State of Illinois
90th General Assembly
Legislation

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[ Introduced ][ Enrolled ][ Senate Amendment 001 ]
[ Senate Amendment 002 ]

90_SB1528eng

      205 ILCS 5/16.1           from Ch. 17, par. 323.1
          Amends the Illinois Banking Act.  Adds  a  caption  to  a
      Section concerning the removal of bank directors.
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 1        AN  ACT  concerning  financial regulation, amending named
 2    Acts.
 3        Be it enacted by the People of  the  State  of  Illinois,
 4    represented in the General Assembly:
 5        Section   5.  The   Illinois  Bank  Examiners'  Education
 6    Foundation Act is amended by changing Section 6 as follows:
 7        (20 ILCS 3210/6) (from Ch. 17, par. 406)
 8        Sec. 6.  The Board shall have the power:
 9        (1)  To promulgate reasonable rules for  the  purpose  of
10    administering the provisions of this Act.
11        (2)  To issue orders for the purpose of administering the
12    provisions of this Act and any rule promulgated in accordance
13    with this Act.
14        (3)  To  require  the  Commissioner  to furnish the Board
15    space for meetings to be held by the  Board  as  well  as  to
16    require  the Commissioner to provide the technical assistance
17    and clerical  and  professional  support  as  the  Board  may
18    require.
19        (4)  To  adopt  its  own  bylaws  with  respect  to board
20    meetings and procedures.  The bylaws shall provide that:
21             (A)  A majority of the  whole  Board  constitutes  a
22        quorum.
23             (B)  A  majority  of  the  quorum  shall  constitute
24        effective  action except that a vote of a majority of the
25        whole Board shall be necessary for the approval of  rules
26        and regulations proposed for adoption by the Commissioner
27        under   paragraph  (1)  of  this  Section  and  shall  be
28        necessary for recommendations made  to  the  Commissioner
29        with  regard to proposed amendments to this Act or to the
30        administrative practices hereunder.
31             (C)  The Board shall meet  at  least  once  in  each
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 1        calendar  year and upon the call of the Commissioner or a
 2        majority of the Board  quarter.  The  Commissioner  or  a
 3        majority of the Board may call such special or additional
 4        meetings  as  may  be deemed he or they deem necessary or
 5        desirable.
 6        (5)  To authorize the transfer of funds from the Illinois
 7    Bank Examiners' Education Fund to the Bank and Trust  Company
 8    Fund.   Any  amount  so transferred shall be retransferred to
 9    the Illinois Bank Examiners' Education Fund from the Bank and
10    Trust Company Fund within a period not to exceed 3 years.
11        (6)  To  maintain  and  direct  the  investments  of  the
12    Illinois Bank Examiners' Education Fund as  provided  in  the
13    Illinois  Banking  Act  and  to issue an annual report to the
14    Governor, the General Assembly and all State-chartered  banks
15    on the activities of the Foundation during the preceding year
16    which  shall  include,  but  is not limited to, detailing the
17    monies  generated  and  deposited  into  the  Illinois   Bank
18    Examiners'  Education  Fund  by  the  special  education fee,
19    voluntary contributions, and income from investments and  the
20    expenditures from the Fund.
21    (Source: P.A. 86-1449; 87-1038.)
22        Section  10.  The  Illinois  Banking  Act  is  amended by
23    changing Sections 5, 9, 10, 13, 21.1, 24,  48,  and  48.1  as
24    follows:
25        (205 ILCS 5/5) (from Ch. 17, par. 311)
26        Sec.  5.  General  corporate  powers.   A  bank organized
27    under this Act or subject hereto shall be  a  body  corporate
28    and  politic  and  shall, without specific mention thereof in
29    the charter, have all the powers conferred by  this  Act  and
30    the following additional general corporate powers:
31        (1)  To  sue  and  be  sued,  complain, and defend in its
32    corporate name.
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 1        (2)  To have a corporate seal, which may  be  altered  at
 2    pleasure,  and  to  use the same by causing it or a facsimile
 3    thereof  to  be  impressed  or  affixed  or  in  any   manner
 4    reproduced, provided that the affixing of a corporate seal to
 5    an  instrument shall not give the instrument additional force
 6    or effect, or change the construction thereof, and the use of
 7    a corporate seal is not mandatory.
 8        (3)  To  make,  alter,  amend,  and  repeal  bylaws,  not
 9    inconsistent  with  its  charter  or  with   law,   for   the
10    administration of the affairs of the bank.
11        (4)  To  elect  or appoint and remove officers and agents
12    of  the  bank  and  define  their  duties   and   fix   their
13    compensation.
14        (5)  To   adopt   and  operate  reasonable  bonus  plans,
15    profit-sharing plans, stock-bonus plans, stock-option  plans,
16    pension  plans and similar incentive plans for its directors,
17    officers and employees.
18        (5.1)  To manage, operate and administer a fund  for  the
19    investment of funds by a public agency or agencies, including
20    any  unit  of  local  government  or  school district, or any
21    person.  The fund for a public agency  shall  invest  in  the
22    same   type  of  investments  and  be  subject  to  the  same
23    limitations provided for the investment of public funds.  The
24    fund for public agencies shall  maintain  a  separate  ledger
25    showing  the  amount  of investment for each public agency in
26    the fund. "Public funds" and "public agency" as used in  this
27    Section shall have the meanings ascribed to them in Section 1
28    of the Public Funds Investment Act.
29        (6)  To  make reasonable donations for the public welfare
30    or  for  charitable,  scientific,  religious  or  educational
31    purposes.
32        (7)  To borrow or incur an obligation; and to pledge  its
33    assets:
34             (a)  to secure its borrowings, its lease of personal
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 1        or real property or its other nondeposit obligations;
 2             (b)  to  enable  it  to act as agent for the sale of
 3        obligations of the United States;
 4             (c)  to secure  deposits  of  public  money  of  the
 5        United  States,  whenever  required  by  the  laws of the
 6        United  States,  including  without  being  limited   to,
 7        revenues and funds the deposit of which is subject to the
 8        control  or regulation of the United States or any of its
 9        officers, agents, or employees and Postal Savings funds;
10             (d)  to secure deposits of public money of any state
11        or of any political corporation  or  subdivision  thereof
12        including,  without  being limited to, revenues and funds
13        the deposit  of  which  is  subject  to  the  control  or
14        regulation  of  any state or of any political corporation
15        or subdivisions thereof or  of  any  of  their  officers,
16        agents, or employees;
17             (e)  to  secure  deposits of money whenever required
18        by the National Bankruptcy Act;
19             (f)  (blank); and
20             (g)  to  secure  trust  funds  commingled  with  the
21        bank's  funds,  whether  deposited  by  the  bank  or  an
22        affiliate of the bank, pursuant to  Section  2-8  of  the
23        Corporate Fiduciary Act.
24        (8)  To  own, possess, and carry as assets all or part of
25    the real estate necessary in or with which to do its  banking
26    business, either directly or indirectly through the ownership
27    of  all  or part of the capital stock, shares or interests in
28    any corporation, association, trust engaged  in  holding  any
29    part  or  parts  or all of the bank premises, engaged in such
30    business and in conducting a safe  deposit  business  in  the
31    premises or part of them, or engaged in any activity that the
32    bank  is  permitted  to  conduct  in a subsidiary pursuant to
33    paragraph (12) of this Section 5.
34        (9)  To own, possess, and  carry  as  assets  other  real
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 1    estate  to which it may obtain title in the collection of its
 2    debts or that was  formerly  used  as  a  part  of  the  bank
 3    premises,  but  title  to  any  real  estate except as herein
 4    permitted shall not be retained by the bank, either  directly
 5    or  by  or  through  a subsidiary, as permitted by subsection
 6    (12) of this Section for a total period of more than 10 years
 7    after acquiring title, either directly or indirectly.
 8        (10)  To do any act, including the acquisition of  stock,
 9    necessary  to  obtain  insurance  of  its  deposits,  or part
10    thereof, and any act necessary to obtain a guaranty, in whole
11    or in part, of any of its loans or investments by the  United
12    States  or  any agency thereof, and any act necessary to sell
13    or otherwise dispose of any of its loans  or  investments  to
14    the  United  States or any agency thereof, and to acquire and
15    hold membership in the Federal Reserve System.
16        (11)  Notwithstanding any other provisions of this Act or
17    any other law, to do any act and to own, possess,  and  carry
18    as assets property of the character, including stock, that is
19    at  the  time authorized or permitted to national banks by an
20    Act of Congress, but subject always to the  same  limitations
21    and  restrictions  as are applicable to national banks by the
22    pertinent federal law and subject to applicable provisions of
23    the Financial Institutions Insurance Sales Law.
24        (12)  To own, possess, and carry as assets stock  of  one
25    or  more corporations that is, or are, engaged in one or more
26    of the following businesses:
27             (a)  holding  title  to  and  administering   assets
28        acquired  as a result of the collection or liquidating of
29        loans, investments, or discounts; or
30             (b)  holding title  to  and  administering  personal
31        property  acquired  by  the  bank, directly or indirectly
32        through a subsidiary,  for  the  purpose  of  leasing  to
33        others,  provided  the lease or leases and the investment
34        of the bank, directly or through a  subsidiary,  in  that
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 1        personal  property  otherwise comply with Section 35.1 of
 2        this Act; or
 3             (c)  carrying  on  or  administering  any   of   the
 4        activities  excepting  the  receipt  of  deposits  or the
 5        payment of checks or other  orders  for  the  payment  of
 6        money  in  which  a  bank  may  engage in carrying on its
 7        general banking business; provided, however, that nothing
 8        contained in this paragraph (c) shall be deemed to permit
 9        a bank organized under this Act or subject hereto to  do,
10        either directly or indirectly through any subsidiary, any
11        act,  including  the making of any loan or investment, or
12        to own, possess, or carry as assets any property that  if
13        done by or owned, possessed, or carried by the State bank
14        would  be  in violation of or prohibited by any provision
15        of this Act.
16        The provisions of this subsection (12) shall not apply to
17    and shall not be deemed to limit the powers of a  State  bank
18    with  respect  to  the ownership, possession, and carrying of
19    stock that a State bank is  permitted  to  own,  possess,  or
20    carry under this Act.
21        Any  bank  intending to establish a subsidiary under this
22    subsection (12) shall give written notice to the Commissioner
23    60 days prior to the subsidiary's commencing of business  or,
24    as the case may be, prior to acquiring stock in a corporation
25    that  has  already  commenced  business.  After receiving the
26    notice, the Commissioner may waive or reduce the  balance  of
27    the  60  day notice period.  The Commissioner may specify the
28    form of the notice and may promulgate rules  and  regulations
29    to administer this subsection (12).
30        (13)  To   accept  for  payment  at  a  future  date  not
31    exceeding one year from the date of acceptance, drafts  drawn
32    upon  it  by  its customers; and to issue, advise, or confirm
33    letters of credit authorizing the  holders  thereof  to  draw
34    drafts upon it or its correspondents.
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 1        (14)  To  own and lease personal property acquired by the
 2    bank at the request of a  prospective  lessee  and  upon  the
 3    agreement  of  that  person  to  lease  the personal property
 4    provided that the lease, the agreement with respect  thereto,
 5    and  the amount of the investment of the bank in the property
 6    comply with Section 35.1 of this Act.
 7        (15) (a)  To establish and maintain, in addition  to  the
 8    main banking premises, branches offering any banking services
 9    permitted at the main banking premises of a State bank.
10        (b)  To  establish  and  maintain,  after  May  31, 1997,
11    branches in another state that may conduct  any  activity  in
12    that  state that is authorized or permitted for any bank that
13    has a banking charter issued by that state,  subject  to  the
14    same  limitations  and  restrictions  that  are applicable to
15    banks chartered by that state.
16        (16)  (Blank).
17        (17)  To establish and maintain terminals, as  authorized
18    by the Electronic Fund Transfer Act.
19        (18)  To  establish and maintain temporary service booths
20    at any  International  Fair  held  in  this  State  which  is
21    approved by the United States Department of Commerce, for the
22    duration  of  the  international fair for the sole purpose of
23    providing a convenient place for foreign trade  customers  at
24    the  fair  to  exchange  their  home countries' currency into
25    United States currency or the converse. This power shall  not
26    be  construed  as  establishing  a  new  place  or  change of
27    location for the bank providing the service booth.
28        (19)  To indemnify its  officers,  directors,  employees,
29    and agents, as authorized for corporations under Section 8.75
30    of the Business Corporation Act of 1983.
31        (20)  To  own,  possess, and carry as assets stock of, or
32    be or become a member of, any  corporation,  mutual  company,
33    association,  trust,  or  other entity formed exclusively for
34    the purpose of providing directors' and  officers'  liability
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 1    and bankers' blanket bond insurance or reinsurance to and for
 2    the  benefit  of the stockholders, members, or beneficiaries,
 3    or their assets or businesses, or their officers,  directors,
 4    employees,  or  agents,  and not to or for the benefit of any
 5    other person or entity or the public generally.
 6        (21)  To make debt or equity investments in  corporations
 7    or  projects,  whether for profit or not for profit, designed
 8    to promote the development of the community and its  welfare,
 9    provided  that  the  aggregate  investment  in  all  of these
10    corporations and in all of these projects does not exceed 10%
11    of the unimpaired capital and unimpaired surplus of the  bank
12    and   provided  that  this  limitation  shall  not  apply  to
13    creditworthy loans by  the  bank  to  those  corporations  or
14    projects.   Upon  written  application to the Commissioner, a
15    bank may make an investment that would, when aggregated  with
16    all  other  such  investments,  exceed  10% of the unimpaired
17    capital and unimpaired surplus of the bank. The  Commissioner
18    may  approve the investment if he is of the opinion and finds
19    that the proposed investment will not have a material adverse
20    effect on the safety and soundness of the bank.
21        (22)  To own, possess, and carry as assets the stock of a
22    corporation engaged in the ownership or operation of a travel
23    agency or to operate  a  travel  agency  as  a  part  of  its
24    business, provided that the bank either owned, possessed, and
25    carried as assets the stock of such a corporation or operated
26    a travel agency as part of its business before July 1, 1991.
27        (23)  With respect to affiliate facilities:
28             (a)  to  conduct  at affiliate facilities any of the
29        following transactions  for  and  on  behalf  of  another
30        commonly  owned bank, if so authorized by the other bank:
31        receiving deposits; cashing and issuing  checks,  drafts,
32        and  money orders; changing money; and receiving payments
33        on existing indebtedness; and
34             (b)  to authorize a commonly owned bank  to  conduct
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 1        for and on behalf of it any of the transactions listed in
 2        this paragraph (23) at one or more affiliate facilities.
 3        Any  bank intending to conduct or to authorize a commonly
 4    owned bank to conduct at an affiliate  facility  any  of  the
 5    transactions  specified  in  this  paragraph  (23) shall give
 6    written notice to the Commissioner at least  30  days  before
 7    any such transaction is conducted at the affiliate facility.
 8        (24)  To  act  as  the agent for any fire, life, or other
 9    insurance company authorized by the  State  of  Illinois,  by
10    soliciting  and  selling insurance and collecting premiums on
11    policies issued by such  company;  and  to  may  receive  for
12    services  so  rendered  such  fees  or  commissions as may be
13    agreed upon between the said bank and the  insurance  company
14    for  which  it  may  act as agent; provided, however, that no
15    such bank shall in any case assume or guarantee  the  payment
16    of  any  premium  on  insurance  policies  issued through its
17    agency by its principal; and provided further, that the  bank
18    shall  not  guarantee  the  truth of any statement made by an
19    assured in filing his application for insurance.
20        (25)  Notwithstanding any other provisions of this Act or
21    any other law, to offer any product or service that is at the
22    time  authorized  or  permitted  to   any   insured   savings
23    association by applicable law, provided that powers conferred
24    only by this subsection (25):
25             (a)  shall always be subject to the same limitations
26        and  restrictions  that  are  applicable  to  the insured
27        savings association for the product or  service  by  such
28        applicable law;
29             (b)  shall  be  subject  to applicable provisions of
30        the Financial Institutions Insurance Sales Law;
31             (c)  shall not include the right to own or conduct a
32        real estate brokerage business for which a license  would
33        be required under the laws of this State; and
34             (d)  shall   not   be   construed   to  include  the
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 1        establishment or maintenance of a branch, nor shall  they
 2        be construed to limit the establishment or maintenance of
 3        a branch pursuant to subsection (11).
 4    (Source: P.A.  89-208,  eff.  9-29-95;  89-310,  eff. 1-1-96;
 5    89-364,  eff.  8-18-95;  89-626,  eff.  8-9-96;  90-41,  eff.
 6    10-1-97; 90-301, eff. 8-1-97; revised 10-22-97.)
 7        (205 ILCS 5/9) (from Ch. 17, par. 316)
 8        Sec. 9. Contents of application. The  application  for  a
 9    permit  to  organize  shall  be  in  a  form specified by the
10    Commissioner and shall be filed with the Commissioner  signed
11    by  each  of  the applicants and shall be acknowledged before
12    some officer authorized by law to acknowledge deeds. It shall
13    state:
14        (1)  The name,  residence,  business  or  occupation  and
15    address  of  each  applicant, and a statement of the proposed
16    management;
17        (2)  The name for the proposed bank;
18        (3)  The location of the proposed bank;
19        (4)  The amount of capital and, surplus and  reserve  for
20    operating expenses for the proposed bank;
21        (5)  The number of shares of capital stock, the number of
22    shares  and classes of preferred stock, if any, the par value
23    of the capital stock and preferred stock, and the amount  for
24    which  each  share of capital stock and preferred stock is to
25    be sold;
26        (6)  A statement of the financial worth of  each  of  the
27    applicants;
28        (7)  (Blank);
29        (8)  Such  other relevant information as the Commissioner
30    may require.
