Illinois General Assembly

  Bills & Resolutions  
  Compiled Statutes  
  Public Acts  
  Legislative Reports  
  IL Constitution  
  Legislative Guide  
  Legislative Glossary  

 Search By Number
 (example: HB0001)
Search Tips

Search By Keyword

Illinois Compiled Statutes

Information maintained by the Legislative Reference Bureau
Updating the database of the Illinois Compiled Statutes (ILCS) is an ongoing process. Recent laws may not yet be included in the ILCS database, but they are found on this site as Public Acts soon after they become law. For information concerning the relationship between statutes and Public Acts, refer to the Guide.

Because the statute database is maintained primarily for legislative drafting purposes, statutory changes are sometimes included in the statute database before they take effect. If the source note at the end of a Section of the statutes includes a Public Act that has not yet taken effect, the version of the law that is currently in effect may have already been removed from the database and you should refer to that Public Act to see the changes made to the current law.

FINANCIAL REGULATION
(205 ILCS 205/) Savings Bank Act.

205 ILCS 205/Art. 6

 
    (205 ILCS 205/Art. 6 heading)
ARTICLE 6. Investments

205 ILCS 205/6001

    (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 certified by the entity authorized to govern his licensure or 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. 90-665, eff. 7-30-98.)

205 ILCS 205/6002

    (205 ILCS 205/6002) (from Ch. 17, par. 7306-2)
    Sec. 6002. Investment in loans.
    (a) Subject to the regulations of the Commissioner, a savings bank may loan funds as follows:
        (1) On the security of deposit accounts, but no such
    
loan shall exceed the withdrawal value of the pledged account.
        (2) On the security of real estate:
            (A) of a value, determined in accordance with
        
this Act, sufficient to provide good and ample security for the loan;
            (B) with a fee simple title or a leasehold title;
            (C) with the title established by evidence of
        
title as is consistent with sound lending practices in the locality;
            (D) with the security interest in the real estate
        
evidenced by an appropriate written instrument and the loan evidenced by a note, bond, or similar written instrument; a loan on the security of the whole of the beneficial interest in a land trust satisfies the requirements of this paragraph if the title to the land is held by a corporate trustee and if the real estate held in the land trust meets the other requirements of this subsection;
            (E) with a mortgage loan not to exceed 40 years.
        (3) For the purpose of repair, improvement,
    
rehabilitation, furnishing, or equipment of real estate.
        (4) For the purpose of financing or refinancing an
    
existing ownership interest in certificates of stock, certificates of beneficial interest, other evidence of an ownership interest in, or a proprietary lease from a corporation, trust, or partnership formed for the purpose of the cooperative ownership of real estate, secured by the assignment or transfer of certificates or other evidence of ownership of the borrower.
        (5) Through the purchase of loans that, at the time
    
of purchase, the savings bank could make in accordance with this Section and the bylaws.
        (6) Through the purchase of installment contracts for
    
the sale of real estate and title thereto that is subject to the contracts, but in each instance only if the savings bank, at the time of purchase, could make a mortgage loan of the same amount and for the same length of time on the security of the real estate.
        (7) Through loans guaranteed or insured, wholly or in
    
part, by the United States or any of its instrumentalities.
        (8) Subject to regulations adopted by the
    
Commissioner, through secured or unsecured loans for business, corporate, commercial, or agricultural purposes; provided that the total of all loans granted under this paragraph shall not exceed 15% of the savings bank's total assets unless a greater amount is authorized in writing by the Commissioner.
        (9) For the purpose of manufactured home financing
    
subject, however, to the regulation of the Commissioner. As used in this Section, "manufactured home" means a manufactured home as defined in subdivision (53) of Section 9-102 of the Uniform Commercial Code.
        (10) Through loans secured by the cash surrender
    
value of any life insurance policy or any collateral that would be a legal investment under the terms of this Act if made by the savings bank.
        (11) Any provision of this Act or any other law,
    
