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Public Act 92-0336
HB1089 Enrolled LRB9206828JSpc
AN ACT concerning banking.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Illinois Banking Act is amended by
changing Section 32 as follows:
(205 ILCS 5/32) (from Ch. 17, par. 339)
Sec. 32. Basic loaning limits. The liabilities
outstanding at one time to a state bank of a person for money
borrowed, including the liabilities of a partnership or joint
venture in the liabilities of the several members thereof,
shall not exceed 25% 20% of the amount of the unimpaired
capital and unimpaired surplus of the bank.
The liabilities to any state bank of a person may exceed
25% 20% of the unimpaired capital and unimpaired surplus of
the bank, provided that (i) the excess amount from time to
time outstanding is fully secured by readily marketable
collateral having a market value, as determined by reliable
and continuously available quotations, at least equal to the
excess amount outstanding; and (ii) the total liabilities
shall not exceed 30% of the unimpaired capital and unimpaired
surplus of the bank.
The following shall not be considered as money borrowed
within the meaning of this Section:
(1) The purchase or of discount of bills of
exchange drawn in good faith against actually existing
values.
(2) The purchase or discount of commercial or
business paper actually owned by the person negotiating
the same.
(3) The purchase of or loaning money in exchange
for evidences of indebtedness which shall be secured by
mortgage or trust deed upon productive real estate the
value of which, as ascertained by the oath of 2 qualified
appraisers, neither of whom shall be an officer,
director, or employee of the bank or of any subsidiary or
affiliate of the bank, is double the amount of the
principal debt secured at the time of the original
purchase of evidence of indebtedness or loan of money and
which is still double the amount of the principal debt
secured at the time of any renewal of the indebtedness or
loan, and which mortgage or trust deed is shown, either
by a guaranty policy of a title guaranty company approved
by the Commissioner or by a registrar's certificate of
title in any county having adopted the provisions of the
Registered Titles (Torrens) Act, or by the opinion of an
attorney-at-law, to be a first lien upon the real estate
therein described, and real estate shall not be deemed to
be encumbered within the meaning of this subsection (3)
by reason of the existence of instruments reserving
rights-of-way, sewer rights and rights in wells, building
restrictions or other restrictive covenants, nor by
reason of the fact it is subject to lease under which
rents or profits are reserved by the owners.
(4) The purchase of marketable investment
securities.
(5) The liability to a state bank of a person who
is an accommodation party to, or guarantor of payment
for, any evidence of indebtedness of another person who
obtains a loan from or discounts paper with or sells
paper to the state bank; but the total liability to a
state bank of a person as an accommodation party or
guarantor of payment in respect of such evidences of
indebtedness shall not exceed 20% of the amount of the
unimpaired capital and unimpaired surplus of the bank;
provided however that the liability of an accommodation
party to paper excepted under subsection 2 of this
Section shall not be included in the computation of this
limitation.
(6) The liability to a state bank of a person, who
as a guarantor, guarantees collection of the obligation
or indebtedness of another person.
The total liabilities of any one person, for money
borrowed, or otherwise, shall not exceed 25% of the deposits
of the bank, and those total liabilities shall at no time
exceed 50% of the amount of the unimpaired capital and
unimpaired surplus of the bank. Absent an actual unremedied
breach, the obligation or responsibility for breach of
warranties or representations, express or implied, of a
person transferring negotiable or non-negotiable paper to a
bank without recourse and without guaranty of payment, shall
not be included in determining the amount of liabilities of
the person to the bank for borrowed money or otherwise; and
in the event of and to the extent of an unremedied breach,
the amount remaining unpaid for principal and interest on the
paper in respect of which the unremedied breach exists shall
thereafter for the purpose of determining whether subsequent
transactions giving rise to additional liability of the
person to the state bank for borrowed money or otherwise are
within the limitations of Sections 32 through 34 of this Act,
be included in computing the amount of liabilities of the
person for borrowed money or otherwise.
The liability of a person to a state bank on account of
acceptances made or issued by the state bank on behalf of the
person shall be included in the computation of the total
liabilities of the person for money borrowed except to the
extent the acceptances grow out of transactions of the
character described in subsection (6) of Section 34 of this
Act and are otherwise within the limitations of that
subsection; provided nevertheless that any such excepted
acceptances acquired by the state bank which accepted the
same shall be included in the computation of the liabilities
of the person to the state bank for money borrowed.
(Source: P.A. 89-364, eff. 8-18-95; 90-301, eff. 8-1-97.)
Section 99. Effective date. This Act takes effect upon
becoming law.
Passed in the General Assembly May 15, 2001.
Approved August 10, 2001.
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