31    (Source: P.A. 90-301, eff. 8-1-97.)
32        (205 ILCS 5/10) (from Ch. 17, par. 317)
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 1        Sec. 10. Permit  to  organize.  Upon  the  filing  of  an
 2    application  for a permit to organize, the Commissioner shall
 3    investigate the truth of the  statements  therein  and  shall
 4    consider  the  proposed  bank's capital structure, its future
 5    earnings prospects, the general  character,  experience,  and
 6    qualifications  of its proposed management, its proposed plan
 7    of operation, and the  convenience  and  needs  of  the  area
 8    sought  to  be  served  and notwithstanding the provisions of
 9    Section 7 of this Act, the Commissioner shall not approve the
10    application and issue a permit to organize unless he shall be
11    of the opinion and finds:
12        (1)  That the proposed capital at least meets the minimum
13    requirements of  this  Act  determined  by  the  Commissioner
14    pursuant  to  Section  7  of  this  Act  including additional
15    capital necessitated by the  circumstances  of  the  proposed
16    bank  including  its size,  scope of operations and market in
17    which it proposes to operate;
18        (2)  That the future earnings prospects are favorable;
19        (3)  That  the   general   character,   experience,   and
20    qualifications  of  its  proposed management and its proposed
21    plan of operation are is such as to assure reasonable promise
22    of successful, safe and sound operation;
23        (4)  That the name of the proposed bank is not  the  same
24    as  or deceptively similar to the name of any other bank then
25    operating in this State; and
26        (5)  That the convenience and needs of the area sought to
27    be served by the proposed bank will be promoted.
28    (Source: P.A. 86-368.)
29        (205 ILCS 5/13) (from Ch. 17, par. 320)
30        Sec. 13.  Issuance of charter.
31        (a)  When the directors have  organized  as  provided  in
32    Section  12  of  this  Act,  and  the  capital  stock and the
33    preferred stock, if any, together with a surplus of not  less
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 1    than  50%  of  the  capital, has been all fully paid in and a
 2    record  of  the  same  filed  with  the   Commissioner,   the
 3    Commissioner  or  some competent person of the Commissioner's
 4    appointment  shall  make  a  thorough  examination  into  the
 5    affairs of the proposed bank, and if satisfied (i)  that  all
 6    the  requirements  of  this Act have been complied with, (ii)
 7    and that no intervening circumstance has occurred  to  change
 8    the  Commissioner's  findings  made pursuant to Section 10 of
 9    this Act,  and  (iii)  that  the  prior  involvement  by  any
10    stockholder who will own a sufficient amount of stock to have
11    control,  as  defined  in  Section  18  of  this  Act, of the
12    proposed bank with any other financial  institution,  whether
13    as stockholder, director, officer, or customer, was conducted
14    in   a   safe   and  sound  manner,  upon  payment  into  the
15    Commissioner's office  of  the  reasonable  expenses  of  the
16    examination,   as   determined   by   the  Commissioner,  the
17    Commissioner shall issue a charter authorizing  the  bank  to
18    commence  business  as  authorized in this Act.  All charters
19    issued by the Commissioner or any  predecessor  agency  which
20    chartered  State  banks, including any charter outstanding as
21    of September 1, 1989, shall be perpetual.  For  the  2  years
22    after  the  Commissioner  has issued a charter to a bank, the
23    bank shall request and obtain  from  the  Commissioner  prior
24    written  approval  before  it  may  change  senior management
25    personnel or directors.
26        The original charter, duly certified by the Commissioner,
27    or a certified copy shall  be  evidence  in  all  courts  and
28    places  of  the  existence  and  authority  of the bank to do
29    business.   Upon  the  issuance  of  the   charter   by   the
30    Commissioner,  the  bank  shall be deemed fully organized and
31    may proceed to do business.  The  Commissioner  may,  in  the
32    Commissioner's   discretion,  withhold  the  issuing  of  the
33    charter when the Commissioner has reason to believe that  the
34    bank   is   organized   for   any  purpose  other  than  that
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 1    contemplated by this Act or that a commission or fee has been
 2    paid in connection with the sale of the stock  of  the  bank.
 3    The   Commissioner   shall   revoke  the  charter  and  order
 4    liquidation in the event that the bank does  not  commence  a
 5    general banking business within one year from the date of the
 6    issuance of the charter, unless a request has been submitted,
 7    in  writing,  to  the  Commissioner  for an extension and the
 8    request  has  been  approved.   After  commencing  a  general
 9    banking  business,  a  bank,  upon  written  notice  to   the
10    Commissioner, may change its name.
11        (b) (1)  The  Commissioner  may also issue a charter to a
12    bank  that  is  owned   exclusively   by   other   depository
13    institutions  or depository institution holding companies and
14    is organized to engage exclusively in providing  services  to
15    or   for   other   depository   institutions,  their  holding
16    companies, and the officers, directors, and employees of such
17    institutions and companies, and  in  providing  correspondent
18    banking   services   at   the  request  of  other  depository
19    institutions or their holding companies (also referred to  as
20    a "bankers' bank").
21        (2)  A  bank  chartered  pursuant to paragraph (1) shall,
22    except  as   otherwise   specifically   determined   by   the
23    Commissioner,  be  vested with the same rights and privileges
24    and subject to the same duties, restrictions, penalties,  and
25    liabilities now or hereafter imposed under this Act.
26        (c)  A  bank  chartered  under this Act after November 1,
27    1985, and an out-of-state bank that merges with a State  bank
28    and establishes or maintains a branch in this State after May
29    31,  1997,  shall  obtain  from  and,  at  all times while it
30    accepts  or  retains  deposits,  maintain  with  the  Federal
31    Deposit Insurance Corporation, or such other  instrumentality
32    of  or  corporation  chartered  by the United States, deposit
33    insurance as authorized under federal law.
34        (d) (i)  A bank that has a banking charter issued by  the
SB1528 Engrossed            -14-               LRB9009866JSmg
 1    Commissioner  under  this  Act  may,  pursuant  to  a written
 2    purchase and assumption agreement, transfer substantially all
 3    of its assets to another  State  bank  or  national  bank  in
 4    consideration, in whole or in part, for the transferee banks'
 5    assumption  of  any  part  or all of its liabilities.  Such a
 6    transfer shall in no way be deemed to impair the  charter  of
 7    the  transferor  bank or cause the transferor bank to forfeit
 8    any  of  its  rights,  powers,  interests,   franchises,   or
 9    privileges as a State bank, nor shall any voluntary reduction
10    in  the  transferor  bank's  activities  resulting  from  the
11    transfer  have  any  such  effect;  provided, however, that a
12    State bank that transfers substantially  all  of  its  assets
13    pursuant  to  this  subsection (d) and following the transfer
14    does not accept deposits and make loans, shall not  have  any
15    rights,  powers,  interests,  franchises, or privileges under
16    subsection (15) of Section 5 of this Act until the  bank  has
17    resumed accepting deposits and making loans.
18        (ii)  The   fact  that  a  State  bank  does  not  resume
19    accepting deposits and making loans for a period of 24 months
20    commencing on September 11, 1989 or on a date of the transfer
21    of substantially all of a State bank's assets,  whichever  is
22    later, or such longer period as the Commissioner may allow in
23    writing,  may  be the basis for a finding by the Commissioner
24    under Section 51 of this Act  that  the  bank  is  unable  to
25    continue operations.
26        (iii)  The  authority provided by subdivision (i) of this
27    subsection (d) shall terminate on May 31, 1997, and  no  bank
28    that has transferred substantially all of its assets pursuant
29    to  this subsection (d) shall continue in existence after May
30    31, 1997.
31    (Source: P.A. 89-208, eff.  9-29-95;  89-567,  eff.  7-26-96;
32    89-603,   eff.  8-2-96;  90-14,  eff.  7-1-97;  90-301,  eff.
33    8-1-97.)
SB1528 Engrossed            -15-               LRB9009866JSmg
 1        (205 ILCS 5/21.1)
 2        Sec. 21.1.  Application for certificate of authority.
 3        (a)  On or after June 1, 1997, an out-of-state bank  may,
 4    in  order to procure a certificate of authority to merge with
 5    a State bank after executing, shall execute and  filing  file
 6    in  duplicate  not  less  than  60  days  before the proposed
 7    effective date of the merger an application therefor with the
 8    Commissioner  and  after   shall   also   filing   with   the
 9    Commissioner   file  a  copy  of  its  charter,  articles  of
10    association or articles of incorporation, and all  amendments
11    thereto,  duly  authenticated  by  the  proper officer of the
12    state wherein it is chartered or incorporated  and  the  last
13    quarterly  statement  of  condition filed by the out-of-state
14    bank with the appropriate federal  banking  regulator.    The
15    Commissioner  shall specify the form of the application which
16    shall  set  forth,  to  the  extent  applicable,   the   same
17    information   required   in   an  application  by  a  foreign
18    corporation  pursuant  to  Section  13.15  of  the   Business
19    Corporation Act of 1983. Subject to Sections 21.2 and 21.3 of
20    this  Act,  receipt  by  the  Commissioner  of  a  copy of an
21    application filed  with  and  approved  by  the  out-of-state
22    bank's chartering authority authorizing the out-of-state bank
23    to   merge  with  a  State  bank  shall  satisfy  the  filing
24    requirements of this subsection (a).
25        When the provisions of this Section  have  been  complied
26    with, the Commissioner shall issue a certificate of authority
27    to  merge.  If the merger is not consummated within one year,
28    the Commissioner may cancel the certificate of authority.
29        (b)  An out-of-state bank that is the resulting bank in a
30    merger with a State bank may, after the merger, establish and
31    maintain a branch or branches in Illinois  at  the  locations
32    where  the  State  bank  had  its  main  office  and branches
33    immediately before the merger.
34        (c)  An out-of-state bank that establishes and  maintains
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 1    a  branch  or branches in Illinois pursuant to subsection (b)
 2    of this Section may, after the merger, establish and maintain
 3    additional branches in this State to the  same  extent  as  a
 4    State bank.
 5        (d)  A branch of an out-of-state bank may not conduct any
 6    activity that is not authorized for a State bank.
 7        (e)  An out-of-state bank shall provide written notice to
 8    the  Commissioner  of  its  intent to establish an additional
 9    branch or  branches  in  this  State  within  30  days  after
10    approval   of  the  appropriate  federal  banking  agency  to
11    establish the branch or branches.  The notice form  shall  be
12    specified  by  the  Commissioner  and  may include any of the
13    information required for a similar notice by  a  State  bank.
14    Receipt  by  the  Commissioner  of notice of the out-of-state
15    bank's intent to establish such additional branch or branches
16    in  this  State  from  the  out-of-state  bank's   chartering
17    authority  shall  satisfy the requirements of this subsection
18    (e).
19    (Source: P.A. 89-208, eff. 9-29-95.)
20        (205 ILCS 5/24) (from Ch. 17, par. 331)
21        Sec. 24.  Effective date of merger; filing. The  executed
22    merger  agreement  together with copies of the resolutions of
23    the stockholders of each  merging  bank  or  insured  savings
24    association  approving it, certified by the bank's or insured
25    savings association's  president  or  vice-president  or  the
26    cashier,  shall be filed with the Commissioner. A merger that
27    is to result in a State bank shall, unless a  later  date  is
28    specified   in  the  agreement,  become  effective  when  the
29    Commissioner  has  approved  the  agreement  and   issued   a
30    certificate of merger to the continuing bank. The charters of
31    the  merging banks or insured savings association, other than
32    the continuing bank, shall thereupon automatically terminate.
33    If, after  May  31,  1997,  the  merger  will  result  in  an
SB1528 Engrossed            -17-               LRB9009866JSmg
 1    out-of-state  bank, the charter of a merging State bank shall
 2    terminate upon notice to the Commissioner that the merger  is
 3    effective.  The  certificate of merger shall specify the name
 4    of each merging bank or insured savings association  and  the
 5    name  of  the  continuing  bank,  and  the  amendments to the
 6    charter of the continuing bank provided  for  by  the  merger
 7    agreement.  The  certificate  shall be conclusive evidence of
 8    the merger and of the correctness of all proceedings therefor
 9    in all courts  and  places,  and  the  certificate  shall  be
10    recorded.
11    (Source: P.A. 89-208, eff. 9-29-95.)
12        (205 ILCS 5/48) (from Ch. 17, par. 359)
13        Sec. 48. Commissioner's powers; duties.  The Commissioner
14    shall  have the powers and authority, and is charged with the
15    duties and responsibilities designated in  this  Act,  and  a
16    State bank shall not be subject to any other visitorial power
17    other  than as authorized by this Act, except those vested in
18    the courts, or upon prior consultation with the Commissioner,
19    a foreign bank  regulator  with  an  appropriate  supervisory
20    interest  in the parent or affiliate of a state bank.  In the
21    performance of the Commissioner's duties:
22        (1)  The Commissioner shall call for statements from  all
23    State  banks  as  provided  in  Section  47 at least one time
24    during each calendar quarter.
25        (2) (a)  The Commissioner, as often as  the  Commissioner
26    shall  deem  necessary or proper, and no less frequently than
27    18 months following the preceding examination, shall  appoint
28    a  suitable  person  or persons to make an examination of the
29    affairs of every State bank, except that for  every  eligible
30    State  bank,  as  defined  by regulation, the Commissioner in
31    lieu of the examination may accept on  an  alternating  basis
32    the examination made by the eligible State bank's appropriate
33    federal banking agency pursuant to Section 111 of the Federal
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 1    Deposit   Insurance  Corporation  Improvement  Act  of  1991,
 2    provided the appropriate federal banking agency has made such
 3    an examination.   A  person  so  appointed  shall  not  be  a
 4    stockholder  or  officer  or  employee of any bank which that
 5    person may be directed to examine, and shall have  powers  to
 6    make  a thorough examination into all the affairs of the bank
 7    and in so doing to examine any of the officers or  agents  or
 8    employees  thereof on oath and shall make a full and detailed
 9    report of the condition of the bank to the Commissioner.   In
10    making   the  examination  the  examiners  shall  include  an
11    examination of the affairs of all the affiliates of the bank,
12    as defined in subsection (b) of Section 35.2 of this Act,  as
13    shall  be  necessary  to disclose fully the conditions of the
14    affiliates, the relations between the bank and the affiliates
15    and the effect of those relations upon  the  affairs  of  the
16    bank, and in connection therewith shall have power to examine
17    any  of  the officers, directors, agents, or employees of the
18    affiliates on oath.  After May 31, 1997, the Commissioner may
19    enter  into  cooperative  agreements  with  state  regulatory
20    authorities of other states to  provide  for  examination  of
21    State bank branches in those states, and the Commissioner may
22    accept  reports  of  examinations of State bank branches from
23    those  state  regulatory  authorities.    These   cooperative
24    agreements  may set forth the manner in which the other state
25    regulatory authorities may be  compensated  for  examinations
26    prepared for and submitted to the Commissioner.
27        (b)  After  May  31, 1997, the Commissioner is authorized
28    to examine, as often as the Commissioner shall deem necessary
29    or proper, branches of out-of-state banks.  The  Commissioner
30    may  establish  and  may  assess  fees  to  be  paid  to  the
31    Commissioner for examinations under this subsection (b).  The
32    fees shall be borne by the out-of-state bank, unless the fees
33    are  borne  by  the state regulatory authority that chartered
34    the  out-of-state  bank,  as  determined  by  a   cooperative
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 1    agreement  between  the Commissioner and the state regulatory
 2    authority that chartered the out-of-state bank.
 3        (2.5)  Whenever  any  State  bank,  any   subsidiary   or
 4    affiliate  of a State bank, or after May 31, 1997, any branch
 5    of an out-of-state bank causes to be performed,  by  contract
 6    or otherwise, any bank services for itself, whether on or off
 7    its premises:
 8             (a)  that    performance   shall   be   subject   to
 9        examination by the Commissioner to the same extent as  if
10        services  were  being performed by the bank or, after May
11        31, 1997, branch of the out-of-state bank itself  on  its
12        own premises; and
13             (b)  the  bank or, after May 31, 1997, branch of the
14        out-of-state bank shall notify the  Commissioner  of  the
15        existence  of  a  service relationship.  The notification
16        shall be submitted with the first statement of  condition
17        (as  required  by  Section  47 of this Act) due after the
18        making of the service contract or the performance of  the
19        service,  whichever occurs first.  The Commissioner shall
20        be notified of  each  subsequent  contract  in  the  same
21        manner.
22        For  purposes  of  this  subsection (2.5), the term "bank
23    services" means services  such  as  sorting  and  posting  of
24    checks  and deposits, computation and posting of interest and
25    other credits and charges, preparation and mailing of checks,
26    statements,  notices,  and  similar  items,  or   any   other
27    clerical,  bookkeeping,  accounting,  statistical, or similar
28    functions performed for  a  State  bank,  including  but  not
29    limited  to  electronic data processing related to those bank
30    services.