except for paragraph (18) of Section 6003, to the contrary notwithstanding, but subject to the Financial Institutions Insurance Sales Law and subject to the Commissioner's regulations, any savings bank may make any loan or investment or engage in any activity that it could make or engage in if it were organized under State law as a savings and loan association or under federal law as a federal savings and loan association or federal savings bank.
        (12) A savings bank may issue letters of credit or
    
other similar arrangements only as provided for by regulation of the Commissioner with regard to aggregate amounts permitted, take out commitments for stand-by letters of credit, underlying documentation and underwriting, legal limitations on loans of the savings bank, control and subsidiary records, and other procedures deemed necessary by the Commissioner.
        (13) For the purpose of automobile financing, subject
    
to the regulation of the Commissioner.
        (14) For the purpose of financing primary, secondary,
    
undergraduate, or postgraduate education.
        (15) Through revolving lines of credit on the
    
security of a first or junior lien on the borrower's personal residence, based primarily on the borrower's equity, the proceeds of which may be used for any purpose; those loans being commonly referred to as home equity loans.
        (16) As secured or unsecured credit to cover the
    
payment of checks, drafts, or other funds transfer orders in excess of the available balance of an account on which they are drawn, subject to the regulations of the Commissioner.
    (b) For purposes of this Section, "real estate" includes a manufactured home as defined in subdivision (53) of Section 9-102 of the Uniform Commercial Code which is real property as defined in Section 5-35 of the Conveyance and Encumbrance of Manufactured Homes as Real Property and Severance Act.
(Source: P.A. 98-749, eff. 7-16-14.)

205 ILCS 205/6003

    (205 ILCS 205/6003) (from Ch. 17, par. 7306-3)
    Sec. 6003. Other investments. 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. 89-317, eff. 8-11-95; 90-665, eff. 7-30-98.)

205 ILCS 205/6004

    (205 ILCS 205/6004) (from Ch. 17, par. 7306-4)
    Sec. 6004. Calculation of interest; postpayments and prepayments.
    (a) In any contract or loan that is secured by a mortgage, deed of trust, or conveyance in the nature of a mortgage for the purpose of purchase or refinance of residential real estate, the interest that is computed, calculated, charged, or collected pursuant to the contract or loan, or pursuant to any regulation or rule promulgated under this Act, may not be computed, calculated, charged or collected for any period of time occurring after the date on which the total indebtedness, with the exception of late payment penalties, is paid in full.
    (b) For purposes of this Section, a prepayment means the payment of the total indebtedness, with the exception of late payment penalties if incurred or charged, on any date before the date specified in the contract or loan agreement on which the total indebtedness shall be paid in full, or before the date on which all payments, if timely made, shall have been made. In the event of a prepayment of the indebtedness that is made on a date after the date on which interest on the indebtedness was last computed, calculated, charged, or collected but before the next date on which interest on the indebtedness was to be calculated, computed, charged, or collected, the lender may calculate, charge, and collect interest on the indebtedness for the period that elapsed between the date on which the prepayment is made and the date on which interest on the indebtedness was last computed, calculated, charged, or collected at a rate equal to 1/360 of the annual rate for each day which so elapsed, which rate shall be applied to the indebtedness outstanding as of the date of prepayment. The lender shall refund to the borrower any interest charged or collected that exceeds that which the lender may charge or collect under this subsection.
(Source: P.A. 86-1213.)

205 ILCS 205/6005

    (205 ILCS 205/6005) (from Ch. 17, par. 7306-5)
    Sec. 6005. General loan contract provisions. Each loan and any agreement for securing the loan shall be evidenced by one or more written instruments, consistent with sound lending practices in the locality. Whenever recordation of an instrument is necessary to establish priority over the claim of any third party, the instrument shall be recorded.
(Source: P.A. 86-1213.)

205 ILCS 205/6006

    (205 ILCS 205/6006) (from Ch. 17, par. 7306-6)
    Sec. 6006. Modification agreements. A savings bank, at any time, may enter into a written agreement with a borrower to modify, in any manner not inconsistent with the provisions of this Act, the terms of a loan as to the amount, time or method of the payments to be made, the interest rate, and any other provision of the loan contract, and the loan contract and the security instrument shall not be prejudiced by the making of any modification, even if a modification was not provided for in the loan contract.
(Source: P.A. 86-1213.)

