AUTHORITY: Implementing Section 7 of the Illinois Banking Act [205 ILCS 5/7] and Section 2-7 of the Corporate Fiduciary Act [205 ILCS 620/2-7] and authorized by Section 48(b)(6) of the Illinois Banking Act [205 ILCS 5/48(b)(6)] and Section 5-1(a) of the Corporate Fiduciary Act [205 ILCS 620/5-1(a)].

SOURCE: Adopted at 28 Ill. Reg. 1045, effective January 5, 2004; amended at 41 Ill. Reg. 11328, effective August 28, 2017.

SUBPART A: SCOPE AND DEFINITIONS

 

Section 310.100  Scope and Authority

 

Pursuant to Section 7 of the Illinois Banking Act [205 ILCS 5/7] and Section 2-7 of the Corporate Fiduciary Act [205 ILCS 620/2-7], this Part establishes the minimum organizational capital requirements that must be met in order for proposed State banks and State banks to exercise the powers conferred by the Illinois Banking Act and for proposed Illinois trust companies and Illinois trust companies to exercise the powers conferred by the Corporate Fiduciary Act.  The Commissioner shall use these minimum organizational capital requirements in reviewing the applications of proposed or existing State banks or proposed or existing Illinois trust companies in applications for:  a permit to organize a State bank under Section 10 of the Illinois Banking Act [205 ILCS 5/10]; a certificate of authority under Section 2-5 of the Corporate Fiduciary Act [205 ILCS 620/2-5]; a change in the location of a State bank’s main banking premises under Section 13 of the Illinois Banking Act [205 ILCS 5/13]; a merger resulting in a State bank under Section 22 or 30 of the Illinois Banking Act [205 ILCS 5/22 or 30]; a merger or consolidation resulting in a trust company under Section 3-1 of the Corporate Fiduciary Act [205 ILCS 620/3-1]; and a conversion resulting in a State bank under Section 26 or 30 of the Illinois Banking Act [205 ILCS 5/26 or 30].

 

Section 310.110  Definitions

 

“Chicago, Illinois central business district” is generally considered as that part of the city of Chicago bounded by a line beginning with Lake Shore Drive on the east, thence south to Balbo Drive, thence west to Michigan Avenue, thence north to Harrison Street, thence west to Clinton Street, thence north to Lake Street, thence east to Wacker Drive, and thence on Wacker Drive north and east to Orleans Street, thence north to Chicago Avenue and thence east to Lake Shore Drive.  However, certain locations (e.g., areas within close proximity or areas with similar market characteristics) within the city of Chicago may also require the same minimum capital requirements.

 

“Chicago, Illinois metropolitan area” is generally considered as the geographical area encompassing the counties of Cook, DuPage, Kane, Lake, McHenry and Will, except that part within Cook county defined in this Section as the Chicago, Illinois central business district.  However, an entity may organize or locate a State bank within this geographical area by meeting the minimum organizational capital requirements for banks located outside of the Chicago, Illinois metropolitan area based upon the market characteristics of the proposed location.

 

“Commissioner” means the Commissioner of Banks and Real Estate or a person authorized by the Commissioner to act in the Commissioner’s stead.

SUBPART B: BANKS

 

Section 310.200  Minimum Organizational Capital Requirements for Banks

 

The minimum organizational capital requirements that must be met to exercise the powers conferred in the Illinois Banking Act are as follows:

 

a)         $6,000,000 for a bank that is located in the Chicago, Illinois central business district;

 

b)         $4,000,000 for a bank that is located in the Chicago, Illinois metropolitan area;

 

c)         $3,000,000 for a bank that is located outside of the Chicago, Illinois central business district and metropolitan area; and

 

d)         $3,500,000 for a banker’s bank that is owned exclusively by other banks or bank holding companies and that has been exclusively organized to provide services to other banks, bank holding companies, and the officers, directors and employees of such institutions.

 

Section 310.210  When Greater Capital Requirements May Be Necessary

 

a)         Greater capital requirements may be required by the Commissioner if the condition and operations or the proposed scope of operations of the proposed or existing State bank require additional capital to achieve or maintain a safe and sound condition. 

 

b)         If the Commissioner determines that the proposed or existing bank requires capital in addition to the minimum organizational capital requirements set forth in Section 310.200, the bank shall be informed by the Office of Banks and Real Estate and afforded the opportunity to amend the related application.

