State of Illinois
91st General Assembly
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Public Act 91-0645

SB890 Enrolled                                LRB9105132JSpcA

    AN ACT to create the Illinois Financial Institutions Year
2000 Safety and Soundness 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
Illinois   Financial  Institutions  Year  2000   Safety   and
Soundness Act.

    Section   5.  Findings  and  declarations of policy.  The
General Assembly hereby finds and declares that:
         (1)  the economic strength and  general  welfare  of
    Illinois depends on  strong,  safe  and  sound  financial
    institutions  that command the highest  levels  of public
    confidence among the citizens of this State;
         (2)  Illinois  financial  institutions  are   highly
    monitored  and  closely  supervised  by federal and state
    regulatory  agencies  which  impose   strict   compliance
    standards  and  conduct regular and frequent examinations
    on these institutions;
         (3)  countless  computer systems, software programs,
    microchips, and integrated circuits  have  been  created,
    distributed, installed, and relied upon  throughout  this
    State and the world which are not capable of  recognizing
    certain  dates  in  1999 and after December 31, 1999, and
    which will read dates in the year 2000 and thereafter  as
    if  those dates represent the year 1900 or thereafter, or
    which will fail to process those dates (commonly referred
    to as the "Year 2000 Problem");
         (4)  the federal and state regulatory agencies which
    regulate Illinois financial institutions  have   required
    these   institutions   to  undergo  exhaustive  planning,
    remediation, testing,  and  contingency  preparedness  to
    properly  address  the  Year 2000 Problem with respect to
    both internal  and  external  mission  critical  computer
    systems,   internal  and  external  non-mission  critical
    computer systems, third  party  vendors,  customers,  and
    other  possible sources of business interruption, and are
    closely monitoring,  examining,  and  supervising   these
    efforts on an institution by institution basis;
         (5)  Illinois financial institutions  have  expended
    hundreds  of  millions    of  dollars  on  reprogramming,
    replacing, and testing their computer systems to properly
    address  the  Year  2000  Problem  and   continue  to  be
    accountable   to   their  federal  and  state  regulatory
    agencies  for  meeting  the  strict  safety and soundness
    standards imposed on them in  connection  with  the  Year
    2000 Problem;
         (6)  Illinois financial institutions are integral to
    the  payments  system and credit and savings bases relied
    on  by  all other businesses,  governmental entities, and
    citizens  of this State  irrespective  of  whether  those
    businesses,   governmental  entities,  and  citizens have
    addressed and implemented solutions  in  connection  with
    the Year 2000 Problem; and
         (7)  it  is  in  the  interests  of  this  State  to
    recognize  the  unique and rigorous standards required of
    Illinois financial institutions in  connection  with  the
    Year  2000 Problem and their integral role in maintaining
    the payments system and credit and savings bases in  this
    State  and  to  preserve  public  confidence   in   these
    institutions   and  ensure their  safety  and  soundness,
    thereby protecting and enhancing the economy and  general
    welfare of this State, by providing uniform and judicious
    legal standards for Illinois  financial  institutions  in
    connection with the Year 2000 Problem.
    Section 10.  Definitions.  For the purposes of this Act:
    (a)  The term "Illinois financial institution" means:
         (1)  a   State    bank,   a  national  bank,  or  an
    out-of-state  bank, as those terms  are  defined  in  the
    Illinois Banking Act, or any subsidiary of a State  bank,
    a national bank, or an out-of-state bank;
         (2)  a  foreign banking corporation, as that term is
    defined   in  the  Foreign  Banking Office  Act,  or  any
    subsidiary of a foreign banking corporation;
         (3)  a corporate fiduciary, as that term is  defined
    in  the  Corporate  Fiduciary Act, or any subsidiary of a
    corporate fiduciary;
         (4)  a savings bank organized under the Savings Bank
    Act, an out-of-state savings  bank  chartered  under  the
    laws  of  a state other than Illinois, a territory of the
    United States, or the District of Columbia, or a  federal
    savings  bank  organized    under   federal  law,  or any
    subsidiary of a savings  bank,  an  out-of-state  savings
    bank, or a federal savings bank;
         (5)  an association or federal association, as those
    terms are defined in the Illinois Savings and Loan Act of
    1985,  or  any  subsidiary  of  an association or federal
    association;
         (6)  an out-of-state savings  and  loan  association
    chartered  under the laws of a state other than Illinois,
    a territory of the United  States,  or  the  District  of
    Columbia,  or  a  federal  savings  and  loan association
    organized under  federal  law  whose  principal  business
    office  is located outside of Illinois, or any subsidiary
    of  an  out-of-state  savings  and  loan  association  or
    federal savings  and  loan  association  whose  principal
    business office is located outside of Illinois;
         (7)  a  credit  union,  as  defined  in the Illinois
    Credit Union Act, or any subsidiary of a credit union; or
         (8)  a network  owned  by  one  or  more   financial
    institutions,   as    those  terms  are  defined  in  the
    Electronic Fund Transfer Act.
    The  terms in this subsection (a) also shall be deemed to
include a direct or indirect holding company of  an  Illinois
financial  institution  in  connection with a Year 2000 claim
involving the  Illinois  financial  institution  directly  or
indirectly owned by such holding company.
    (b) The term "Year 2000 failure" means any failure by any
device or system (including, without limitation, any computer
system  and  any  microchip or integrated circuit embedded in
another device or product), or  any  software,  firmware,  or
other  set  or collection of processing instructions, however
constructed,   in   processing,    calculating,    comparing,
sequencing,  displaying,  storing, transmitting, or receiving
date-related data during the years 1999  and  2000  or  from,
into, or between the twentieth century  and  the twenty-first
century,   or  the failure to recognize or accurately process
any  specific  date, or  the failure  to  accurately  account
for the status of the year 2000 as a leap year.
    (c)  The  term "Year 2000 action" means a civil action of
any kind brought under  Illinois  law,  except  for  a  civil
action  brought  by  a federal or state agency that regulates
the Illinois financial institution, in which:
         (1)  a Year 2000 claim is asserted; or
         (2)  any claim or defense is related,  directly   or
    indirectly, to a Year 2000 claim.
    (d)  The  term "Year 2000 claim" means any claim or cause
of action of any kind, whether  asserted  by  way  of  claim,
counterclaim,  cross-claim,  third-party claim, or otherwise,
in which a party or other person's loss or harm is alleged to
have resulted,  directly  or  indirectly,  from  any  act  or
omission  in connection with an actual or potential Year 2000
failure, except for claims involving physical injury  to  the
extent of the claim of physical injury.
    (e)  The term "physical injury" means any physical injury
to  a  natural person, including the death of the person, but
does not include mental  suffering,  emotional  distress,  or
other  similar  elements  of  injury  that  do not constitute
physical harm to a natural person.

