by the purchaser
shall comply with subsection (a) of Section 3-104 and be
accompanied by the existing certificate of title for the
repossessed vehicle. The lienholder shall execute the
assignment and warranty of title showing the name and address
of the purchaser in the spaces provided therefor on the
certificate of title or as the Secretary of State prescribes.
The lienholder shall complete the assignment of title in the
certificate of title to reflect the transfer of the vehicle
to the lienholder and also a reassignment to reflect the
transfer from the lienholder to the purchaser. For this
purpose, the lienholder is specifically authorized to
complete and execute the space reserved in the certificate of
title for a dealer reassignment, notwithstanding that the
lienholder is not a licensed dealer. Nothing herein shall be
construed to mean that the lienholder is taking title to the
repossessed vehicle for purposes of liability for retailer
occupation, vehicle use, or other tax with respect to the
proceeds from the repossession sale. Delivery of the
existing certificate of title to the purchaser shall be
deemed disclosure to the purchaser of the owner of the
vehicle.
(f-5) Repossession without assignment of title. In all
cases wherein a lienholder has repossessed a vehicle by other
than judicial process and holds it for resale under a
security agreement, and the owner of record has not executed
an assignment of the existing certificate of title, the
lienholder shall comply with the following provisions:
(1) Prior to sale, the lienholder shall deliver or
mail to the owner at the owner's last known address and
to any other lienholder of record, a notice of redemption
setting forth the following information: (i) the name of
the owner of record and in bold type at or near the top
of the notice a statement that the owner's vehicle was
repossessed on a specified date for failure to make
payments on the loan (or other reason), (ii) a
description of the vehicle subject to the lien sufficient
to identify it, (iii) the right of the owner to redeem
the vehicle, (iv) the lienholder's intent to sell or
otherwise dispose of the vehicle after the expiration of
21 days from the date of mailing or delivery of the
notice, and (v) the name, address, and telephone number
of the lienholder from whom information may be obtained
concerning the amount due to redeem the vehicle and from
whom the vehicle may be redeemed under Section 9-506 of
the Uniform Commercial Code. At the lienholder's option,
the information required to be set forth in this notice
of redemption may be made a part of or accompany the
notification of sale or other disposition required under
subsection (3) of Section 9-504 of the Uniform Commercial
Code, but none of the information required by this notice
shall be construed to impose any requirement under
Article 9 of the Uniform Commercial Code.
(2) With respect to the repossession of a vehicle
used primarily for personal, family, or household
purposes, the lienholder shall also deliver or mail to
the owner at the owner's last known address an affidavit
of defense. The affidavit of defense shall accompany the
notice of redemption required in subdivision (f-5)(1) of
this Section. The affidavit of defense shall (i) identify
the lienholder, owner, and the vehicle; (ii) provide
space for the owner to state the defense claimed by the
owner; and (iii) include an acknowledgment by the owner
that the owner may be liable to the lienholder for fees,
charges, and costs incurred by the lienholder in
establishing the insufficiency or invalidity of the
owner's defense. To stop the transfer of title, the
affidavit of defense must be received by the lienholder
no later than 21 days after the date of mailing or
delivery of the notice required in subdivision (f-5)(1)
of this Section. If the lienholder receives the affidavit
from the owner in a timely manner, the lienholder must
apply to a court of competent jurisdiction to determine
if the lienholder is entitled to possession of the
vehicle.
(3) Upon selling the vehicle to another person, the
lienholder need not send the certificate of title to the
Secretary of State, but shall promptly and within 20 days
mail or deliver to the purchaser as transferee (i) the
existing certificate of title for the repossessed
vehicle, reflecting the release of the lienholder's
security interest in the vehicle; and (ii) an affidavit
of repossession made by or on behalf of the lienholder
which provides the following information: that the
vehicle was repossessed, a description of the vehicle
sufficient to identify it, whether the vehicle has been
damaged in excess of 33 1/3% of its fair market value as
required under subdivision (b)(3) of Section 3-117.1,
that the owner and any other lienholder of record were
given the notice required in subdivision (f-5)(1) of this
Section, that the owner of record was given the affidavit
of defense required in subdivision (f-5)(2) of this
Section, that the interest of the owner was lawfully
terminated or sold pursuant to the terms of the security
agreement, and the purchaser's name and address. If the
vehicle is damaged in excess of 33 1/3% of its fair
market value, the lienholder shall make application for a
salvage certificate under Section 3-117.1 and transfer
the vehicle to a person eligible to receive assignments
of salvage certificates identified in Section 3-118.
(4) The application for a certificate of title made
by the purchaser shall comply with subsection (a) of
Section 3-104 and be accompanied by the affidavit of
repossession furnished by the lienholder and the existing
certificate of title for the repossessed vehicle. The
lienholder shall execute the assignment and warranty of
title showing the name and address of the purchaser in
the spaces provided therefor on the certificate of title
or as the Secretary of State prescribes. The lienholder
shall complete the assignment of title in the certificate
of title to reflect the transfer of the vehicle to the
lienholder and also a reassignment to reflect the
transfer from the lienholder to the purchaser. For this
purpose, the lienholder is specifically authorized to
execute the assignment on behalf of the owner as seller
if the owner has not done so and to complete and execute
the space reserved in the certificate of title for a
dealer reassignment, notwithstanding that the lienholder
is not a licensed dealer. Nothing herein shall be
construed to mean that the lienholder is taking title to
the repossessed vehicle for purposes of liability for
retailer occupation, vehicle use, or other tax with
respect to the proceeds from the repossession sale.
