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92_HB3233
LRB9206318JSprA
1 AN ACT concerning financial regulation.
2 Be it enacted by the People of the State of Illinois,
3 represented in the General Assembly:
4 Section 5. The Office of Banks and Real Estate Act is
5 amended by changing Sections 5 and 6 as follows:
6 (20 ILCS 3205/5) (from Ch. 17, par. 455)
7 Sec. 5. Powers. In addition to all the other powers and
8 duties provided by law, the Commissioner shall have the
9 following powers:
10 (a) To exercise the rights, powers and duties formerly
11 vested by law in the Director of Financial Institutions under
12 the Illinois Banking Act.
13 (b) To exercise the rights, powers and duties formerly
14 vested by law in the Department of Financial Institutions
15 under "An act to provide for and regulate the administration
16 of trusts by trust companies", approved June 15, 1887, as
17 amended.
18 (c) To exercise the rights, powers and duties formerly
19 vested by law in the Director of Financial Institutions under
20 "An act authorizing foreign corporations, including banks and
21 national banking associations domiciled in other states, to
22 act in a fiduciary capacity in this state upon certain
23 conditions herein set forth", approved July 13, 1953, as
24 amended.
25 (d) Whenever the Commissioner is authorized or required
26 by law to consider or to make findings regarding the
27 character of incorporators, directors, management personnel,
28 or other relevant individuals under the Illinois Banking Act,
29 the Corporate Fiduciary Act, the Pawnbroker Regulation Act,
30 or at other times as the Commissioner deems necessary for the
31 purpose of carrying out the Commissioner's statutory powers
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1 and responsibilities, the Commissioner shall consider
2 criminal history record information, including nonconviction
3 information, pursuant to the Criminal Identification Act.
4 The Commissioner shall, in the form and manner required by
5 the Department of State Police and the Federal Bureau of
6 Investigation, cause to be conducted a criminal history
7 record investigation to obtain information currently
8 contained in the files of the Department of State Police or
9 the Federal Bureau of Investigation, provided that the
10 Commissioner need not cause additional criminal history
11 record investigations to be conducted on individuals for whom
12 the Commissioner, a federal bank regulatory agency, or any
13 other government agency has caused such investigations to
14 have been conducted previously unless such additional
15 investigations are otherwise required by law or unless the
16 Commissioner deems such additional investigations to be
17 necessary for the purposes of carrying out the Commissioner's
18 statutory powers and responsibilities. The Department of
19 State Police shall provide, on the Commissioner's request,
20 information concerning criminal charges and their disposition
21 currently on file with respect to a relevant individual.
22 Information obtained as a result of an investigation under
23 this Section shall be used in determining eligibility to be
24 an incorporator, director, management personnel, or other
25 relevant individual in relation to a financial institution or
26 other entity supervised by the Commissioner. Upon request
27 and payment of fees in conformance with the requirements of
28 Section 2605-400 of the Department of State Police Law (20
29 ILCS 2605/2605-400), the Department of State Police is
30 authorized to furnish, pursuant to positive identification,
31 such information contained in State files as is necessary to
32 fulfill the request.
33 (e) When issuing charters, permits, licenses, or other
34 authorizations, the Commissioner may impose such terms and
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1 conditions on the issuance as he deems necessary or
2 appropriate to ensure that the issuance is consistent with
3 applicable statutes, rules, and policies. Failure to abide
4 by those terms and conditions may result in the revocation
5 of the issuance, the imposition of corrective orders, or the
6 imposition of civil money penalties.
7 (f) If the Commissioner has reasonable cause to believe
8 that any entity that has not submitted an application for
9 authorization or licensure is conducting any activity that
10 would otherwise require authorization or licensure by the
11 Commissioner, the Commissioner shall have the power to
12 subpoena witnesses, to compel their attendance, and to
13 require the production of any relevant books, papers,
14 accounts, and documents in order to determine whether the
15 entity is subject to authorization or licensure by the
16 Commissioner or the Office of Banks and Real Estate.
17 (g) The Commissioner may, through the Attorney General,
18 request the circuit court of any county to issue an
19 injunction to restrain any person from violating the
20 provisions of any Act administered by the Commissioner.
21 (h) Whenever the Commissioner is authorized to take any
22 action or required by law to consider or make findings, the
23 Commissioner may delegate or appoint an officer or employee
24 of the Office of Banks and Real Estate to take that action or
25 make that finding.
26 (Source: P.A. 90-301, eff. 8-1-97; 90-602, eff. 7-1-98;
27 91-239, eff. 1-1-00.)
28 (20 ILCS 3205/6) (from Ch. 17, par. 456)
29 Sec. 6. Duties. The Commissioner shall direct and
30 supervise all the administrative and technical activities of
31 the Office and shall:
32 (a) Apply and carry out this Act and the law and all
33 rules adopted in pursuance thereof.
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1 (b) Appoint, subject to the provisions of the Personnel
2 Code, such employees, experts, and special assistants as may
3 be necessary to carry out effectively the provisions of this
4 Act and, if the rate of compensation is not otherwise fixed
5 by law, fix their compensation; but neither the Commissioner
6 nor any deputy commissioner shall be subject to the Personnel
7 Code.
8 (c) Serve as Chairman of the State Banking Board of
9 Illinois.
10 (d) Serve as Chairman of the Board of Trustees of the
11 Illinois Bank Examiners' Education Foundation.
12 (e) Issue guidelines in the form of rules or regulations
13 which will prohibit discrimination by any State chartered
14 bank against any individual, corporation, partnership,
15 association or other entity because it appears in a so-called
16 blacklist issued by any domestic or foreign corporate or
17 governmental entity.
18 (f) Make an annual report to the Governor regarding the
19 work of the Office as the Commissioner may consider desirable
20 or as the Governor may request.
21 (g) Perform such other acts as may be requested by the
22 State Banking Board of Illinois pursuant to its lawful powers
23 and perform any other lawful act that the Commissioner
24 considers to be necessary or desirable to carry out the
25 purposes and provisions of this Act.
26 (h) Adopt, in accordance with the Illinois
27 Administrative Procedure Act, reasonable rules that the
28 Commissioner deems necessary for the proper administration
29 and enforcement of any Act the administration of which is
30 vested in the Commissioner or the Office of Banks and Real
31 Estate.
32 (Source: P.A. 89-508, eff. 7-3-96.)
33 Section 10. The Illinois Banking Act is amended by
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1 changing Sections 2, 5, 5b, 7, 8, 10, 12, 13, 13.5, 14, 15,
2 16.1, 17, 18, 21.2, 22, 25, 30.5, 31, 33, 37, 47 48, 48.5,
3 49, 51, and 53, and adding Sections 4.9 and 48.7 as follows:
4 (205 ILCS 5/2) (from Ch. 17, par. 302)
5 Sec. 2. General definitions. In this Act, unless the
6 context otherwise requires, the following words and phrases
7 shall have the following meanings:
8 "Accommodation party" shall have the meaning ascribed to
9 that term in Section 3-419 of the Uniform Commercial Code.
10 "Action" in the sense of a judicial proceeding includes
11 recoupments, counterclaims, set-off, and any other proceeding
12 in which rights are determined.
13 "Affiliate facility" of a bank means a main banking
14 premises or branch of another commonly owned bank. The main
15 banking premises or any branch of a bank may be an "affiliate
16 facility" with respect to one or more other commonly owned
17 banks.
18 "Appropriate federal banking agency" means the Federal
19 Deposit Insurance Corporation, the Federal Reserve Bank of
20 Chicago, or the Federal Reserve Bank of St. Louis, as
21 determined by federal law.
22 "Bank" means any person doing a banking business whether
23 subject to the laws of this or any other jurisdiction.
24 A "banking house", "branch", "branch bank" or "branch
25 office" shall mean any place of business of a bank at which
26 deposits are received, checks paid, or loans made, but shall
27 not include any place at which only records thereof are made,
28 posted, or kept. A place of business at which deposits are
29 received, checks paid, or loans made shall not be deemed to
30 be a branch, branch bank, or branch office if the place of
31 business is adjacent to and connected with the main banking
32 premises, or if it is separated from the main banking
33 premises by not more than an alley; provided always that (i)
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1 if the place of business is separated by an alley from the
2 main banking premises there is a connection between the two
3 by public or private way or by subterranean or overhead
4 passage, and (ii) if the place of business is in a building
5 not wholly occupied by the bank, the place of business shall
6 not be within any office or room in which any other business
7 or service of any kind or nature other than the business of
8 the bank is conducted or carried on. A place of business at
9 which deposits are received, checks paid, or loans made shall
10 not be deemed to be a branch, branch bank, or branch office
11 (i) of any bank if the place is a terminal established and
12 maintained in accordance with paragraph (17) of Section 5 of
13 this Act, or (ii) of a commonly owned bank by virtue of
14 transactions conducted at that place on behalf of the other
15 commonly owned bank under paragraph (23) of Section 5 of this
16 Act if the place is an affiliate facility with respect to the
17 other bank.
18 "Branch of an out-of-state bank" means a branch
19 established or maintained in Illinois by an out-of-state bank
20 as a result of a merger between an Illinois bank and the
21 out-of-state bank that occurs on or after May 31, 1997, or
22 any branch established by the out-of-state bank following the
23 merger.
24 "Call report fee" means the fee to be paid to the
25 Commissioner by each State bank pursuant to paragraph (a) of
26 subsection (3) of Section 48 of this Act.
27 "Capital" includes the aggregate of outstanding capital
28 stock and preferred stock.
29 "Cash flow reserve account" means the account within the
30 books and records of the Commissioner of Banks and Real
31 Estate used to record funds designated to maintain a
32 reasonable Bank and Trust Company Fund operating balance to
33 meet agency obligations on a timely basis.
34 "Charter" includes the original charter and all
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1 amendments thereto and articles of merger or consolidation.
2 "Commissioner" means the Commissioner of Banks and Real
3 Estate or a person authorized by the Commissioner, the Office
4 of Banks and Real Estate Act, or this Act to act in the
5 Commissioner's stead.
6 "Commonly owned banks" means 2 or more banks that each
7 qualify as a bank subsidiary of the same bank holding company
8 pursuant to Section 18 of the Federal Deposit Insurance Act;
9 "commonly owned bank" refers to one of a group of commonly
10 owned banks but only with respect to one or more of the other
11 banks in the same group.
12 "Community" means a city, village, or incorporated town
13 and also includes the area served by the banking offices of a
14 bank, but need not be limited or expanded to conform to the
15 geographic boundaries of units of local government in this
16 State.
17 "Company" means a corporation, limited liability company,
18 partnership, business trust, association, or similar
19 organization and, unless specifically excluded, includes a
20 "State bank" and a "bank".
21 "Consolidating bank" means a party to a consolidation.
22 "Consolidation" takes place when 2 or more banks, or a
23 trust company and a bank, are extinguished and by the same
24 process a new bank is created, taking over the assets and
25 assuming the liabilities of the banks or trust company
26 passing out of existence.
27 "Continuing bank" means a merging bank, the charter of
28 which becomes the charter of the resulting bank.