    Section 15.  Action for damages.  An  Illinois  financial
institution shall not be liable in a Year 2000 action brought
by  or  for  damages  incurred  by  persons not in privity of
contract  with  the   Illinois   financial   institution   in
connection  with  the  transaction that gave rise to the Year
2000 claim.

    Section 20.  Notice of claim.  No person  shall  bring  a
Year  2000  action  or  make  a  Year  2000  claim against an
Illinois financial institution unless the  person  has  given
written  notice  to the Illinois financial institution of the
person's  Year  2000  claim  and   the   Illinois   financial
institution  has been afforded at least 60 days after receipt
of the notice to resolve the claim.

    Section  25.  Employees,  officers,  and  directors.   No
employee,  officer,  or  director  of  an  Illinois financial
institution shall be liable to any person for  damages  in  a
Year  2000  action,  except  for  an  act  or  omission  that
constitutes  fraud;  provided  that  this  Section  shall not
preclude a Year 2000 action  against  an  Illinois  financial
institution  that  is otherwise permitted by law based on the
actions of an employee, officer, or director of the financial
institution.

    Section 30.  Unaffected rights.  The provisions  of  this
Act  shall not affect the rights of parties under Articles 3,
4, 4A, and 8 of the Uniform Commercial Code and  other  rules
governing  the  processing  of check, credit, debit, ACH, and
wire  transactions,  provided  that  such  rights  shall   be
strictly  construed  to  further the purposes and policies of
the  provisions  therein  and   the   application   of   such
construction is not likely to impair the safety and soundness
of the Illinois financial institution.

    Section   90.  Severability.   The provisions of this Act
are severable under Section 1.31 of the Statute on Statutes.

    Section 92.  The Banking Emergencies Act  is  amended  by
adding Section 5 as follows:

