State of Illinois
91st General Assembly
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Public Act 91-0330

HB2204 Enrolled                               LRB9105133JSpcA

    AN   ACT   concerning   the   regulation   of   financial
institutions, amending a named Act.

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

    Section  1.  Short  title.   This Act may be cited as the
Banking on Illinois Act.

    Section 5.  Findings and  declarations  of  policy.   The
General Assembly hereby finds and declares:
         (1)  that  the economic strength and general welfare
    of  Illinois  depends  on  a  strong,   profitable,   and
    competitive banking industry in this State that preserves
    and  creates  employment,  increases credit availability,
    attracts capital, and expands the savings  base  for  the
    citizens of this State;
         (2)  that  the removal of geographic restrictions in
    the federal banking laws and in the laws of the 50 states
    has given rise to a substantial number of  newly  created
    community banks and interstate bank mergers requiring the
    selection of main office locations and relocations;
         (3)  that  by  ensuring  a favorable environment for
    banks to commence and operate their businesses from  this
    State,  more  newly  created  community banks and merging
    banks  will  choose   to   maintain   or   retain   their
    headquarters  in  and relocate their main banking offices
    to Illinois; and
         (4)  that preserving and increasing  the  number  of
    bank   headquarters   and  main  banking  offices  within
    Illinois   will   substantially    increase    employment
    opportunities,    credit    availability,   and   capital
    investment in this State, while strengthening the savings
    base  of  this  State,  thereby   providing   significant
    benefits  to  all  Illinois  citizens,  to commercial and
    agricultural businesses of all sizes in this  State,  and
    to  all  local  governments and political subdivisions of
    this State.

    Section 10.  Purpose.  The purpose  of  this  Act  is  to
encourage and provide a favorable environment in Illinois for
the  chartering  and  operating  of  banks  that  locate  and
maintain main banking offices in this State.

    Section 15.  Application of Illinois law.
    (a)  To further the purpose and policies of this Act, the
provisions   of   the   following  Acts  shall  be  liberally
construed:
         (1)  the Illinois Banking Act; and
         (2)  the Foreign Banking Office Act.
    (b)  Subsection (a) of this Section shall not be  applied
in  a  manner  that  will  adversely  affect  the  safety and
soundness of a bank.

    Section 95.  The  Illinois  Banking  Act  is  amended  by
changing Sections 5, 5e, and 48.1 as follows:

    (205 ILCS 5/5) (from Ch. 17, par. 311)
    Sec.  5.  General  corporate  powers.   A  bank organized
under this Act or subject hereto shall be  a  body  corporate
and  politic  and  shall, without specific mention thereof in
the charter, have all the powers conferred by  this  Act  and
the following additional general corporate powers:
    (1)  To  sue  and  be  sued,  complain, and defend in its
corporate name.
    (2)  To have a corporate seal, which may  be  altered  at
pleasure,  and  to  use the same by causing it or a facsimile
thereof  to  be  impressed  or  affixed  or  in  any   manner
reproduced, provided that the affixing of a corporate seal to
an  instrument shall not give the instrument additional force
or effect, or change the construction thereof, and the use of
a corporate seal is not mandatory.
    (3)  To  make,  alter,  amend,  and  repeal  bylaws,  not
inconsistent  with  its  charter  or  with   law,   for   the
administration  of the affairs of the bank.  If this Act does
not  provide  specific  guidance  in  matters  of   corporate
governance, the provisions of the Business Corporation Act of
1983 may be used if so provided in the bylaws.
    (4)  To  elect  or appoint and remove officers and agents
of  the  bank  and  define  their  duties   and   fix   their
compensation.
    (5)  To   adopt   and  operate  reasonable  bonus  plans,
profit-sharing plans, stock-bonus plans, stock-option  plans,
pension  plans and similar incentive plans for its directors,
officers and employees.
    (5.1)  To manage, operate and administer a fund  for  the
investment of funds by a public agency or agencies, including
any  unit  of  local  government  or  school district, or any
person.  The fund for a public agency  shall  invest  in  the
same   type  of  investments  and  be  subject  to  the  same
limitations provided for the investment of public funds.  The
fund for public agencies shall  maintain  a  separate  ledger
showing  the  amount  of investment for each public agency in
the fund. "Public funds" and "public agency" as used in  this
Section shall have the meanings ascribed to them in Section 1
of the Public Funds Investment Act.
    (6)  To  make reasonable donations for the public welfare
or  for  charitable,  scientific,  religious  or  educational
purposes.
    (7)  To borrow or incur an obligation; and to pledge  its
assets:
         (a)  to secure its borrowings, its lease of personal
    or real property or its other nondeposit obligations;
         (b)  to  enable  it  to act as agent for the sale of
    obligations of the United States;
         (c)  to secure  deposits  of  public  money  of  the
    United  States,  whenever  required  by  the  laws of the
    United  States,  including  without  being  limited   to,
    revenues and funds the deposit of which is subject to the
    control  or regulation of the United States or any of its
    officers, agents, or employees and Postal Savings funds;
         (d)  to secure deposits of public money of any state
    or of any political corporation  or  subdivision  thereof
    including,  without  being limited to, revenues and funds
    the deposit  of  which  is  subject  to  the  control  or
    regulation  of  any state or of any political corporation
    or subdivisions thereof or  of  any  of  their  officers,
    agents, or employees;
         (e)  to  secure  deposits of money whenever required
    by the National Bankruptcy Act;
         (f)  (blank); and
         (g)  to  secure  trust  funds  commingled  with  the
    bank's  funds,  whether  deposited  by  the  bank  or  an
    affiliate of the bank, pursuant to  Section  2-8  of  the
    Corporate Fiduciary Act.
    (8)  To  own, possess, and carry as assets all or part of
the real estate necessary in or with which to do its  banking
business, either directly or indirectly through the ownership
of  all  or part of the capital stock, shares or interests in
any corporation, association, trust engaged  in  holding  any
part  or  parts  or all of the bank premises, engaged in such
business and in conducting a safe  deposit  business  in  the
premises or part of them, or engaged in any activity that the
bank  is  permitted  to  conduct  in a subsidiary pursuant to
paragraph (12) of this Section 5.
    (9)  To own, possess, and  carry  as  assets  other  real
estate  to which it may obtain title in the collection of its
debts or that was  formerly  used  as  a  part  of  the  bank
premises,  but  title  to  any  real  estate except as herein
permitted shall not be retained by the bank, either  directly
or  by  or  through  a subsidiary, as permitted by subsection
(12) of this Section for a total period of more than 10 years
after acquiring title, either directly or indirectly.
    (10)  To do any act, including the acquisition of  stock,
necessary  to  obtain  insurance  of  its  deposits,  or part