Delivery of the existing certificate of title to the
purchaser shall be deemed disclosure to the purchaser of
the owner of the vehicle. In the event the lienholder
does not hold the certificate of title for the
repossessed vehicle, the lienholder shall make
application for and may obtain a new certificate of title
in the name of the lienholder upon furnishing information
satisfactory to the Secretary of State. Upon receiving
the new certificate of title, the lienholder may proceed
with the sale described in subdivision (f-5)(3), except
that upon selling the vehicle the lienholder shall
promptly and within 20 days mail or deliver to the
purchaser the new certificate of title reflecting the
assignment and transfer of title to the purchaser.
(5) Neither the lienholder nor the owner shall file
with the Office of the Secretary of State the notice of
redemption or affidavit of defense described in
subdivisions (f-5)(1) and (f-5)(2) of this Section. The
Office of the Secretary of State shall not determine the
merits of an owner's affidavit of defense, nor consider
any allegations or assertions regarding the validity or
invalidity of a lienholder's claim to the vehicle or an
owner's asserted defenses to the repossession action.
(f-7) Notice of reinstatement in certain cases.
(1) If, at the time of repossession by a lienholder
that is seeking to transfer title pursuant to subsection
(f-5), the owner has paid an amount equal to 30% or more
of the deferred payment price or total of payments due,
the owner may, within 21 days of the date of
repossession, reinstate the contract or loan agreement
and recover the vehicle from the lienholder by tendering
in a lump sum (i) the total of all unpaid amounts,
including any unpaid delinquency or deferral charges due
at the date of reinstatement, without acceleration; and
(ii) performance necessary to cure any default other than
nonpayment of the amounts due; and (iii) all reasonable
costs and fees incurred by the lienholder in retaking,
holding, and preparing the vehicle for disposition and in
arranging for the sale of the vehicle. Reasonable costs
and fees incurred by the lienholder include without
limitation repossession and storage expenses and, if
authorized by the contract or loan agreement, reasonable
attorneys' fees and collection agency charges.
(2) Tender of payment and performance pursuant to
this limited right of reinstatement restores to the owner
his rights under the contract or loan agreement as though
no default had occurred. The owner has the right to
reinstate the contract or loan agreement and recover the
vehicle from the lienholder only once under this
subsection. The lienholder may, in the lienholder's sole
discretion, extend the period during which the owner may
reinstate the contract or loan agreement and recover the
vehicle beyond the 21 days allowed under this subsection,
and the extension shall not subject the lienholder to
liability to the owner under the laws of this State.
(3) The lienholder shall deliver or mail written
notice to the owner at the owner's last known address,
within 3 business days of the date of repossession, of
the owner's right to reinstate the contract or loan
agreement and recover the vehicle pursuant to the limited
right of reinstatement described in this subsection. At
the lienholder's option, the information required to be
set forth in this notice of reinstatement may be made
part of or accompany the notice of redemption required in
subdivision (f-5)(1) of this Section and the notification
of sale or other disposition required under subsection
(3) of Section 9-504 of the Uniform Commercial Code, but
none of the information required by this notice of
reinstatement shall be construed to impose any
requirement under Article 9 of the Uniform Commercial
Code.
(4) The reinstatement period, if applicable, and
the redemption period described in subdivision (f-5)(1)
of this Section, shall run concurrently if the
information required to be set forth in the notice of
reinstatement is part of or accompanies the notice of
redemption. In any event, the 21 day redemption period
described in subdivision (f-5)(1) of this Section shall
commence on the date of mailing or delivery to the owner
of the information required to be set forth in the notice
of redemption, and the 21 day reinstatement period
described in this subdivision, if applicable, shall
commence on the date of mailing or delivery to the owner
of the information required to be set forth in the notice
of reinstatement.
(5) The Office of the Secretary of State shall not
determine the merits of an owner's claim of right to
reinstatement, nor consider any allegations or assertions
regarding the validity or invalidity of a lienholder's
claim to the vehicle or an owner's asserted right to
reinstatement. Where a lienholder is subject to
licensing and regulatory supervision by the State of
Illinois, the lienholder shall be subject to all of the
powers and authority of the lienholder's primary State
regulator to enforce compliance with the procedures set
forth in this subsection (f-7).