29 "Converting bank" means a State bank converting to become
30 a national bank, or a national bank converting to become a
31 State bank.
32 "Converting trust company" means a trust company
33 converting to become a State bank.
34 "Court" means a court of competent jurisdiction.
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1 "Eligible depository institution" means an insured
2 savings association that is in default, an insured savings
3 association that is in danger of default, a State or national
4 bank that is in default or a State or national bank that is
5 in danger of default, as those terms are defined in this
6 Section, or a new bank as that term defined in Section 11(m)
7 of the Federal Deposit Insurance Act or a bridge bank as that
8 term is defined in Section 11(n) of the Federal Deposit
9 Insurance Act or a new federal savings association authorized
10 under Section 11(d)(2)(f) of the Federal Deposit Insurance
11 Act.
12 "Fiduciary" means trustee, agent, executor,
13 administrator, committee, guardian for a minor or for a
14 person under legal disability, receiver, trustee in
15 bankruptcy, assignee for creditors, or any holder of similar
16 position of trust.
17 "Financial institution" means a bank, savings and loan
18 association, credit union, or any licensee under the Consumer
19 Installment Loan Act or the Sales Finance Agency Act and, for
20 purposes of Section 48.3, any proprietary network, funds
21 transfer corporation, or other entity providing electronic
22 funds transfer services, or any corporate fiduciary, its
23 subsidiaries, affiliates, parent company, or contractual
24 service provider that is examined by the Commissioner.
25 "Foundation" means the Illinois Bank Examiners' Education
26 Foundation.
27 "General obligation" means a bond, note, debenture,
28 security, or other instrument evidencing an obligation of the
29 government entity that is the issuer that is supported by the
30 full available resources of the issuer, the principal and
31 interest of which is payable in whole or in part by taxation.
32 "Guarantee" means an undertaking or promise to answer for
33 payment of another's debt or performance of another's duty,
34 liability, or obligation whether "payment guaranteed" or
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1 "collection guaranteed".
2 "In danger of default" means a State or national bank, a
3 federally chartered insured savings association or an
4 Illinois state chartered insured savings association with
5 respect to which the Commissioner or the appropriate federal
6 banking agency has advised the Federal Deposit Insurance
7 Corporation that:
8 (1) in the opinion of the Commissioner or the
9 appropriate federal banking agency,
10 (A) the State or national bank or insured
11 savings association is not likely to be able to meet
12 the demands of the State or national bank's or
13 savings association's obligations in the normal
14 course of business; and
15 (B) there is no reasonable prospect that the
16 State or national bank or insured savings
17 association will be able to meet those demands or
18 pay those obligations without federal assistance; or
19 (2) in the opinion of the Commissioner or the
20 appropriate federal banking agency,
21 (A) the State or national bank or insured
22 savings association has incurred or is likely to
23 incur losses that will deplete all or substantially
24 all of its capital; and
25 (B) there is no reasonable prospect that the
26 capital of the State or national bank or insured
27 savings association will be replenished without
28 federal assistance.
29 "In default" means, with respect to a State or national
30 bank or an insured savings association, any adjudication or
31 other official determination by any court of competent
32 jurisdiction, the Commissioner, the appropriate federal
33 banking agency, or other public authority pursuant to which a
34 conservator, receiver, or other legal custodian is appointed
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1 for a State or national bank or an insured savings
2 association.
3 "Insured savings association" means any federal savings
4 association chartered under Section 5 of the federal Home
5 Owners' Loan Act and any State savings association chartered
6 under the Illinois Savings and Loan Act of 1985 or a
7 predecessor Illinois statute, the deposits of which are
8 insured by the Federal Deposit Insurance Corporation. The
9 term also includes a savings bank organized or operating
10 under the Savings Bank Act.
11 "Insured savings association in recovery" means an
12 insured savings association that is not an eligible
13 depository institution and that does not meet the minimum
14 capital requirements applicable with respect to the insured
15 savings association.
16 "Issuer" means for purposes of Section 33 every person
17 who shall have issued or proposed to issue any security;
18 except that (1) with respect to certificates of deposit,
19 voting trust certificates, collateral-trust certificates, and
20 certificates of interest or shares in an unincorporated
21 investment trust not having a board of directors (or persons
22 performing similar functions), "issuer" means the person or
23 persons performing the acts and assuming the duties of
24 depositor or manager pursuant to the provisions of the trust,
25 agreement, or instrument under which the securities are
26 issued; (2) with respect to trusts other than those specified
27 in clause (1) above, where the trustee is a corporation
28 authorized to accept and execute trusts, "issuer" means the
29 entrusters, depositors, or creators of the trust and any
30 manager or committee charged with the general direction of
31 the affairs of the trust pursuant to the provisions of the
32 agreement or instrument creating the trust; and (3) with
33 respect to equipment trust certificates or like securities,
34 "issuer" means the person to whom the equipment or property
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1 is or is to be leased or conditionally sold.
2 "Letter of credit" and "customer" shall have the meanings
3 ascribed to those terms in Section 5-102 of the Uniform
4 Commercial Code.
5 "Main banking premises" means the location that is
6 designated in a bank's charter as its main office.
7 "Maker or obligor" means for purposes of Section 33 the
8 issuer of a security, the promisor in a debenture or other
9 debt security, or the mortgagor or grantor of a trust deed or
10 similar conveyance of a security interest in real or personal
11 property.
12 "Merged bank" means a merging bank that is not the
13 continuing, resulting, or surviving bank in a consolidation
14 or merger.
15 "Merger" includes consolidation.
16 "Merging bank" means a party to a bank merger.
17 "Merging trust company" means a trust company party to a
18 merger with a State bank.
19 "Mid-tier bank holding company" means a corporation that
20 (a) owns 100% of the issued and outstanding shares of each
21 class of stock of a State bank, (b) has no other
22 subsidiaries, and (c) 100% of the issued and outstanding
23 shares of the corporation are owned by a parent bank holding
24 company.
25 "Municipality" means any municipality, political
26 subdivision, school district, taxing district, or agency.
27 "National bank" means a national banking association
28 located in this State and after May 31, 1997, means a
29 national banking association without regard to its location.
30 "Out-of-state bank" means a bank chartered under the laws
31 of a state other than Illinois, a territory of the United
32 States, or the District of Columbia.
33 "Parent bank holding company" means a corporation that is
34 a bank holding company as that term is defined in the
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1 Illinois Bank Holding Company Act of 1957 and owns 100% of
2 the issued and outstanding shares of a mid-tier bank holding
3 company.
4 "Person" means an individual, corporation, limited
5 liability company, partnership, joint venture, trust, estate,
6 or unincorporated association.
7 "Public agency" means the State of Illinois, the various
8 counties, townships, cities, towns, villages, school
9 districts, educational service regions, special road
10 districts, public water supply districts, fire protection
11 districts, drainage districts, levee districts, sewer
12 districts, housing authorities, the Illinois Bank Examiners'
13 Education Foundation, the Chicago Park District, and all
14 other political corporations or subdivisions of the State of
15 Illinois, whether now or hereafter created, whether herein
16 specifically mentioned or not, and shall also include any
17 other state or any political corporation or subdivision of
18 another state.
19 "Public funds" or "public money" means current operating
20 funds, special funds, interest and sinking funds, and funds
21 of any kind or character belonging to, in the custody of, or
22 subject to the control or regulation of the United States or
23 a public agency. "Public funds" or "public money" shall
24 include funds held by any of the officers, agents, or
25 employees of the United States or of a public agency in the
26 course of their official duties and, with respect to public
27 money of the United States, shall include Postal Savings
28 funds.
29 "Published" means, unless the context requires otherwise,
30 the publishing of the notice or instrument referred to in
31 some newspaper of general circulation in the community in
32 which the bank is located at least once each week for 3
33 successive weeks. Publishing shall be accomplished by, and
34 at the expense of, the bank required to publish. Where
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1 publishing is required, the bank shall submit to the
2 Commissioner that evidence of the publication as the
3 Commissioner shall deem appropriate.
4 "Qualified financial contract" means any security
5 contract, commodity contract, forward contract, including
6 spot and forward foreign exchange contracts, repurchase
7 agreement, swap agreement, and any similar agreement, any
8 option to enter into any such agreement, including any
9 combination of the foregoing, and any master agreement for
10 such agreements. A master agreement, together with all
11 supplements thereto, shall be treated as one qualified
12 financial contract. The contract, option, agreement, or
13 combination of contracts, options, or agreements shall be
14 reflected upon the books, accounts, or records of the bank,
15 or a party to the contract shall provide documentary evidence
16 of such agreement.
17 "Recorded" means the filing or recording of the notice or
18 instrument referred to in the office of the Recorder of the
19 county wherein the bank is located.
20 "Resulting bank" means the bank resulting from a merger
21 or conversion.
22 "Securities" means stocks, bonds, debentures, notes, or
23 other similar obligations.
24 "Stand-by letter of credit" means a letter of credit
25 under which drafts are payable upon the condition the
26 customer has defaulted in performance of a duty, liability,
27 or obligation.
28 "State bank" means any banking corporation that has a
29 banking charter issued by the Commissioner under this Act.
30 "State Banking Board" means the State Banking Board of
31 Illinois.
32 "Subsidiary" with respect to a specified company means a
33 company that is controlled by the specified company. For
34 purposes of paragraphs (8) and (12) of Section 5 of this Act,
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1 "control" means the exercise of operational or managerial
2 control of a corporation by the bank, either alone or
3 together with other affiliates of the bank.
4 "Surplus" means the aggregate of (i) amounts paid in
5 excess of the par value of capital stock and preferred stock;
6 (ii) amounts contributed other than for capital stock and
7 preferred stock and allocated to the surplus account; and
8 (iii) amounts transferred from undivided profits.
9 "Tier 1 Capital" and "Tier 2 Capital" have the meanings
10 assigned to those terms in regulations promulgated for the
11 appropriate federal banking agency of a state bank, as those
12 regulations are now or hereafter amended.
13 "Trust company" means a limited liability company or
14 corporation incorporated in this State for the purpose of
15 accepting and executing trusts.
16 "Undivided profits" means undistributed earnings less
17 discretionary transfers to surplus.
18 "Unimpaired capital and unimpaired surplus", for the
19 purposes of paragraph (21) of Section 5 and Sections 32, 33,
20 34, 35.1, 35.2, and 47 of this Act means the sum of the state
21 bank's Tier 1 Capital and Tier 2 Capital plus such other
22 shareholder equity as may be included by regulation of the
23 Commissioner. Unimpaired capital and unimpaired surplus
24 shall be calculated on the basis of the date of the last
25 quarterly call report filed with the Commissioner preceding
26 the date of the transaction for which the calculation is
27 made, provided that: (i) when a material event occurs after
28 the date of the last quarterly call report filed with the
29 Commissioner that reduces or increases the bank's unimpaired
30 capital and unimpaired surplus by 10% or more, then the
31 unimpaired capital and unimpaired surplus shall be calculated
32 from the date of the material event for a transaction
33 conducted after the date of the material event; and (ii) if
34 the Commissioner determines for safety and soundness reasons
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1 that a state bank should calculate unimpaired capital and
2 unimpaired surplus more frequently than provided by this
3 paragraph, the Commissioner may by written notice direct the
4 bank to calculate unimpaired capital and unimpaired surplus
5 at a more frequent interval. In the case of a state bank
6 newly chartered under Section 13 or a state bank resulting
7 from a merger, consolidation, or conversion under Sections 21
8 through 26 for which no preceding quarterly call report has
9 been filed with the Commissioner, unimpaired capital and
10 unimpaired surplus shall be calculated for the first calendar
11 quarter on the basis of the effective date of the charter,
12 merger, consolidation, or conversion.
