Public Act 90-0226 of the 90th General Assembly
Public Act 90-0226
SB690 Enrolled LRB9002795JScc
AN ACT concerning certain financial institutions,
amending named Acts.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 10. The Illinois Banking Act is amended by
changing Section 18 and adding Sections 21.2 and 21.3 as
follows:
(205 ILCS 5/18) (from Ch. 17, par. 325)
Sec. 18. Change in control.
(a) Before a change may occur in the ownership of
outstanding stock of any State bank, whether by sale and
purchase, gift, bequest or inheritance, or any other means,
including the acquisition of stock of the State bank by any
bank holding company, which will result in control or a
change in the control of the bank or before a change in the
control of a holding company having control of the
outstanding stock of a State bank whether by sale and
purchase, gift, bequest or inheritance, or any other means,
including the acquisition of stock of such holding company by
any other bank holding company, which will result in control
or a change in control of the bank or holding company, or
before a transfer of substantially all the assets or
liabilities of the State bank, the Commissioner shall be of
the opinion and find:
(1) that the general character of its proposed
management, after the change in control, is such as to
assure reasonable promise of successful, safe and sound
operation;
(1.1) that depositors' interests will not be
jeopardized by the purchase or assumption and that
adequate provision has been made for all liabilities as
required for a voluntary liquidation under Section 68 of
this Act;
(2) that the future earnings prospects, after the
proposed change in control, are favorable;
(3) that any prior involvement by the persons
proposing to obtain control, to purchase substantially
all the assets, or to assume substantially all the
liabilities of the State bank or by the proposed
management personnel with any other financial
institution, whether as stockholder, director, officer or
customer, was conducted in a safe and sound manner; and
(4) that if the acquisition is being made by a bank
holding company, the acquisition is authorized under the
Illinois Bank Holding Company Act of 1957.
(b) Persons desiring to purchase control of an existing
state bank, to purchase substantially all the assets, or to
assume substantially all the liabilities of the State bank
shall, prior to that purchase, submit to the Commissioner:
(1) a statement of financial worth;
(2) satisfactory evidence that any prior
involvement by the persons and the proposed management
personnel with any other financial institution, whether
as stockholder, director, officer or customer, was
conducted in a safe and sound manner; and
(3) such other relevant information as the
Commissioner may request to substantiate the findings
under subsection (a) of this Section.
As used in this Section, the term "control" means the
ownership of such amount of stock or ability to direct the
voting of such stock as to give power to, directly or
indirectly, direct or cause the direction of the management
or policies of the bank. A change in ownership of stock
which would result in direct or indirect ownership by a
stockholder, an affiliated group of stockholders or a holding
company of less than 10 percent of the outstanding stock
shall not be considered a change of control. A change in
ownership of stock which would result in direct or indirect
ownership by a stockholder, an affiliated group of
stockholders or a holding company of 20 percent or such
lesser amount which would entitle the holder by applying
cumulative voting to elect one director shall be presumed to
constitute a change of control for purposes of this Section
18. If there is any doubt as to whether a change in the
ownership or control of the outstanding stock is sufficient
to result in obtaining control thereof or to effect a change
in the control thereof, such doubt shall be resolved in favor
of reporting the facts to the Commissioner.
As used in this Section, "substantially all" the assets
or liabilities of a State bank means that portion of the
assets or liabilities of a State bank such that their
purchase or transfer will materially impair the ability of
the State bank to continue successful, safe, and sound
operations or to continue as a going concern or would cause
the bank to lose its federal deposit insurance.
(b-1) Any person who obtains ownership of stock of an
existing State bank or stock of a holding company that
controls the State bank by gift, bequest, or inheritance such
that ownership of the stock would constitute control of the
State bank or holding company may obtain title and ownership
of the stock, but may not exercise management or control of
the business and affairs of the bank or vote his or her
shares so as to exercise management or control unless and
until the Commissioner approves an application for the change
of control as provided in subsection (b) of this Section.
(c) Whenever a state bank makes a loan or loans,
secured, or to be secured, by 25% or more of the outstanding
stock of a state bank, the president or other chief executive
officer of the lending bank shall promptly report such fact
to the Commissioner upon obtaining knowledge of such loan or
loans, except that no report need be made in those cases
where the borrower has been the owner of record of the stock
for a period of one year or more, or the stock is that of a
newly organized bank prior to its opening.
(d) The reports required by subsections (b) and (c) of
this Section 18, other than those relating to a transfer of
assets or assumption of liabilities, shall contain the
following information to the extent that it is known by the
person making the report: (1) the number of shares involved;
(2) the names of the sellers (or transferors); (3) the names
of the purchasers (or transferees); (4) the names of the
beneficial owners if the shares are registered in another
name: (5) the purchase price, if applicable; (6) the total
number of shares owned by the sellers (or transferors), the
purchasers (or transferees) and the beneficial owners both
immediately before and after the transaction; and, (7) in the
case of a loan, the name of the borrower, the amount of the
loan, the name of the bank issuing the stock securing the
loan and the number of shares securing the loan. In addition
to the foregoing, such reports shall contain such other
information which is requested by the Commissioner to inform
the Commissioner of the effect of the transaction upon
control of the bank whose stock is involved.