thereof, and any act necessary to obtain a guaranty, in whole
or in part, of any of its loans or investments by the  United
States  or  any agency thereof, and any act necessary to sell
or otherwise dispose of any of its loans  or  investments  to
the  United  States or any agency thereof, and to acquire and
hold membership in the Federal Reserve System.
    (11)  Notwithstanding any other provisions of this Act or
any other law, to do any act and to own, possess,  and  carry
as assets property of the character, including stock, that is
at  the  time authorized or permitted to national banks by an
Act of Congress, but subject always to the  same  limitations
and  restrictions  as are applicable to national banks by the
pertinent federal law and subject to applicable provisions of
the Financial Institutions Insurance Sales Law.
    (12)  To own, possess, and carry as assets stock  of  one
or  more corporations that is, or are, engaged in one or more
of the following businesses:
         (a)  holding  title  to  and  administering   assets
    acquired  as a result of the collection or liquidating of
    loans, investments, or discounts; or
         (b)  holding title  to  and  administering  personal
    property  acquired  by  the  bank, directly or indirectly
    through a subsidiary,  for  the  purpose  of  leasing  to
    others,  provided  the lease or leases and the investment
    of the bank, directly or through a  subsidiary,  in  that
    personal  property  otherwise comply with Section 35.1 of
    this Act; or
         (c)  carrying  on  or  administering  any   of   the
    activities  excepting  the  receipt  of  deposits  or the
    payment of checks or other  orders  for  the  payment  of
    money  in  which  a  bank  may  engage in carrying on its
    general banking business; provided, however, that nothing
    contained in this paragraph (c) shall be deemed to permit
    a bank organized under this Act or subject hereto to  do,
    either directly or indirectly through any subsidiary, any
    act,  including  the making of any loan or investment, or
    to own, possess, or carry as assets any property that  if
    done by or owned, possessed, or carried by the State bank
    would  be  in violation of or prohibited by any provision
    of this Act.
    The provisions of this subsection (12) shall not apply to
and shall not be deemed to limit the powers of a  State  bank
with  respect  to  the ownership, possession, and carrying of
stock that a State bank is  permitted  to  own,  possess,  or
carry under this Act.
    Any  bank  intending to establish a subsidiary under this
subsection (12) shall give written notice to the Commissioner
60 days prior to the subsidiary's commencing of business  or,
as the case may be, prior to acquiring stock in a corporation
that  has  already  commenced  business.  After receiving the
notice, the Commissioner may waive or reduce the  balance  of
the  60  day notice period.  The Commissioner may specify the
form of the notice and may promulgate rules  and  regulations
to administer this subsection (12).
    (13)  To   accept  for  payment  at  a  future  date  not
exceeding one year from the date of acceptance, drafts  drawn
upon  it  by  its customers; and to issue, advise, or confirm
letters of credit authorizing the  holders  thereof  to  draw
drafts upon it or its correspondents.
    (14)  To  own and lease personal property acquired by the
bank at the request of a  prospective  lessee  and  upon  the
agreement  of  that  person  to  lease  the personal property
provided that the lease, the agreement with respect  thereto,
and  the amount of the investment of the bank in the property
comply with Section 35.1 of this Act.
    (15) (a)  To establish and maintain, in addition  to  the
main banking premises, branches offering any banking services
permitted at the main banking premises of a State bank.
    (b)  To  establish  and  maintain,  after  May  31, 1997,
branches in another state that may conduct  any  activity  in
that  state that is authorized or permitted for any bank that
has a banking charter issued by that state,  subject  to  the
same  limitations  and  restrictions  that  are applicable to
banks chartered by that state.
    (16)  (Blank).
    (17)  To establish and maintain terminals, as  authorized
by the Electronic Fund Transfer Act.
    (18)  To  establish and maintain temporary service booths
at any  International  Fair  held  in  this  State  which  is
approved by the United States Department of Commerce, for the
duration  of  the  international fair for the sole purpose of
providing a convenient place for foreign trade  customers  at
the  fair  to  exchange  their  home countries' currency into
United States currency or the converse. This power shall  not
be  construed  as  establishing  a  new  place  or  change of