(f-10) Repossession by judicial process. In all cases
wherein a lienholder has repossessed a vehicle by judicial
process and holds it for resale under a security agreement,
order for replevin, or other court order establishing the
lienholder's right to possession of the vehicle, the
lienholder may proceed to sell or otherwise dispose of the
vehicle as authorized under the Uniform Commercial Code or
the court order. Upon selling the vehicle to another person,
the lienholder need not send the certificate of title to the
Secretary of State, but shall promptly and within 20 days
mail or deliver to the purchaser as transferee (i) the
existing certificate of title for the repossessed vehicle
reflecting the release of the lienholder's security interest
in the vehicle; (ii) a certified copy of the court order; and
(iii) a bill of sale identifying the new owner's name and
address and the year, make, model, and vehicle identification
number of the vehicle. The application for a certificate of
title made by the purchaser shall comply with subsection (a)
of Section 3-104 and be accompanied by the certified copy of
the court order furnished by the lienholder and the existing
certificate of title for the repossessed vehicle. The
lienholder shall execute the assignment and warranty of title
showing the name and address of the purchaser in the spaces
provided therefor on the certificate of title or as the
Secretary of State prescribes. The lienholder shall complete
the assignment of title in the certificate of title to
reflect the transfer of the vehicle to the lienholder and
also a reassignment to reflect the transfer from the
lienholder to the purchaser. For this purpose, the
lienholder is specifically authorized to execute the
assignment on behalf of the owner as seller if the owner has
not done so and to complete and execute the space reserved in
the certificate of title for a dealer reassignment,
notwithstanding that the lienholder is not a licensed dealer.
Nothing herein shall be construed to mean that the lienholder
is taking title to the repossessed vehicle for purposes of
liability for retailer occupation, vehicle use, or other tax
with respect to the proceeds from the repossession sale.
Delivery of the existing certificate of title to the
purchaser shall be deemed disclosure to the purchaser of the
owner of the vehicle. In the event the lienholder does not
hold the certificate of title for the repossessed vehicle,
the lienholder shall make application for and may obtain a
new certificate of title in the name of the lienholder upon
furnishing information satisfactory to the Secretary of
State. Upon receiving the new certificate of title, the
lienholder may proceed with the sale described in this
subsection, except that upon selling the vehicle the
lienholder shall promptly and within 20 days mail or deliver
to the purchaser the new certificate of title reflecting the
assignment and transfer of title to the purchaser.
(f-15) The Secretary of State shall not issue a
certificate of title to a purchaser under subsection (f),
(f-5), or (f-10) of this Section, unless the person from whom
the vehicle has been repossessed by the lienholder is shown
to be the last registered owner of the motor vehicle. The
Secretary of State may provide by rule for the standards to
be followed by a lienholder in assigning and transferring
certificates of title with respect to repossessed vehicles.
(f-20) If applying for a salvage certificate or a
junking certificate, after the original 21 day notice to the
debtor has been fulfilled, the lienholder shall within 20
days make an application to the Secretary of State for a
certificate of title, a salvage certificate or a junking
certificate, as set forth in this Code. In all cases,
however, The Secretary of State shall not issue a certificate
of title, a salvage certificate or a junking certificate to
such lienholder unless the person from whom such vehicle has
been repossessed is shown to be the last registered owner of
such motor vehicle and such lienholder establishes to the
satisfaction of the Secretary of State that he is entitled to
such certificate of title, salvage certificate or junking
certificate. The Secretary of State may shall provide by rule
for the standards to be followed by a lienholder in order to
obtain a salvage certificate or junking certificate of title
for a repossessed vehicle.
(g) A person holding a certificate of title whose
interest in the vehicle has been extinguished or transferred
other than by voluntary transfer shall mail or deliver the
certificate, within 20 days upon request of the Secretary of
State. The delivery of the certificate pursuant to the
request of the Secretary of State does not affect the rights
of the person surrendering the certificate, and the action of
the Secretary of State in issuing a new certificate of title
as provided herein is not conclusive upon the rights of an
owner or lienholder named in the old certificate.
(h) The Secretary of State may decline to process any
application for a transfer of an interest in a vehicle
hereunder if any fees or taxes due under this Act from the
transferor or the transferee have not been paid upon
reasonable notice and demand.
(i) The Secretary of State shall not be held civilly or
criminally liable to any person because any purported
transferor may not have had the power or authority to make a
transfer of any interest in any vehicle or because a
certificate of title issued in error is subsequently used to
commit a fraudulent act.
(Source: P.A. 90-212, eff. 1-1-98.)
(625 ILCS 5/3-117.1) (from Ch. 95 1/2, par. 3-117.1)
Sec. 3-117.1. When junking certificates or salvage
certificates must be obtained.
(a) Except as provided in Chapter 4 of this Code, a
person who possesses a junk vehicle shall within 15 days
cause the certificate of title, salvage certificate,
certificate of purchase, or a similarly acceptable out of
state document of ownership to be surrendered to the
Secretary of State along with an application for a junking
certificate, except as provided in Section 3-117.2, whereupon
the Secretary of State shall issue to such a person a junking
certificate, which shall authorize the holder thereof to
possess, transport, or, by an endorsement, transfer ownership
in such junked vehicle, and a certificate of title shall not
again be issued for such vehicle.