(d-1) The reports required by subsection (b) of this
Section 18 that relate to purchase of assets and assumption
of liabilities shall contain the following information to the
extent that it is known by the person making the report: (1)
the value, amount, and description of the assets transferred;
(2) the amount, type, and to whom each type of liabilities
are owed; (3) the names of the purchasers (or transferees);
(4) the names of the beneficial owners if the shares of a
purchaser or transferee are registered in another name; (5)
the purchase price, if applicable; and, (6) in the case of a
loan obtained to effect a purchase, the name of the borrower,
the amount and terms of the loan, and the description of the
assets securing the loan. In addition to the foregoing,
these reports shall contain any other information that is
requested by the Commissioner to inform the Commissioner of
the effect of the transaction upon the bank from which assets
are purchased or liabilities are transferred.
(e) Whenever such a change as described in subsection
(a) of this Section 18 occurs, each state bank shall report
promptly to the Commissioner any changes or replacement of
its chief executive officer or of any director occurring in
the next 12 month period, including in its report a statement
of the past and current business and professional
affiliations of the new chief executive officer or directors.
(f) (Blank).
(g) (1) Except as otherwise expressly provided in this
subsection (g), the Commissioners shall not approve an
application for a change in control if upon consummation
of the change in control the persons applying for the
change in control, including any affiliates of the
persons applying, would control 30% or more of the total
amount of deposits which are located in this State at
insured depository institutions. For purposes of this
subsection (g), the words "insured depository
institution" shall mean State banks, national banks, and
insured savings associations. For purposes of this
subsection (g), the word "deposits" shall have the
meaning ascribed to that word in Section 3(1) of the
Federal Deposit Insurance Act. For purposes of this
subsection (g), the total amount of deposits which are
considered to be located in this State at insured
depository institutions shall equal the sum of all
deposits held at the main banking premises and branches
in the State of Illinois of State banks, national banks,
or insured savings associations. For purposes of this
subsection (g), the word "affiliates" shall have the
meaning ascribed to that word in Section 35.2 of this
Act.
(2) Notwithstanding the provisions of subsection
(g)(1) of this Section, the Commissioner may approve an
application for a change in control for a bank that is in
default or in danger of default. Except in those
instances in which an application for a change in control
is for a bank that is in default or in danger of default,
the Commissioner may not approve a change in control
which does not meet the requirements of subsection (g)(1)
of this Section. The Commissioner may not waive the
provisions of subsection (g)(1) of this Section, whether
pursuant to Section 3(d) of the federal Bank Holding
Company Act of 1956 or Section 44(d) of the Federal
Deposit Insurance Act, except as expressly provided in
this subsection (g)(2).
(Source: P.A. 88-546; 89-567, eff. 7-26-96.)
(205 ILCS 5/21.2 new)
Sec. 21.2. Interstate mergers; minimum age requirement.
(a) No out of state bank and no national bank whose main
banking premises is located in a state other than Illinois
shall merge with or into, or shall acquire all or
substantially all of the assets of an Illinois bank that has
existed and continuously operated as a bank for 5 years or
less.
(b) For purposes of subsection (a) of this Section, an
Illinois bank that is the resulting bank following a merger
involving an Illinois interim bank shall be considered to
have been in existence and continuously operated during the
existence and continuous operation of the Illinois merged
bank. As used in this subsection (b), the words "interim
bank" shall mean a bank which shall not accept deposits, make
loans, pay checks, or engage in the general business of
banking or any part thereof, and is chartered solely for the
purpose of merging with or acquiring control of, or acquiring
all or substantially all of the assets of an existing
Illinois bank.
(c) The provisions of subsection (a) of the Section
shall not apply to the merger or acquisition of all or
substantially all of the assets of an Illinois bank:
(1) if the merger or acquisition is part of a
purchase or acquisition with respect to which the Federal
Deposit Insurance Corporation provides assistance under
Section 13(c) of the Federal Deposit Insurance Act; or
(2) if the Illinois bank is in default or in danger
of default.
(205 ILCS 5/21.3 new)
Sec. 21.3. Mergers; deposit concentration limits.
(a) Except as otherwise expressly provided in this
Section, no bank shall merge with or into or acquire control
of, or acquire all or substantially all of the assets of, a
State bank or a national bank whose main banking premises is
located in Illinois if, upon consummation of the merger or
acquisition, the bank, including any affiliates of the bank,
would control 30% or more of the total amount of deposits
which are located in this State at insured depository
institutions. For purposes of this subsection (a) the words
"insured depository institution" shall mean State banks,
national banks, and insured savings associations. For
purposes of this subsection (a), the word "deposits" shall
have the meaning ascribed to that word in Section (3)(1) of
the Federal Deposit Insurance Act. For purposes of this
subsection (a), the total amount of deposits which are
considered to be located in this State at insured depository
institutions shall equal the sum of all deposits held at the
main banking premises and branches in the State of Illinois
of State banks, national banks, and insured savings
associations. For purposes of this Section, the word
"affiliates" shall have the meaning ascribed to that word in
Section 35.2 of this Act.