13 (Source: P.A. 89-208, eff. 9-29-95; 89-364, eff. 8-18-95;
14 89-508, eff. 7-3-96; 89-534, eff. 1-1-97; 89-567, eff.
15 7-26-96; 89-626, eff. 8-9-96; 90-14, eff. 7-1-97; 90-301,
16 eff. 8-1-97.)
17 (205 ILCS 5/4.9 new)
18 Sec. 4.9. Limitations on powers. Notwithstanding any
19 other provision of law to the contrary, the Commissioner may
20 specify the powers of banks generally or of a particular bank
21 and by rule or order limit or restrict the powers of banks or
22 of a particular bank if the Commissioner finds the exercise
23 of those powers by banks generally or by a particular bank
24 may tend to be an unsafe or unsound practice or is otherwise
25 not in the interest of depositors or consumers of the bank.
26 (205 ILCS 5/5) (from Ch. 17, par. 311)
27 Sec. 5. General corporate powers. A bank organized
28 under this Act or subject hereto shall be a body corporate
29 and politic and shall, without specific mention thereof in
30 the charter, have all the powers conferred by this Act and
31 the following additional general corporate powers:
32 (1) To sue and be sued, complain, and defend in its
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1 corporate name.
2 (2) To have a corporate seal, which may be altered at
3 pleasure, and to use the same by causing it or a facsimile
4 thereof to be impressed or affixed or in any manner
5 reproduced, provided that the affixing of a corporate seal to
6 an instrument shall not give the instrument additional force
7 or effect, or change the construction thereof, and the use of
8 a corporate seal is not mandatory.
9 (3) To make, alter, amend, and repeal bylaws, not
10 inconsistent with its charter or with law, for the
11 administration of the affairs of the bank. If this Act does
12 not provide specific guidance in matters of corporate
13 governance, the provisions of the Business Corporation Act of
14 1983 may be used if so provided in the bylaws.
15 (4) To elect or appoint and remove officers and agents
16 of the bank and define their duties and fix their
17 compensation.
18 (5) To adopt and operate reasonable bonus plans,
19 profit-sharing plans, stock-bonus plans, stock-option plans,
20 pension plans and similar incentive plans for its directors,
21 officers and employees.
22 (5.1) To manage, operate and administer a fund for the
23 investment of funds by a public agency or agencies, including
24 any unit of local government or school district, or any
25 person. The fund for a public agency shall invest in the
26 same type of investments and be subject to the same
27 limitations provided for the investment of public funds. The
28 fund for public agencies shall maintain a separate ledger
29 showing the amount of investment for each public agency in
30 the fund. "Public funds" and "public agency" as used in this
31 Section shall have the meanings ascribed to them in Section 1
32 of the Public Funds Investment Act.
33 (6) To make reasonable donations for the public welfare
34 or for charitable, scientific, religious or educational
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1 purposes.
2 (7) To borrow or incur an obligation; and to pledge its
3 assets:
4 (a) to secure its borrowings, its lease of personal
5 or real property or its other nondeposit obligations;
6 (b) to enable it to act as agent for the sale of
7 obligations of the United States;
8 (c) to secure deposits of public money of the
9 United States, whenever required by the laws of the
10 United States, including without being limited to,
11 revenues and funds the deposit of which is subject to the
12 control or regulation of the United States or any of its
13 officers, agents, or employees and Postal Savings funds;
14 (d) to secure deposits of public money of any state
15 or of any political corporation or subdivision thereof
16 including, without being limited to, revenues and funds
17 the deposit of which is subject to the control or
18 regulation of any state or of any political corporation
19 or subdivisions thereof or of any of their officers,
20 agents, or employees;
21 (e) to secure deposits of money whenever required
22 by the National Bankruptcy Act;
23 (f) (blank); and
24 (g) to secure trust funds commingled with the
25 bank's funds, whether deposited by the bank or an
26 affiliate of the bank, pursuant to Section 2-8 of the
27 Corporate Fiduciary Act.
28 (8) To own, possess, and carry as assets all or part of
29 the real estate necessary in or with which to do its banking
30 business, either directly or indirectly through the ownership
31 of all or part of the capital stock, shares or interests in
32 any corporation, association, trust engaged in holding any
33 part or parts or all of the bank premises, engaged in such
34 business and in conducting a safe deposit business in the
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1 premises or part of them, or engaged in any activity that the
2 bank is permitted to conduct in a subsidiary pursuant to
3 paragraph (12) of this Section 5.
4 (9) To own, possess, and carry as assets other real
5 estate to which it may obtain title in the collection of its
6 debts or that was formerly used as a part of the bank
7 premises, but title to any real estate except as herein
8 permitted shall not be retained by the bank, either directly
9 or by or through a subsidiary, as permitted by subsection
10 (12) of this Section for a total period of more than 10 years
11 after acquiring title, either directly or indirectly.
12 (10) To do any act, including the acquisition of stock,
13 necessary to obtain insurance of its deposits, or part
14 thereof, and any act necessary to obtain a guaranty, in whole
15 or in part, of any of its loans or investments by the United
16 States or any agency thereof, and any act necessary to sell
17 or otherwise dispose of any of its loans or investments to
18 the United States or any agency thereof, and to acquire and
19 hold membership in the Federal Reserve System.
20 (11) Notwithstanding any other provisions of this Act or
21 any other law, to do any act and to own, possess, and carry
22 as assets property of the character, including stock, that is
23 at the time authorized or permitted to national banks by an
24 Act of Congress, but subject always to the same limitations
25 and restrictions as are applicable to national banks by the
26 pertinent federal law and subject to applicable provisions of
27 the Financial Institutions Insurance Sales Law.
28 (12) To own, possess, and carry as assets stock of one
29 or more corporations that is, or are, engaged in one or more
30 of the following businesses:
31 (a) holding title to and administering assets
32 acquired as a result of the collection or liquidating of
33 loans, investments, or discounts; or
34 (b) holding title to and administering personal
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1 property acquired by the bank, directly or indirectly
2 through a subsidiary, for the purpose of leasing to
3 others, provided the lease or leases and the investment
4 of the bank, directly or through a subsidiary, in that
5 personal property otherwise comply with Section 35.1 of
6 this Act; or
7 (c) carrying on or administering any of the
8 activities excepting the receipt of deposits or the
9 payment of checks or other orders for the payment of
10 money in which a bank may engage in carrying on its
11 general banking business; provided, however, that nothing
12 contained in this paragraph (c) shall be deemed to permit
13 a bank organized under this Act or subject hereto to do,
14 either directly or indirectly through any subsidiary, any
15 act, including the making of any loan or investment, or
16 to own, possess, or carry as assets any property that if
17 done by or owned, possessed, or carried by the State bank
18 would be in violation of or prohibited by any provision
19 of this Act.
20 The provisions of this subsection (12) shall not apply to
21 and shall not be deemed to limit the powers of a State bank
22 with respect to the ownership, possession, and carrying of
23 stock that a State bank is permitted to own, possess, or
24 carry under this Act.
25 Any bank intending to establish a subsidiary under this
26 subsection (12) shall give written notice to the Commissioner
27 60 days prior to the subsidiary's commencing of business or,
28 as the case may be, prior to acquiring stock in a corporation
29 that has already commenced business. After receiving the
30 notice, the Commissioner may waive or reduce the balance of
31 the 60 day notice period. The Commissioner may specify the
32 form of the notice and may promulgate rules and regulations
33 to administer this subsection (12).
34 (13) To accept for payment at a future date not
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1 exceeding one year from the date of acceptance, drafts drawn
2 upon it by its customers; and to issue, advise, or confirm
3 letters of credit authorizing the holders thereof to draw
4 drafts upon it or its correspondents.
5 (14) To own and lease personal property acquired by the
6 bank at the request of a prospective lessee and upon the
7 agreement of that person to lease the personal property
8 provided that the lease, the agreement with respect thereto,
9 and the amount of the investment of the bank in the property
10 comply with Section 35.1 of this Act.
11 (15) (a) To establish and maintain, in addition to the
12 main banking premises, branches offering any banking
13 services permitted at the main banking premises of a
14 State bank.
15 (b) To establish and maintain, after May 31, 1997,
16 branches in another state that may conduct any activity
17 in that state that is authorized or permitted for any
18 bank that has a banking charter issued by that state,
19 subject to the same limitations and restrictions that are
20 applicable to banks chartered by that state.
21 (16) (Blank).
22 (17) To establish and maintain terminals, as authorized
23 by the Electronic Fund Transfer Act.
24 (18) To establish and maintain temporary service booths
25 at any International Fair held in this State which is
26 approved by the United States Department of Commerce, for the
27 duration of the international fair for the sole purpose of
28 providing a convenient place for foreign trade customers at
29 the fair to exchange their home countries' currency into
30 United States currency or the converse. This power shall not
31 be construed as establishing a new place or change of
32 location for the bank providing the service booth.
33 (19) To indemnify its officers, directors, employees,
34 and agents, as authorized for corporations under Section 8.75
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1 of the Business Corporation Act of 1983.
2 (20) To own, possess, and carry as assets stock of, or
3 be or become a member of, any corporation, mutual company,
4 association, trust, or other entity formed exclusively for
5 the purpose of providing directors' and officers' liability
6 and bankers' blanket bond insurance or reinsurance to and for
7 the benefit of the stockholders, members, or beneficiaries,
8 or their assets or businesses, or their officers, directors,
9 employees, or agents, and not to or for the benefit of any
10 other person or entity or the public generally.
11 (21) To make debt or equity investments in corporations
12 or projects, whether for profit or not for profit, designed
13 to promote the development of the community and its welfare,
14 provided that the aggregate investment in all of these
15 corporations and in all of these projects does not exceed 10%
16 of the unimpaired capital and unimpaired surplus of the bank
17 and provided that this limitation shall not apply to
18 creditworthy loans by the bank to those corporations or
19 projects. Upon written application to the Commissioner, a
20 bank may make an investment that would, when aggregated with
21 all other such investments, exceed 10% of the unimpaired
22 capital and unimpaired surplus of the bank. The Commissioner
23 may approve the investment if he is of the opinion and finds
24 that the proposed investment will not have a material adverse
25 effect on the safety and soundness of the bank.
26 (22) To own, possess, and carry as assets the stock of a
27 corporation engaged in the ownership or operation of a travel
28 agency or to operate a travel agency as a part of its
29 business, provided that the bank either owned, possessed, and
30 carried as assets the stock of such a corporation or operated
31 a travel agency as part of its business before July 1, 1991.