A licensee who possesses a junk vehicle and a Certificate
of Title, Salvage Certificate, Certificate of Purchase, or a
similarly acceptable out-of-state document of ownership for
such junk vehicle, may transport the junk vehicle to another
licensee prior to applying for or obtaining a junking
certificate, by executing a uniform invoice. The licensee
transferor shall furnish a copy of the uniform invoice to the
licensee transferee at the time of transfer. In any case,
the licensee transferor shall apply for a junking certificate
in conformance with Section 3-117.1 of this Chapter. The
following information shall be contained on a uniform
invoice:
(1) The business name, address and dealer license
number of the person disposing of the vehicle, junk
vehicle or vehicle cowl;
(2) The name and address of the person acquiring
the vehicle, junk vehicle or vehicle cowl, and if that
person is a dealer, the Illinois or out-of-state dealer
license number of that dealer;
(3) The date of the disposition of the vehicle,
junk vehicle or vehicle cowl;
(4) The year, make, model, color and description of
each vehicle, junk vehicle or vehicle cowl disposed of by
such person;
(5) The manufacturer's vehicle identification
number, Secretary of State identification number or
Illinois Department of State Police number, for each
vehicle, junk vehicle or vehicle cowl part disposed of by
such person;
(6) The printed name and legible signature of the
person or agent disposing of the vehicle, junk vehicle or
vehicle cowl; and
(7) The printed name and legible signature of the
person accepting delivery of the vehicle, junk vehicle or
vehicle cowl.
The Secretary of State may certify a junking manifest in
a form prescribed by the Secretary of State that reflects
those vehicles for which junking certificates have been
applied or issued. A junking manifest may be issued to any
person and it shall constitute evidence of ownership for the
vehicle listed upon it. A junking manifest may be
transferred only to a person licensed under Section 5-301 of
this Code as a scrap processor. A junking manifest will
allow the transportation of those vehicles to a scrap
processor prior to receiving the junk certificate from the
Secretary of State.
(b) An application for a salvage certificate shall be
submitted to the Secretary of State in any of the following
situations:
(1) When an insurance company makes a payment of
damages on a total loss claim for a vehicle, the
insurance company shall be deemed to be the owner of such
vehicle and the vehicle shall be considered to be salvage
except that ownership of a vehicle 9 model years of age
or older may, by agreement between the registered owner
and the insurance company, be retained by the registered
owner of such vehicle. The insurance company shall
promptly deliver or mail within 20 days the certificate
of title along with proper application and fee to the
Secretary of State, and a salvage certificate shall be
issued in the name of the insurance company. An insurer
making payment of damages on a total loss claim for the
theft of a vehicle may exchange the salvage certificate
for a certificate of title if the vehicle is recovered
without damage. In such a situation, the insurer shall
fill out and sign a form prescribed by the Secretary of
State which contains an affirmation under penalty of
perjury that the vehicle was recovered without damage and
the Secretary of State may, by rule or regulation,
require photographs to be submitted.
(2) When a vehicle the ownership of which has been
transferred to any person through a certificate of
purchase from acquisition of the vehicle at an auction,
other dispositions as set forth in Sections 4-208 and
4-209 of this Code, a lien arising under Section 18a-501
of this Code, or a public sale under the Abandoned Mobile
Home Act shall be deemed salvage or junk at the option of
the purchaser. The person acquiring such vehicle in such
manner shall promptly deliver or mail, within 20 days
after the acquisition of the vehicle, the certificate of
purchase, the proper application and fee, and, if the
vehicle is an abandoned mobile home under the Abandoned
Mobile Home Act, a certification from a local law
enforcement agency that the vehicle was purchased or
acquired at a public sale under the Abandoned Mobile Home
Act to the Secretary of State and a salvage certificate
or junking certificate shall be issued in the name of
that person. The salvage certificate or junking
certificate issued by the Secretary of State under this
Section shall be free of any lien that existed against
the vehicle prior to the time the vehicle was acquired by
the applicant under this Code.
(3) A vehicle which has been repossessed by a
lienholder shall be considered to be salvage only when
the repossessed vehicle, on the date of repossession by
the lienholder, has sustained damage by collision, fire,
theft, rust corrosion, or other means so that the cost of
repairing such damage, including labor, would be greater
than 33 1/3% of its fair market value without such
damage. If the lienholder determines that such vehicle
is damaged in excess of 33 1/3% of such fair market
value, the lienholder shall, before sale, transfer or
assignment of the vehicle, make application for a salvage
certificate, and shall submit with such application the
proper fee and evidence of possession. If the facts
required to be shown in subsection (f) of Section 3-114
are satisfied, the Secretary of State shall issue a
salvage certificate in the name of the lienholder making
the application. In any case wherein the vehicle
repossessed is not damaged in excess of 33 1/3% of its
fair market value, the lienholder shall comply with the
requirements of subsections (f), (f-5), and (f-10) of
Section 3-114, except that the affidavit of repossession
made by or on behalf of the lienholder, after the
original 21 day notice to the debtor has been fulfilled,
shall within 15 days make an application to the Secretary
of State for a certificate of title, submitting with such
application evidence of possession. The application
shall also contain an affirmation under penalty of
perjury that the vehicle on the date of sale such
application for certificate of title is not damaged in
excess of 33 1/3% of its fair market value. If the facts
required to be shown in subsection (f) of Section 3-114
are satisfied, the Secretary of State shall issue a
certificate of title as set forth in Section 3-116 of
this Code. The Secretary of State may by rule or
regulation require photographs to be submitted.