    (205 ILCS 610/5 new)
    Sec. 5.  Year 2000 Consumer Protections.
    (a)  For the purposes of this Section:
         (1) the term "Illinois financial institution" means:
              (A)  a  State  bank,  a  national  bank,  or an
         out-of-state bank, as those terms are defined in the
         Illinois Banking Act, or any subsidiary of  a  State
         bank, a national bank, or an out-of-state bank;
              (B)  a  foreign  banking  corporation,  as that
         term is defined in the Foreign Banking  Office  Act,
         or any subsidiary of a foreign banking corporation;
              (C)  a  corporate  fiduciary,  as  that term is
         defined in  the  Corporate  Fiduciary  Act,  or  any
         subsidiary of a corporate fiduciary;
              (D)  a savings bank organized under the Savings
         Bank  Act,  an  out-of-state  savings bank chartered
         under the laws of a state  other  than  Illinois,  a
         territory  of  the United States, or the District of
         Columbia, or a federal savings bank  organized under
         federal law, or any subsidiary of a savings bank, an
         out-of-state savings  bank,  or  a  federal  savings
         bank;
              (E)  an  association or federal association, as
         those terms are defined in the Illinois Savings  and
         Loan   Act   of   1985,  or  any  subsidiary  of  an
         association or federal association;
              (F)  an   out-of-state   savings    and    loan
         association  chartered  under  the  laws  of a state
         other than  Illinois,  a  territory  of  the  United
         States  or  the  District  of Columbia, or a federal
         savings and loan association organized under federal
         law  whose  principal  business  office  is  located
         outside  of  Illinois,  or  any  subsidiary  of   an
         out-of-state savings and loan association or federal
         savings   and   loan   association  whose  principal
         business office is located outside of Illinois;
              (G)  a credit union, as defined in the Illinois
         Credit Union Act, or  any  subsidiary  of  a  credit
         union; or
              (H)  a  network  owned by one or more financial
         institutions, as those  terms  are  defined  in  the
         Electronic Fund Transfer Act.
         (2)  the term "consumer" means an individual person;
    and
         (3)  the  term "Year 2000 failure" means any failure
    by any device or system (including,  without  limitation,
    any  computer  system  and  any  microchip  or integrated
    circuit embedded in another device or  product),  or  any
    software,   firmware,  or  other  set  or  collection  of
    processing   instructions,   however   constructed,    in
    processing,     calculating,    comparing,    sequencing,
    displaying,   storing,   transmitting,    or    receiving
    date-related data during the years 1999 and 2000 or from,
    into,   or   between   the   twentieth  century  and  the
    twenty-first century, or  the  failure  to  recognize  or
    accurately  process  any specific date, or the failure to
    accurately account for the status of the year 2000  as  a
    leap year.
    (b)  A financial institution shall stay an action for the
collection  of  a  debt  from  a  consumer for 30 days if the
consumer's default, failure  to  pay,  breach,  omission,  or
other  violation  of  the  agreement that is the basis of the
collection action was caused by a Year 2000  failure  on  the
part  of  any  person,  provided  the  consumer  notifies the
financial institution in writing of his or her  inability  to
meet  the  debt  obligation within 30 days of discovering the
inability to  meet  the  obligation  due  to  the  Year  2000
failure, and the notice sets forth:
         (1)  the  identity  of  the  person experiencing the
    Year 2000 failure;
         (2)  the reason  such  person's  Year  2000  failure
    caused  the  consumer's inability to meet the obligation;
    and
         (3)  the   name   and   telephone   number   of    a
    representative  of  the person experiencing the Year 2000
    failure  who  the  financial  institution  may  call  for
    purposes of verification.
    This subsection shall not be applied more  than  once  in
connection  with  the  same  debt of a consumer, nor shall it
otherwise affect the consumer's underlying  debt  obligation,
the  accrual  of  any interest on the debt obligation, or the
calculation  of  any  period  of  delinquency  for  the  debt
obligation.
    (c)  A financial institution shall not charge a late  fee
on  a  consumer  debt obligation, or if already charged shall
waive such late fee, if the consumer's failure to timely  pay
under  the agreement that provides the basis for the late fee
was caused by a Year 2000 failure on the part of any  person,
provided  the  consumer notifies the financial institution in
writing of his or her inability to make timely payment within
30 days of discovering the inability to make  timely  payment
due to the Year 2000 failure, and the notice sets forth:
         (1)  the  identity  of  the  person experiencing the
    Year 2000 failure;
         (2)  the reason  such  person's  Year  2000  failure
    caused  the  consumer's inability to make timely payment;
    and
         (3)  the   name   and   telephone   number   of    a
    representative  of  the person experiencing the Year 2000
    failure  who  the  financial  institution  may  call  for
    purposes of verification.
    This subsection shall not be applied more  than  once  in
connection  with  the  same  debt of a consumer, nor shall it
otherwise affect the consumer's underlying  debt  obligation,
the  accrual  of  any interest on the debt obligation, or the
calculation  of  any  period  of  delinquency  for  the  debt
obligation.
    (d)  A  consumer  may  dispute  directly  with  a  credit
reporting agency operating in this State any negative  credit
information   reported   in   connection  with  the  consumer
resulting from a Year 2000 failure on the part of any  person
other  than  the  consumer.   If  requested  by  the consumer
pursuant to this  subsection,  the  credit  reporting  agency
shall include a statement prepared by the consumer of no more
than 100 words in the consumer's file explaining the negative
credit  information  relating  to such Year 2000 failure, and
the credit reporting agency shall  include  the  individual's
statement  in  any report it provides to any person or entity
regarding the consumer.  The credit  reporting  agency  shall
not  charge  the  consumer  a  fee  for the inclusion of this
statement in the consumer's credit file.
    Section 99.  Effective Date.  This Act takes effect  upon
becoming law.

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