AUTHORITY: Implementing Sections 1-7(a) and (b) and authorized by Sections 5-1(a) and 1-7(a) of the Corporate Fiduciary Act [205 ILCS 620].

SOURCE: Adopted at 14 Ill. Reg. 15771, effective September 18, 1990; amended at 20 Ill. Reg. 10825, effective August 1, 1996; amended at 44 Ill. Reg. 6272, effective April 24, 2020.

SUBPART A: GENERAL PROVISIONS

 

Section 396.5  Purpose

 

The Office of Banks and Real Estate is authorized to promulgate rules setting the terms and conditions for approval of corporate fiduciary applications and notices.  The purpose of this Part is to set forth those terms and conditions under one heading to facilitate easy reference by the corporate fiduciaries affected.

 

(Source:  Added at 20 Ill. Reg. 10825, effective August 1, 1996)

 

Section 396.10  Definitions

 

"Commissioner" means the Secretary of the Department of Financial and Professional Regulation.

 

"Corporate fiduciary" shall have the meaning ascribed to it in Section 1-5.05 of the Corporate Fiduciary Act [205 ILCS 620].

 

"Corporate fiduciary subsidiary" means a subsidiary of a corporation organized for the purposes of accepting and executing trusts which has received a Certificate of Authority from the Commissioner to accept and execute trusts, but shall not include a state bank, a state savings and loan association, a state savings bank or any subsidiary thereof.

 

(Source:  Amended at 44 Ill. Reg. 6272, effective April 24, 2020)

 

Section 396.20  Purpose (Renumbered)

 

(Source:  Section 396.20 renumbered to Section 396.110 at 20 Ill. Reg. 10825, effective August 1, 1996)

 

Section 396.30  Factors to be Considered by the Commissioner (Renumbered)

 

(Source:  Section 396.30 renumbered to Section 396.120 at 20 Ill. Reg. 10825, effective August 1, 1996)

SUBPART B: CORPORATE FIDUCIARY SUBSIDIARIES

 

Section 396.110  Purpose

 

A corporate fiduciary which proposes to establish a subsidiary, whether by incorporating the subsidiary or by acquiring the subsidiary, shall apply, on an application specified by the Commissioner, for approval from the Commissioner, not less than 90 days prior to commencing business by the subsidiary if newly incorporated, or prior to its acquisition if it is acquired.

 

(Source:  Section 396.110 renumbered from Section 396.20 at 20 Ill. Reg. 10825, effective August 1, 1996)

 

Section 396.120  Factors to be Considered by the Commissioner

 

When reviewing an application to establish a corporate fiduciary subsidiary, the following factors are relevant:

 

a)         the types of activities to be conducted by the corporate fiduciary subsidiary (i.e., title insurance, employee benefit services, and bookkeeping services);

 

b)         the earnings potential of the corporate fiduciary subsidiary (i.e., the earnings are sufficient to meet the current and anticipated needs of the subsidiary as identified in the business plan);

 

c)         the general character and experience of the management of the corporate fiduciary subsidiary (i.e., background, formal education, and practical experience in the types of services to be provided by the subsidiary); and

 

d)         the effect of the corporate fiduciary subsidiary upon the financial condition of the corporate fiduciary.

 

(Source:  Section 396.120 renumbered from Section 396.30 at 20 Ill. Reg. 10825, effective August 1, 1996)

SUBPART C: CORPORATE FIDUCIARY BRANCH OFFICES – APPROVAL

 

Section 396.210  Purpose

 

Section 1-7(a) of the Corporate Fiduciary Act requires any corporate fiduciary that is a trust company to apply for and obtain approval from the Commissioner for the establishment of a branch office.  This Subpart sets forth the terms and conditions a trust company must satisfy in order for the Commissioner to approve its application for the establishment of a branch office.

 

(Source:  Amended at 44 Ill. Reg. 6272, effective April 24, 2020)

 

Section 396.220  Terms and Conditions for Approval

 

A trust company must demonstrate the following in order for the Commissioner to approve its application to establish a branch office:

 

a)         That the trust company's aggregate direct and indirect fixed asset investment, including lease obligations, will be reasonable in relation to its projected earnings, capital, surplus and reserves, and liquidity (i.e., generally not greater than 50%).

 

b)         That the expense of establishing and operating the branch office will not have an undue effect on the trust company's earnings (i.e., the establishment will not result in negative net earnings and will not bring capital below that required for safe and sound operation).

 

c)         That the management of the trust company and the branch has demonstrated or will demonstrate the ability to operate the trust company branch office in a safe and sound manner (i.e., proposed management has the appropriate level of experience commensurate with the accounts to be administered, the prior conduct of management was conducted in a safe and sound manner and appropriate internal controls are in place to adequately supervise management actions).

 

d)         That the trust company has developed procedures for operations, controls and audits at the branch office, including but not limited to facilities for safekeeping and recordkeeping.

 

e)         That the types of activities proposed to be performed at the branch office are consistent with and within the scope of the activities performed by the trust company and authorized by the trust company's certificate of authority.

 

(Source:  Added at 20 Ill. Reg. 10825, effective August 1, 1996)

 

Section 396.230  Application Procedures

 

a)         A trust company that intends to establish a branch office shall file an application for approval with the Commissioner on forms prescribed by the Commissioner.

 

b)         The application shall be deemed filed when the Commission has received the applicable filing fee and a completed application form, including all of the supporting documentation necessary to determine that the terms and conditions set forth in this rule have been satisfied.

 

(Source:  Added at 20 Ill. Reg. 10825, effective August 1, 1996)

SUBPART D: CORPORATE FIDUCIARY BRANCH OFFICES – NOTICE

 

Section 396.310  Purpose (Repealed)

 

(Source:  Repealed at 44 Ill. Reg. 6272, effective April 24, 2020)

 

Section 396.320  Notice Requirements (Repealed)

 

(Source:  Repealed at 44 Ill. Reg. 6272, effective April 24, 2020)

 

Section 396.330  Notice Procedures (Repealed)

 

(Source:  Repealed at 44 Ill. Reg. 6272, effective April 24, 2020)