31        (3)  The expense of administering this Act, including the
32    expense of the examinations of State  banks  as  provided  in
33    this  Act,  shall to the extent of the amounts resulting from
34    the fees provided for in paragraphs (a), (a-2),  and  (b)  of
SB1528 Engrossed            -20-               LRB9009866JSmg
 1    this  subsection  (3)  be  assessed  against and borne by the
 2    State banks:
 3             (a)  Each bank shall pay to the Commissioner a  Call
 4        Report  Fee which shall be paid in quarterly installments
 5        equal to one-fourth of the sum of the annual fixed fee of
 6        $800, plus a variable fee based on the  assets  shown  on
 7        the  quarterly  statement  of  condition delivered to the
 8        Commissioner  in  accordance  with  Section  47  for  the
 9        preceding quarter according to  the  following  schedule:
10        16¢  per  $1,000 of the first $5,000,000 of total assets,
11        15¢ per $1,000 of the next $20,000,000 of  total  assets,
12        13¢  per $1,000 of the next $75,000,000  of total assets,
13        9¢ per $1,000 of the next $400,000,000 of  total  assets,
14        7¢  per  $1,000 of the next $500,000,000 of total assets,
15        and  5¢  per  $1,000  of  all   assets   in   excess   of
16        $1,000,000,000,  of  the  State bank. The Call Report Fee
17        shall be calculated by the Commissioner and billed to the
18        banks  for  remittance  at  the  time  of  the  quarterly
19        statements of condition provided for in Section  47.  The
20        Commissioner  may require payment of the fees provided in
21        this Section by an electronic transfer  of  funds  or  an
22        automatic debit of an account of each of the State banks.
23        In  case  more than one examination of any bank is deemed
24        by the Commissioner to be necessary  in  any  examination
25        frequency  cycle  specified  in  subsection  2(a) of this
26        Section,  and  is  performed  at   his   direction,   the
27        Commissioner  may  assess  a reasonable additional fee to
28        recover the cost of the additional examination.  In  lieu
29        of the method and amounts set forth in this paragraph (a)
30        for   the   calculation  of  the  Call  Report  Fee,  the
31        Commissioner may specify by rule  that  the  Call  Report
32        Fees   provided   by   this   Section   may  be  assessed
33        semiannually or some other period and may provide in  the
34        rule the formula to be used for calculating and assessing
SB1528 Engrossed            -21-               LRB9009866JSmg
 1        the periodic Call Report Fees to be paid by State banks.
 2             (a-1)  If  in  the  opinion  of  the Commissioner an
 3        emergency exists or appears likely, the Commissioner  may
 4        assign an examiner or examiners to monitor the affairs of
 5        a   State   bank   with   whatever   frequency  he  deems
 6        appropriate, including but not limited to a daily  basis.
 7        The reasonable and necessary expenses of the Commissioner
 8        during the period of the monitoring shall be borne by the
 9        subject  bank.   The Commissioner shall furnish the State
10        bank a statement of time and expenses if requested to  do
11        so  within  30  days  of the conclusion of the monitoring
12        period.
13             (a-2)  On and after January 1, 1990, the  reasonable
14        and   necessary   expenses  of  the  Commissioner  during
15        examination  of  the  performance  of   electronic   data
16        processing services under subsection (2.5) shall be borne
17        by  the  banks  for  which the services are provided.  An
18        amount, based upon a  fee  structure  prescribed  by  the
19        Commissioner,  shall  be  paid by the banks or, after May
20        31, 1997, branches of out-of-state  banks  receiving  the
21        electronic  data  processing services along with the Call
22        Report  Fee  assessed  under  paragraph   (a)   of   this
23        subsection (3).
24             (a-3)  After   May  31,  1997,  the  reasonable  and
25        necessary expenses of the Commissioner during examination
26        of the performance of electronic data processing services
27        under subsection (2.5) at or on  behalf  of  branches  of
28        out-of-state  banks  shall  be  borne by the out-of-state
29        banks, unless those  expenses  are  borne  by  the  state
30        regulatory  authorities  that  chartered the out-of-state
31        banks, as determined by  cooperative  agreements  between
32        the  Commissioner  and  the  state regulatory authorities
33        that chartered the out-of-state banks.
34             (b)  "Fiscal year" for purposes of this  Section  48
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 1        is  defined  as a period beginning July 1 of any year and
 2        ending June 30 of the next year. The  Commissioner  shall
 3        receive  for each fiscal year, commencing with the fiscal
 4        year ending June 30, 1987, a contingent fee equal to  the
 5        lesser  of  the  aggregate  of the fees paid by all State
 6        banks under paragraph (a)  of  subsection  (3)  for  that
 7        year, or the amount, if any, whereby the aggregate of the
 8        administration expenses, as defined in paragraph (c), for
 9        that  fiscal year exceeds the sum of the aggregate of the
10        fees payable by all  State  banks  for  that  year  under
11        paragraph  (a)  of subsection (3), plus all other amounts
12        collected by the Commissioner for  that  year  under  any
13        other  provision  of  this Act, plus the aggregate of all
14        fees collected for that year by  the  Commissioner  under
15        the  Corporate  Fiduciary Act, excluding the receivership
16        fees provided  for  in  Section  5-10  of  the  Corporate
17        Fiduciary  Act,  and  the Foreign Banking Office Act. The
18        aggregate amount of the contingent fee  thus  arrived  at
19        for   any  fiscal  year  shall  be  apportioned  amongst,
20        assessed upon, and paid by the State  banks  and  foreign
21        banking   corporations,   respectively,   in   the   same
22        proportion  that  the  fee of each under paragraph (a) of
23        subsection (3), respectively, for that year bears to  the
24        aggregate  for  that  year  of  the  fees collected under
25        paragraph (a) of subsection (3). The aggregate amount  of
26        the  contingent  fee,  and  the  portion  thereof  to  be
27        assessed   upon  each  State  bank  and  foreign  banking
28        corporation, respectively, shall  be  determined  by  the
29        Commissioner  and  shall  be  paid by each, respectively,
30        within 120 days of the close of the period for which  the
31        contingent  fee  is  computed  and  is  payable,  and the
32        Commissioner shall give 20 days  advance  notice  of  the
33        amount  of  the  contingent fee payable by the State bank
34        and of the date fixed by the Commissioner for payment  of
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 1        the fee.
 2             (c)  The  "administration  expenses"  for any fiscal
 3        year shall mean the ordinary and contingent expenses  for
 4        that  year  incident  to making the examinations provided
 5        for by, and for otherwise administering,  this  Act,  the
 6        Corporate Fiduciary Act, excluding the expenses paid from
 7        the  Corporate Fiduciary Receivership account in the Bank
 8        and Trust Company Fund, the Foreign Banking  Office  Act,
 9        the  Electronic  Fund Transfer Act, and the Illinois Bank
10        Examiners'  Education  Foundation  Act,   including   all
11        salaries   and   other  compensation  paid  for  personal
12        services rendered for the State by officers or  employees
13        of  the  State, including the Commissioner and the Deputy
14        Commissioners,  all  expenditures   for   telephone   and
15        telegraph  charges,  postage  and  postal charges, office
16        stationery, supplies and services, and  office  furniture
17        and  equipment,  including  typewriters  and  copying and
18        duplicating machines and filing  equipment,  surety  bond
19        premiums,  and  travel  expenses  of  those  officers and
20        employees, employees, expenditures  or  charges  for  the
21        acquisition,  enlargement  or  improvement of, or for the
22        use of, any office  space,  building,  or  structure,  or
23        expenditures   for   the   maintenance   thereof  or  for
24        furnishing heat, light, or power  with  respect  thereto,
25        all  to  the  extent that those expenditures are directly
26        incidental to such examinations or administration.    The
27        Commissioner  shall  not be required by paragraphs (c) or
28        (d-1) of this subsection (3) to maintain  in  any  fiscal
29        year's  budget appropriated reserves for accrued vacation
30        and accrued sick leave that is required  to  be  paid  to
31        employees  of  the Commissioner upon termination of their
32        service with the Commissioner in an amount that  is  more
33        than  is  reasonably  anticipated to be necessary for any
34        anticipated turnover in employees, whether due to  normal
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 1        attrition   or   due   to   layoffs,   terminations,   or
 2        resignations.
 3             (d)  The  aggregate  of  all  fees  collected by the
 4        Commissioner under this Act, the Corporate Fiduciary Act,
 5        or the Foreign Banking Office Act on and  after  July  1,
 6        1979,  shall  be paid promptly after receipt of the same,
 7        accompanied by a detailed  statement  thereof,  into  the
 8        State  treasury  and shall be set apart in a special fund
 9        to be known as the "Bank and Trust Company Fund",  except
10        as  provided  in paragraph (c) of subsection (11) of this
11        Section. The amount from time to time deposited into  the
12        Bank  and  Trust Company Fund shall be used to offset the
13        ordinary administrative expenses of the  Commissioner  of
14        Banks and Real Estate as defined in this Section. Nothing
15        in  this  amendatory Act of 1979 shall prevent continuing
16        the  practice  of  paying  expenses  involving  salaries,
17        retirement, social  security,  and  State-paid  insurance
18        premiums  of  State  officers  by appropriations from the
19        General Revenue Fund.  However, the General Revenue  Fund
20        shall  be reimbursed for those payments made on and after
21        July 1, 1979, by an annual transfer  of  funds  from  the
22        Bank and Trust Company Fund.
23             (d-1)  Adequate funds shall be available in the Bank
24        and  Trust  Company  Fund to permit the timely payment of
25        administration expenses.  In each fiscal year  the  total
26        administration  expenses shall be deducted from the total
27        fees collected by  the  Commissioner  and  the  remainder
28        transferred  into  the  Cash Flow Reserve Account, unless
29        the balance of the Cash Flow Reserve Account prior to the
30        transfer  equals  or  exceeds  one-fourth  of  the  total
31        initial appropriations from the Bank  and  Trust  Company
32        Fund for the subsequent year, in which case the remainder
33        shall  be  credited  to  State  banks and foreign banking
34        corporations and  applied  against  their  fees  for  the
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 1        subsequent  year.  The amount credited to each State bank
 2        and foreign banking corporation  shall  be  in  the  same
 3        proportion  as  the Call Report Fees paid by each for the
 4        year bear to the total Call Report Fees collected for the
 5        year.  If, after a transfer  to  the  Cash  Flow  Reserve
 6        Account  is  made  or  if  no  remainder is available for
 7        transfer, the balance of the Cash Flow Reserve Account is
 8        less than one-fourth of the total initial  appropriations
 9        for  the  subsequent  year  and the amount transferred is
10        less than 5% of the total Call Report Fees for the  year,
11        additional  amounts  needed to make the transfer equal to
12        5% of the total Call Report Fees for the  year  shall  be
13        apportioned amongst, assessed upon, and paid by the State
14        banks  and  foreign  banking  corporations  in  the  same
15        proportion   that   the   Call   Report   Fees  of  each,
16        respectively, for the year bear to the total Call  Report
17        Fees  collected  for  the  year.   The additional amounts
18        assessed shall be transferred into the Cash Flow  Reserve
19        Account.   For  purposes  of  this  paragraph  (d-1), the
20        calculation of the fees  collected  by  the  Commissioner
21        shall  exclude  the  receivership  fees  provided  for in
22        Section 5-10 of the Corporate Fiduciary Act.
23             (e)  The Commissioner may upon  request  certify  to
24        any public record in his keeping and shall have authority
25        to levy a reasonable charge for issuing certifications of
26        any public record in his keeping.
27             (f)  In  addition  to  fees  authorized elsewhere in
28        this Act, the Commissioner  may,  in  connection  with  a
29        review,  approval,  or  provision  of  a  service, levy a
30        reasonable charge to recover  the  cost  of  the  review,
31        approval, or service.
32        (4)  Nothing  contained in this Act shall be construed to
33    limit the obligation relative to examinations and reports  of
34    any  State  bank, deposits in which are to any extent insured
SB1528 Engrossed            -26-               LRB9009866JSmg
 1    by the United States or any agency thereof, nor to  limit  in
 2    any  way  the  powers  of  the Commissioner with reference to
 3    examinations and reports of that bank.
 4        (5)  The  nature  and  condition  of  the  assets  in  or
 5    investment of any bonus, pension, or profit sharing plan  for
 6    officers  or  employees of every State bank or, after May 31,
 7    1997, branch of an out-of-state bank shall be  deemed  to  be
 8    included  in  the  affairs of that State bank or branch of an
 9    out-of-state bank subject to examination by the  Commissioner
10    under  the  provisions of subsection (2) of this Section, and
11    if the Commissioner shall find from an examination  that  the
12    condition of or operation of the investments or assets of the
13    plan  is unlawful, fraudulent, or unsafe, or that any trustee
14    has  abused  his  trust,  the  Commissioner  shall,  if   the
15    situation so found by the Commissioner shall not be corrected
16    to his satisfaction within 60 days after the Commissioner has
17    given  notice  to the board of directors of the State bank or
18    out-of-state bank of his findings, report the  facts  to  the
19    Attorney  General  who  shall thereupon institute proceedings
20    against the State bank or out-of-state  bank,  the  board  of
21    directors  thereof,  or  the  trustees under such plan as the
22    nature of the case may require.
23        (6)  The Commissioner shall have the power:
24             (a)  To promulgate reasonable rules for the  purpose
25        of administering the provisions of this Act.
26             (b)  To    issue   orders   for   the   purpose   of
27        administering the provisions of this  Act  and  any  rule
28        promulgated in accordance with this Act.
29             (c)  To  appoint  hearing officers to execute any of
30        the powers granted to the Commissioner under this Section
31        for the purpose of administering this Act  and  any  rule
32        promulgated in accordance with this Act.
33             (d)  To   subpoena   witnesses,   to   compel  their
34        attendance, to administer an oath, to examine any  person
SB1528 Engrossed            -27-               LRB9009866JSmg
 1        under oath, and to require the production of any relevant
 2        books,  papers,  accounts, and documents in the course of
 3        and pursuant to any investigation being conducted, or any
 4        action being taken, by the Commissioner in respect of any
 5        matter relating to the duties imposed upon, or the powers
 6        vested in, the Commissioner under the provisions of  this
 7        Act or any rule promulgated in accordance with this Act.
 8             (e)  To conduct hearings.
 9        (7)  Whenever,  in  the  opinion of the Commissioner, any
10    director, officer, employee, or agent of  a  State  bank  or,
11    after  May  31,  1997,  of any branch of an out-of-state bank
12    shall have violated any law, rule, or order relating to  that
13    bank  or  shall have engaged in an unsafe or unsound practice
14    in conducting  the  business  of  that  bank  or  shall  have
15    violated  any law or engaged or participated in any unsafe or
16    unsound practice in connection with any financial institution
17    or other business entity such that the character and  fitness
18    of  the director, officer, employee, or agent does not assure
19    reasonable promise of safe and sound operation of  the  State
20    bank,  the Commissioner may issue an order of removal. If, in
21    the  opinion  of  the  Commissioner,  any  former   director,
22    officer,  employee,  or  agent  of a State bank, prior to the
23    termination of his or her service with  that  bank,  violated
24    any  law,  rule,  or  order  relating  to  that State bank or
25    engaged in an unsafe or unsound practice  in  conducting  the
26    business  of  that  bank  or  violated  any law or engaged or
27    participated in any unsafe or unsound practice in  connection
28    with  any financial institution or other business entity such
29    that the character and  fitness  of  the  director,  officer,
30    employee,  or agent would not have assured reasonable promise
31    of safe and sound operation of the State bank  prior  to  the
32    termination  of  his  or  her  service  with  that  bank, the
33    Commissioner may issue an order prohibiting that person  from
34    further service with a bank as a director, officer, employee,
SB1528 Engrossed            -28-               LRB9009866JSmg
 1    or  agent.  An order issued pursuant to this subsection shall
 2    be served upon the director, officer, employee, or  agent.  A
 3    copy  of the order shall be sent to each director of the bank
 4    affected by registered  mail.  The  person  affected  by  the
 5    action  may  request a hearing before the State Banking Board
 6    within 10 days after receipt of the order  of  removal.   The
 7    hearing  shall  be held by the Board within 30 days after the
 8    request has been received by the Board. The Board shall  make
 9    a  determination  approving,  modifying,  or disapproving the
10    order  of  the  Commissioner  as  its  final   administrative
11    decision.  If a hearing is held by the Board, the Board shall
12    make its determination within 60 days from the conclusion  of
13    the  hearing.  Any person affected by a decision of the Board
14    under this subsection (7) of Section 48 of this Act may  have
15    the  decision  reviewed only under and in accordance with the
16    Administrative Review Law  and  the  rules  adopted  pursuant
17    thereto.  A  copy  of the order shall also be served upon the
18    bank of which he is a director, officer, employee, or  agent,
19    whereupon he shall cease to be a director, officer, employee,
20    or  agent  of  that  bank.   The Commissioner may institute a
21    civil action against the director, officer, or agent  of  the
22    State  bank  or,  after  May  31,  1997, of the branch of the
23    out-of-state bank against whom any order provided for by this
24    subsection (7) of  this  Section  48  has  been  issued,  and
25    against  the  State bank or, after May 31, 1997, out-of-state
26    bank, to enforce compliance with or to enjoin  any  violation
27    of  the  terms  of  the  order.  Any  person who has been the
28    subject of an order of removal or  an  order  of  prohibition
29    issued  by  the Commissioner under this subsection or Section
30    5-6 of the Corporate Fiduciary Act may not  thereafter  serve
31    as director, officer, employee, or agent of any State bank or
32    of  any  branch of any out-of-state bank, or of any corporate
33    fiduciary, as defined in  Section  1-5.05  of  the  Corporate
34    Fiduciary  Act,  or  of  any  other entity that is subject to
SB1528 Engrossed            -29-               LRB9009866JSmg
 1    licensure or regulation by the Commissioner or the Office  of
 2    Banks  and  Real  Estate  unless the Commissioner has granted
 3    prior approval in writing.