 

c)         In determining if additional capital in excess of the minimum organizational capital requirements is necessary for a proposed or existing bank, the Commissioner shall consider the size and scope of the bank’s operations.  The review of the proposed or existing bank’s scope of operations may consist of an assessment of the percentage of investment to be made in fixed assets, the proposed or existing bank’s projections for future growth, future earnings prospects, the amount of organizational expenses incurred by the proposed bank, access to readily available sources of additional capital, the capability of management, and any other factors deemed appropriate by the Commissioner. Instances when additional capital may be required include, but are not limited to, those situations where the business plan contemplates aggressive future growth or a higher risk activity such as transactional internet activity, or where the proposed bank incurs significant organizational expenses.

 

Section 310.220  Exceptions to Minimum Organizational Capital Requirements for Banks

 

a)         In applications involving a merger resulting in a State bank pursuant to Section 22 or Section 30 of the Illinois Banking Act, a conversion resulting in a State bank pursuant to Section 26 or 30 of the Illinois Banking Act, or a change in location of a State bank pursuant to Section 13 of the Illinois Banking Act, a lesser amount of capital than specified in Section 310.200 may be approved if the Commissioner determines that such lesser amount of capital is sufficient to enable the bank to operate in a safe and sound manner.  For example, the Commissioner may authorize a lesser amount of capital than that prescribed in Section 310.200 if the applicant is an existing bank operating with capital levels below the minimum capital requirements prescribed in that Section and operating in a safe and sound manner and the application contemplates an activity that the bank will be able to conduct in a safe and sound manner at the current capital levels following approval of the application.

 

b)         A bank organized to assume the assets and liabilities of an existing bank or insured savings association that has failed, or is in default or in danger of default, shall have a minimum tier 1 capital, as defined by the Federal Deposit Insurance Corporation, of 5% of total assets.  The Commissioner hereby incorporates by reference the definition of tier 1 captial found in 12 CFR 325, Minimum Capital Requirements, as effective April 1, 2002 (no later amendments or editions).  Copies of 12 CFR 325 are available at the Commissioner's Springfield or Chicago office.  Copies may also be obtained on the Federal Deposit Insurance Corporation web site.

SUBPART C: TRUST COMPANIES

 

Section 310.300  Minimum Organizational Capital Requirements for Trust Companies

 

The minimum organizational capital requirement that must be met by an applicant for a certificate of authority under the Corporate Fiduciary Act to become an Illinois trust company is $3,000,000.  The minimum organizational capital requirement prescribed in this subsection shall be in addition to and separate from the amount pledged or surety bond held pursuant to Section 6-13.5 of the Corporate Fiduciary Act.

 

Section 310.310  When Greater Capital Requirements May Be Necessary

 

a)         Greater capital requirements may be required by the Commissioner if the condition and operations or the proposed scope of operations of the proposed or existing trust company require additional capital to achieve or maintain a safe and sound condition.  Instances when additonal capital may be required include but are not limited to those situations where the business plan contemplates high risk activity or where the trust company incurs significant organizational expenses.

 

b)         If the Commissioner determines that the proposed or existing trust company requires capital in addition to the minimum organization capital requirements set forth in Section 310.300, the trust company shall be informed by the Office of Banks and Real Estate and afforded the opportunity to amend the related application. 

 

Section 310.320  Exceptions to Minimum Organizational Capital Requirements for Trust Companies

 

An Illinois trust company organized before January 1, 2003, when a lower capital requirement may have been in effect, may continue to operate under that lower capital requirement unless the Commissioner has increased the required capital for that trust company under Section 2-7 of the Corporate Fiduciary Act.

 

Section 310.330  Merger or Consolidation of Trust Companies

 

In any merger or consolidation resulting in a trust company made pursuant to Section 3-1 of the Corporate Fiduciary Act, the resulting trust company must meet the minimum organizational capital requirement in effect at the time of the merger or consolidation.  In such cases, the current capital requirement must be met even if a lower capital requirement previously had applied to any or all of the merging or consolidating parties.

 

Section 310.340  Adequacy of Capital Investments of Trust Companies (Repealed)

 

(Source:  Repealed at 41 Ill. Reg. 11328, effective August 28, 2017)