(4) A vehicle which is a part of a fleet of more
than 5 commercial vehicles registered in this State or
any other state or registered proportionately among
several states shall be considered to be salvage when
such vehicle has sustained damage by collision, fire,
theft, rust, corrosion or similar means so that the cost
of repairing such damage, including labor, would be
greater than 33 1/3% of the fair market value of the
vehicle without such damage. If the owner of a fleet
vehicle desires to sell, transfer, or assign his interest
in such vehicle to a person within this State other than
an insurance company licensed to do business within this
State, and the owner determines that such vehicle, at the
time of the proposed sale, transfer or assignment is
damaged in excess of 33 1/3% of its fair market value,
the owner shall, before such sale, transfer or
assignment, make application for a salvage certificate.
The application shall contain with it evidence of
possession of the vehicle. If the fleet vehicle at the
time of its sale, transfer, or assignment is not damaged
in excess of 33 1/3% of its fair market value, the owner
shall so state in a written affirmation on a form
prescribed by the Secretary of State by rule or
regulation. The Secretary of State may by rule or
regulation require photographs to be submitted. Upon
sale, transfer or assignment of the fleet vehicle the
owner shall mail the affirmation to the Secretary of
State.
(5) A vehicle that has been submerged in water to
the point that rising water has reached over the door
sill and has entered the passenger or trunk compartment
is a "flood vehicle". A flood vehicle shall be
considered to be salvage only if the vehicle has
sustained damage so that the cost of repairing the
damage, including labor, would be greater than 33 1/3% of
the fair market value of the vehicle without that damage.
The salvage certificate issued under this Section shall
indicate the word "flood", and the word "flood" shall be
conspicuously entered on subsequent titles for the
vehicle. A person who possesses or acquires a flood
vehicle that is not damaged in excess of 33 1/3% of its
fair market value shall make application for title in
accordance with Section 3-116 of this Code, designating
the vehicle as "flood" in a manner prescribed by the
Secretary of State. The certificate of title issued
shall indicate the word "flood", and the word "flood"
shall be conspicuously entered on subsequent titles for
the vehicle.
(c) Any person who without authority acquires, sells,
exchanges, gives away, transfers or destroys or offers to
acquire, sell, exchange, give away, transfer or destroy the
certificate of title to any vehicle which is a junk or
salvage vehicle shall be guilty of a Class 3 felony.
(d) Any person who knowingly fails to surrender to the
Secretary of State a certificate of title, salvage
certificate, certificate of purchase or a similarly
acceptable out-of-state document of ownership as required
under the provisions of this Section is guilty of a Class A
misdemeanor for a first offense and a Class 4 felony for a
subsequent offense; except that a person licensed under this
Code who violates paragraph (5) of subsection (b) of this
Section is guilty of a business offense and shall be fined
not less than $1,000 nor more than $5,000 for a first offense
and is guilty of a Class 4 felony for a second or subsequent
violation.
(e) Any vehicle which is salvage or junk may not be
driven or operated on roads and highways within this State.
A violation of this subsection is a Class A misdemeanor. A
salvage vehicle displaying valid special plates issued under
Section 3-601(b) of this Code, which is being driven to or
from an inspection conducted under Section 3-308 of this
Code, is exempt from the provisions of this subsection. A
salvage vehicle for which a short term permit has been issued
under Section 3-307 of this Code is exempt from the
provisions of this subsection for the duration of the permit.
(Source: P.A. 88-516; 88-685, eff. 1-24-95; 89-669, eff.
1-1-97.)
(625 ILCS 5/3-104.1 rep.)
Section 50. The Illinois Vehicle Code is amended by
repealing Section 3-104.1.
Section 55. The Fiduciary Obligations Act is amended by
changing Section 9 as follows:
(760 ILCS 65/9) (from Ch. 17, par. 2009)
Sec. 9. Notwithstanding any other law, if a fiduciary
makes a deposit in a bank to his personal credit of checks
drawn by him upon an account in his own name as fiduciary, or
of checks payable to him as fiduciary, or of checks drawn by
him upon an account in the name of his principal if he is
empowered to draw checks thereon, or of checks payable to his
principal and indorsed by him, if he is empowered to indorse
such checks, or if he otherwise makes a deposit of funds held
by him as fiduciary, the bank receiving such deposit is not
bound to inquire whether the fiduciary is committing thereby
a breach of his obligation as fiduciary; and the bank is
authorized to pay the amount of the deposit or any part
thereof upon the personal check of the fiduciary without
being liable to the principal, unless the bank receives the
deposit or pays the check with actual knowledge that the
fiduciary is committing a breach of his obligation as
fiduciary in making such deposit or in drawing such check, or
with knowledge of such facts that its action in receiving the
deposit or paying the check amounts to bad faith.
(Source: Laws 1931, p. 676.)
Section 60. The Uniform Commercial Code is amended by
changing Sections 9-105, 9-106, and 9-302 as follows:
(810 ILCS 5/9-105) (from Ch. 26, par. 9-105)
Sec. 9-105. Definitions and index of definitions.