 4        (8)  The Commissioner may impose civil penalties of up to
 5    $10,000  against  any  person  for  each  violation  of   any
 6    provision  of  this  Act,  any rule promulgated in accordance
 7    with this Act,  any order of the Commissioner, or  any  other
 8    action which in the Commissioner's discretion is an unsafe or
 9    unsound banking practice.
10        (9)  The Commissioner may impose civil penalties of up to
11    $100  against any person for the first failure to comply with
12    reporting requirements set forth in the report of examination
13    of the bank and up to $200  for  the  second  and  subsequent
14    failures to comply with those reporting requirements.
15        (10)  All   final   administrative   decisions   of   the
16    Commissioner  hereunder  shall  be subject to judicial review
17    pursuant to the provisions of the Administrative Review  Law.
18    For  matters  involving administrative review, venue shall be
19    in either Sangamon County or Cook County.
20        (11)  The endowment fund for the Illinois Bank Examiners'
21    Education Foundation shall be administered as follows:
22             (a)  (Blank).
23             (b)  The  Foundation   is   empowered   to   receive
24        voluntary  contributions,  gifts,  grants,  bequests, and
25        donations on  behalf  of  the  Illinois  Bank  Examiners'
26        Education   Foundation  from  national  banks  and  other
27        persons for the purpose of funding the endowment  of  the
28        Illinois Bank Examiners' Education Foundation.
29             (c)  The  aggregate  of all special educational fees
30        collected by the Commissioner and  property  received  by
31        the   Commissioner   on   behalf  of  the  Illinois  Bank
32        Examiners' Education  Foundation  under  this  subsection
33        (11)  on  or  after  June  30,  1986, shall be either (i)
34        promptly paid after receipt of the same, accompanied by a
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 1        detailed statement thereof, into the State  Treasury  and
 2        shall  be set apart in a special fund to be known as "The
 3        Illinois Bank Examiners' Education Fund" to  be  invested
 4        by  either  the Treasurer of the State of Illinois in the
 5        Public  Treasurers'  Investment  Pool  or  in  any  other
 6        investment he is authorized to make or  by  the  Illinois
 7        State Board of Investment as the board of trustees of the
 8        Illinois  Bank Examiners' Education Foundation may direct
 9        or  (ii)  deposited  into  an  account  maintained  in  a
10        commercial bank or corporate fiduciary in the name of the
11        Illinois Bank Examiners' Education Foundation pursuant to
12        the order and direction of the Board of Trustees  of  the
13        Illinois Bank Examiners' Education Foundation.
14        (12)  (Blank).
15    (Source: P.A.  89-208,  eff.  9-29-95;  89-317, eff. 8-11-95;
16    89-508, eff.  7-3-96;  89-567,  eff.  7-26-96;  89-626,  eff.
17    8-9-96; 90-14, eff. 7-1-97; 90-301, eff. 8-1-97.)
18        (205 ILCS 5/48.1) (from Ch. 17, par. 360)
19        Sec. 48.1.  Customer financial records; confidentiality.
20        (a)  For the purpose of this Section, the term "financial
21    records"  means any original, any copy, or any summary of (1)
22    a document granting signature authority  over  a  deposit  or
23    account,  (2) a statement, ledger card or other record on any
24    deposit or account, which shows each transaction in  or  with
25    respect  to  that  account, (3) a check, draft or money order
26    drawn on a bank or issued and payable by a bank, or  (4)  any
27    other   item   containing   information   pertaining  to  any
28    relationship established in the ordinary course of  a  bank's
29    business between a bank and its customer.
30        (b)  This Section does not prohibit:
31             (1)  The   preparation,   examination,  handling  or
32        maintenance of any  financial  records  by  any  officer,
33        employee  or  agent  of  a  bank  having  custody  of the
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 1        records, or the examination of the records by a certified
 2        public accountant engaged  by  the  bank  to  perform  an
 3        independent audit.
 4             (2)  The examination of any financial records by, or
 5        the  furnishing  of  financial  records by a bank to, any
 6        officer, employee or agent of  (i)  the  Commissioner  of
 7        Banks  and  Real Estate, (ii) after May 31, 1997, a state
 8        regulatory authority authorized to examine a branch of  a
 9        State   bank   located   in   another  state,  (iii)  the
10        Comptroller of the Currency,  (iv)  the  Federal  Reserve
11        Board,  or  (v) the Federal Deposit Insurance Corporation
12        for use solely in  the  exercise  of  his  duties  as  an
13        officer, employee, or agent.
14             (3)  The   publication   of   data   furnished  from
15        financial records relating to customers  where  the  data
16        cannot  be  identified  to  any  particular  customer  or
17        account.
18             (4)  The making of reports or returns required under
19        Chapter 61 of the Internal Revenue Code of 1986.
20             (5)  Furnishing  information concerning the dishonor
21        of any negotiable instrument permitted  to  be  disclosed
22        under the Uniform Commercial Code.
23             (6)  The  exchange in the regular course of business
24        of credit information between a bank and other  banks  or
25        financial   institutions   or   commercial   enterprises,
26        directly or through a consumer reporting agency.
27             (7)  The    furnishing   of   information   to   the
28        appropriate law enforcement authorities  where  the  bank
29        reasonably believes it has been the victim of a crime.
30             (8)  The furnishing of information under the Uniform
31        Disposition of Unclaimed Property Act.
32             (9)  The   furnishing   of   information  under  the
33        Illinois Income Tax  Act  and  the  Illinois  Estate  and
34        Generation-Skipping Transfer Tax Act.
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 1             (10)  The   furnishing   of  information  under  the
 2        federal Currency and Foreign Transactions  Reporting  Act
 3        Title 31, United States Code, Section 1051 et seq.
 4             (11)  The  furnishing of information under any other
 5        statute that by its terms or by  regulations  promulgated
 6        thereunder  requires  the disclosure of financial records
 7        other than by subpoena, summons, warrant, or court order.
 8             (12)  The  furnishing  of  information   about   the
 9        existence  of  an  account  of  a  person  to  a judgment
10        creditor of that person who has made  a  written  request
11        for that information.
12             (13)  The exchange in the regular course of business
13        of information between commonly owned banks in connection
14        with  a  transaction  authorized  under paragraph (23) of
15        Section 5 and conducted at an affiliate facility.
16             (14)  The furnishing of  information  in  accordance
17        with   the   federal  Personal  Responsibility  and  Work
18        Opportunity Reconciliation Act of 1996. Any bank governed
19        by this Act  shall  enter  into  an  agreement  for  data
20        exchanges  with  a State agency provided the State agency
21        pays to the bank a  reasonable  fee  not  to  exceed  its
22        actual  cost  incurred.   A bank providing information in
23        accordance with this item shall  not  be  liable  to  any
24        account  holder  or  other  person  for any disclosure of
25        information  to  a  State  agency,  for  encumbering   or
26        surrendering any assets held by the bank in response to a
27        lien  or  order to withhold and deliver issued by a State
28        agency, or for any other action taken  pursuant  to  this
29        item, including individual or mechanical errors, provided
30        the  action  does  not  constitute  gross  negligence  or
31        willful  misconduct.  A  bank shall have no obligation to
32        hold, encumber, or surrender assets  until  it  has  been
33        served  with  a  subpoena,  summons,  warrant,  court  or
34        administrative order, lien, or levy.
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 1             (15)  The exchange in the regular course of business
 2        of  information  between  a  bank  and any commonly owned
 3        affiliate of the bank, subject to the provisions  of  the
 4        Financial Institutions Insurance Sales Law.
 5        (c)  A bank may not disclose to any person, except to the
 6    customer  or his duly authorized agent, any financial records
 7    relating to that customer of that bank unless:
 8             (1)  the customer has authorized disclosure  to  the
 9        person;
10             (2)  the financial records are disclosed in response
11        to  a  lawful  subpoena,  summons, warrant or court order
12        which meets the requirements of subsection  (d)  of  this
13        Section; or
14             (3)  the bank is attempting to collect an obligation
15        owed   to  the  bank  and  the  bank  complies  with  the
16        provisions of  Section  2I  of  the  Consumer  Fraud  and
17        Deceptive Business Practices Act.
18        (d)  A   bank  shall  disclose  financial  records  under
19    paragraph (2) of subsection  (c)  of  this  Section  under  a
20    lawful  subpoena, summons, warrant, or court order only after
21    the bank mails a copy of the subpoena, summons,  warrant,  or
22    court  order to the person establishing the relationship with
23    the  bank,   if   living,   and,   otherwise   his   personal
24    representative,  if known, at his last known address by first
25    class mail, postage prepaid, unless the bank is  specifically
26    prohibited  from notifying the person by order of court or by
27    applicable State or federal law.  A bank  shall  not  mail  a
28    copy  of a subpoena to any person pursuant to this subsection
29    if the  subpoena  was  issued  by  a  grand  jury  under  the
30    Statewide Grand Jury Act.
31        (e)  Any  officer or employee of a bank who knowingly and
32    willfully furnishes financial records in  violation  of  this
33    Section is guilty of a business offense and, upon conviction,
34    shall be fined not more than $1,000.
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 1        (f)  Any  person  who  knowingly and willfully induces or
 2    attempts to induce any officer  or  employee  of  a  bank  to
 3    disclose  financial  records  in violation of this Section is
 4    guilty of a business offense and, upon conviction,  shall  be
 5    fined not more than $1,000.
 6        (g)  A  bank  shall  be  reimbursed  for  costs  that are
 7    reasonably necessary and that have been directly incurred  in
 8    searching  for,  reproducing,  or transporting books, papers,
 9    records, or other data of a customer required or requested to
10    be produced pursuant to a lawful subpoena, summons,  warrant,
11    or  court  order.  The Commissioner shall determine the rates
12    and conditions under which payment may be made.
13    (Source: P.A. 89-208, eff.  9-29-95;  89-364,  eff.  8-18-95;
14    89-508,   eff.  7-3-96;  89-626,  eff.  8-9-96;  90-18,  eff.
15    7-1-97.)
16        Section 15.  The Savings Bank Act is amended by  changing
17    Sections 1006, 1008, 6001, 6003, and 6013 as follows:
18        (205 ILCS 205/1006) (from Ch. 17, par. 7301-6)
19        Sec. 1006. Parity.
20        (a)  Subject to the regulation of the Commissioner and in
21    addition  to  the  powers  granted by this Act,  each savings
22    bank operating under this  Act  shall  possess  those  powers
23    granted  by  regulation promulgated under the Federal Deposit
24    Insurance Act for state savings banks.
25        (b)  A savings bank may establish branches or offices  at
26    which  savings or investments are regularly received or loans
27    approved as follows:
28             (1)  to the extent branch  powers  and  offices  are
29        granted to State banks under the Illinois Banking Act;
30             (2)  within the geographic area defined in Article 2
31        of this Act and subject to the provisions of Article 2 of
32        this Act;
SB1528 Engrossed            -35-               LRB9009866JSmg
 1             (3)  within  the  same geographic areas or states as
 2        those states from which a holding company is permitted to
 3        acquire an Illinois savings bank or an  Illinois  savings
 4        bank holding company;
 5             (4)  to  the  same extent that holding companies and
 6        savings and loan associations headquartered  outside  the
 7        State  of  Illinois are allowed to operate in Illinois by
 8        virtue of Articles 1A and 2B of the Illinois Savings  and
 9        Loan Act of 1985;
10             (5)  as  the  result  of mergers, consolidations, or
11        bulk sales of facilities in the case of relocations.
12        (c)  The Commissioner may adopt regulations that  provide
13    for   the   establishment  of  branches  as  defined  by  the
14    Commissioner.
15        (d)  Notwithstanding any other provision of this  Act,  a
16    savings bank that purchases or assumes all or any part of the
17    assets or liabilities of a bank, savings bank, or savings and
18    loan  association  or  merges  or  consolidates  with a bank,
19    savings bank, or savings and loan association may retain  and
20    maintain  the  main  premises or branches of the former bank,
21    savings bank, or savings and loan association as branches  of
22    the  purchasing,  merging,  or  consolidating  savings  bank,
23    provided  it  assumes  the  deposit  liabilities of the bank,
24    savings bank, or savings and loan association  maintained  at
25    the main premises or branches.
26        (e)  A  savings  bank  has any power reasonably incident,
27    convenient, or useful to the accomplishment  of  the  express
28    powers conferred upon the savings bank by this Act.
29    (Source: P.A. 89-74, eff. 6-30-95; 90-301, eff. 8-1-97.)
30        (205 ILCS 205/1008) (from Ch. 17, par. 7301-8)
31        Sec. 1008. General corporate powers.
32        (a)  A  savings  bank operating under this Act shall be a
33    body corporate and politic and shall have all of the specific
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 1    powers conferred by this Act and  in  addition  thereto,  the
 2    following general powers:
 3             (1)  To sue and be sued, complain, and defend in its
 4        corporate  name  and  to have a common seal, which it may
 5        alter or renew at pleasure.
 6             (2)  To obtain and maintain insurance by  a  deposit
 7        insurance corporation as defined in this Act.
 8             (3)  To act as a fiscal agent for the United States,
 9        the  State of Illinois or any department, branch, arm, or
10        agency of the State or any unit of  local  government  or
11        school  district  in  the State, when duly designated for
12        that  purpose,  and  as  agent  to   perform   reasonable
13        functions as may be required of it.
14             (4)  To   become  a  member  of  or  deal  with  any
15        corporation or agency of the United States or  the  State
16        of  Illinois,  to  the  extent that the agency assists in
17        furthering or facilitating its purposes or powers and  to
18        that  end  to  purchase  stock  or  securities thereof or
19        deposit money therewith, and to  comply  with  any  other
20        conditions of membership or credit.
21             (5)  To make donations in reasonable amounts for the
22        public  welfare or for charitable, scientific, religious,
23        or educational purposes.
24             (6)  To  adopt  and  operate  reasonable  insurance,
25        bonus, profit sharing, and retirement plans for  officers
26        and  employees  and  for  directors  including,  but  not
27        limited  to,  advisory, honorary, and emeritus directors,
28        who are not officers or employees.
29             (7)  To reject any application  for  membership;  to
30        retire   deposit   accounts  by  enforced  retirement  as
31        provided in this Act and the bylaws;  and  to  limit  the
32        issuance  of,  or payments on, deposit accounts, subject,
33        however, to contractual obligations.
34             (8)  To purchase stock in service  corporations  and
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 1        to  invest  in  any  form  of indebtedness of any service
 2        corporation  as  defined  in   this   Act,   subject   to
 3        regulations of the Commissioner.
 4             (9)  To   purchase  stock  of  a  corporation  whose
 5        principal purpose is to operate a safe deposit company or
 6        escrow service company.
 7             (10)  To  exercise  all  the  powers  necessary   to
 8        qualify  as a trustee or custodian under federal or State
 9        law, provided that the authority to  accept  and  execute
10        trusts  is  subject  to  the  provisions of the Corporate
11        Fiduciary Act and to the supervision of those  activities
12        by the Commissioner of Banks and Real Estate.
13             (11)  (Blank).
14             (12)  To  establish, maintain, and operate terminals
15        as authorized by the Electronic Fund Transfer  Act.   The
16        establishment,  maintenance,  operation,  and location of
17        those terminals shall be subject to the approval  of  the
18        Commissioner.
19             (13)  Pledge its assets:
20                  (A)  to  enable it to act as agent for the sale
21             of obligations of the United States;
22                  (B)  to secure deposits;
23                  (C)  to  secure  deposits  of  money   whenever
24             required by the National Bankruptcy Act;
25                  (D)  to   qualify  under  Section  2-9  of  the
26             Corporate Fiduciary Act; and
27                  (E)  to secure trust funds commingled with  the
28             savings  bank's  funds,  whether  deposited  by  the
29             savings bank or an affiliate of the savings bank, as
30             required   under   Section   2-8  of  the  Corporate
31             Fiduciary Act.
32             (14)  To accept for payment at a future date not  to
33        exceed one year from the date of acceptance, drafts drawn
34        upon  it  by  its  customers;  and  to  issue, advise, or
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 1        confirm letters of credit authorizing holders thereof  to
 2        draw drafts upon it or its correspondents.
 3             (15)  Subject    to    the    regulations   of   the
 4        Commissioner, to own and lease personal property acquired
 5        by the savings bank  at  the  request  of  a  prospective
 6        lessee  and,  upon the agreement of that person, to lease
 7        the personal property.
 8             (16)  To establish temporary service booths  at  any
 9        International  Fair in this State that is approved by the
10        United States Department of Commerce for the duration  of
11        the  international  fair  for  the purpose of providing a
12        convenient place for foreign trade customers to  exchange
13        their   home   countries'  currency  into  United  States
14        currency or the converse.  To provide temporary  periodic
15        service  to persons residing in a bona fide nursing home,
16        senior  citizens'  retirement  home,  or  long-term  care
17        facility.   These  powers  shall  not  be  construed   as
18        establishing  a  new  place or change of location for the
19        savings bank providing the service booth.
20             (17)  To   indemnify   its   officers,    directors,
21        employees,  and  agents,  as  authorized for corporations
22        under Section 8.75 of the Business  Corporations  Act  of
23        1983.
24             (18)  To  provide data processing services to others
25        on a for-profit basis.
26             (19)  To  utilize  any  electronic   technology   to
27        provide customers with home banking services.