205 ILCS 205/6007

    (205 ILCS 205/6007) (from Ch. 17, par. 7306-7)
    Sec. 6007. Sale, assignment, and servicing of loans and contracts.
    (a) Any savings bank may sell any loan or a participating interest in a loan at any time in the usual and regular course of business. Loans sold may be sold with or without recourse except as may otherwise be provided by regulations of the Secretary. The Secretary may, by regulation, adopt limitations upon the sale of loans. The provisions of this subsection (a) do not apply to the sale of loans to agencies of the United States, the State of Illinois, or other government sponsored agencies as may be approved by the Secretary.
    (b) A savings bank may contract to service a loan or a participating interest in a loan, but a contract therefor shall conform to any pertinent regulations prescribed by the Secretary and shall require sufficient compensation to reimburse the savings bank for all expenses incurred under the contract.
    (c) A savings bank may sell and assign, with or without recourse, any master's certificate of sale, defaulted loan, or defaulted real estate contract to any person eligible to purchase it for an amount not less than the fair cash market value thereof.
(Source: P.A. 97-492, eff. 1-1-12.)

205 ILCS 205/6008

    (205 ILCS 205/6008) (from Ch. 17, par. 7306-8)
    Sec. 6008. Purchase of real estate at forced sale. A savings bank may purchase at any sheriff's or other judicial sale, either public or private, any real estate upon which the savings bank has any mortgage, lien or other encumbrance, or in which the savings bank has any other interest. The savings bank thereafter may repair, insure, improve, sell, convey, lease, preserve, mortgage, exchange, or otherwise dispose of real estate so acquired in the best interests of the savings bank. For purposes of this Section, "real estate" includes a manufactured home as defined in subdivision (53) of Section 9-102 of the Uniform Commercial Code which is real property as defined in Section 5-35 of the Conveyance and Encumbrance of Manufactured Homes as Real Property and Severance Act.
(Source: P.A. 98-749, eff. 7-16-14.)

205 ILCS 205/6009

    (205 ILCS 205/6009) (from Ch. 17, par. 7306-9)
    Sec. 6009. Purchase of real estate for office and rental purposes.
    (a) A savings bank may acquire and hold real estate in fee simple or leaseholds on which a building or buildings exist or are to be erected suitable for the transaction of the savings bank's business, and from portions of which not required for the savings bank's own use, revenue may be derived; or may own all or part of the capital stock, shares, or interest in any corporation, limited liability company, association, or trust engaged solely in holding all or part of that real estate. However, the amount so invested under this Section and item (7) of Section 6003 may not exceed a savings bank's total capital unless the Secretary, upon a proper showing, approves a larger amount consistent with the needs of the savings bank's business and its immediate future expansion.
    (b) Unless prior written approval of the Secretary is obtained, no savings bank may purchase, lease, or otherwise acquire a site for an office building or interest in real estate from any officer, director, employee, or stockholder holding more than 10% of the aggregate capital stock of the savings bank, or any firm, corporation, entity, or family in which any officer, director, employee, or stockholder holding more than 10% of the aggregate capital stock of a savings bank has any direct or indirect interest.
    (c) An acquisition prohibited by this Section includes the purchase, lease, or acquisition of property in which any of the persons described in this Section held any interest for a period of 10 years preceding the purchase, lease, or acquisition, but does not include the acquisition of an option for a site or real estate where the option is assignable and exercised by the savings bank in its own name and for its own benefit.
(Source: P.A. 97-492, eff. 1-1-12.)

205 ILCS 205/6010

    (205 ILCS 205/6010) (from Ch. 17, par. 7306-10)
    Sec. 6010. Prohibited loans. No savings bank may make a loan to any person owning 10% or more of its capital stock, any affiliated person, agent, or attorney of the savings bank, either individually or as an agent or partner of another, except in accordance with laws and regulations applicable to similar transactions to which banks are subject.
(Source: P.A. 86-1213.)