32 (23) With respect to affiliate facilities:
33 (a) to conduct at affiliate facilities for and on
34 behalf of another commonly owned bank, if so authorized
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1 by the other bank, all transactions that the other bank
2 is authorized or permitted to perform; and
3 (b) to authorize a commonly owned bank to conduct
4 for and on behalf of it any of the transactions it is
5 authorized or permitted to perform at one or more
6 affiliate facilities.
7 Any bank intending to conduct or to authorize a commonly
8 owned bank to conduct at an affiliate facility any of the
9 transactions specified in this paragraph (23) shall give
10 written notice to the Commissioner at least 30 days before
11 any such transaction is conducted at the affiliate facility.
12 (24) To act as the agent for any fire, life, or other
13 insurance company authorized by the State of Illinois, by
14 soliciting and selling insurance and collecting premiums on
15 policies issued by such company; and to receive for services
16 so rendered such fees or commissions as may be agreed upon
17 between the bank and the insurance company for which it may
18 act as agent; provided, however, that no such bank shall in
19 any case assume or guarantee the payment of any premium on
20 insurance policies issued through its agency by its
21 principal; and provided further, that the bank shall not
22 guarantee the truth of any statement made by an assured in
23 filing his application for insurance.
24 (25) Notwithstanding any other provisions of this Act or
25 any other law, to offer any product or service that is at the
26 time authorized or permitted to any insured savings
27 association or out-of-state bank by applicable law, provided
28 that powers conferred only by this subsection (25):
29 (a) shall always be subject to the same limitations
30 and restrictions that are applicable to the insured
31 savings association or out-of-state bank for the product
32 or service by such applicable law;
33 (b) shall be subject to applicable provisions of
34 the Financial Institutions Insurance Sales Law;
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1 (c) shall not include the right to own or conduct a
2 real estate brokerage business for which a license would
3 be required under the laws of this State; and
4 (d) shall not be construed to include the
5 establishment or maintenance of a branch, nor shall they
6 be construed to limit the establishment or maintenance of
7 a branch pursuant to subsection (11).
8 (Source: P.A. 90-41, eff. 10-1-97; 90-301, eff. 8-1-97;
9 90-655, eff. 7-30-98; 90-665, eff. 7-30-98; 91-330, eff.
10 7-29-99; 91-849, eff. 6-22-00.)
11 (205 ILCS 5/5b) (from Ch. 17, par. 312.1)
12 Sec. 5b. Deposits in outside depository.
13 (a) Except as provided in subsection (b), every bank is
14 liable for deposits made in an outside depository from the
15 time the deposit is made.
16 (b) A bank may adopt a policy that its liability for
17 deposits made in outside depositories will be delayed until
18 the deposits are recorded, and, if such a policy is adopted
19 and depositors are notified in writing at least 21 days in
20 advance of the effective date of such policy, the bank's
21 liability will be delayed in accordance with the policy. In
22 case of deposit accounts opened after such a policy is
23 adopted, the policy shall be effective if the depositor is
24 given written notice of the policy at the time the deposit
25 account is opened.
26 (c) For the purposes of this Section "outside
27 depository" means any receptacle attached to a main banking
28 premise, or branch, as allowed in subsection (15) of Section
29 5 of this Act, or other location for the purpose of making
30 deposits either during or after regular banking hours, but
31 does not include an automatic teller machine or point of sale
32 terminal, as defined in the Electronic Fund Transfer Act.
33 (Source: P.A. 88-273; 89-310, eff. 1-1-96.)
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1 (205 ILCS 5/7) (from Ch. 17, par. 314)
2 Sec. 7. Organization capital requirements. A bank may be
3 organized to exercise the powers conferred by this Act with
4 minimum capital and surplus as determined by the
5 Commissioner. The Commissioner shall record such
6 organization capital requirements in the Office of the
7 Secretary of State.
8 (Source: P.A. 90-301, eff. 8-1-97.)
9 (205 ILCS 5/8) (from Ch. 17, par. 315)
10 Sec. 8. Incorporators. A State bank may be organized on
11 application by 5 or more incorporators who shall be
12 individuals except that a bank holding company may be the
13 sole incorporator of a State bank. Each incorporator shall
14 undertake to subscribe and pay in full in cash for stock
15 having a value of not less than one per cent of the minimum
16 capital and surplus requirements as set forth in Section 7,
17 except that incorporators of a State bank that will be owned
18 by a bank holding company may subscribe and pay in full in
19 cash for stock of the bank holding company, provided that the
20 incorporator's investment in the bank holding company must at
21 least equal the amount of money that would have been needed
22 for the incorporator to acquire shares of the bank's stock
23 pursuant to this Section.
24 (Source: P.A. 90-301, eff. 8-1-97.)
25 (205 ILCS 5/10) (from Ch. 17, par. 317)
26 Sec. 10. Permit to organize.
27 (a) Upon the filing of an application for a permit to
28 organize, the Commissioner shall investigate the truth of the
29 statements therein and shall consider the proposed bank's
30 capital structure, its future earnings prospects, the general
31 character, experience, and qualifications of its proposed
32 management, its proposed plan of operation, and the
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1 convenience and needs of the area sought to be served, and
2 notwithstanding the provisions of Section 7 of this Act, the
3 Commissioner shall not approve the application and issue a
4 permit to organize unless he shall be of the opinion and
5 finds:
6 (1) that the proposed capital at least meets the
7 minimum requirements of this Act determined by the
8 Commissioner pursuant to Section 7 of this Act including
9 additional capital necessitated by the circumstances of
10 the proposed bank including its size, scope of
11 operations and market in which it proposes to operate;
12 (2) that the future earnings prospects are
13 favorable;
14 (3) that the general character, experience, and
15 qualifications of its proposed management and its
16 proposed plan of operation are such as to assure
17 reasonable promise of successful, safe and sound
18 operation;
19 (4) that the name of the proposed bank is not the
20 same as or deceptively similar to a name reserved with
21 the Commissioner's office under Section 9.5 or to the
22 name of any other bank then operating in this State; and
23 (5) that the convenience and needs of the area
24 sought to be served by the proposed bank will be
25 promoted.
26 (b) The Commissioner shall revoke the permit to organize
27 and order liquidation of any funds collected in the event
28 that the organizers do not obtain a charter from the
29 Commissioner authorizing the bank to commence business within
30 6 months from the date of the issuance of the permit, unless
31 a request has been submitted, in writing, to the Commissioner
32 for an extension and the request has been approved.
33 (c) The Commissioner may impose such terms and
34 conditions, if any, on the issuance of the permit to organize
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1 as the Commissioner deems appropriate and necessary for the
2 organization of the bank.
3 (Source: P.A. 90-665, eff. 7-30-98; 91-452, eff. 1-1-00.)
4 (205 ILCS 5/12) (from Ch. 17, par. 319)
5 Sec. 12. Organization.
6 (a) The directors so elected shall may proceed to
7 organize in conformity with this Act and as follows:
8 (1) To qualify themselves as directors.
9 (2) To elect one of their number as president.
10 (3) To make and adopt by-laws not inconsistent with
11 its charter or with law for the administration of the
12 affairs of the bank.
13 (4) To appoint such officers as the by-laws may
14 provide, and fix the salaries of all officers.
15 (5) To furnish to the Commissioner lists of the
16 stockholders and copies of any other records the
17 Commissioner may require.
18 (6) To collect the subscriptions to the capital
19 stock and to the preferred stock, if any, including the
20 surplus and the reserves for operating expenses.
21 (6.5) To notify the Commissioner of any significant
22 deviation or change from the original plan of operation
23 or proposed business activities submitted with the
24 application for a permit to organize.
25 (7) To report the organization to the Commissioner.
26 (b) Subscriptions to the capital stock and to the
27 preferred stock, if any, collected pursuant to item (6) of
28 subsection (a) of this Section must be placed in escrow.
29 Funds may not be withdrawn from the escrow until (1) the
30 charter authorizing the bank to commence a banking business
31 has been issued under Section 13 or (2) the directors submit
32 a written request to withdraw a specified amount of funds and
33 the Commissioner grants a written approval for the
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1 withdrawal.
2 (Source: P.A. 85-204.)
3 (205 ILCS 5/13) (from Ch. 17, par. 320)
4 Sec. 13. Issuance of charter.
5 (a) When the directors have organized as provided in
6 Section 12 of this Act, and the capital stock and the
7 preferred stock, if any, together with a surplus of not less
8 than 50% of the capital, has been all fully paid in and a
9 record of the same filed with the Commissioner, the
10 Commissioner or some competent person of the Commissioner's
11 appointment shall make a thorough examination into the
12 affairs of the proposed bank, and if satisfied (i) that all
13 the requirements of this Act have been complied with, (ii)
14 that no intervening circumstance has occurred to change the
15 Commissioner's findings made pursuant to Section 10 of this
16 Act, and (iii) that the prior involvement by any stockholder
17 who will own a sufficient amount of stock to have control, as
18 defined in Section 18 of this Act, of the proposed bank with
19 any other financial institution, whether as stockholder,
20 director, officer, or customer, was conducted in a safe and
21 sound manner, upon payment into the Commissioner's office of
22 the reasonable expenses of the examination, as determined by
23 the Commissioner, the Commissioner shall issue a charter
24 authorizing the bank to commence business as authorized in
25 this Act. All charters issued by the Commissioner or any
26 predecessor agency which chartered State banks, including any
27 charter outstanding as of September 1, 1989, shall be
28 perpetual. For the 2 years after the Commissioner has issued
29 a charter to a bank, the bank shall request and obtain from
30 the Commissioner prior written approval before it may change
31 senior management personnel or directors.
32 The original charter, duly certified by the Commissioner,
33 or a certified copy shall be evidence in all courts and
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1 places of the existence and authority of the bank to do
2 business. Upon the issuance of the charter by the
3 Commissioner, the bank shall be deemed fully organized and
4 may proceed to do business. The Commissioner may, in the
5 Commissioner's discretion, withhold the issuing of the
6 charter when the Commissioner has reason to believe that the
7 bank is organized for any purpose other than that
8 contemplated by this Act or that a commission or fee has been
9 paid in connection with the sale of the stock of the bank.
10 The Commissioner shall revoke the charter and order
11 liquidation in the event that the bank does not commence a
12 general banking business within one year from the date of the
13 issuance of the charter, unless a request has been submitted,
14 in writing, to the Commissioner for an extension and the
15 request has been approved. After commencing a general
16 banking business, a bank may change its name by filing
17 written notice with the Commissioner at least 30 days prior
18 to the effective date of such change. A bank chartered under
19 this Act may change its main banking premises by filing
20 written application with the Commissioner, on forms
21 prescribed by the Commissioner, provided (i) the change shall
22 not be a removal to a new location without complying with the
23 capital requirements of Section 7 and of subsection (1) of
24 Section 10 of this Act; (ii) the Commissioner approves the
25 relocation or change; and (iii) the bank complies with any
26 applicable federal law or regulation. The application shall
27 be deemed to be approved if the Commissioner has not acted on
28 the application within 30 days after receipt of the
29 application, unless within the 30-day time frame the
30 Commissioner informs the bank that an extension of time is
31 necessary prior to the Commissioner's action on the
32 application.