28             (20)  Subject    to    the    regulations   of   the
29        Commissioner, to enter into an  agreement  to  act  as  a
30        surety.
31             (21)  Subject    to    the    regulations   of   the
32        Commissioner,  to  issue  credit  cards,  extend   credit
33        therewith,  and  otherwise  engage  in  or participate in
34        credit card operations.
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 1             (22)  To purchase for  its  own  account  shares  of
 2        stock  of  a bankers' bank, described in Section 13(b)(1)
 3        of the Illinois  Banking  Act,  on  the  same  terms  and
 4        conditions  as  a  bank  may purchase such shares.  In no
 5        event shall the total amount of  such  stock  held  by  a
 6        savings  bank  in  such  bankers'  bank exceed 10% of its
 7        capital and surplus (including undivided profits) and  in
 8        no event shall a savings bank acquire more than 5% of any
 9        class of voting securities of such bankers' bank.
10             (23)  With respect to affiliate facilities:
11                  (A)  to  conduct at affiliate facilities any of
12             the following transactions for and on behalf of  any
13             affiliated  depository institution, if so authorized
14             by the affiliate or affiliates: receiving  deposits;
15             renewing   deposits;  cashing  and  issuing  checks,
16             drafts, money orders, travelers checks,  or  similar
17             instruments;  changing  money; receiving payments on
18             existing indebtedness;  and  conducting  ministerial
19             functions   with   respect   to  loan  applications,
20             servicing  loans,   and   providing   loan   account
21             information; and
22                  (B)  to   authorize  an  affiliated  depository
23             institution to conduct for and on behalf of it,  any
24             of the transactions listed in this subsection at one
25             or more affiliate facilities.
26             A  savings bank intending to conduct or to authorize
27        an affiliated depository institution  to  conduct  at  an
28        affiliate  facility  any of the transactions specified in
29        this  subsection  shall  give  written  notice   to   the
30        Commissioner at least 30 days before any such transaction
31        is conducted at an affiliate facility.  All conduct under
32        this  subsection  shall  be on terms consistent with safe
33        and sound banking practices and applicable law.
34             (24) (23)  Subject to Article XLIV of  the  Illinois
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 1        Insurance  Code,  to act as the agent for any fire, life,
 2        or other insurance company authorized  by  the  State  of
 3        Illinois,   by   soliciting  and  selling  insurance  and
 4        collecting premiums on policies issued by  such  company;
 5        and  may  receive  for  services so rendered such fees or
 6        commissions as  may  be  agreed  upon  between  the  said
 7        savings  bank  and the insurance company for which it may
 8        act as agent; provided, however,  that  no  such  savings
 9        bank shall in any case assume or guarantee the payment of
10        any  premium  on  insurance  policies  issued through its
11        agency by its principal; and provided further,  that  the
12        savings  bank  shall  not  guarantee  the  truth  of  any
13        statement  made  by an assured in filing his  application
14        for insurance.
15             (25) (23)  To become a member of  the  Federal  Home
16        Loan  Bank  Board  and  to  have  the powers granted to a
17        savings association organized under the Illinois  Savings
18        and  Loan  Act  of 1985 or the laws of the United States,
19        subject to regulations of the Commissioner.
20             (26)  To offer any product or service that is at the
21        time authorized or permitted to a bank by applicable law,
22        but  subject  always  to   the   same   limitations   and
23        restrictions  that  are  applicable  to  the bank for the
24        product or service by such applicable law and subject  to
25        the  applicable  provisions of the Financial Institutions
26        Insurance Sales Law and rules of the Commissioner.
27        (b)  If this Act or the regulations  adopted  under  this
28    Act fail to provide specific guidance in matters of corporate
29    governance, the provisions of the Business Corporation Act of
30    1983 may be used.
31    (Source:  P.A.  89-74,  eff.  6-30-95;  89-310,  eff. 1-1-96;
32    89-317, eff. 8-11-95;  89-355,  eff.  8-17-95;  89-508,  eff.
33    7-3-96; 89-603, eff. 8-2-96; 89-626, eff. 8-9-96; 90-14, eff.
34    7-1-97;  90-41,  eff.  10-1-97; 90-270, eff. 7-30-97; 90-301,
SB1528 Engrossed            -41-               LRB9009866JSmg
 1    eff. 8-1-97; revised 10-21-97.)
 2        (205 ILCS 205/6001) (from Ch. 17, par. 7306-1)
 3        Sec. 6001. General provisions.
 4        (a)  No savings bank shall make any  loan  or  investment
 5    authorized  by this Article unless the savings bank first has
 6    determined that the  type,  amount,  purpose,  and  repayment
 7    provisions  of  the  loan  or  investment  in relation to the
 8    borrower's or issuer's resources and credit standing  support
 9    the  reasonable  belief  that  the loan or investment will be
10    financially sound and will be repaid according to  its  terms
11    and that the loan or investment is not otherwise unlawful.
12        (b)  Each loan or investment that a savings bank makes or
13    purchases,  whether  wholly  or  in  part, must be adequately
14    underwritten, reviewed periodically, and reserved against  as
15    necessary  in accordance with its payment performance, all in
16    accordance  with  the  regulations  and  directives  of   the
17    Commissioner.
18        (c)  Every  appraisal  or  reappraisal of property that a
19    savings bank is required to make shall be made as follows:
20             (1)  By   an   independent   qualified    appraiser,
21        designated  by  the  board  of directors, who is properly
22        licensed or and certified by  the  entity  authorized  to
23        govern  his  licensure or and certification and who meets
24        the requirements of the Appraisal Subcommittee and of the
25        Federal Act.
26             (2)  In the case of an insured or  guaranteed  loan,
27        by  any  appraiser appointed by any lending, insuring, or
28        guaranteeing agency of the United States or the State  of
29        Illinois  that  insures or guarantees the loan, wholly or
30        in part.
31             (3)  Each appraisal shall be in writing prepared  at
32        the  request of the lender for the lender's use; disclose
33        the  market  value  of  the  security  offered;   contain
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 1        sufficient  information and data concerning the appraised
 2        property to substantiate the  market  value  thereof;  be
 3        certified  and signed by the appraiser or appraisers; and
 4        state that the appraiser or  appraisers  have  personally
 5        examined  the described property.  The appraisal shall be
 6        filed and preserved by the savings bank. In addition, the
 7        appraisal shall be prepared and  reported  in  accordance
 8        with  the  Standards  of  Professional  Practice  and the
 9        ethical rules of the Appraisal Foundation as adopted  and
10        promulgated by the Appraisal Subcommittee.
11        (d)  If  appraisals  of  real  estate  securing a savings
12    bank's loans are obtained as part of an  examination  by  the
13    Commissioner,  the cost of those appraisals shall promptly be
14    paid by  the  savings  bank  directly  to  the  appraiser  or
15    appraisers.
16        (e)  Any  violation  of  this Article shall constitute an
17    unsafe  or  unsound  practice.   Any  person  who   knowingly
18    violates  any  provision  of this Article shall be subject to
19    enforcement action or civil money penalties as  provided  for
20    in this Act.
21        (f)  For  purposes  of this Article, "underwriting" shall
22    mean the  process  of  compiling  information  to  support  a
23    determination  as  to  whether  an investment or extension of
24    credit shall be made by a savings bank.   It  shall  include,
25    but    not   be   limited   to,   evaluating   a   borrower's
26    creditworthiness,  determination  of   the   value   of   the
27    underlying    collateral,    market    factors,    and    the
28    appropriateness  of  the  investment  or loan for the savings
29    bank.  Underwriting as  used  herein  does  not  include  the
30    agreement  to purchase unsold portions of public offerings of
31    stocks or bonds as  commonly  used  in  corporate  securities
32    issuances and sales.
33        (g)  For   purposes   of   this  Section,  the  following
34    definitions shall apply:
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 1             (1)  "Federal Act" means Title XI of  the  Financial
 2        Institutions Reform, Recovery and Enforcement Act of 1989
 3        and regulations adopted pursuant thereto.
 4             (2)  "Appraisal  Subcommittee" means the designee of
 5        the  heads  of   the   Federal   Financial   Institutions
 6        Examination Council Act of 1978 (12 U.S.C. 3301 et seq.).
 7             (3)  "Appraisal   Foundation"  means  the  Appraisal
 8        Foundation  that  was   incorporated   as   an   Illinois
 9        not-for-profit corporation on November 30, 1987.
10    (Source: P.A. 86-1213.)
11        (205 ILCS 205/6003) (from Ch. 17, par. 7306-3)
12        Sec.  6003.  Other investments. If the board of directors
13    determines at any time that funds are available in excess  of
14    the demands and needs for loans, maturities, and withdrawals,
15    A savings bank may invest funds as provided in this Section:
16             (1)  In   demand,   time,  or  savings  deposits  or
17        accounts,  withdrawable  accounts,   or   other   insured
18        obligations  of any financial institution the accounts of
19        which are insured by a federal agency.
20             (2)  In participating interests in loans of  a  type
21        that  the  savings  bank would be authorized to make, but
22        only if the other  participants  are  (A)  savings  banks
23        organized   under   this   Act,   (B)  savings  and  loan
24        associations, banks, credit unions, and  licensees  under
25        the  Consumer  Installment  Loan Act or the Sales Finance
26        Agency Act, organized under the laws of this  State,  (C)
27        associations    or    corporations    insured    by    an
28        instrumentality     of    the    United    States,    (D)
29        instrumentalities of or corporations owned wholly  or  in
30        part  by the United States or this State, or, (E) subject
31        to regulations of the Commissioner, service  corporations
32        of   a   savings   bank   organized  under  this  Act  or
33        subsidiaries of a savings and loan association, bank,  or
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 1        credit  union  organized  under the laws of this State or
 2        the United States.
 3             (3)  In obligations  of,  or  obligations  that  are
 4        fully  guaranteed  by  the United States and in stocks or
 5        obligations of any Federal  Reserve  Bank,  Federal  Home
 6        Loan  Bank,  the  Student  Loan  Market  Association, the
 7        Government National  Mortgage  Association,  the  Federal
 8        National  Mortgage  Association,  The  Federal  Home Loan
 9        Mortgage  Corporation,  the  Federal  Deposit   Insurance
10        Corporation, or any other agency of the United States.
11             (4)  In bonds or other  direct  obligations  of,  or
12        guaranteed as to principal and interest by, this State.
13             (5)  In  obligations  that by the laws of this State
14        are made legal investments for savings banks.
15             (6)  In bonds or  other  evidences  of  indebtedness
16        that  are direct general obligations of any unit of local
17        government of this State or in bonds or  other  evidences
18        of   indebtedness  that  are  payable  from  revenues  or
19        earnings specifically pledged therefor of a unit of local
20        government, but in no event shall the total amount of the
21        securities of any one maker or obligor exceed 15% of  the
22        savings  bank's  total  capital,  nor shall the aggregate
23        amount of investments under this paragraph exceed 15%  of
24        the savings bank's total assets.
25             (7)  Equity  investments  in  real estate.  With the
26        prior written consent of the Commissioner, a savings bank
27        may invest in the initial purchase  and  development,  or
28        the  purchase or commitment to purchase after completion,
29        of home sites and housing for sale or rental,  including,
30        but  not  limited  to,  projects  for the reconstruction,
31        rehabilitation, or rebuilding of  residential  properties
32        to  meet  the  minimum  standards of health and occupancy
33        prescribed  by   appropriate   local   authorities,   the
34        provision of accommodations for retail stores, shops, and
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 1        other  community services that are reasonably incident to
 2        that housing or in the shares of a corporation that  owns
 3        one or more of those projects and that is wholly owned by
 4        one  or more financial institutions whose investments are
 5        regulated by the laws of this  State  or  of  the  United
 6        States.   In  no  event shall the total investment in any
 7        one project  exceed  15%  of  the  savings  bank's  total
 8        capital,  nor  shall  the aggregate investment under this
 9        paragraph exceed 50% of its total  capital.   No  savings
10        bank  may make an investment of this type unless it is in
11        compliance with the capital requirements of this Act  and
12        with  the capital maintenance requirements of its insurer
13        of deposit accounts.   The Commissioner shall approve the
14        investment only if the savings bank shows:
15                  (A)  that the savings bank has adequate  assets
16             available for the investment;
17                  (B)  that  the  proposed  investment  does  not
18             exceed  the  reasonable market value of the property
19             or interest therein as determined in accordance with
20             the appraisal requirements of this Act; and
21                  (C)  that  all  other  requirements   of   this
22             Section have been met.
23             Nothing  contained  in  this  paragraph  prohibits a
24        savings bank from developing or building on land acquired
25        by it under any other provision  of  this  Act  nor  from
26        completing  the  construction  of buildings in accordance
27        with any construction loan contract  where  the  borrower
28        has failed to comply with the terms of the contract.
29             (8)  In  obligations  of  the  State  of  Israel  or
30        obligations fully guaranteed by the State of Israel as to
31        payment  of principal and interest, but in no event shall
32        the total amount of that investment  exceed  15%  of  the
33        savings bank's total capital.
34             (9)  In    stocks   or   obligations   of   business
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 1        development corporations chartered by this  State  or  by
 2        the  United  States or an agency thereof, but in no event
 3        shall the aggregate amount of stock exceed  2.5%  of  the
 4        savings  bank's  total  capital or $250,000, whichever is
 5        greater.
 6             (10)  In obligations  of  urban  renewal  investment
 7        corporations  chartered  under the laws of this State, or
 8        the United  States,  or  in  certificates  of  beneficial
 9        interest  of  urban  renewal investment trusts, but in no
10        event  shall  the  aggregate   amount   of   the   stock,
11        obligations  or  beneficial  interest certificates of any
12        one  maker  exceed  2.5%  of  the  savings  bank's  total
13        capital, nor shall the aggregate  amount  of  investments
14        under this paragraph exceed 15% of its total capital.
15             (11)  Subject    to    the    regulations   of   the
16        Commissioner, in loans deemed sufficiently secured by the
17        board of directors of the savings bank.  However, if  the
18        security  is stock or equity securities of any kind other
19        than those of  a  financial  institution,  the  stock  or
20        securities  must  be  listed  on  a  national exchange or
21        actively traded and quoted on an over-the-counter  market
22        or  their  value must be ascertainable in accordance with
23        regulations promulgated by the Commissioner.
24             (12)  In commercial paper.  As used in this Section,
25        the term "commercial paper" means short term  obligations
26        having  a  maturity  ranging from 2 to 270 days issued by
27        banks, corporations, or other borrowers.  Investments  in
28        commercial paper under this Section must be in securities
29        rated  in one of the 4 highest categories by a nationally
30        recognized rating service.
31             (13)  Purchase  of  stock  in  insurance  companies.
32        Notwithstanding  any  provision  of  this  Act   to   the
33        contrary,  a  savings  bank  may  purchase  shares of, or
34        otherwise  acquire   equity   interests   in,   insurance
SB1528 Engrossed            -47-               LRB9009866JSmg
 1        companies  and  insurance  holding companies organized to
 2        provide   insurance   for   savings   institutions    and
 3        corporations  and  individuals  affiliated  with  savings
 4        institutions, provided ownership of equity interests is a
 5        prerequisite  to  obtaining  directors  and officers' and
 6        blanket bond insurance through the company or  companies.
 7        The  Commissioner  may  promulgate regulations concerning
 8        the size of each savings bank's investment and manner  of
 9        holding those investments.
10             (14)  Subject to the regulation of the Commissioner,
11        in  equity or debt securities or instruments of a service
12        corporation subsidiary of the savings bank.
13             (15)  Through   advances   of   federal   funds   to
14        designated depositories, provided that the  advances  are
15        made  on  the  condition  that they be repaid on the next
16        business day following the date on which the  advance  is
17        made.   For  the  purposes  of  this  paragraph, the term
18        "federal funds" means funds that a savings  bank  has  on
19        deposit  at  a depository that are exchangeable for funds
20        on deposit at a federal reserve bank; the term  "business
21        day"  means  any  day  on  which  the  savings  bank, the
22        depository, and the federal reserve bank where the  funds
23        are on deposit are all open for general business.
24             (16)  In  financial  futures or options transactions
25        subject to the regulations of the Commissioner.
26             (17)  In a subsidiary chartered for the  purpose  of
27        exercising  all  powers  necessary  to act as a corporate
28        fiduciary under the Corporate Fiduciary Act.
29             (18)  In marketable investment securities, but in no
30        event shall the total amount of those securities  of  any
31        one  maker  or  obligor  exceed 15% of the savings bank's
32        total  capital  nor  shall  the   aggregate   amount   of
33        investments  under  this  Section  exceed  15%  of  total
34        assets.   As  used  in this Section, the term "marketable
SB1528 Engrossed            -48-               LRB9009866JSmg
 1        investment securities" does not include stocks, but means
 2        investment  grade   marketable   obligations   evidencing
 3        indebtedness  of  any person in the form of bonds, notes,
 4        or debentures commonly known  as  investment  securities,
 5        and of a type customarily sold on recognized exchanges or
 6        traded  over  the counter and investment grade marketable
 7        obligations of the International Bank for  Reconstruction
 8        and Development, the Inter-American Development Bank, the
 9        Asian  Development Bank, the African Development Bank, or
10        the International Finance Corporation.  As used  in  this
11        Section, the term "investment grade" means being rated in
12        one   of  the  4  highest  categories  by  at  least  one
13        nationally recognized rating service.