location for the bank providing the service booth.
    (19)  To indemnify its  officers,  directors,  employees,
and agents, as authorized for corporations under Section 8.75
of the Business Corporation Act of 1983.
    (20)  To  own,  possess, and carry as assets stock of, or
be or become a member of, any  corporation,  mutual  company,
association,  trust,  or  other entity formed exclusively for
the purpose of providing directors' and  officers'  liability
and bankers' blanket bond insurance or reinsurance to and for
the  benefit  of the stockholders, members, or beneficiaries,
or their assets or businesses, or their officers,  directors,
employees,  or  agents,  and not to or for the benefit of any
other person or entity or the public generally.
    (21)  To make debt or equity investments in  corporations
or  projects,  whether for profit or not for profit, designed
to promote the development of the community and its  welfare,
provided  that  the  aggregate  investment  in  all  of these
corporations and in all of these projects does not exceed 10%
of the unimpaired capital and unimpaired surplus of the  bank
and   provided  that  this  limitation  shall  not  apply  to
creditworthy loans by  the  bank  to  those  corporations  or
projects.   Upon  written  application to the Commissioner, a
bank may make an investment that would, when aggregated  with
all  other  such  investments,  exceed  10% of the unimpaired
capital and unimpaired surplus of the bank. The  Commissioner
may  approve the investment if he is of the opinion and finds
that the proposed investment will not have a material adverse
effect on the safety and soundness of the bank.
    (22)  To own, possess, and carry as assets the stock of a
corporation engaged in the ownership or operation of a travel
agency or to operate  a  travel  agency  as  a  part  of  its
business, provided that the bank either owned, possessed, and
carried as assets the stock of such a corporation or operated
a travel agency as part of its business before July 1, 1991.
    (23)  With respect to affiliate facilities:
         (a)  to  conduct  at affiliate facilities any of the
    following transactions  for  and  on  behalf  of  another
    commonly  owned bank, if so authorized by the other bank:
    receiving deposits; cashing and issuing  checks,  drafts,
    and  money orders; changing money; and receiving payments
    on existing indebtedness; and
         (b)  to authorize a commonly owned bank  to  conduct
    for and on behalf of it any of the transactions listed in
    this paragraph (23) at one or more affiliate facilities.
    Any  bank intending to conduct or to authorize a commonly
owned bank to conduct at an affiliate  facility  any  of  the
transactions  specified  in  this  paragraph  (23) shall give
written notice to the Commissioner at least  30  days  before
any such transaction is conducted at the affiliate facility.
    (24)  To  act  as  the agent for any fire, life, or other
insurance company authorized by the  State  of  Illinois,  by
soliciting  and  selling insurance and collecting premiums on
policies issued by such company; and to receive for  services
so  rendered  such  fees or commissions as may be agreed upon
between the bank and the insurance company for which  it  may
act  as  agent; provided, however, that no such bank shall in
any case assume or guarantee the payment of  any  premium  on
insurance   policies   issued   through  its  agency  by  its
principal; and provided further,  that  the  bank  shall  not
guarantee  the  truth  of any statement made by an assured in
filing his application for insurance.
    (25)  Notwithstanding any other provisions of this Act or
any other law, to offer any product or service that is at the
time  authorized  or  permitted  to   any   insured   savings
association  or out-of-state bank by applicable law, provided
that powers conferred only by this subsection (25):
         (a)  shall always be subject to the same limitations
    and restrictions  that  are  applicable  to  the  insured
    savings  association or out-of-state bank for the product
    or service by such applicable law;
         (b)  shall be subject to  applicable  provisions  of
    the Financial Institutions Insurance Sales Law;
         (c)  shall not include the right to own or conduct a
    real  estate brokerage business for which a license would
    be required under the laws of this State; and
         (d)  shall  not  be   construed   to   include   the
    establishment  or maintenance of a branch, nor shall they
    be construed to limit the establishment or maintenance of
    a branch pursuant to subsection (11).
(Source: P.A. 89-208,  eff.  9-29-95;  89-310,  eff.  1-1-96;
89-364,  eff.  8-18-95;  89-626,  eff.  8-9-96;  90-41,  eff.
10-1-97;  90-301,  eff. 8-1-97; 90-655, eff. 7-30-98; 90-665,
eff. 7-30-98.)