(1) In this Article unless the context otherwise
requires:
(a) "Account debtor" means the person who is
obligated on an account, chattel paper or general
intangible;
(b) "Chattel paper" means a writing or writings
which evidence both a monetary obligation and a security
interest in or a lease of specific goods, but a charter
or other contract involving the use or hire of a vessel
is not chattel paper. When a transaction is evidenced
both by such a security agreement or a lease and by an
instrument or a series of instruments, the group of
writings taken together constitutes chattel paper;
(c) "Collateral" means the property subject to a
security interest, and includes accounts and chattel
paper which have been sold;
(d) "Debtor" means the person who owes payment or
other performance of the obligation secured, whether or
not he owns or has rights in the collateral, and includes
the seller of accounts or chattel paper. Where the debtor
and the owner of the collateral are not the same person,
the term "debtor" means the owner of the collateral in
any provision of the Article dealing with the collateral,
the obligor in any provision dealing with the obligation,
and may include both where the context so requires;
(e) "Deposit account" means a demand, time,
savings, passbook or like account maintained with a bank,
as defined in subsection (1) of Section 4-105 savings and
loan association, credit union or like organization,
other than an account evidenced by a certificate of
deposit;
(f) "Document" means document of title as defined
in the general definitions of Article 1 (Section 1-201),
and a receipt of the kind described in subsection (2) of
Section 7-201;
(g) "Encumbrance" includes real estate mortgages
and other liens on real estate and all other rights in
real estate that are not ownership interests;
(h) "Goods" includes all things which are movable
at the time the security interest attaches or which are
fixtures (Section 9-313), but does not include money,
documents, instruments, investment property, commodity
contracts, accounts, chattel paper, general intangibles,
or minerals or the like (including oil and gas) before
extraction. "Goods" also includes standing timber which
is to be cut and removed under a conveyance or contract
for sale, the unborn young of animals, and growing crops;
(i) "Instrument" means a negotiable instrument
(defined in Section 3-104), a non-transferable
certificate of deposit, a non-negotiable certificate of
deposit, or any other writing which evidences a right to
the payment of money and is not itself a security
agreement or lease and is of a type which is in ordinary
course of business transferred by delivery with any
necessary indorsement or assignment. The term does not
include investment property;
(j) "Mortgage" means a consensual interest created
by a real estate mortgage, a trust deed on real estate,
or the like;
(j-5) "Non-negotiable certificate of deposit" means
a written document issued by a bank, as defined in
subsection (1) of Section 4-105, that contains an
acknowledgement that a sum of money has been received by
the issuer and a promise by the issuer to repay the sum
of money, and is not a negotiable instrument as defined
in Section 3-104;
(j-7) "Non-transferable certificate of deposit"
means a non-negotiable certificate of deposit which may
not be transferred except on the books of the issuer,
with the consent of the issuer, or is subject to other
restrictions or conditions of the issuer on transfer;
(k) An advance is made "pursuant to commitment" if
the secured party has bound himself to make it, whether
or not a subsequent event of default or other event not
within his control has relieved or may relieve him from
his obligation;
(l) "Security agreement" means an agreement which
creates or provides for a security interest;
(m) "Secured party" means a lender, seller or other
person in whose favor there is a security interest,
including a person to whom accounts or chattel paper have
been sold. When the holders of obligations issued under
an indenture of trust, equipment trust agreement or the
like are represented by a trustee or other person, the
representative is the secured party;
(n) "Transmitting utility" means any person
primarily engaged in the railroad, street railway or
trolley bus business, the electric or electronics
communications transmission business, the transmission of
goods by pipeline, or the distribution, transmission, or
the production and transmission of electricity, steam,
gas or water, or the provision of sewer service.
(o) "Uncertificated certificate of deposit" means an
obligation of a bank, as defined in subsection (1) of Section
4-105, to repay a sum of money it has received, that is not a
deposit account and is not represented by a writing, but only
by an entry on the books of the bank and any documentation
given to the customer by the bank.
(2) Other definitions applying to this Article and the
Sections in which they appear are:
"Account". Section 9-106.
"Attach". Section 9-203.
"Commodity contract". Section 9-115.
"Commodity customer". Section 9-115.
"Commodity intermediary". Section 9-115.
"Construction mortgage". Section 9-313 (1).
"Consumer goods". Section 9-109 (1).
"Control". Section 9-115.
"Equipment". Section 9-109 (2).
"Farm products". Section 9-109 (3).
"Fixture". Section 9-313 (1).
"Fixture filing". Section 9-313 (1).
"General intangibles". Section 9-106.
"Inventory". Section 9-109 (4).
"Investment property". Section 9-115.
"Lien creditor". Section 9-301 (3).
"Proceeds". Section 9-306 (1).
"Purchase money security interest". Section 9-107.
"United States". Section 9-103.
(3) The following definitions in other Articles apply to
this Article:
"Bank". Section 4-105.
"Broker". Section 8-102.
"Certificated security". Section 8-102.
"Check". Section 3-104.
"Clearing corporation". Section 8-102.
"Contract for sale". Section 2-106.
"Control". Section 8-106.
"Delivery". Section 8-301.
"Entitlement holder". Section 8-102.
"Financial asset". Section 8-102.
"Holder in due course". Section 3-302.
"Letter of credit". Section 5-102.
"Note". Section 3-104.
"Proceeds of a letter of credit". Section 5-114(a).