14             (19)  In investment grade marketable obligations  of
15        any  other  state,  territory, or possession or political
16        subdivision thereof to the same extent that it may invest
17        in marketable investment securities under paragraph  (18)
18        of this Section.
19    (Source: P.A. 88-481; 89-317, eff. 8-11-95.)
20        (205 ILCS 205/6013) (from Ch. 17, par. 7306-13)
21        Sec. 6013. Loans to one borrower.
22        (a)  Except  as  provided  in  subsection  (c), the total
23    loans and extensions of credit, both direct and indirect,  by
24    a  savings  bank  to  any  person,  other  than  a  municipal
25    corporation for money borrowed, outstanding at one time shall
26    not  exceed  20%  of  the  savings  bank's total capital plus
27    general loan loss reserves.
28        (b)  Except as provided  in  subsection  (c),  the  total
29    loans  and extensions of credit, both direct and indirect, by
30    a savings bank to any person outstanding at one time  and  at
31    least  100% secured by readily marketable collateral having a
32    market value, as  determined  by  reliable  and  continuously
33    available  price  quotations,  shall  not  exceed  10% of the
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 1    savings bank's total capital plus general loan loss reserves.
 2    This limitation shall be separate from and in addition to the
 3    limitation contained in subsection (a).
 4        (c)  If the limit under subsection (a) or  (b)  on  total
 5    loans  to  one borrower is less than $500,000, a savings bank
 6    that meets its minimum capital requirement under this Act may
 7    have loan and extensions of credit, both direct and indirect,
 8    outstanding to any person at one time not to exceed $500,000.
 9    With the  prior  written  approval  of  the  Commissioner,  a
10    savings  bank  that has capital in excess of 6% of assets may
11    make loans and extensions of credit to one borrower  for  the
12    development  of residential housing properties, located or to
13    be located in this State, not to exceed 30%  of  the  savings
14    bank's total capital plus general loan loss reserves.
15        (d)  For  purposes  of  this  Section,  the term "person"
16    shall be deemed to include an individual, firm,  corporation,
17    business  trust,  partnership,  trust,  estate,  association,
18    joint   venture,   pool,   syndicate,   sole  proprietorship,
19    unincorporated association, any political subdivision, or any
20    similar entity or organization.
21        (e)  For  the  purposes  of  this  Section  any  loan  or
22    extension of credit granted to one person,  the  proceeds  of
23    which  are  used  for  the direct benefit of a second person,
24    shall be deemed a loan or extension of credit to  the  second
25    person as well as the first person.
26        (f)  For   the   purposes  of  this  Section,  the  total
27    liabilities of a firm, partnership, pool, syndicate, or joint
28    venture shall include the liabilities of the members  of  the
29    entity.
30        (g)  For  the purposes of this Section, the term "readily
31    marketable collateral" means financial instruments or bullion
32    that are salable under ordinary circumstances with reasonable
33    promptness at  a  fair  market  value  on  an  auction  or  a
34    similarly   available   daily   bid-and-ask   price   market.
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 1    "Financial   instruments"   include   stocks,  bonds,  notes,
 2    debentures traded on a national exchange or over the counter,
 3    commercial  paper,  negotiable   certificates   of   deposit,
 4    bankers'  acceptances,  and  shares in money market or mutual
 5    funds.
 6        (h)  Each   savings   bank   shall   institute   adequate
 7    procedures  to  ensure  that  collateral  fully  secures  the
 8    outstanding loan or extension of credit at all times.
 9        (i)  If  collateral  values  fall  below  100%   of   the
10    outstanding  loan  or  extension of credit to the extent that
11    the loan or extension of credit no longer is  in  conformance
12    with  subsection  (b)  and  exceeds  the  20%  limitation  of
13    subsection  (a),  the  loan  must be brought into conformance
14    with  this  Section  within  5  business  days  except  where
15    judicial   proceedings   or   other   similar   extraordinary
16    occurrences prevent the savings bank from taking action.
17        (j)  This Section shall not apply to loans or  extensions
18    of  credit to the United States of America or its agencies or
19    this State or its agencies or to  any  loan,  investment,  or
20    extension  of  credit  made  pursuant to Section 6003 of this
21    Act.
22    (Source: P.A. 89-74, eff. 6-30-95.)
23        Section 20.  The Illinois Credit Union Act is amended  by
24    changing  Sections  1.1  and  61  and  adding Section 34.1 as
25    follows:
26        (205 ILCS 305/1.1) (from Ch. 17, par. 4402)
27        Sec. 1.1.  Definitions. Credit Union - The  term  "credit
28    union"   means   a   cooperative,   non-profit   association,
29    incorporated  under  this  Act,  under the laws of the United
30    States of America or under the laws of another state, for the
31    purposes of encouraging thrift among its members, creating  a
32    source  of  credit  at  a  reasonable  rate  of interest, and
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 1    providing an opportunity for its members to use  and  control
 2    their own money in order to improve their economic and social
 3    conditions. The membership of a credit union shall consist of
 4    a  group or groups each having a common  bond as set forth in
 5    this Act.
 6        Common Bond - The term "common bond" refers to groups  of
 7    people who meet one of the following qualifications:
 8        (1)  Persons  belonging  to a specific association, group
 9    or organization, such as  a  church,  labor  union,  club  or
10    society  and  members of their immediate families which shall
11    include any relative by  blood  or  marriage  or  foster  and
12    adopted children.
13        (2)  Persons  who reside in a reasonably compact and well
14    defined neighborhood  or  community,  and  members  of  their
15    immediate  families which shall include any relative by blood
16    or marriage or foster and adopted children.
17        (3)  Persons who  have  a  common  employer  or  who  are
18    members   of   an  organized  labor  union  or  an  organized
19    occupational  or  professional   group   within   a   defined
20    geographical  area,  and  members of their immediate families
21    which shall include any relative  by  blood  or  marriage  or
22    foster and adopted children.
23        Shares  - The term "shares" or "share accounts" means any
24    form of shares issued by a credit union and established by  a
25    member  in  accordance  with  standards specified by a credit
26    union, including but not  limited  to  common  shares,  share
27    draft   accounts,  classes  of  shares,  share  certificates,
28    special purpose  share  accounts,  shares  issued  in  trust,
29    custodial  accounts,  and  individual  retirement accounts or
30    other plans established pursuant to Section 401(d) or (f)  or
31    Section  408(a)  of  the  Internal  Revenue  Code,  as now or
32    hereafter amended, or similar provisions of any tax  laws  of
33    the United States that may hereafter exist.
34        Credit  Union  Organization  -  The  term  "credit  union
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 1    organization" means any organization established to serve the
 2    needs  of credit unions, the business of which relates to the
 3    daily operations of credit unions.
 4        Department - The term  "Department"  means  the  Illinois
 5    Department of Financial Institutions.
 6        Director  - The term "Director" means the Director of the
 7    Illinois Department of Financial Institutions.
 8        NCUA - The term "NCUA" means the  National  Credit  Union
 9    Administration,  an  agency  of  the United States Government
10    charged with the supervision of credit unions chartered under
11    the laws of the United States of America.
12        Central Credit Union - The term  "central  credit  union"
13    means a credit union incorporated primarily to receive shares
14    from and make loans to credit unions and Directors, Officers,
15    committee  members  and employees of credit unions. A central
16    credit union may also accept  as  members  persons  who  were
17    members  of  credit  unions which were liquidated and persons
18    from occupational groups  not  otherwise  served  by  another
19    credit union.
20        Corporate  Credit  Union  -  The  term  "corporate credit
21    union"  means  a  credit  union  which  is   a   cooperative,
22    non-profit  association,  the  membership of which is limited
23    primarily to other credit unions.
24        Insolvent - "Insolvent" means the condition that  results
25    when  the  total  of  all  liabilities and shares exceeds net
26    assets of the credit union.
27        Danger of insolvency - The term "Danger of insolvency" as
28    used in Section 61 means when a credit union falls below a 2%
29    capital to asset ratio.
30    (Source: P.A. 86-432.)
31        (205 ILCS 305/34.1 new)
32        Sec. 34.1.  Compliance review.
33        (a)  As used in this Section:
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 1        "Affiliate" means an organization  established  to  serve
 2    the  needs of credit unions, the business of which relates to
 3    the daily operations of credit unions.
 4        "Compliance review committee" means:
 5             (1)  one or more persons appointed by the  board  of
 6        directors  or supervisory committee of a credit union for
 7        the purposes set forth in subsection (b); or
 8             (2)  any other person to the extent the person  acts
 9        in  an  investigatory  capacity  at  the  direction  of a
10        compliance review committee.
11        "Compliance review documents" means documents prepared in
12    connection with a review or evaluation conducted by or for  a
13    compliance review committee.
14        "Person  means  an  individual, a group of individuals, a
15    board committee, a partnership, a  firm,  an  association,  a
16    corporation, or any other entity.
17        (b)  This Section applies to compliance review committees
18    whose  functions  are  to evaluate and seek to improve any of
19    the following:
20             (1)  loan policies or underwriting standards;
21             (2)  asset quality;
22             (3)  financial  reporting  to   federal   or   State
23        governmental or regulatory agencies; or
24             (4)  compliance  with  federal or State statutory or
25        regulatory requirements.
26        (c)  Except as provided  in  subsection  (d),  compliance
27    review  documents  and  the  deliberations  of the compliance
28    review committee are  privileged  and  confidential  and  are
29    nondiscoverable and nonadmissible.
30             (1)  Compliance  review documents are privileged and
31        confidential  and  are  not  subject  to   discovery   or
32        admissible in evidence in any civil action.
33             (2)  Individuals   serving   on   compliance  review
34        committees or acting under the direction of a  compliance
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 1        review  committee shall not be required to testify in any
 2        civil action about the contents of any compliance  review
 3        document   or   conclusions   of  any  compliance  review
 4        committee or about the  actions  taken  by  a  compliance
 5        review committee.
 6             (3)  An  affiliate of a credit union, a credit union
 7        regulatory agency, and the insurer of credit union  share
 8        accounts   shall   have   access   to  compliance  review
 9        documents, provided that (i) the documents  shall  remain
10        confidential  and  are not subject to discovery from such
11        entity and (ii) delivery of compliance  review  documents
12        to  an  affiliate  or  pursuant  to the requirements of a
13        credit union regulatory agency or an  insurer  of  credit
14        union share accounts shall not constitute a waiver of the
15        privilege granted in this Section.
16        (d)  This  Section  does  not  apply  to:  (1) compliance
17    review committees on which individuals serving on or  at  the
18    direction  of the compliance review committee have management
19    responsibility for the  operations,  records,  employees,  or
20    activities  being  examined  or  evaluated  by the compliance
21    review committee and (2) any civil or  administrative  action
22    initiated  by  a credit union regulatory agency or an insurer
23    of credit union share accounts.
24        (e)  This Section shall not be  construed  to  limit  the
25    discovery  or  admissibility  in  any  civil  action  of  any
26    documents  other  than  compliance  review  documents  or  to
27    require the appointment of a compliance review committee.
28        (205 ILCS 305/61) (from Ch. 17, par. 4462)
29        Sec. 61.  Suspension.
30        (1)  If  the Director determines that any credit union is
31    bankrupt,  insolvent,  impaired  or  that  it  has  willfully
32    violated this Act, or is operating in an  unsafe  or  unsound
33    manner,  he  shall  issue an order temporarily suspending the
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 1    credit union's operations for not more  than  60  days.   The
 2    Board  of  Directors  shall  be given notice by registered or
 3    certified mail of such suspension, which notice shall include
 4    the reasons for  such  suspension  and  a  list  of  specific
 5    violations  of  the Act, or a list of the specific violations
 6    of this Act, or both such  reasons  and  list.  The  Director
 7    shall  also  notify  the members of the Credit Union Board of
 8    Advisors of any suspension.  The Director may assess  to  the
 9    credit  union a penalty, not to exceed the examination fee as
10    set forth in this  Act,  $50  to  offset  costs  incurred  in
11    determining  the  condition  of  the credit union's books and
12    records.
13        (2)  Upon receipt of such suspension notice,  the  credit
14    union  shall cease all operations, except those authorized by
15    the Director, or the Director may appoint  a  Manager-Trustee
16    to  operate  the  credit  union during the suspension period.
17    The Board of Directors shall, within 10 days of  the  receipt
18    of  the  suspension notice, file with the Director a reply to
19    the suspension notice, either by submitting one  or  more  of
20    the  following:  a corrective plan of action or a request for
21    formal hearing on said action pursuant  to  the  Department's
22    rules  and regulations. or by a request that the credit union
23    be declared insolvent and a Liquidating Agent be appointed.
24        (3)  Upon receipt from  the  suspended  credit  union  of
25    evidence  that the conditions causing the order of suspension
26    have been corrected, and after determining that the  proposed
27    corrective  plan of action submitted is factual, the Director
28    shall revoke the suspension notice, permit the  credit  union
29    to  resume  normal operations, and notify the Board of Credit
30    Union Advisors of such action.
31        (4)  If  the  Director  determines  that   the   proposed
32    corrective  plan  of  action will not correct such conditions
33    and that the credit union cannot be reorganized, he may  take
34    possession  and  control  of  the  credit  union  its office,
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 1    furniture, fixtures, books, records and other assets and upon
 2    examination, determine whether it is practicable and feasible
 3    to reorganize the credit union to continue its business.  The
 4    Director may permit the credit union  to  operate  under  his
 5    direction  and  control, and may appoint a Manager-Trustee to
 6    manage its affairs until such time as the condition requiring
 7    such action has been remedied, or in the case  of  insolvency
 8    or   danger   of  insolvency  where  an  emergency  requiring
 9    expeditious action exists,  the  Director  may  involuntarily
10    merge  the  credit  union  without  the vote of the suspended
11    credit union's  Board  of  Directors  or  members  (hereafter
12    involuntary  merger)  subject  to  rules  promulgated  by the
13    Director.  No credit union shall be required to  serve  as  a
14    surviving  credit  union in any involuntary merger.  Upon the
15    request of the Director, a  credit  union  by  a  vote  of  a
16    majority  of  its  Board of Directors may elect to serve as a
17    surviving credit union in  an  involuntary  merger.   If  the
18    Director he determines that the suspended credit union should
19    be liquidated, he may appoint a Liquidating Agent and require
20    of that person such bond and security as he considers proper.
21        (5)  Upon  receipt of a request for a formal hearing, the
22    Director shall conduct  proceedings  pursuant  to  rules  and
23    regulations  of  the  Department  and  take  necessary action
24    subsequent to the hearing officer's decision; whether  it  be
25    revocation   of   the   suspension  notice,  issuance  of  an
26    involuntary liquidation or appointment of a Manager-Trustee..
27    The credit union may request the appropriate  court  to  stay
28    execution   of   such  action.   Involuntary  liquidation  or
29    involuntary merger may not be ordered prior to the conclusion
30    of suspension procedures outlined in this Section.
31        (6)  If, within the suspension period, the  credit  union
32    fails  to  answer the suspension notice or fails to request a
33    formal  hearing,  or  both,  the  Director   may   then   (i)
34    involuntarily  merge  the credit union if the credit union is
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 1    insolvent  or  in  danger  of  insolvency  and  an  emergency
 2    requiring expeditious action exists or (ii) revoke the credit
 3    union's charter, appoint a Liquidating  Agent  and  liquidate
 4    the credit union.
 5    (Source: P.A. 86-432.)
 6        Section  25.  The Electronic Fund Transfer Act is amended
 7    by adding Section 85 as follows:
 8        (205 ILCS 616/85 new)
 9        Sec. 85.  Reliance on Commissioner.  No person  shall  be
10    liable  under  this  Act  for any act done or omitted in good
11    faith in conformity with any rule, interpretation, or opinion
12    issued  by  the  Commissioner  of  Banks  and  Real   Estate,
13    notwithstanding  that after the act or omission has occurred,
14    the rule, interpretation, or opinion upon which  reliance  is
15    placed  is  amended,  rescinded, or determined by judicial or
16    other authority to be invalid for any reason.
17        Section 30.  The Corporate Fiduciary Act  is  amended  by
18    changing Sections 1-7, 4-4, and 5-6 as follows:
19        (205 ILCS 620/1-7) (from Ch. 17, par. 1551-7)
20        Sec. 1-7.  Office locations corporate fiduciaries.
21        (a)  Any corporate fiduciary may establish branch offices
22    at  any  location.  Any  corporate  fiduciary  that  seeks to
23    establish a branch office shall, if it is  a  trust  company,
24    apply  for and obtain approval for the branch office from the
25    Commissioner  or,  if  it  is  a  bank,  savings   and   loan
26    association,  or  savings  bank, give notice of its intent to
27    establish a branch office to the Commissioner, 30 days  prior
28    to  the purchasing or leasing of land, building, or equipment
29    for the branch office under the terms and conditions  as  the
30    Commissioner shall specify by rule.
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 1        (b)  Any  trust  company  that  proposes  to  establish a
 2    subsidiary, whether by incorporating  the  subsidiary  or  by
 3    acquiring  the  subsidiary,  shall apply for and obtain prior
 4    approval from the Commissioner 60 days  prior  to  commencing
 5    business  by  the subsidiary, if newly incorporated, or prior
 6    to  its  acquisition,  if  it  is  acquired,   provided   the
 7    Commissioner  may specify circumstances and conditions when a
 8    trust company may directly or indirectly acquire a subsidiary
 9    without prior approval.
10    (Source: P.A. 86-754; 87-506.)