205 ILCS 205/6011

    (205 ILCS 205/6011) (from Ch. 17, par. 7306-11)
    Sec. 6011. Effect of unauthorized investments.
    (a) Every loan or other investment made in violation of this Act shall be due and payable according to its terms, and the obligation thereof shall not be impaired.
    (b) Every director or officer of a savings bank who shall knowingly participate in or assent to, or who shall knowingly permit any of the officers or agents of the savings bank to make, investments not authorized by this Act shall be liable individually for all damage that the savings bank may sustain in consequence of the investments, in addition to any criminal penalties prescribed by this Act.
    (c) The Commissioner may require every director or officer of a savings bank who shall knowingly participate in or assent to, or who shall knowingly permit any of the officers or agents of the savings bank to make, investments not authorized by this Act to deposit with the savings bank an indemnity bond, insurance, or collateral of a kind and amount sufficient to indemnify the savings bank against damages that the savings bank may sustain in consequence of the investments. The amount considered sufficient to indemnify the savings bank shall, in the case of an unauthorized investment, be the difference between the book value and the market value of the investment at the time the Commissioner makes his determination that the investment is unauthorized. The amount considered sufficient to indemnify the savings bank, in the case of an unauthorized loan, shall be the difference between the book value of the loan and the amount that could have been made under the provisions of this Act. Whenever an unauthorized investment has been sold or disposed of without recourse, the Commissioner shall release all or part of the indemnity after deducting any loss. Whenever the balance of an unauthorized loan has been reduced to an amount that would permit the loan to be made under the provisions of this Act, the indemnity shall be released, provided that the Commissioner in making the determination may require an independent appraisal of the security.
(Source: P.A. 86-1213.)

205 ILCS 205/6012

    (205 ILCS 205/6012) (from Ch. 17, par. 7306-12)
    Sec. 6012. Acknowledgments. No acknowledgment of a deed, mortgage, or other instrument shall be invalid because the acknowledgment was taken before an officer authorized by the laws of this State to acknowledge conveyances who is also a member, director, employee, or officer of a savings bank that is a party to the deed, mortgage, or other instrument.
(Source: P.A. 86-1213.)

205 ILCS 205/6013

    (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 25% 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. In addition, a loan or extension of credit to one person shall be deemed a loan or extension of credit to others when a common enterprise exists between the first person and such other persons.
    (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 25% 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.
    (k) This Section does not apply to the obligations as endorser, whether with or without recourse, or as guarantor, whether conditional or unconditional, of negotiable or nonnegotiable installment consumer paper of the person transferring the same if the bank's files or the knowledge of its officers of the financial condition of each maker of those obligations is reasonably adequate and if an officer of the bank, designated for that purpose by the board of directors of the bank, certifies that the responsibility of each maker of the obligations has been evaluated and that the bank is relying primarily upon each maker for the payment of the obligations. The certification shall be in writing and shall be retained as part of the records of the bank.
    (l) The Commissioner may prescribe rules to carry out the purposes of this Section and to establish limits or requirements other than those specified in this Section for particular types of loans and extensions of credit.
(Source: P.A. 92-483, eff. 8-23-01; 92-700, eff. 7-19-02.)

205 ILCS 205/6014

    (205 ILCS 205/6014) (from Ch. 17, par. 7306-14)
    Sec. 6014. Commissioner's regulations.
    (a) The Commissioner shall promulgate rules and regulations to determine permissible levels of investment and permissible concentrations of assets for savings banks applicable to all lending and investment authority granted by this Article 6. The rules and regulations shall give due regard to capital adequacy, operating income, underwriting standards, risk inherent in the investment or loan, and competitive parity with other financial institutions.
    (b) Violations of any of the provisions of this Article 6 shall constitute an unsafe and unsound practice and may subject the savings bank, its directors, officers, or agents to enforcement actions, civil money penalties, or other sanctions as provided in this Act.
(Source: P.A. 86-1213.)