"Sale". Section 2-106.
"Securities intermediary". Section 8-102.
"Security". Section 8-102.
"Security certificate". Section 8-102.
"Security entitlement". Section 8-102.
"Uncertificated security". Section 8-102.
(4) In addition Article 1 contains general definitions
and principles of construction and interpretation applicable
throughout this Article.
(Source: P.A. 89-364, eff. 1-1-96; 89-534, eff. 1-1-97.)
(810 ILCS 5/9-106) (from Ch. 26, par. 9-106)
Sec. 9-106. Definitions: "account"; "general
intangibles". "Account" means any right to payment for goods
sold or leased or for services rendered which is not
evidenced by an instrument or chattel paper, whether or not
it has been earned by performance. "General intangibles"
means any personal property (including things in action)
other than goods, accounts, chattel paper, documents,
instruments, investment property, rights to proceeds of
written letters of credit, deposit accounts, uncertificated
certificates of deposit, and money. All rights to payment
earned or unearned under a charter or other contract
involving the use or hire of a vessel and all rights incident
to the charter or contract are accounts.
(Source: P.A. 89-364, eff. 1-1-96; 89-534, eff. 1-1-97.)
(810 ILCS 5/9-302) (from Ch. 26, par. 9-302)
Sec. 9-302. When filing is required to perfect security
interest; security interests to which filing provisions of
this Article do not apply.
(1) A financing statement must be filed to perfect all
security interests except the following:
(a) a security interest in collateral in possession
of the secured party under Section 9-305;
(b) a security interest temporarily perfected in
instruments, certificated securities, or documents
without delivery under Section 9-304 or in proceeds for a
20 day period under Section 9-306;
(c) a security interest created by an assignment of
a beneficial interest in a trust or a decedent's estate;
(d) a purchase money security interest in consumer
goods; but filing is required for a motor vehicle
required to be registered; and fixture filing is required
for priority over conflicting interests in fixtures to
the extent provided in Section 9-313;
(e) an assignment of accounts which does not alone
or in conjunction with other assignments to the same
assignee transfer a significant part of the outstanding
accounts of the assignor;
(f) a security interest of a collecting bank
(Section 4-208) or arising under the Article on Sales
(see Section 9-113) or covered in subsection (3) of this
Section;
(g) an assignment for the benefit of all creditors
of the transferor, and subsequent transfers by the
assignee thereunder;
(h) a security interest in investment property
which is perfected without filing under Section 9-115 or
Section 9-116;
(i) a security interest in a deposit account. Such
a security interest is perfected:
(i) as to a deposit account maintained with
the secured party, when the security agreement is
executed;
(ii) as to a deposit account maintained with
any organization other than the secured party, when
notice thereof is given in writing to the
organization with whom the deposit account is
maintained and that organization provides written
acknowledgement of and consent to the notice of the
secured party.
(j) a security interest in an uncertificated
certificate of deposit. Such a security interest is
perfected;
(i) as to an uncertificated certificate of
deposit issued by the secured party, when the
security agreement is executed;
(ii) as to an uncertificated certificate of
deposit issued by any organization other than the
secured party, when notice thereof is given in
writing to the issuer of the uncertificated
certificate of deposit and the issuer provides
written acknowledgement of and consent to the notice
of the secured party.
(2) If a secured party assigns a perfected security
interest, no filing under this Article is required in order
to continue the perfected status of the security interest
against creditors of and transferees from the original
debtor.
(3) The filing of a financing statement otherwise
required by this Article is not necessary or effective to
perfect a security interest in property subject to
(a) a statute or treaty of the United States which
provides for a national or international registration or
a national or international certificate of title or which
specifies a place of filing different from that specified
in this Article for filing of the security interest; or
(b) the following statutes of this State: the
Illinois Vehicle Code; the Boat Registration and Safety
Act; but during any period in which collateral is
inventory held for sale by a person who is in the
business of selling goods of that kind, the filing
provisions of this Article (Part 4) apply to a security
interest in that collateral created by him as debtor; or
(c) a certificate of title statute of another
jurisdiction under the law of which indication of a
security interest on the certificate is required as a
condition of perfection (subsection (2) of Section
9-103).
(4) Compliance with a statute or treaty described in
subsection (3) is equivalent to the filing of a financing
statement under this Article, and a security interest in
property subject to the statute or treaty can be perfected
only by compliance therewith except as provided in Section
9-103 on multiple state transactions. Duration and renewal of
perfection of a security interest perfected by compliance
with the statute or treaty are governed by the provisions of
the statute or treaty; in other respects the security
interest is subject to this Article.
(Source: P.A. 89-364, eff. 1-1-96.)