11        (205 ILCS 620/4-4) (from Ch. 17, par. 1554-4)
12        Sec. 4-4.  Place of business not  to  be  established  in
13    State; not deemed transacting business.
14        (a)  A  foreign corporation, as defined in Section 1-5.08
15    of this Act, shall not establish in this  State  a  place  of
16    business,  branch  office,  or  agency  for  the  conduct  of
17    business  as  a  fiduciary and because it is not permitted to
18    establish in this State a place of business, branch office or
19    agency, a  foreign  corporation  insofar  as  it  acts  in  a
20    fiduciary  capacity  in this State pursuant to the provisions
21    of this Act shall not be deemed to be transacting business in
22    this State.  The  foreign  corporation  may  apply  for,  and
23    procure  from  the  Commissioner,  a  license  to establish a
24    representative  office   pursuant   to   the   Foreign   Bank
25    Representative Office Act.
26        (b)  Notwithstanding  subsection (a) of this Section 4-4,
27    after May 31, 1997, a branch  of  an  out-of-state  bank,  as
28    defined  in  Section  2  of  the  Illinois  Banking  Act, may
29    establish an office in this State for the conduct of business
30    as a fiduciary, provided:; (i) the branch of the out-of-state
31    bank obtains a certificate  of  authority  pursuant  to  this
32    Section; (ii) fiduciary business conducted in this State by a
33    branch  of  an out-of-state bank is subject to examination by
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 1    the Commissioner; and (ii) (iii) the trust activities of  the
 2    branch  of  the  out-of-state bank are subject to regulation,
 3    including enforcement actions, by  the  Commissioner  to  the
 4    same extent as Illinois corporate fiduciaries.
 5        (c)  The  application  for  a  certificate  of  authority
 6    pursuant to this Section shall be filed with the Commissioner
 7    on  forms  prescribed  by  the Commissioner and shall contain
 8    such relevant information as the Commissioner may specify  to
 9    determine  that  the  fiduciary business will be conducted by
10    the branch of the out-of-state  bank  in  a  safe  and  sound
11    manner.
12    (Source:  P.A.  89-208,  eff.  9-29-95; 89-364, eff. 8-18-95;
13    89-626, eff. 8-9-96.)
14        (205 ILCS 620/5-6) (from Ch. 17, par. 1555-6)
15        Sec. 5-6.  Removal orders.  Whenever, in the  opinion  of
16    the  Commissioner,  any director, officer, employee, or agent
17    of a corporate fiduciary shall have violated any  law,  rule,
18    or  order  relating to the corporate fiduciary, or shall have
19    engaged in an unsafe or unsound practice  in  conducting  the
20    business  of  the corporate fiduciary, or shall have violated
21    any law or engaged or participated in any unsafe  or  unsound
22    practice  in  connection  with  any  financial institution or
23    other business entity such that the character and fitness  of
24    the  director,  officer,  employee,  or agent does not assure
25    reasonable  promise  of  safe  and  sound  operation  of  the
26    corporate fiduciary, the Commissioner may issue an  order  of
27    removal.  If  in  the opinion of the Commissioner, any former
28    director,  officer,  employee,  or  agent  of   a   corporate
29    fiduciary,  prior  to  the  termination of his or her service
30    with the corporate fiduciary,  violated  any  law,  rule,  or
31    order  relating  to  the corporate fiduciary or engaged in an
32    unsafe or unsound practice in conducting the business of  the
33    corporate  fiduciary  or  violated  any  law  or  engaged  or
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 1    participated  in any unsafe or unsound practice in connection
 2    with any financial institution or other business entity  such
 3    that  the  character  and  fitness  of the director, officer,
 4    employee, or agent would not have assured reasonable  promise
 5    of  safe and sound operation of the corporate fiduciary prior
 6    to the termination of his or her service with  the  corporate
 7    fiduciary,  the  Commissioner  may issue an order prohibiting
 8    that person from further service with a  corporate  fiduciary
 9    as  a  director, officer, employee, or agent. An order issued
10    pursuant to this Section shall be served upon  the  director,
11    officer,  employee,  or  agent.  A copy of the order shall be
12    sent to each director of the corporate fiduciary affected  by
13    personal service, certified mail return receipt requested, or
14    any  other method that provides proof of service and receipt.
15    The person affected by  the  action  may  request  a  hearing
16    before  the  State  Banking Board of Illinois, hereafter "the
17    Board", within 10 days after receipt of the order of  removal
18    or  prohibition.   The  hearing  shall  be  held by the Board
19    according to the same procedures used pursuant to Section  48
20    of  the  Illinois  Banking Act, and the hearing shall be held
21    within 30 days after the request has  been  received  by  the
22    Board.   After concluding the hearing, the Board shall make a
23    determination approving, modifying, or disapproving the order
24    of the Commissioner as its final administrative decision.   A
25    copy  of  the  order  shall  be  served  upon  the  corporate
26    fiduciary  of  which  the  person  is  a  director,  officer,
27    employee,  or agent, whereupon the person shall cease to be a
28    director,  officer,  employee,  or  agent  of  the  corporate
29    fiduciary.  Any person who has been removed or prohibited  by
30    an order of the Commissioner under this Section or subsection
31    (7)  of  Section  48  of  the  Illinois  Banking  Act may not
32    thereafter serve as director, officer, employee, or agent  of
33    any State bank or corporate fiduciary, or of any other entity
34    that   is   subject   to   licensure  or  regulation  by  the
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 1    Commissioner or the Office of Banks and  Real  Estate  unless
 2    the Commissioner has granted prior approval in writing.   The
 3    Commissioner   may  institute  a  civil  action  against  the
 4    director, officer, employee, or agent  subject  to  an  order
 5    issued under this Section and against the corporate fiduciary
 6    to  enforce compliance with or to enjoin any violation of the
 7    terms of the order.
 8    (Source: P.A. 90-301, eff. 8-1-97.)
 9        Section 35.  The Consumer Installment Loan Act is amended
10    by changing Section 19.1 as follows:
11        (205 ILCS 670/19.1) (from Ch. 17, par. 5425.1)
12        Sec. 19.1. Where the licensee repossesses a motor vehicle
13    that was used as collateral and which is used  primarily  for
14    the  obligor's  personal,  family  or household purposes, the
15    licensee shall be subject to the requirements  of  and  shall
16    transfer  the  certificate of title pursuant to Section 3-114
17    of the Illinois Vehicle Code and the obligor at the  time  of
18    repossession  has  paid an amount equal to 30% or more of the
19    total of payments due,  the  obligor  may,  within  15  days,
20    reinstate the contract and recover the motor vehicle from the
21    licensee by tendering:
22        (a)  the  total  of  all  unpaid  amounts,  including any
23    unpaid  delinquency  or   deferral   charges   due,   without
24    acceleration; and
25        (b)  performance necessary to cure any default other than
26    nonpayment of the amounts due; and
27        (c)  any reasonable cost or fees incurred by the licensee
28    in   the  retaking  of  the  goods.  Tender  of  payment  and
29    performance pursuant to this Section restores to the  obligor
30    his  rights under the loan as though no default had occurred.
31    The obligor has a right to reinstate the contract and recover
32    the  collateral  from  the  licensee  only  once  under  this
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 1    Section.
 2        The licensee must give written  notice  to  the  obligor,
 3    within  3 days of the repossession, of the obligor's right to
 4    reinstate the contract and recover the collateral pursuant to
 5    this Section. The Written notice shall  be  in  substantially
 6    the following form:
 7                 NOTICE OF RIGHT TO RECOVER VEHICLE
 8        Your car was repossessed on (specify date) for failure to
 9    make payments on the loan (or other reason).
10        Under Illinois law, because you have paid at least 30% of
11    the  loan before repossession, you may be able to get the car
12    back. To recover the car and reinstate the loan you  must  do
13    the following within 15 days of the date of repossession:
14        1.   Make  payment of all back payments as
15             of the date of this notice
16    .                                                $...........
17        2.   Pay any late charge due.                $...........
18        3.   Pay the costs of repossession.          $...........
19             Total due as  of  the  date  of  this
20             notice
21    plus  any  additional amounts which may become
22             due
23    between the date of the notice and the date of
24             reinstatement.                          $...........
25        Bring cash, a certified check  or  money  order  for  the
26    total  amount  plus  any amounts which may become due between
27    the date of the notice and the date of reinstatement  to  our
28    office  located at (specify address) by (specify date) to get
29    your car back.
30    (Source: P.A. 90-437, eff. 1-1-98.)
31        Section 45.  The Illinois  Vehicle  Code  is  amended  by
32    changing Sections 3-114 and 3-117.1 as follows:
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 1        (625 ILCS 5/3-114) (from Ch. 95 1/2, par. 3-114)
 2        Sec. 3-114.  Transfer by operation of law.
 3        (a)  If  the  interest of an owner in a vehicle passes to
 4    another other than  by  voluntary  transfer,  the  transferee
 5    shall,  except as provided in paragraph (b), promptly mail or
 6    deliver within 20 days to the Secretary  of  State  the  last
 7    certificate  of  title,  if available, proof of the transfer,
 8    and his application for a new certificate  in  the  form  the
 9    Secretary  of  State prescribes. It shall be unlawful for any
10    person having possession of a  certificate  of  title  for  a
11    motor  vehicle,  semi-trailer,  or house car by reason of his
12    having a lien or encumbrance on  such  vehicle,  to  fail  or
13    refuse  to  deliver  such  certificate to the owner, upon the
14    satisfaction  or  discharge  of  the  lien  or   encumbrance,
15    indicated upon such certificate of title.
16        (b)  If  the  interest of an owner in a vehicle passes to
17    another under the provisions of the Small Estates  provisions
18    of the Probate Act of 1975 the transferee shall promptly mail
19    or  deliver  to  the Secretary of State, within 120 days, the
20    last certificate of title, if  available,  the  documentation
21    required under the provisions of the Probate Act of 1975, and
22    an  application  for  certificate  of title. The Small Estate
23    Affidavit form shall be furnished by the Secretary of  State.
24    The  transfer  may  be to the transferee or to the nominee of
25    the transferee.
26        (c)  If the interest of an owner in a vehicle  passes  to
27    another under other provisions of the Probate Act of 1975, as
28    amended,  and  the  transfer  is  made by a representative or
29    guardian, such transferee shall promptly mail or  deliver  to
30    the  Secretary  of  State,  the last certificate of title, if
31    available, and a certified copy of the letters of  office  or
32    guardianship,  and  an  application for certificate of title.
33    Such application shall be made before the estate  is  closed.
34    The  transfer  may  be to the transferee or to the nominee of
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 1    the transferee.
 2        (d)  If the interest of an owner in joint tenancy  passes
 3    to  the  other  joint  tenant  with  survivorship  rights  as
 4    provided  by  law,  the  transferee  shall  promptly  mail or
 5    deliver to the Secretary of State, the  last  certificate  of
 6    title,  if  available, proof of death of the one joint tenant
 7    and survivorship  of  the  surviving  joint  tenant,  and  an
 8    application  for certificate of title. Such application shall
 9    be made within 120 days after the death of the joint  tenant.
10    The  transfer  may  be to the transferee or to the nominee of
11    the transferee.
12        (e)  The Secretary of State shall transfer  a  decedent's
13    vehicle  title  to any legatee, representative or heir of the
14    decedent who submits to the Secretary a death certificate and
15    an  affidavit  by  an  attorney  at  law  on  the  letterhead
16    stationery  of the attorney at law stating the facts  of  the
17    transfer.
18        (f)  Repossession with assignment of title.  In all cases
19    wherein  a lienholder has repossessed a vehicle by other than
20    judicial process and holds it for  resale  under  a  security
21    agreement, and the owner of record has executed an assignment
22    of  the  existing  certificate  of  title  after default, the
23    lienholder may proceed to sell or otherwise  dispose  of  the
24    vehicle  as  authorized  under  the  Uniform Commercial Code.
25    Upon selling the vehicle to another  person,  the  lienholder
26    need  not  send  the certificate of title to the Secretary of
27    State, but shall promptly and within 20 days mail or  deliver
28    to  the  purchaser  as transferee the existing certificate of
29    title for the repossessed vehicle, reflecting the release  of
30    the  lienholder's  security  interest  in  the  vehicle.  The
31    application  for a certificate of title made by the purchaser
32    shall comply with subsection (a)  of  Section  3-104  and  be
33    accompanied  by  the  existing  certificate  of title for the
34    repossessed  vehicle.  The  lienholder  shall   execute   the
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 1    assignment and warranty of title showing the name and address
 2    of  the  purchaser  in  the  spaces  provided therefor on the
 3    certificate of title or as the Secretary of State prescribes.
 4    The lienholder shall complete the assignment of title in  the
 5    certificate  of  title to reflect the transfer of the vehicle
 6    to the lienholder and also  a  reassignment  to  reflect  the
 7    transfer  from  the  lienholder  to  the purchaser.  For this
 8    purpose,  the  lienholder  is  specifically   authorized   to
 9    complete and execute the space reserved in the certificate of
10    title  for  a  dealer  reassignment, notwithstanding that the
11    lienholder is not a licensed dealer.  Nothing herein shall be
12    construed to mean that the lienholder is taking title to  the
13    repossessed  vehicle  for  purposes of liability for retailer
14    occupation, vehicle use, or other tax  with  respect  to  the
15    proceeds  from  the  repossession  sale.    Delivery  of  the
16    existing  certificate  of  title  to  the  purchaser shall be
17    deemed disclosure to  the  purchaser  of  the  owner  of  the
18    vehicle.
19        (f-5)  Repossession  without assignment of title.  In all
20    cases wherein a lienholder has repossessed a vehicle by other
21    than judicial  process  and  holds  it  for  resale  under  a
22    security  agreement, and the owner of record has not executed
23    an assignment of  the  existing  certificate  of  title,  the
24    lienholder shall comply with the following provisions:
25             (1)  Prior  to sale, the lienholder shall deliver or
26        mail to the owner at the owner's last known  address  and
27        to any other lienholder of record, a notice of redemption
28        setting  forth the following information: (i) the name of
29        the owner of record and in bold type at or near  the  top
30        of  the  notice  a statement that the owner's vehicle was
31        repossessed on a  specified  date  for  failure  to  make
32        payments   on   the   loan  (or  other  reason),  (ii)  a
33        description of the vehicle subject to the lien sufficient
34        to identify it, (iii) the right of the  owner  to  redeem
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 1        the  vehicle,  (iv)  the  lienholder's  intent to sell or
 2        otherwise dispose of the vehicle after the expiration  of
 3        21  days  from  the  date  of  mailing or delivery of the
 4        notice, and (v) the name, address, and  telephone  number
 5        of  the  lienholder from whom information may be obtained
 6        concerning the amount due to redeem the vehicle and  from
 7        whom  the  vehicle may be redeemed under Section 9-506 of
 8        the Uniform Commercial Code.  At the lienholder's option,
 9        the information required to be set forth in  this  notice
10        of  redemption  may  be  made  a part of or accompany the
11        notification of sale or other disposition required  under
12        subsection (3) of Section 9-504 of the Uniform Commercial
13        Code, but none of the information required by this notice
14        shall  be  construed  to  impose  any  requirement  under
15        Article 9 of the Uniform Commercial Code.
16             (2)  With  respect  to the repossession of a vehicle
17        used  primarily  for  personal,  family,   or   household
18        purposes,  the  lienholder  shall also deliver or mail to
19        the owner at the owner's last known address an  affidavit
20        of defense.  The affidavit of defense shall accompany the
21        notice  of redemption required in subdivision (f-5)(1) of
22        this Section. The affidavit of defense shall (i) identify
23        the lienholder, owner,  and  the  vehicle;  (ii)  provide
24        space  for  the owner to state the defense claimed by the
25        owner; and (iii) include an acknowledgment by  the  owner
26        that  the owner may be liable to the lienholder for fees,
27        charges,  and  costs  incurred  by  the   lienholder   in
28        establishing  the  insufficiency  or  invalidity  of  the
29        owner's  defense.   To  stop  the  transfer of title, the
30        affidavit of defense must be received by  the  lienholder
31        no  later  than  21  days  after  the  date of mailing or
32        delivery of the notice required in  subdivision  (f-5)(1)
33        of this Section. If the lienholder receives the affidavit
34        from  the  owner  in a timely manner, the lienholder must
SB1528 Engrossed            -67-               LRB9009866JSmg
 1        apply to a court of competent jurisdiction  to  determine
 2        if  the  lienholder  is  entitled  to  possession  of the
 3        vehicle.
 4             (3)  Upon selling the vehicle to another person, the
 5        lienholder need not send the certificate of title to  the
 6        Secretary of State, but shall promptly and within 20 days
 7        mail  or  deliver  to the purchaser as transferee (i) the
 8        existing  certificate  of  title  for   the   repossessed
 9        vehicle,  reflecting  the  release  of  the  lienholder's
10        security  interest  in the vehicle; and (ii) an affidavit
11        of repossession made by or on behalf  of  the  lienholder
12        which   provides  the  following  information:  that  the
13        vehicle was repossessed, a  description  of  the  vehicle
14        sufficient  to  identify it, whether the vehicle has been
15        damaged in excess of 33 1/3% of its fair market value  as
16        required  under  subdivision  (b)(3)  of Section 3-117.1,
17        that the owner and any other lienholder  of  record  were
18        given the notice required in subdivision (f-5)(1) of this
19        Section, that the owner of record was given the affidavit
20        of  defense  required  in  subdivision  (f-5)(2)  of this
21        Section, that the interest  of  the  owner  was  lawfully
22        terminated  or sold pursuant to the terms of the security
23        agreement, and the purchaser's name and address.  If  the
24        vehicle  is  damaged  in  excess  of  33 1/3% of its fair
25        market value, the lienholder shall make application for a
26        salvage certificate under Section  3-117.1  and  transfer
27        the  vehicle  to a person eligible to receive assignments
28        of salvage certificates identified in Section 3-118.