33 (b) (1) The Commissioner may also issue a charter to a
34 bank that is owned exclusively by other depository
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1 institutions or depository institution holding companies and
2 is organized to engage exclusively in providing services to
3 or for other depository institutions, their holding
4 companies, and the officers, directors, and employees of such
5 institutions and companies, and in providing correspondent
6 banking services at the request of other depository
7 institutions or their holding companies (also referred to as
8 a "bankers' bank").
9 (2) A bank chartered pursuant to paragraph (1) shall,
10 except as otherwise specifically determined or limited by the
11 Commissioner in an order or pursuant to a rule, be vested
12 with the same rights and privileges and subject to the same
13 duties, restrictions, penalties, and liabilities now or
14 hereafter imposed under this Act.
15 (c) A bank chartered under this Act after November 1,
16 1985, and an out-of-state bank that merges with a State bank
17 and establishes or maintains a branch in this State after May
18 31, 1997, shall obtain from and, at all times while it
19 accepts or retains deposits, maintain with the Federal
20 Deposit Insurance Corporation, or such other instrumentality
21 of or corporation chartered by the United States, deposit
22 insurance as authorized under federal law.
23 (d) (i) A bank that has a banking charter issued by the
24 Commissioner under this Act may, pursuant to a written
25 purchase and assumption agreement, transfer substantially all
26 of its assets to another State bank or national bank in
27 consideration, in whole or in part, for the transferee banks'
28 assumption of any part or all of its liabilities. Such a
29 transfer shall in no way be deemed to impair the charter of
30 the transferor bank or cause the transferor bank to forfeit
31 any of its rights, powers, interests, franchises, or
32 privileges as a State bank, nor shall any voluntary reduction
33 in the transferor bank's activities resulting from the
34 transfer have any such effect; provided, however, that a
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1 State bank that transfers substantially all of its assets
2 pursuant to this subsection (d) and following the transfer
3 does not accept deposits and make loans, shall not have any
4 rights, powers, interests, franchises, or privileges under
5 subsection (15) of Section 5 of this Act until the bank has
6 resumed accepting deposits and making loans.
7 (ii) The fact that a State bank does not resume
8 accepting deposits and making loans for a period of 24 months
9 commencing on September 11, 1989 or on a date of the transfer
10 of substantially all of a State bank's assets, whichever is
11 later, or such longer period as the Commissioner may allow in
12 writing, may be the basis for a finding by the Commissioner
13 under Section 51 of this Act that the bank is unable to
14 continue operations.
15 (iii) The authority provided by subdivision (i) of this
16 subsection (d) shall terminate on May 31, 1997, and no bank
17 that has transferred substantially all of its assets pursuant
18 to this subsection (d) shall continue in existence after May
19 31, 1997.
20 (Source: P.A. 90-14, eff. 7-1-97; 90-301, eff. 8-1-97;
21 90-665, eff. 7-30-98; 91-322, eff. 1-1-00.)
22 (205 ILCS 5/13.5)
23 Sec. 13.5. Formation and merger of interim banks.
24 (a) An interim bank may be chartered as a State bank for
25 the exclusive purpose of accomplishing a corporate
26 restructuring through merger with an existing State bank or
27 as the resulting bank in a merger with an existing national
28 bank or an insured savings association. An interim bank
29 shall be chartered and merged pursuant to the provisions of
30 this Section. The interim bank shall not accept deposits,
31 make loans, pay checks, or engage in the general banking
32 business or any part thereof, and shall not be subject to the
33 provisions of this Act other than those set forth in this
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1 Section; provided, however, that if the interim bank becomes
2 the resulting bank in a merger, such resulting bank shall
3 have all of the powers, rights, and duties of a State bank
4 and must comply with all applicable provisions of this Act.
5 (b) An interim State bank may be organized upon
6 application by 5 or more incorporators or by a bank holding
7 company. The application shall be made on forms prescribed
8 by the Commissioner which shall request, at a minimum, the
9 following information:
10 (1) the names and addresses of the incorporators;
11 (2) the proposed name and address of the interim
12 bank;
13 (3) the name and address of all banks with which
14 the interim bank will be merging;
15 (4) a copy of the merger agreement by which the
16 interim bank will be merged with the banks identified in
17 item (3) containing the same information required in
18 merger agreements pursuant to subsection (1) of Section
19 22 of this Act; and
20 (5) an acknowledgement that the interim bank shall
21 not engage in the general banking business or any part
22 thereof unless and until the interim bank becomes the
23 resulting bank in a merger.
24 (c) The merger agreement must be approved by all of the
25 incorporators of the interim bank and must be approved by the
26 existing State bank with which the interim bank will merge,
27 as required by Section 22 of this Act.
28 (d) Upon receipt of the application to organize the
29 interim bank and the merger agreement submitted pursuant to
30 this Section and Section 22 of this Act, the Commissioner may
31 issue a charter to the interim bank and approve the merger
32 agreement if the Commissioner makes the findings set forth in
33 subsection (3) of Section 22 of this Act. The interim bank's
34 charter shall not take effect until, and shall only be
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1 effective for purposes of, the merger.
2 (e) Nothing in this Section affects the obligations of
3 an existing State bank with which the interim bank will
4 merge, or the rights of minority or dissenting shareholders
5 of the existing State bank, in connection with the approval,
6 execution, and accomplishment of a merger agreement as
7 provided elsewhere in this Act.
8 (Source: P.A. 90-301, eff. 8-1-97.)
9 (205 ILCS 5/14) (from Ch. 17, par. 321)
10 Sec. 14. Stock. Unless otherwise provided for in this
11 Act provisions of general application to stock of a state
12 bank shall be as follows:
13 (1) All banks shall have their capital divided into
14 shares of a par value of not less than $1 one dollar each and
15 not more than $100 one hundred dollars each, however, the par
16 value of shares of a bank effecting a reverse stock split
17 pursuant to item (8) of subsection (a) of Section 17 may
18 temporarily exceed this limit provided it conforms to the
19 limits immediately after the reverse stock split is
20 completed. No issue of capital stock or preferred stock shall
21 be valid until not less than the par value of all such stock
22 so issued shall be paid in and notice thereof by the
23 president, a vice-president or cashier of the bank has been
24 transmitted to the Commissioner. In the case of an increase
25 in capital stock by the declaration of a stock dividend, the
26 capitalization of retained earnings effected by such stock
27 dividend shall constitute the payment for such shares
28 required by the preceding sentence, provided that the surplus
29 of said bank after such stock dividend shall be at least
30 equal to fifty per cent of the capital as increased. The
31 charter shall not limit or deny the voting power of the
32 shares of any class of stock except as provided in Section
33 15(3) of this Act.
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1 (2) Pursuant to action taken in accordance with the
2 requirements of Section 17, a bank may issue preferred stock
3 of one or more classes as shall be approved by the
4 Commissioner as hereinafter provided, and make such amendment
5 to its charter as may be necessary for this purpose; but in
6 the case of any newly organized bank which has not yet issued
7 capital stock the requirements of Section 17 shall not apply.
8 (3) Without limiting the authority herein contained a
9 bank, when so provided in its charter and when approved by
10 the Commissioner, may issue shares of preferred stock:
11 (a) Subject to the right of the bank to redeem any
12 of such shares at not exceeding the price fixed by the
13 charter for the redemption thereof;
14 (b) Subject to the provisions of subsection (8) of
15 this Section 14 entitling the holders thereof to
16 cumulative or noncumulative dividends;
17 (c) Having preference over any other class or
18 classes of shares as to the payment of dividends;
19 (d) Having preference as to the assets of the bank
20 over any other class or classes of shares upon the
21 voluntary or involuntary liquidation of the bank;
22 (e) Convertible into shares of any other class of
23 stock, provided that preferred shares shall not be
24 converted into shares of a different par value unless
25 that part of the capital of the bank represented by such
26 preferred shares is at the time of the conversion equal
27 to the aggregate par value of the shares into which the
28 preferred shares are to be converted.
29 (4) If any part of the capital of a bank consists of
30 preferred stock, the determination of whether or not the
31 capital of such bank is impaired and the amount of such
32 impairment shall be based upon the par value of its stock
33 even though the amount which the holders of such preferred
34 stock shall be entitled to receive in the event of retirement
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1 or liquidation shall be in excess of the par value of such
2 preferred stock.
3 (5) Pursuant to action taken in accordance with the
4 requirements of Section 17 of this Act, a state bank may
5 provide for a specified number of authorized but unissued
6 shares of capital stock for one or more of the following
7 purposes:
8 (a) Reserved for issuance under stock option plan
9 or plans to directors, officers or employees;
10 (b) Reserved for issuance upon conversion of
11 convertible preferred stock issued pursuant to and in
12 compliance with the provisions of subsections (2) and (3)
13 of this Section 14.
14 (c) Reserved for issuance upon conversion of
15 convertible debentures or other convertible evidences of
16 indebtedness issued by a state bank, provided always that
17 the terms of such conversion have been approved by the
18 Commissioner;
19 (d) Reserved for issuance by the declaration of a
20 stock dividend. If and when any shares of capital stock
21 are proposed to be authorized and reserved for any of the
22 purposes set forth in subparagraphs (a), (b) or (c)
23 above, the notice of the meeting, whether special or
24 annual, of stockholders at which such proposition is to
25 be considered shall be accompanied by a statement setting
26 forth or summarizing the terms upon which the shares of
27 capital stock so reserved are to be issued, and the
28 extent to which any preemptive rights of stockholders are
29 inapplicable to the issuance of the shares so reserved or
30 to the convertible preferred stock or convertible
31 debentures or other convertible evidences of
32 indebtedness, and the approving vote of the holders of at
33 least two-thirds of the outstanding shares of stock
34 entitled to vote at such meeting of the terms of such
-35- LRB9206318JSprA
1 issuance shall be requisite for the adoption of any
2 amendment providing for the reservation of authorized but
3 unissued shares for any of said purposes. Nothing in this
4 subsection (5) contained shall be deemed to authorize the
5 issuance of any capital stock for a consideration less
6 than the par value thereof.