    (205 ILCS 5/5e)
    Sec. 5e.  Lending and account authority.
    (a)  Notwithstanding the provisions of any other  law  in
connection  with extensions of credit, a State bank may elect
to contract for and receive interest, fees, and other charges
for extensions of credit subject only to  the  provisions  of
subsection  (1)  of Section 4 of the Interest Act, except for
extensions of credit  secured  by  residential  real  estate,
which shall be subject to the laws applicable thereto.
    (b)  The establishment of account service charges and the
amounts of the charges not otherwise limited or prescribed by
law  is a business decision to be made by a bank according to
prudent  business  judgment  and  safe  and  sound  operating
standards.  In establishing account service charges, the bank
may consider, but is not limited to  considering,  the  costs
incurred by the bank, plus a profit margin, for providing the
service, the deterrence of misuse of the bank's services, the
establishment  of  the  competitive  position  of the bank in
accordance  with  the  bank's  marketing  strategy,  and  the
maintenance of the safety and soundness of the bank.
(Source: P.A. 89-603, eff. 8-2-96.)

    (205 ILCS 5/48.1) (from Ch. 17, par. 360)
    Sec. 48.1.  Customer financial records; confidentiality.
    (a)  For the purpose of this Section, the term "financial
records" means any original, any copy, or any summary of:

         (1)  a document granting signature authority over  a
    deposit or account;,
         (2)  a statement, ledger card or other record on any
    deposit  or  account,  which shows each transaction in or
    with respect to that account;,
         (3)  a check, draft or money order drawn on  a  bank
    or issued and payable by a bank;, or
         (4)  any    other    item   containing   information
    pertaining  to  any  relationship  established   in   the
    ordinary  course  of a bank's business between a bank and
    its customer, including  financial  statements  or  other
    financial information provided by the customer.
    (b)  This Section does not prohibit:
         (1)  The   preparation,   examination,  handling  or
    maintenance of any  financial  records  by  any  officer,
    employee  or  agent  of  a  bank  having  custody  of the
    records, or the examination of the records by a certified
    public accountant engaged  by  the  bank  to  perform  an
    independent audit.
         (2)  The examination of any financial records by, or
    the  furnishing  of  financial  records by a bank to, any
    officer, employee or agent of  (i)  the  Commissioner  of
    Banks  and  Real Estate, (ii) after May 31, 1997, a state
    regulatory authority authorized to examine a branch of  a
    State   bank   located   in   another  state,  (iii)  the
    Comptroller of the Currency,  (iv)  the  Federal  Reserve
    Board,  or  (v) the Federal Deposit Insurance Corporation
    for use solely in  the  exercise  of  his  duties  as  an
    officer, employee, or agent.
         (3)  The   publication   of   data   furnished  from
    financial records relating to customers  where  the  data
    cannot  be  identified  to  any  particular  customer  or
    account.
         (4)  The making of reports or returns required under
    Chapter 61 of the Internal Revenue Code of 1986.
         (5)  Furnishing  information concerning the dishonor
    of any negotiable instrument permitted  to  be  disclosed
    under the Uniform Commercial Code.
         (6)  The  exchange in the regular course of business
    of (i) credit information between a bank and other  banks
    or  financial  institutions  or  commercial  enterprises,
    directly  or  through a consumer reporting agency or (ii)
    financial records or information derived  from  financial
    records  between  a  bank  and  other  banks or financial
    institutions or commercial enterprises for the purpose of
    conducting due diligence pursuant to a purchase  or  sale
    involving the bank or assets or liabilities of the bank.
         (7)  The    furnishing   of   information   to   the
    appropriate law enforcement authorities  where  the  bank
    reasonably believes it has been the victim of a crime.
         (8)  The furnishing of information under the Uniform
    Disposition of Unclaimed Property Act.
         (9)  The   furnishing   of   information  under  the
    Illinois Income Tax  Act  and  the  Illinois  Estate  and
    Generation-Skipping Transfer Tax Act.
         (10)  The   furnishing   of  information  under  the
    federal Currency and Foreign Transactions  Reporting  Act
    Title 31, United States Code, Section 1051 et seq.
         (11)  The  furnishing of information under any other
    statute that by its terms or by  regulations  promulgated
    thereunder  requires  the disclosure of financial records
    other than by subpoena, summons, warrant, or court order.
         (12)  The  furnishing  of  information   about   the
    existence  of  an  account  of  a  person  to  a judgment
    creditor of that person who has made  a  written  request
    for that information.
         (13)  The exchange in the regular course of business
    of information between commonly owned banks in connection
    with  a  transaction  authorized  under paragraph (23) of
    Section 5 and conducted at an affiliate facility.
         (14)  The furnishing of  information  in  accordance
    with   the   federal  Personal  Responsibility  and  Work
    Opportunity Reconciliation Act of 1996. Any bank governed
    by this Act  shall  enter  into  an  agreement  for  data
    exchanges  with  a State agency provided the State agency
    pays to the bank a  reasonable  fee  not  to  exceed  its
    actual  cost  incurred.   A bank providing information in
    accordance with this item shall  not  be  liable  to  any
    account  holder  or  other  person  for any disclosure of
    information  to  a  State  agency,  for  encumbering   or
    surrendering any assets held by the bank in response to a
    lien  or  order to withhold and deliver issued by a State
    agency, or for any other action taken  pursuant  to  this
    item, including individual or mechanical errors, provided
    the  action  does  not  constitute  gross  negligence  or
    willful  misconduct.  A  bank shall have no obligation to
    hold, encumber, or surrender assets  until  it  has  been
    served  with  a  subpoena,  summons,  warrant,  court  or
    administrative order, lien, or levy.
         (15)  The exchange in the regular course of business
    of  information  between  a  bank  and any commonly owned
    affiliate of the bank, subject to the provisions  of  the
    Financial Institutions Insurance Sales Law.
    (c)  Except as otherwise provided by this Act, a bank may
not  disclose  to  any  person, except to the customer or his
duly authorized agent, any  financial  records  or  financial
information  obtained from financial records relating to that
customer of that bank unless:
         (1)  the customer has authorized disclosure  to  the
    person;
         (2)  the financial records are disclosed in response
    to  a  lawful  subpoena,  summons, warrant or court order
    which meets the requirements of subsection  (d)  of  this
    Section; or
         (3)  the bank is attempting to collect an obligation
    owed   to  the  bank  and  the  bank  complies  with  the
    provisions of  Section  2I  of  the  Consumer  Fraud  and
    Deceptive Business Practices Act.
    (d)  A   bank  shall  disclose  financial  records  under
paragraph (2) of subsection  (c)  of  this  Section  under  a
lawful  subpoena, summons, warrant, or court order only after
the bank mails a copy of the subpoena, summons,  warrant,  or
court  order to the person establishing the relationship with
the  bank,   if   living,   and,   otherwise   his   personal
representative,  if known, at his last known address by first
class mail, postage prepaid, unless the bank is  specifically
prohibited  from notifying the person by order of court or by
applicable State or federal law.  A bank  shall  not  mail  a
copy  of a subpoena to any person pursuant to this subsection
if the  subpoena  was  issued  by  a  grand  jury  under  the
Statewide Grand Jury Act.
    (e)  Any  officer or employee of a bank who knowingly and
willfully furnishes financial records in  violation  of  this
Section is guilty of a business offense and, upon conviction,
shall be fined not more than $1,000.
    (f)  Any  person  who  knowingly and willfully induces or
attempts to induce any officer  or  employee  of  a  bank  to
disclose  financial  records  in violation of this Section is
guilty of a business offense and, upon conviction,  shall  be
fined not more than $1,000.
    (g)  A  bank  shall  be  reimbursed  for  costs  that are
reasonably necessary and that have been directly incurred  in
searching  for,  reproducing,  or transporting books, papers,
records, or other data of a customer required or requested to
be produced pursuant to a lawful subpoena, summons,  warrant,
or  court  order.  The Commissioner shall determine the rates
and conditions under which payment may be made.
(Source: P.A. 89-208, eff.  9-29-95;  89-364,  eff.  8-18-95;
89-508, eff. 7-3-96; 89-626, eff. 8-9-96; 90-18, eff. 7-1-97;
90-665, eff. 7-30-98.)

    Section  99.  Effective date.  This Act takes effect upon
becoming law.

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