093_SB0235

 
                                     LRB093 03314 JLS 03332 b

 1        AN ACT in relation to banking.

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

 4        Section 5.  The Illinois Banking Act is amended by adding
 5    Section 6.5 as follows:

 6        (205 ILCS 5/6.5 new)
 7        Sec.  6.5.  Reliance  on  power  of  attorney;  notice to
 8    customer.
 9        (a)  Within 10 days after a bank acts in reliance upon  a
10    written  power  of  attorney  naming  a  bank customer as the
11    principal, the bank shall notify the customer in  writing  of
12    the  reliance.  The notice shall be mailed to the customer at
13    the customer's address, as set forth in the  bank's  records,
14    and  shall  set  forth  sufficient  information  to allow the
15    customer to identify the transaction and must include a  copy
16    of the power of attorney.
17        (b)  The  customer  must  examine the notice to determine
18    whether any transaction was  not  authorized  because  of  an
19    alteration  of  the  power of attorney or because a purported
20    signature by or on behalf of the customer was not authorized.
21    Within 10 days after receipt of the notice made  pursuant  to
22    subsection  (a),  the  customer  must  notify the bank of any
23    unauthorized transaction discovered or that should have  been
24    discovered from an examination of the notice.
25        (c)  If  the  bank  proves that the customer failed, with
26    respect to a transaction disclosed in  a  notice,  to  comply
27    with  the  duties  imposed on the customer by subsection (b),
28    the customer is precluded from asserting a claim against  the
29    bank based upon:
30             (1)  the  customer's  unauthorized  signature or any
31        alteration of the power of attorney,  if  the  bank  also
 
                            -2-      LRB093 03314 JLS 03332 b
 1        proves  that it suffered a loss by reason of the failure;
 2        and
 3             (2)  the  customer's   unauthorized   signature   or
 4        alteration  by  the  same wrongdoer on any other power of
 5        attorney relied on in good  faith  by  the  bank  if  the
 6        transaction  was  consummated  before  the  bank received
 7        notice from the customer of the unauthorized signature or
 8        alteration.
 9        (d)  If subsection (c) applies and  the  customer  proves
10    that  the bank failed to exercise ordinary care in relying on
11    the power of attorney  and  that  the  failure  substantially
12    contributed  to  loss,  the  loss  is  allocated  between the
13    customer precluded and  the  bank  asserting  the  preclusion
14    according  to the extent to which the failure of the customer
15    to comply with subsection (c) and the failure of the bank  to
16    exercise  ordinary  care  contributed  to  the  loss.  If the
17    customer proves that the bank did not rely on  the  power  of
18    attorney  in  good faith, the preclusion under subsection (c)
19    does not apply.