7 (6) Upon written application to the Commissioner 60 days
8 prior to the proposed purchase and receipt of the written
9 approval of the Commissioner, a state bank may purchase and
10 hold as treasury stock such amounts of the total number of
11 issued and outstanding shares of its capital and preferred
12 stock outstanding as the Commissioner determines is
13 consistent with safety and soundness of the bank. The
14 Commissioner may specify the manner of accounting for the
15 treasury stock and the form of notice prior to ultimate
16 disposition of the shares. Except as authorized in this
17 subsection, it shall not be lawful for a state bank to
18 purchase or hold any additional such shares or securities
19 described in subsection (2) of Section 37 unless necessary to
20 prevent loss upon a debt previously contracted in good faith,
21 in which event such shares or securities so purchased or
22 acquired shall, within 6 months from the time of purchase or
23 acquisition, be sold or disposed of at public or private
24 sale. Any state bank which intends to purchase and hold
25 treasury stock as authorized in this subsection (6) shall
26 file a written application with the Commissioner 60 days
27 prior to any such proposed purchase. The application shall
28 state the number of shares to be purchased, the consideration
29 for the shares, the name and address of the person from whom
30 the shares are to be purchased, if known, and the total
31 percentage of its issued and outstanding shares to be held by
32 the bank after the purchase. The total consideration paid by
33 a state bank for treasury stock shall reduce capital and
34 surplus of the bank for purposes of Sections of this Act
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1 relating to lending and investment limits which require
2 computation of capital and surplus. After considering and
3 approving an application to purchase and hold treasury stock
4 under this subsection, the Commissioner may waive or reduce
5 the balance of the 60 day application period. The
6 Commissioner may specify the form of the application for
7 approval to acquire treasury stock and promulgate rules and
8 regulations for the administration of this subsection (6). A
9 state bank may, acquire or resell its owns shares as treasury
10 stock pursuant to this subsection (6) without a change in its
11 charter pursuant to Section 17. Such stock may be held for
12 any purpose permitted in subsection (5) of this Section 14 or
13 may be resold upon such reasonable terms as the board of
14 directors may determine provided notice is given to the
15 Commissioner prior to the resale of such stock.
16 (7) During the time that a state bank shall continue its
17 banking business, it shall not withdraw or permit to be
18 withdrawn, either in the form of dividends or otherwise, any
19 portion of its capital, but nothing in this subsection shall
20 prevent a reduction or change of the capital stock or the
21 preferred stock under the provisions of Sections 17 through
22 30 of this Act, a purchase of treasury stock under the
23 provisions of subsection (6) of this Section 14 or a
24 redemption of preferred stock pursuant to charter provisions
25 therefor.
26 (8) (a) Subject to the provisions of this Act, the
27 board of directors of a state bank from time to time may
28 declare a dividend of so much of the net profits of such
29 bank as it shall judge expedient, but each bank before
30 the declaration of a dividend shall carry at least
31 one-tenth of its net profits since the date of the
32 declaration of the last preceding dividend, or since the
33 issuance of its charter in the case of its first
34 dividend, to its surplus until the same shall be equal to
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1 its capital.
2 (b) No dividends shall be paid by a state bank
3 while it continues its banking business to an amount
4 greater than its net profits then on hand, deducting
5 first therefrom its losses and bad debts. All debts due
6 to a state bank on which interest is past due and unpaid
7 for a period of 6 months or more, unless the same are
8 well secured and in the process of collection, shall be
9 considered bad debts.
10 (9) A State bank may, but shall not be obliged to, issue
11 a certificate for a fractional share, and, by action of its
12 board of directors, may in lieu thereof, pay cash equal to
13 the value of the fractional share. A certificate for a
14 fractional share shall entitle the holder to exercise
15 fractional voting rights, to receive dividends, and to
16 participate in any of the assets of the bank in the event of
17 liquidation.
18 (Source: P.A. 90-160, eff. 7-23-97; 90-301, eff. 8-1-97;
19 90-655, eff. 7-30-98.)
20 (205 ILCS 5/15) (from Ch. 17, par. 322)
21 Sec. 15. Stock and stockholders. Unless otherwise
22 provided for in this Act, provisions of general application
23 to capital stock, preferred stock, and stockholders of a
24 State bank shall be as follows:
25 (1) There shall be an annual meeting of the stockholders
26 for the election of directors each year on the first business
27 day in January, unless some other date shall be fixed by the
28 by-laws. A special meeting of the stockholders may be called
29 at any time by the board of directors, and otherwise as may
30 be provided in the bylaws.
31 (2) Written or printed notice stating the place, day,
32 and hour of the meeting, and in case of a special meeting,
33 the purpose or purposes for which the meeting is called,
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1 shall be delivered not less than 10 nor more than 40 days
2 before the date of the meeting either personally or by mail,
3 by or at the direction of the president, or the secretary, or
4 the officer or persons calling the meeting, to each
5 stockholder of record entitled to vote at the meeting. If
6 mailed, the notice shall be deemed to be delivered when
7 deposited in the United States mail with postage thereon
8 prepaid addressed to the stockholder at his address as it
9 appears on the records of the bank.
10 (3) Except as provided below in this paragraph (3), each
11 outstanding share shall be entitled to one vote on each
12 matter submitted to a vote at a meeting of stockholders.
13 Shares of its own stock belonging to a bank shall not be
14 voted, directly or indirectly, at any meeting and shall not
15 be counted in determining the total number of outstanding
16 shares at any given time, but shares of its own stock held by
17 it in a fiduciary capacity may be voted and shall be counted
18 in determining the total number of outstanding shares at any
19 given time. A stockholder may vote either in person or by
20 proxy executed in writing by the stockholder or by his duly
21 authorized attorney-in-fact. No proxy shall be valid after
22 11 months from the date of its execution, unless otherwise
23 provided in the proxy. Except as provided below in this
24 paragraph (3), in all elections for directors every
25 stockholder (or subscriber to the stock prior to the issuance
26 of a charter) shall have the right to vote, in person or by
27 proxy, for the number of shares of stock owned by him, for as
28 many persons as there are directors to be elected, or to
29 cumulate the shares and give one candidate as many votes as
30 the number of directors multiplied by the number of his or
31 her shares of stock shall equal, or to distribute them on the
32 same principle among as many candidates as he or she shall
33 think fit. The bank charter of any bank organized on or
34 after January 1, 1984 may limit or eliminate cumulative
-39- LRB9206318JSprA
1 voting rights in all or specified circumstances, or may
2 eliminate voting rights entirely, as to any class or classes
3 or series of stock of the bank; provided that one class of
4 shares or series thereof shall always have voting rights in
5 respect of all matters in the bank. A bank organized prior to
6 January 1, 1984 may amend its charter to eliminate cumulative
7 voting rights under all or specified circumstances, or to
8 eliminate voting rights entirely, as to any class or classes
9 or series of stock of the bank; provided that one class of
10 shares or series thereof shall always have voting rights in
11 respect of all matters in the bank, and provided further that
12 the proposal to eliminate the voting rights receives the
13 approval of the holders of 70% of the outstanding shares of
14 stock entitled to vote as provided in paragraph (b) (7) of
15 Section 17. A majority of the outstanding shares represented
16 in person or by proxy shall constitute a quorum at a meeting
17 of stockholders. In the absence of a quorum a meeting may be
18 adjourned from time to time without notice to the
19 stockholders.
20 (4) Whenever additional stock of a class is offered for
21 sale, stockholders of record of the same class on the date of
22 the offer shall have the right to subscribe to the proportion
23 of the shares as the stock of the class held by them bears to
24 the total of the outstanding stock of the class, and the
25 price thereof may be in excess of par value. This right
26 shall be transferable but shall terminate if not exercised
27 within 60 days of the offer, unless the Commissioner shall
28 authorize a shorter time. If the right is not exercised, the
29 stock shall not be re-offered for sale to others at a lower
30 price without the stockholders of the same class again being
31 accorded a preemptive right to subscribe at the lower price.
32 Notwithstanding any of the provisions of this paragraph (4)
33 or any other provision of law, stockholders shall not have
34 any preemptive or other right to subscribe for or to purchase
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1 or acquire shares of capital stock issued or to be issued
2 under a stock-option plan or upon conversion of preferred
3 stock or convertible debentures or other convertible
4 indebtedness that has been approved by stockholders in the
5 manner required by the provisions of subsection (5) of
6 Section 14 hereof or to treasury stock acquired pursuant to
7 subsection (6) of Section 14.
8 (5) For the purpose of determining stockholders entitled
9 to notice of or to vote at any meeting of stockholders, or
10 stockholders entitled to receive payment of any dividend, or
11 in order to make a determination of stockholders for any
12 other proper purpose, the board of directors of a bank may
13 provide that the stock transfer books shall be closed for a
14 stated period not to exceed, in any case, 40 days. In lieu
15 of closing the stock transfer books, the board of directors
16 may fix in advance a date as the record date for any
17 determination of stockholders, the date in any case to be not
18 more than 40 days, and in case of a meeting of stockholders,
19 not less than 10 days prior to the date on which the
20 particular action, requiring the determination of
21 stockholders, is to be taken. If the stock transfer books
22 are not closed and no record date is fixed for the
23 determination of stockholders entitled to notice of or to
24 vote at a meeting of stockholders, or stockholders entitled
25 to receive payment of a dividend, the date on which notice of
26 a meeting is mailed or the date on which the resolution of
27 the board of directors declaring the dividend is adopted, as
28 the case may be, shall be the record date for the
29 determination of stockholders.
30 (6) Stock standing in the name of another corporation,
31 domestic or foreign, may be voted by the officer, agent, or
32 proxy as the by-laws of the corporation may prescribe, or, in
33 the absence of such provision, as the board of directors of
34 the corporation may determine. Stock standing in the name of
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1 a deceased person may be voted by his or her administrator or
2 executor, either in person or by proxy. Stock standing in
3 the name of a guardian or trustee may be voted by that
4 fiduciary either in person or by proxy. Shares standing in
5 the name of a receiver may be voted by the receiver, and
6 shares held by or under control of a receiver may be voted by
7 the receiver without the transfer thereof into his or her
8 name if authority so to do be contained in an appropriate
9 order of the court by which the receiver was appointed. A
10 stockholder whose shares of stock are pledged shall be
11 entitled to vote those shares until the shares have been
12 transferred into the name of the pledgee, and thereafter the
13 pledgee shall be entitled to vote the shares so transferred.
14 (7) Shares of stock shall be transferable in accordance
15 with the general laws of this State governing the transfer of
16 corporate shares.
17 (8) The president and cashier of every State bank shall
18 cause to be kept at all times a full and correct list of the
19 names and residences of all the shareholders in the State
20 bank and the number of shares held by each in the office
21 where its business is transacted. The list shall be subject
22 to the inspection of all the shareholders of the State bank
23 and the officers authorized to assess taxes under State
24 authority during business hours of each day in which business
25 may be legally transacted. A copy of the list, verified by
26 the oath of the president or cashier, shall be transmitted to
27 the Commissioner of Banks and Real Estate within 10 days of
28 any demand therefor made by the Commissioner.
29 (9) Any number of shareholders of a bank may create a
30 voting trust for the purpose of conferring upon a trustee or
31 trustees the right to vote or otherwise represent their
32 shares for a period of not to exceed 10 years by entering
33 into a written voting trust agreement specifying the terms
34 and conditions of the voting trust and by transferring their
-42- LRB9206318JSprA
1 shares to the trustee or trustees for the purposes of the
2 agreement. The trust agreement shall not become effective
3 until a counterpart of the agreement is deposited with the
4 bank at its main banking premises registered office. The
5 counterpart of the voting trust agreement so deposited with
6 the bank shall be subject to the same right of examination by
7 a shareholder of the bank, in person or by agent or attorney,
8 as is the record of shareholders of the bank and shall be
9 subject to examination by any holder of a beneficial interest
10 in the voting trust, either in person or by agent or
11 attorney, at any reasonable time for any proper purpose.
12 (10) Voting agreements. Shareholders may provide for
13 the voting of their shares by signing an agreement for that
14 purpose. A voting agreement created under this paragraph is
15 not subject to the provisions of paragraph (9).
