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92nd General Assembly

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Public Act 92-0020

HB2376 Enrolled                                LRB9205792LDcs

    AN ACT in relation to banking.

    Be it enacted by the People of  the  State  of  Illinois,
represented in the General Assembly:

    Section  5.  The  Illinois  Banking  Act  is  amended  by
changing Section 48 as follows:

    (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; provided,
    however, that an examination conducted at the request  of
    the  State  Treasurer pursuant to the Uniform Disposition
    of Unclaimed Property Act shall not be deemed  to  be  an
    additional examination under this Section. 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  any  amounts
    transferred into the Bank and Trust Company Fund from the
    State Pensions Fund for that year, 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. All earnings received from investments of  funds
    in  the Bank and Trust Company Fund shall be deposited in
    the Bank and Trust Company Fund and may be used  for  the
    same  purposes as fees deposited in that Fund. 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,   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.  90-14,  eff.  7-1-97;  90-301,  eff.   8-1-97;
90-665, eff. 7-30-98; 91-16, eff. 7-1-99.)

    Section  99.  Effective date.  This Act takes effect July
1, 2001.
    Passed in the General Assembly May 17, 2001.
    Approved June 28, 2001.

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