Section 65. The Illinois Fairness in Lending Act is
amended by changing Section 6 as follows:
(815 ILCS 120/6) (from Ch. 17, par. 856)
Sec. 6. Where a financial institution, other than a
credit union, as defined in Section 1.1 of the Illinois
Credit Union Act, as now or hereafter amended, repossesses a
motor vehicle that was used as a collateral and which is
used primarily for the borrower's personal, family or
household purposes, the financial institution shall be
subject to the requirements of and shall transfer the
certificate of title pursuant to Section 3-114 of the
Illinois Vehicle Code and the borrower at the time of
repossession has paid an amount equal to 30% or more of the
total of payments due, the borrower may, within 15 days,
redeem the motor vehicle from the financial institution by
tendering:
(a) the total of all unpaid amounts, including any
unpaid delinquency or deferral charges due without
acceleration, and
(b) performance necessary to cure any default other than
nonpayment of the amounts due; and
(c) any reasonable cost or fees incurred by the
financial institution in the retaking of the goods.
Tender of payment and performance pursuant to this Section
restores to the borrower his rights under the loan as though
no default had occurred. The borrower has a right to redeem
the collateral from the financial institution only once under
this Section. The financial institution may, in the financial
institution's sole discretion, extend the period during which
the borrower may redeem the collateral beyond the 15 days
allowed under this Section, and the extension shall not
subject the financial institution to liability to the
borrower under the laws of this State.
The financial institution must give written notice to the
borrower, within 3 days of the repossession, of the
borrower's right to redeem the collateral pursuant to this
Section. The written notice shall be in substantially the
following form:
NOTICE OF RIGHT TO RECOVER VEHICLE
Your vehicle was repossessed on (specify date) for
failure to make payments on the loan (or other reason).
Under Illinois law, because you have paid at least 30% of
the loan before repossession, you may be able to get the
vehicle back. You have the right to recover the vehicle if
you do the following within 15 days of the date of
repossession:
1. Make payment of all back payments so
that you are current on the loan. $...........
2. Pay any late charge due. $...........
3. Pay the costs of repossession. $...........
Total Amount Now Due $...........
Bring cash, a certified check or money order for the
total amount now due that is listed above to our office
located at (specify address) by (specify date) to get your
vehicle back.
(Source: P.A. 90-343, eff. 8-8-97.)
Section 70. The Motor Vehicle Retail Installment Sales
Act is amended by changing Section 20 as follows:
(815 ILCS 375/20) (from Ch. 121 1/2, par. 580)
Sec. 20. Unless otherwise limited by this Act, the
parties shall have the rights and remedies provided in
Article 9 of the Uniform Commercial Code with respect to
default and, disposition, and recovery redemption of
collateral. If the holder of a retail installment contract
repossesses a motor vehicle that was used as collateral, the
holder shall be subject to the requirements of and shall
transfer the certificate of title pursuant to Section 3-114
of the Illinois Vehicle Code.
If the buyer has paid an amount equal to 60% or more of
the deferred payment price at the time of his default under
the contract and if the buyer, at the request of the holder
and without legal proceedings, surrenders the goods to the
holder in ordinary condition and free from malicious damage,
the holder must, within a period of 5 days from the date of
receipt of the goods at his place of business, elect either
(a) to retain the goods and release the buyer from further
obligation under the contract, or (b) to return the goods to
the buyer at the holder's expense and be limited to an action
to recover the balance of the indebtedness.
If the buyer has paid an amount equal to 30% or more of
the deferred payment price at the time of repossession, the
buyer shall have the right to reinstate the contract and
recover the collateral from the holder within 15 days from
the date of repossession by tendering (a) the total of all
unpaid amounts, including any unpaid delinquency or deferral
charges due at the time of tender, without acceleration, and
(b) performance necessary to cure any default other than
nonpayment of the amounts due; and (c) any reasonable cost or
fees incurred by the holder in the retaking of the goods.
Tender of payment and performance pursuant to this Section
restores to the buyer his rights under the contract as though
no default had occurred. The buyer has a right to reinstate
the contract and recover the collateral from the holder only
once under this Section. The holder may, in the holder's sole
discretion, extend the period during which the buyer may
reinstate the contract and recover redeem the collateral
beyond the 15 days allowed under this Section, and the
extension shall not subject the holder to liability to the
buyer under the laws of this State.
The holder must give written notice to the buyer, within
3 days of the repossession, of the buyer's right to reinstate
the contract and recover the collateral pursuant to this
Section. The written notice shall be in substantially the
following form:
NOTICE OF RIGHT TO RECOVER VEHICLE
Your vehicle was repossessed on (specify date) for
failure to make payments on the contract (or other reason).
Under Illinois law, because you have paid at least 30% of
the deferred payment price before repossession, you may be
able to get the vehicle back. You have the right to recover
the vehicle if you do the following within 15 days of the
date of repossession:
1. Make payment of all back payments due as
of the date of this notice. $
2. Pay any late charges due. $
3. Pay the costs of repossession. $
TOTAL AMOUNT DUE as of the date of
this notice: $
4. Plus pay any additional amounts which
may become due between the date of this
the notice and the date of
reinstatement. $
AMOUNT NOW DUE
Bring cash, a certified check or a money order for the
total amount now due that is plus any additional amounts
which may become due between the date of this notice and the
date of the reinstatement to our office located at (specify
address) by (specify date) to get your vehicle back.
(Source: P.A. 90-343, eff. 8-8-97; 90-437, eff. 1-1-98;
revised 2-7-98.)
Section 99. Effective date. This Act takes effect upon
becoming law, except that Sections 35, 45, 50, 65, and 70
take effect January 1, 1999.