16 A voting agreement created under this paragraph is
17 specifically enforceable in accordance with the principles of
18 equity.
19 (Source: P.A. 89-508, eff. 7-3-96.)
20 (205 ILCS 5/16.1) (from Ch. 17, par. 323.1)
21 Sec. 16.1. One or more of the directors may be removed,
22 with or without cause, at a meeting of shareholders by the
23 affirmative vote of the holders of a majority of the
24 outstanding shares then entitled to vote at an election of
25 directors, except as follows:
26 (1) No director shall be removed at a meeting of
27 shareholders unless the notice of the meeting shall state
28 that a purpose of the meeting is to vote upon the removal of
29 one or more directors named in the notice. Only the named
30 director or directors may be removed at that meeting.
31 (2) In the case of a bank having cumulative voting, if
32 less than the entire board is to be removed, no director may
33 be removed if the votes cast against his or her removal would
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1 be sufficient to elect him or her if then cumulatively voted
2 at an election of the entire board of directors.
3 (3) If a director is elected by a class or series of
4 shares, he or she may be removed only by the shareholders of
5 that class or series.
6 (4) In the case of a State bank whose board is
7 classified as provided in paragraph (3) (5) of Section 16 of
8 this Act, the charter or the by-laws may provide that
9 directors may be removed only for cause.
10 (Source: P.A. 86-368; 87-269.)
11 (205 ILCS 5/17) (from Ch. 17, par. 324)
12 Sec. 17. Changes in charter.
13 (a) By compliance with the provisions of this Act a
14 State bank may:
15 (1) (blank);
16 (2) increase, decrease or change its capital stock,
17 whether issued or unissued, provided that in no case
18 shall the capital be diminished to the prejudice of its
19 creditors;
20 (3) provide for authorized but unissued capital
21 stock reserved for issuance for one or more of the
22 purposes provided for in subsection (5) of Section 14
23 hereof;
24 (4) authorize preferred stock, or increase,
25 decrease or change the preferences, qualifications,
26 limitations, restrictions or special or relative rights
27 of its preferred stock, whether issued or unissued,
28 provided that in no case shall the capital be diminished
29 to the prejudice of its creditors;
30 (5) increase, decrease or change the par value of
31 its shares of its capital stock or preferred stock,
32 whether issued or unissued;
33 (6) (blank) extend the duration of its charter;
-44- LRB9206318JSprA
1 (7) eliminate cumulative voting rights under all or
2 specified circumstances, or eliminate voting rights
3 entirely, as to any class or classes or series of stock
4 of the bank pursuant to paragraph (3) of Section 15,
5 provided that one class of shares or series thereof shall
6 always have voting in respect to all matters in the bank,
7 and provided further that the proposal to eliminate such
8 voting rights receives the approval of the holders of 70%
9 of the outstanding shares of stock entitled to vote as
10 provided in paragraph (7) of subsection (b) of this
11 Section 17;
12 (8) increase, decrease, or change its capital stock
13 or preferred stock, whether issued or unissued, for the
14 purpose of eliminating fractional shares or avoiding the
15 issuance of fractional shares, provided that in no case
16 shall the capital be diminished to the prejudice of its
17 creditors; or
18 (9) make such other change in its charter as may be
19 authorized in this Act.
20 (b) To effect a change or changes in a State bank's
21 charter as provided for in this Section 17:
22 (1) The board of directors shall adopt a resolution
23 setting forth the proposed amendment and directing that
24 it be submitted to a vote at a meeting of stockholders,
25 which may be either an annual or special meeting.
26 (2) If the meeting is a special meeting, written or
27 printed notice setting forth the proposed amendment or
28 summary thereof shall be given to each stockholder of
29 record entitled to vote at such meeting at least 30 days
30 before such meeting and in the manner provided in this
31 Act for the giving of notice of meetings of stockholders.
32 (3) At such special meeting, a vote of the
33 stockholders entitled to vote shall be taken on the
34 proposed amendment. Except as provided in paragraph (7)
-45- LRB9206318JSprA
1 of this subsection (b), the proposed amendment shall be
2 adopted upon receiving the affirmative vote of the
3 holders of at least two-thirds of the outstanding shares
4 of stock entitled to vote at such meeting, unless holders
5 of preferred stock are entitled to vote as a class in
6 respect thereof, in which event the proposed amendment
7 shall be adopted upon receiving the affirmative vote of
8 the holders of at least two-thirds of the outstanding
9 shares of each class of shares entitled to vote as a
10 class in respect thereof and of the total outstanding
11 shares entitled to vote at such meeting. Any number of
12 amendments may be submitted to the stockholders and voted
13 upon by them at one meeting. A certificate of the
14 amendment, or amendments, verified by the president, or a
15 vice-president, or the cashier, shall be filed
16 immediately in the office of the Commissioner.
17 (4) At any annual meeting without a resolution of
18 the board of directors and without a notice and prior
19 publication, as hereinabove provided, a proposition for a
20 change in the bank's charter as provided for in this
21 Section 17 may be submitted to a vote of the stockholders
22 entitled to vote at the annual meeting, except that no
23 proposition for authorized but unissued capital stock
24 reserved for issuance for one or more of the purposes
25 provided for in subsection (5) of Section 14 hereof shall
26 be submitted without complying with the provisions of
27 said subsection. The proposed amendment shall be adopted
28 upon receiving the affirmative vote of the holders of at
29 least two-thirds of the outstanding shares of stock
30 entitled to vote at such meeting, unless holders of
31 preferred stock are entitled to vote as a class in
32 respect thereof, in which event the proposed amendment
33 shall be adopted upon receiving the affirmative vote of
34 the holders of at least two-thirds of the outstanding
-46- LRB9206318JSprA
1 shares of each class of shares entitled to vote as a
2 class in respect thereof and the total outstanding shares
3 entitled to vote at such meeting. A certificate of the
4 amendment, or amendments, verified by the president, or a
5 vice-president or cashier, shall be filed immediately in
6 the office of the Commissioner.
7 (5) If an amendment or amendments shall be approved
8 in writing by the Commissioner, the amendment or
9 amendments so adopted and so approved shall be
10 accomplished in accordance with the vote of the
11 stockholders. The Commissioner may impose such terms and
12 conditions on the approval of the amendment or amendments
13 as he deems necessary or appropriate to ensure that such
14 issuance is consistent with applicable statutes, rules,
15 and policies. The Commissioner shall revoke such
16 approval in the event such amendment or amendments are
17 not effected within one year from the date of the
18 issuance of the Commissioner's certificate and written
19 approval except for transactions permitted under
20 subsection (5) of Section 14 of this Act.
21 (6) No amendment or amendments shall affect suits
22 in which the bank is a party, nor affect causes of
23 action, nor affect rights of persons in any particular,
24 nor shall actions brought against such bank by its former
25 name be abated by a change of name.
26 (7) A proposal to amend the charter to eliminate
27 cumulative voting rights under all or specified
28 circumstances, or to eliminate voting rights entirely, as
29 to any class or classes or series or stock of a bank,
30 pursuant to paragraph (3) of Section 15 and paragraph (7)
31 of subsection (a) of this Section 17, shall be adopted
32 only upon such proposal receiving the approval of the
33 holders of 70% of the outstanding shares of stock
34 entitled to vote at the meeting where the proposal is
-47- LRB9206318JSprA
1 presented for approval, unless holders of preferred stock
2 are entitled to vote as a class in respect thereof, in
3 which event the proposed amendment shall be adopted upon
4 receiving the approval of the holders of 70% of the
5 outstanding shares of each class of shares entitled to
6 vote as a class in respect thereof and of the total
7 outstanding shares entitled to vote at the meeting where
8 the proposal is presented for approval. The proposal to
9 amend the charter pursuant to this paragraph (7) may be
10 voted upon at the annual meeting or a special meeting.
11 (8) Written or printed notice of a stockholders'
12 meeting to vote on a proposal to increase, decrease or
13 change the capital stock or preferred stock pursuant to
14 paragraph (8) of subsection (a) of this Section 17 and to
15 eliminate fractional shares or avoid the issuance of
16 fractional shares shall be given to each stockholder of
17 record entitled to vote at the meeting at least 30 days
18 before the meeting and in the manner provided in this Act
19 for the giving of notice of meetings of stockholders, and
20 shall include all of the following information:
21 (A) A statement of the purpose of the proposed
22 reverse stock split.
23 (B) A statement of the amount of consideration
24 being offered for the bank's stock.
25 (C) A statement that the bank considers the
26 transaction fair to the stockholders, and a
27 statement of the material facts upon which this
28 belief is based.
29 (D) A statement that the bank has secured an
30 opinion from a third party with respect to the
31 fairness, from a financial point of view, of the
32 consideration to be paid, the identity and
33 qualifications of the third party, how the third
34 party was selected, and any material relationship
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1 between the third party and the bank.
2 (E) A summary of the opinion including the
3 basis for and the methods of arriving at the
4 findings and any limitation imposed by the bank in
5 arriving at fair value and a statement making the
6 opinion available for reviewing or copying by any
7 stockholder.
8 (F) A statement that objecting stockholders
9 will be entitled to the fair value of those shares
10 that are voted against the charter amendment, if a
11 proper demand is made on the bank and the
12 requirements are satisfied as specified in this
13 Section.
14 If a stockholder shall file with the bank, prior to or at the
15 meeting of stockholders at which the proposed charter
16 amendment is submitted to a vote, a written objection to the
17 proposed charter amendment and shall not vote in favor
18 thereof, and if the stockholder, within 20 days after
19 receiving written notice of the date the charter amendment
20 was accomplished pursuant to paragraph (5) of subsection (a)
21 of this Section 17, shall make written demand on the bank for
22 payment of the fair value of the stockholder's shares as of
23 the day prior to the date on which the vote was taken
24 approving the charter amendment, the bank shall pay to the
25 stockholder, upon surrender of the certificate or
26 certificates representing the stock, the fair value thereof.
27 The demand shall state the number of shares owned by the
28 objecting stockholder. The bank shall provide written notice
29 of the date on which the charter amendment was accomplished
30 to all stockholders who have filed written objections in
31 order that the objecting stockholders may know when they must
32 file written demand if they choose to do so. Any stockholder
33 failing to make demand within the 20-day period shall be
34 conclusively presumed to have consented to the charter
-49- LRB9206318JSprA
1 amendment and shall be bound by the terms thereof. If within
2 30 days after the date on which a charter amendment was
3 accomplished the value of the shares is agreed upon between
4 the objecting stockholders and the bank, payment therefor
5 shall be made within 90 days after the date on which the
6 charter amendment was accomplished, upon the surrender of the
7 stockholder's certificate or certificates representing the
8 shares. Upon payment of the agreed value the objecting
9 stockholder shall cease to have any interest in the shares or
10 in the bank. If within such period of 30 days the
11 stockholder and the bank do not so agree, then the objecting
12 stockholder may, within 60 days after the expiration of the
13 30-day period, file a complaint in the circuit court asking
14 for a finding and determination of the fair value of the
15 shares, and shall be entitled to judgment against the bank
16 for the amount of the fair value as of the day prior to the
17 date on which the vote was taken approving the charter
18 amendment with interest thereon to the date of the judgment.