(b) Notwithstanding the provisions of subsection (a) of
this Section, the Commissioner or the appropriate federal
banking agency may approve a merger or acquisition of a bank
that is in default or in danger of default. The provisions of
subsection (a) of this Section may not be waived, whether
pursuant to Section 3(d) of the federal Bank Holding Company
Act of 1956 or Section 44(d) of the Federal Deposit Insurance
Act, except as expressly provided in this subsection (b).
Section 15. The Illinois Bank Holding Company Act of 1957
is amended by changing Section 3.071 and adding Section 3.09
as follows:
(205 ILCS 10/3.071) (from Ch. 17, par. 2510.01)
Sec. 3.071. Out of state bank holding companies.
(a) An out of state bank holding company may acquire
ownership of more than 5% of the voting shares of or control
of one or more Illinois banks or Illinois bank holding
companies pursuant to a transaction, occurrence or event that
is described in paragraphs (1) through (5) of subsection (a)
of Section 3.02, provided the acquisition is made in
accordance with Sections 3.02 and 3.07 of this Act in
accordance with subsection (i) of this Section and provided
the following conditions are met:
(1) (Blank).
(2) An out of state bank holding company seeking to
acquire an Illinois bank or Illinois bank holding company
pursuant to subsection (a) of Section 3.071 shall, if
change in control of the bank is governed by Section 18
of the Illinois Banking Act, file with the Commissioner
the application required by that Section containing
information satisfactory to the Commissioner.
(b) (Blank).
(c) (Blank).
(d) (Blank).
(e) (Blank).
(f) (Blank).
(g) (Blank).
(h) (Blank).
(i) (1) An out of state bank holding company which
directly or indirectly controls or has control over an
Illinois bank that has existed and continuously operated
as a bank for 5 years or less, may not cause the Illinois
bank to merge with or into, or to have all or
substantially all of the assets acquired by a bank that
is an out of state bank.
(2) For purposes of subsection (i)(1) of this
Section, an Illinois bank that is the resulting bank
following a merger involving an Illinois interim bank
shall be considered to have been in existence and
continuously operated during the existence and continuous
operation of the Illinois merged bank. As used in this
subsection (i)(2), the words "resulting bank" and "merged
bank" shall have the meanings ascribed to those words in
Section 2 of the Illinois Banking Act. As used in this
subsection (i)(2), the words "interim bank" shall mean a
bank which shall not accept deposits, make loans, pay
checks, or engage in the general business of banking or
any part thereof, and is chartered solely for the purpose
of merging with or acquiring control of, or acquiring all
or substantially all of the assets of an existing
Illinois bank.
(3) The provisions of subsection (i)(1) of this
Section shall not apply to the merger or acquisition of
all or substantially all of the assets of an Illinois
bank:
(i) if the merger or acquisition is part of a
purchase or acquisition with respect to which the
Federal Deposit Insurance Corporation provides
assistance under Section 13(c) of the Federal
Deposit Insurance Act; or
(ii) if the Illinois bank is in default or in
danger of default. As used in this subsection
(i)(3), (ii) the words "in default" and "in danger
of default" shall have the meaning ascribed to those
words in Section 2 of the Illinois Banking Act.
(Source: P.A. 88-546; 89-208, eff. 9-29-95; 89-567, eff.
7-26-96.)
(205 ILCS 10/3.09 new)
Sec. 3.09. Acquisition; deposit concentration limits.
(a) Except as otherwise expressly provided in this
Section, no bank holding company shall acquire control of, or
acquire all or substantially all of the assets of a State
bank or a national bank whose main banking premises is
located in Illinois if, upon consummation of acquisition, the
bank holding company, including affiliates of the bank
holding company, would control 30% or more of the total
amount of deposits which are located in this State at insured
depository institutions. For purposes of this Section the
words "insured depository institutions" shall mean State
banks, national banks, and insured savings associations. For
purposes of this Section, the word "deposits" shall have the
meaning ascribed to that word in Section 3(1) of the Federal
Deposit Insurance Act. For purposes of this Section, the
total amount of deposits which are considered to be located
in this State at insured depository institutions shall equal
the sum of all deposits held at the main banking premises and
branches in the State of Illinois of State banks, national
banks, and insured savings associations. For purposes of this
Section the word "affiliates" shall have the meaning ascribed
to that word in Section 35.2 of the Illinois Banking Act.
(b) Notwithstanding the provisions of subsection (a) of
this Section, the Commissioner or the appropriate federal
banking agency may approve an acquisition of a bank that is
in default or in danger of default. The provisions of
subsection (a) of this Section may not be waived, whether
pursuant to Section 3(d) of the federal Bank Holding Company
Act of 1956 or Section 44(d) of the Federal Deposit Insurance
Act, except as expressly provided in this subsection (b).
Section 99. Effective date. This Act takes effect June
1, 1997.