19 The practice, procedure and judgment shall be governed by the
20 Civil Practice Law. The judgment shall be payable only upon
21 and simultaneously with the surrender to the bank of the
22 certificate or certificates representing the shares. Upon
23 payment of the judgment, the objecting stockholder shall
24 cease to have any interest in the shares or the bank. The
25 shares may be held and disposed of by the bank. Unless the
26 objecting stockholder shall file such complaint within the
27 time herein limited, the stockholder and all persons claiming
28 under the stockholder shall be conclusively presumed to have
29 approved and ratified the charter amendment, and shall be
30 bound by the terms thereof. The right of an objecting
31 stockholder to be paid the fair value of the stockholder's
32 shares of stock as herein provided shall cease if and when
33 the bank shall abandon the charter amendment.
34 (c) The purchase and holding and later resale of
-50- LRB9206318JSprA
1 treasury stock of a state bank pursuant to the provisions of
2 subsection (6) of Section 14 may be accomplished without a
3 change in its charter reflecting any decrease or increase in
4 capital stock.
5 (Source: P.A. 90-160, eff. 7-23-97; 90-301, eff. 8-1-97;
6 90-655, eff. 7-30-98; 91-322, eff. 1-1-00.)
7 (205 ILCS 5/18) (from Ch. 17, par. 325)
8 Sec. 18. Change in control.
9 (a) Before a change may occur in the ownership of
10 outstanding stock of any State bank, whether by sale and
11 purchase, gift, bequest or inheritance, or any other means,
12 including the acquisition of stock of the State bank by any
13 bank holding company, which will result in control or a
14 change in the control of the bank or before a change in the
15 control of a holding company having control of the
16 outstanding stock of a State bank whether by sale and
17 purchase, gift, bequest or inheritance, or any other means,
18 including the acquisition of stock of such holding company by
19 any other bank holding company, which will result in control
20 or a change in control of the bank or holding company, or
21 before a transfer of substantially all the assets or
22 liabilities of the State bank, the Commissioner shall be of
23 the opinion and find:
24 (1) that the general character of its proposed
25 management or of the person desiring to purchase
26 substantially all the assets or to assume substantially
27 all the liabilities of the State bank, after the change
28 in control, is such as to assure reasonable promise of
29 successful, safe and sound operation;
30 (1.1) that depositors' interests will not be
31 jeopardized by the purchase or assumption and that
32 adequate provision has been made for all liabilities as
33 required for a voluntary liquidation under Section 68 of
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1 this Act;
2 (2) that the future earnings prospects of the
3 person desiring to purchase substantially all assets or
4 to assume substantially all the liabilities of the State
5 bank, after the proposed change in control, are
6 favorable;
7 (3) that any prior involvement by the persons
8 proposing to obtain control, to purchase substantially
9 all the assets, or to assume substantially all the
10 liabilities of the State bank or by the proposed
11 management personnel with any other financial
12 institution, whether as stockholder, director, officer or
13 customer, was conducted in a safe and sound manner; and
14 (4) that if the acquisition is being made by a bank
15 holding company, the acquisition is authorized under the
16 Illinois Bank Holding Company Act of 1957.
17 (b) Persons desiring to purchase control of an existing
18 state bank, to purchase substantially all the assets, or to
19 assume substantially all the liabilities of the State bank
20 shall, prior to that purchase, submit to the Commissioner:
21 (1) a statement of financial worth;
22 (2) satisfactory evidence that any prior
23 involvement by the persons and the proposed management
24 personnel with any other financial institution, whether
25 as stockholder, director, officer or customer, was
26 conducted in a safe and sound manner; and
27 (3) such other relevant information as the
28 Commissioner may request to substantiate the findings
29 under subsection (a) of this Section.
30 A person who has submitted information to the
31 Commissioner pursuant to this subsection (b) is under a
32 continuing obligation to immediately supplement that
33 information if there are any material changes in the
34 information previously furnished or if there are any material
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1 changes in any circumstances that may affect the
2 Commissioner's opinion and findings. In addition, a person
3 submitting information under this subsection shall notify the
4 Commissioner of the date when the change in control is
5 finally effected.
6 The Commissioner may impose such terms and conditions on
7 the approval of the change in control application as he deems
8 necessary or appropriate to ensure that the approval is
9 consistent with applicable statutes, rules, and policies.
10 If an applicant, whose application for a change in
11 control has been approved pursuant to subsection (a) of this
12 Section, fails to effect the change in control within 180
13 days after the date of the Commissioner's approval, the
14 Commissioner shall revoke that approval unless a request has
15 been submitted, in writing, to the Commissioner for an
16 extension and the request has been approved.
17 As used in this Section, the term "control" means the
18 ownership of such amount of stock or ability to direct the
19 voting of such stock as to give power to, directly or
20 indirectly, direct or cause the direction of the management
21 or policies of the bank. A change in ownership of stock
22 which would result in direct or indirect ownership by a
23 stockholder, an affiliated group of stockholders or a holding
24 company of less than 10 percent of the outstanding stock
25 shall not be considered a change of control. A change in
26 ownership of stock which would result in direct or indirect
27 ownership by a stockholder, an affiliated group of
28 stockholders or a holding company of 20 percent or such
29 lesser amount which would entitle the holder by applying
30 cumulative voting to elect one director shall be presumed to
31 constitute a change of control for purposes of this Section
32 18. If there is any doubt as to whether a change in the
33 ownership or control of the outstanding stock is sufficient
34 to result in obtaining control thereof or to effect a change
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1 in the control thereof, such doubt shall be resolved in favor
2 of reporting the facts to the Commissioner.
3 As used in this Section, "substantially all" the assets
4 or liabilities of a State bank means that portion of the
5 assets or liabilities of a State bank such that their
6 purchase or transfer will materially impair the ability of
7 the State bank to continue successful, safe, and sound
8 operations or to continue as a going concern or would cause
9 the bank to lose its federal deposit insurance.
10 (b-1) Any person who obtains ownership of stock of an
11 existing State bank or stock of a holding company that
12 controls the State bank by gift, bequest, or inheritance such
13 that ownership of the stock would constitute control of the
14 State bank or holding company may obtain title and ownership
15 of the stock, but may not exercise management or control of
16 the business and affairs of the bank or vote his or her
17 shares so as to exercise management or control unless and
18 until the Commissioner approves an application for the change
19 of control as provided in subsection (b) of this Section.
20 (c) Whenever a state bank makes a loan or loans,
21 secured, or to be secured, by 25% or more of the outstanding
22 stock of a state bank, the president or other chief executive
23 officer of the lending bank shall promptly report such fact
24 to the Commissioner upon obtaining knowledge of such loan or
25 loans, except that no report need be made in those cases
26 where the borrower has been the owner of record of the stock
27 for a period of one year or more, or the stock is that of a
28 newly organized bank prior to its opening.
29 (d) The reports required by subsections (b) and (c) of
30 this Section 18, other than those relating to a transfer of
31 assets or assumption of liabilities, shall contain the
32 following information to the extent that it is known by the
33 person making the report: (1) the number of shares involved;
34 (2) the names of the sellers (or transferors); (3) the names
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1 of the purchasers (or transferees); (4) the names of the
2 beneficial owners if the shares are registered in another
3 name: (5) the purchase price, if applicable; (6) the total
4 number of shares owned by the sellers (or transferors), the
5 purchasers (or transferees) and the beneficial owners both
6 immediately before and after the transaction; and, (7) in the
7 case of a loan, the name of the borrower, the amount of the
8 loan, the name of the bank issuing the stock securing the
9 loan and the number of shares securing the loan. In addition
10 to the foregoing, such reports shall contain such other
11 information which is requested by the Commissioner to inform
12 the Commissioner of the effect of the transaction upon
13 control of the bank whose stock is involved.
14 (d-1) The reports required by subsection (b) of this
15 Section 18 that relate to purchase of assets and assumption
16 of liabilities shall contain the following information to the
17 extent that it is known by the person making the report: (1)
18 the value, amount, and description of the assets transferred;
19 (2) the amount, type, and to whom each type of liabilities
20 are owed; (3) the names of the purchasers (or transferees);
21 (4) the names of the beneficial owners if the shares of a
22 purchaser or transferee are registered in another name; (5)
23 the purchase price, if applicable; and, (6) in the case of a
24 loan obtained to effect a purchase, the name of the borrower,
25 the amount and terms of the loan, and the description of the
26 assets securing the loan. In addition to the foregoing,
27 these reports shall contain any other information that is
28 requested by the Commissioner to inform the Commissioner of
29 the effect of the transaction upon the bank from which assets
30 are purchased or liabilities are transferred.
31 (e) Whenever such a change as described in subsection
32 (a) of this Section 18 occurs, each state bank shall report
33 promptly to the Commissioner any changes or replacement of
34 its chief executive officer or of any director occurring in
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1 the next 12 month period, including in its report a statement
2 of the past and current business and professional
3 affiliations of the new chief executive officer or directors.
4 (f) (Blank).
5 (g) (1) Except as otherwise expressly provided in this
6 subsection (g), the Commissioners shall not approve an
7 application for a change in control if upon consummation
8 of the change in control the persons applying for the
9 change in control, including any affiliates of the
10 persons applying, would control 30% or more of the total
11 amount of deposits which are located in this State at
12 insured depository institutions. For purposes of this
13 subsection (g), the words "insured depository
14 institution" shall mean State banks, national banks, and
15 insured savings associations. For purposes of this
16 subsection (g), the word "deposits" shall have the
17 meaning ascribed to that word in Section 3(1) of the
18 Federal Deposit Insurance Act. For purposes of this
19 subsection (g), the total amount of deposits which are
20 considered to be located in this State at insured
21 depository institutions shall equal the sum of all
22 deposits held at the main banking premises and branches
23 in the State of Illinois of State banks, national banks,
24 or insured savings associations. For purposes of this
25 subsection (g), the word "affiliates" shall have the
26 meaning ascribed to that word in Section 35.2 of this
27 Act.
28 (2) Notwithstanding the provisions of subsection
29 (g)(1) of this Section, the Commissioner may approve an
30 application for a change in control for a bank that is in
31 default or in danger of default. Except in those
32 instances in which an application for a change in control
33 is for a bank that is in default or in danger of default,
34 the Commissioner may not approve a change in control
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1 which does not meet the requirements of subsection (g)(1)
2 of this Section. The Commissioner may not waive the
3 provisions of subsection (g)(1) of this Section, whether
4 pursuant to Section 3(d) of the federal Bank Holding
5 Company Act of 1956 or Section 44(d) of the Federal
6 Deposit Insurance Act, except as expressly provided in
7 this subsection (g)(2).
8 (h) As used in this Section, the term "control" means
9 the ownership of such amount of stock or ability to direct
10 the voting of such stock as to, directly or indirectly, give
11 power to direct or cause the direction of the management or
12 policies of the bank. A change in ownership of stock that
13 would result in direct or indirect ownership by a
14 stockholder, an affiliated group of stockholders, or a
15 h