29             (4)  The application for a certificate of title made
30        by the purchaser shall  comply  with  subsection  (a)  of
31        Section  3-104  and  be  accompanied  by the affidavit of
32        repossession furnished by the lienholder and the existing
33        certificate of title for  the  repossessed  vehicle.  The
34        lienholder  shall  execute the assignment and warranty of
SB1528 Engrossed            -68-               LRB9009866JSmg
 1        title showing the name and address of  the  purchaser  in
 2        the  spaces provided therefor on the certificate of title
 3        or as the Secretary of State prescribes.  The  lienholder
 4        shall complete the assignment of title in the certificate
 5        of  title  to  reflect the transfer of the vehicle to the
 6        lienholder  and  also  a  reassignment  to  reflect   the
 7        transfer  from the lienholder to the purchaser.  For this
 8        purpose, the lienholder  is  specifically  authorized  to
 9        execute  the  assignment on behalf of the owner as seller
10        if the owner has not done so and to complete and  execute
11        the  space  reserved  in  the  certificate of title for a
12        dealer reassignment, notwithstanding that the  lienholder
13        is  not  a  licensed  dealer.   Nothing  herein  shall be
14        construed to mean that the lienholder is taking title  to
15        the  repossessed  vehicle  for  purposes of liability for
16        retailer occupation,  vehicle  use,  or  other  tax  with
17        respect  to  the  proceeds  from  the  repossession sale.
18        Delivery of the existing  certificate  of  title  to  the
19        purchaser  shall be deemed disclosure to the purchaser of
20        the owner of the vehicle. In  the  event  the  lienholder
21        does   not   hold   the  certificate  of  title  for  the
22        repossessed   vehicle,   the   lienholder   shall    make
23        application for and may obtain a new certificate of title
24        in the name of the lienholder upon furnishing information
25        satisfactory  to  the Secretary of State.  Upon receiving
26        the new certificate of title, the lienholder may  proceed
27        with  the  sale described in subdivision (f-5)(3), except
28        that  upon  selling  the  vehicle  the  lienholder  shall
29        promptly and within  20  days  mail  or  deliver  to  the
30        purchaser  the  new  certificate  of title reflecting the
31        assignment and transfer of title to the purchaser.
32             (5)  Neither the lienholder nor the owner shall file
33        with the Office of the Secretary of State the  notice  of
34        redemption   or   affidavit  of  defense    described  in
SB1528 Engrossed            -69-               LRB9009866JSmg
 1        subdivisions (f-5)(1) and (f-5)(2) of this  Section.  The
 2        Office  of the Secretary of State shall not determine the
 3        merits of an owner's affidavit of defense,  nor  consider
 4        any  allegations  or assertions regarding the validity or
 5        invalidity of a lienholder's claim to the vehicle  or  an
 6        owner's asserted defenses to the repossession action.
 7        (f-7)  Notice of reinstatement in certain cases.
 8             (1)  If, at the time of repossession by a lienholder
 9        that  is seeking to transfer title pursuant to subsection
10        (f-5), the owner has paid an amount equal to 30% or  more
11        of  the  deferred payment price or total of payments due,
12        the  owner  may,  within  21  days   of   the   date   of
13        repossession,  reinstate  the  contract or loan agreement
14        and recover the vehicle from the lienholder by  tendering
15        in  a  lump  sum  (i)  the  total  of all unpaid amounts,
16        including any unpaid delinquency or deferral charges  due
17        at  the  date of reinstatement, without acceleration; and
18        (ii) performance necessary to cure any default other than
19        nonpayment of the amounts due; and (iii)  all  reasonable
20        costs  and  fees  incurred by the lienholder in retaking,
21        holding, and preparing the vehicle for disposition and in
22        arranging for the sale of the vehicle.  Reasonable  costs
23        and  fees  incurred  by  the  lienholder  include without
24        limitation repossession  and  storage  expenses  and,  if
25        authorized  by the contract or loan agreement, reasonable
26        attorneys' fees and collection agency charges.
27             (2)  Tender of payment and performance  pursuant  to
28        this limited right of reinstatement restores to the owner
29        his rights under the contract or loan agreement as though
30        no  default  had  occurred.   The  owner has the right to
31        reinstate the contract or loan agreement and recover  the
32        vehicle   from   the  lienholder  only  once  under  this
33        subsection.  The lienholder may, in the lienholder's sole
34        discretion, extend the period during which the owner  may
SB1528 Engrossed            -70-               LRB9009866JSmg
 1        reinstate  the contract or loan agreement and recover the
 2        vehicle beyond the 21 days allowed under this subsection,
 3        and the extension shall not  subject  the  lienholder  to
 4        liability to the owner under the laws of this State.
 5             (3)  The  lienholder  shall  deliver or mail written
 6        notice to the owner at the owner's  last  known  address,
 7        within  3  business  days of the date of repossession, of
 8        the owner's right  to  reinstate  the  contract  or  loan
 9        agreement and recover the vehicle pursuant to the limited
10        right  of reinstatement described in this subsection.  At
11        the lienholder's option, the information required  to  be
12        set  forth  in  this  notice of reinstatement may be made
13        part of or accompany the notice of redemption required in
14        subdivision (f-5)(1) of this Section and the notification
15        of sale or other disposition  required  under  subsection
16        (3)  of Section 9-504 of the Uniform Commercial Code, but
17        none of  the  information  required  by  this  notice  of
18        reinstatement   shall   be   construed   to   impose  any
19        requirement under Article 9  of  the  Uniform  Commercial
20        Code.
21             (4)  The  reinstatement  period,  if applicable, and
22        the redemption period described in  subdivision  (f-5)(1)
23        of   this   Section,   shall   run  concurrently  if  the
24        information required to be set forth  in  the  notice  of
25        reinstatement  is  part  of  or accompanies the notice of
26        redemption.  In any event, the 21 day  redemption  period
27        described  in  subdivision (f-5)(1) of this Section shall
28        commence on the date of mailing or delivery to the  owner
29        of the information required to be set forth in the notice
30        of  redemption,  and  the  21  day  reinstatement  period
31        described  in  this  subdivision,  if  applicable,  shall
32        commence  on the date of mailing or delivery to the owner
33        of the information required to be set forth in the notice
34        of reinstatement.
SB1528 Engrossed            -71-               LRB9009866JSmg
 1             (5)  The Office of the Secretary of State shall  not
 2        determine  the  merits  of  an  owner's claim of right to
 3        reinstatement, nor consider any allegations or assertions
 4        regarding the validity or invalidity  of  a  lienholder's
 5        claim  to  the  vehicle  or  an owner's asserted right to
 6        reinstatement.   Where  a  lienholder   is   subject   to
 7        licensing  and  regulatory  supervision  by  the State of
 8        Illinois, the lienholder shall be subject to all  of  the
 9        powers  and  authority  of the lienholder's primary State
10        regulator to enforce compliance with the  procedures  set
11        forth in this subsection (f-7).
12        (f-10)  Repossession  by  judicial process.  In all cases
13    wherein a lienholder has repossessed a  vehicle  by  judicial
14    process  and  holds it for resale under a security agreement,
15    order for replevin, or other  court  order  establishing  the
16    lienholder's   right   to  possession  of  the  vehicle,  the
17    lienholder may proceed to sell or otherwise  dispose  of  the
18    vehicle  as  authorized  under the Uniform Commercial Code or
19    the court order. Upon selling the vehicle to another  person,
20    the  lienholder need not send the certificate of title to the
21    Secretary of State, but shall promptly  and  within  20  days
22    mail  or  deliver  to  the  purchaser  as  transferee (i) the
23    existing certificate of title  for  the  repossessed  vehicle
24    reflecting  the release of the lienholder's security interest
25    in the vehicle; (ii) a certified copy of the court order; and
26    (iii) a bill of sale identifying the  new  owner's  name  and
27    address and the year, make, model, and vehicle identification
28    number  of  the vehicle. The application for a certificate of
29    title made by the purchaser shall comply with subsection  (a)
30    of  Section 3-104 and be accompanied by the certified copy of
31    the court order furnished by the lienholder and the  existing
32    certificate   of  title  for  the  repossessed  vehicle.  The
33    lienholder shall execute the assignment and warranty of title
34    showing the name and address of the purchaser in  the  spaces
SB1528 Engrossed            -72-               LRB9009866JSmg
 1    provided  therefor  on  the  certificate  of  title or as the
 2    Secretary of State prescribes.  The lienholder shall complete
 3    the assignment of  title  in  the  certificate  of  title  to
 4    reflect  the  transfer  of  the vehicle to the lienholder and
 5    also  a  reassignment  to  reflect  the  transfer  from   the
 6    lienholder   to   the   purchaser.   For  this  purpose,  the
 7    lienholder  is  specifically  authorized   to   execute   the
 8    assignment  on behalf of the owner as seller if the owner has
 9    not done so and to complete and execute the space reserved in
10    the  certificate  of  title  for   a   dealer   reassignment,
11    notwithstanding that the lienholder is not a licensed dealer.
12    Nothing herein shall be construed to mean that the lienholder
13    is  taking  title  to the repossessed vehicle for purposes of
14    liability for retailer occupation, vehicle use, or other  tax
15    with  respect  to  the  proceeds  from the repossession sale.
16    Delivery  of  the  existing  certificate  of  title  to   the
17    purchaser  shall be deemed disclosure to the purchaser of the
18    owner of the vehicle. In the event the  lienholder  does  not
19    hold  the  certificate  of title for the repossessed vehicle,
20    the lienholder shall make application for and  may  obtain  a
21    new  certificate  of title in the name of the lienholder upon
22    furnishing  information  satisfactory  to  the  Secretary  of
23    State.  Upon receiving the  new  certificate  of  title,  the
24    lienholder  may  proceed  with  the  sale  described  in this
25    subsection,  except  that  upon  selling  the   vehicle   the
26    lienholder  shall promptly and within 20 days mail or deliver
27    to the purchaser the new certificate of title reflecting  the
28    assignment and transfer of title to the purchaser.
29        (f-15)  The   Secretary   of  State  shall  not  issue  a
30    certificate of title to a  purchaser  under  subsection  (f),
31    (f-5), or (f-10) of this Section, unless the person from whom
32    the  vehicle  has been repossessed by the lienholder is shown
33    to be the last registered owner of the  motor  vehicle.   The
34    Secretary  of  State may provide by rule for the standards to
SB1528 Engrossed            -73-               LRB9009866JSmg
 1    be followed by a lienholder  in  assigning  and  transferring
 2    certificates of title with respect to repossessed vehicles.
 3        (f-20)  If  applying  for  a  salvage  certificate  or  a
 4    junking  certificate, after the original 21 day notice to the
 5    debtor has been fulfilled, the  lienholder  shall  within  20
 6    days  make  an  application  to  the Secretary of State for a
 7    certificate of title, a  salvage  certificate  or  a  junking
 8    certificate,  as  set  forth  in  this  Code.  In  all cases,
 9    however, The Secretary of State shall not issue a certificate
10    of title, a salvage certificate or a junking  certificate  to
11    such  lienholder unless the person from whom such vehicle has
12    been repossessed is shown to be the last registered owner  of
13    such  motor  vehicle  and  such lienholder establishes to the
14    satisfaction of the Secretary of State that he is entitled to
15    such certificate of title,  salvage  certificate  or  junking
16    certificate. The Secretary of State may shall provide by rule
17    for  the standards to be followed by a lienholder in order to
18    obtain a salvage certificate or junking certificate of  title
19    for a repossessed vehicle.
20        (g)  A  person  holding  a  certificate  of  title  whose
21    interest  in the vehicle has been extinguished or transferred
22    other than by voluntary transfer shall mail  or  deliver  the
23    certificate,  within 20 days upon request of the Secretary of
24    State. The  delivery  of  the  certificate  pursuant  to  the
25    request  of the Secretary of State does not affect the rights
26    of the person surrendering the certificate, and the action of
27    the Secretary of State in issuing a new certificate of  title
28    as  provided  herein  is not conclusive upon the rights of an
29    owner or lienholder named in the old certificate.
30        (h)  The Secretary of State may decline  to  process  any
31    application  for  a  transfer  of  an  interest  in a vehicle
32    hereunder if any fees or taxes due under this  Act  from  the
33    transferor   or  the  transferee  have  not  been  paid  upon
34    reasonable notice and demand.
SB1528 Engrossed            -74-               LRB9009866JSmg
 1        (i)  The Secretary of State shall not be held civilly  or
 2    criminally   liable  to  any  person  because  any  purported
 3    transferor may not have had the power or authority to make  a
 4    transfer  of  any  interest  in  any  vehicle  or  because  a
 5    certificate  of title issued in error is subsequently used to
 6    commit a fraudulent act.
 7    (Source: P.A. 90-212, eff. 1-1-98.)
 8        (625 ILCS 5/3-117.1) (from Ch. 95 1/2, par. 3-117.1)
 9        Sec.  3-117.1.  When  junking  certificates  or   salvage
10    certificates must be obtained.
11        (a)  Except  as  provided  in  Chapter  4 of this Code, a
12    person who possesses a junk  vehicle  shall  within  15  days
13    cause   the   certificate   of  title,  salvage  certificate,
14    certificate of purchase, or a  similarly  acceptable  out  of
15    state   document  of  ownership  to  be  surrendered  to  the
16    Secretary of State along with an application  for  a  junking
17    certificate, except as provided in Section 3-117.2, whereupon
18    the Secretary of State shall issue to such a person a junking
19    certificate,  which  shall  authorize  the  holder thereof to
20    possess, transport, or, by an endorsement, transfer ownership
21    in such junked vehicle, and a certificate of title shall  not
22    again be issued for such vehicle.
23        A licensee who possesses a junk vehicle and a Certificate
24    of  Title, Salvage Certificate, Certificate of Purchase, or a
25    similarly acceptable out-of-state document of  ownership  for
26    such  junk vehicle, may transport the junk vehicle to another
27    licensee  prior  to  applying  for  or  obtaining  a  junking
28    certificate, by executing a  uniform  invoice.  The  licensee
29    transferor shall furnish a copy of the uniform invoice to the
30    licensee  transferee  at  the time of transfer.  In any case,
31    the licensee transferor shall apply for a junking certificate
32    in conformance with Section 3-117.1  of  this  Chapter.   The
33    following   information  shall  be  contained  on  a  uniform
SB1528 Engrossed            -75-               LRB9009866JSmg
 1    invoice:
 2             (1)  The business name, address and  dealer  license
 3        number  of  the  person  disposing  of  the vehicle, junk
 4        vehicle or vehicle cowl;
 5             (2)  The name and address of  the  person  acquiring
 6        the  vehicle,  junk  vehicle or vehicle cowl, and if that
 7        person is a dealer, the Illinois or  out-of-state  dealer
 8        license number of that dealer;
 9             (3)  The  date  of  the  disposition of the vehicle,
10        junk vehicle or vehicle cowl;
11             (4)  The year, make, model, color and description of
12        each vehicle, junk vehicle or vehicle cowl disposed of by
13        such person;
14             (5)  The   manufacturer's   vehicle   identification
15        number,  Secretary  of  State  identification  number  or
16        Illinois Department of  State  Police  number,  for  each
17        vehicle, junk vehicle or vehicle cowl part disposed of by
18        such person;
19             (6)  The  printed  name and legible signature of the
20        person or agent disposing of the vehicle, junk vehicle or
21        vehicle cowl; and
22             (7)  The printed name and legible signature  of  the
23        person accepting delivery of the vehicle, junk vehicle or
24        vehicle cowl.
25        The  Secretary of State may certify a junking manifest in
26    a form prescribed by the Secretary  of  State  that  reflects
27    those  vehicles  for  which  junking  certificates  have been
28    applied or issued.  A junking manifest may be issued  to  any
29    person  and it shall constitute evidence of ownership for the
30    vehicle  listed  upon  it.   A  junking   manifest   may   be
31    transferred  only to a person licensed under Section 5-301 of
32    this Code as a scrap processor.    A  junking  manifest  will
33    allow  the  transportation  of  those  vehicles  to  a  scrap
34    processor  prior  to  receiving the junk certificate from the
SB1528 Engrossed            -76-               LRB9009866JSmg
 1    Secretary of State.
 2        (b)  An application for a salvage  certificate  shall  be
 3    submitted  to  the Secretary of State in any of the following
 4    situations:
 5             (1)  When an insurance company makes  a  payment  of
 6        damages  on  a  total  loss  claim  for  a  vehicle,  the
 7        insurance company shall be deemed to be the owner of such
 8        vehicle and the vehicle shall be considered to be salvage
 9        except  that  ownership of a vehicle 9 model years of age
10        or older may, by agreement between the  registered  owner
11        and  the insurance company, be retained by the registered
12        owner of such  vehicle.   The  insurance   company  shall
13        promptly  deliver  or mail within 20 days the certificate
14        of title along with proper application  and  fee  to  the
15        Secretary  of  State,  and a salvage certificate shall be
16        issued in the name of the insurance company.  An  insurer
17        making  payment  of damages on a total loss claim for the
18        theft of a vehicle may exchange the  salvage  certificate
19        for  a  certificate  of title if the vehicle is recovered
20        without damage.  In such a situation, the  insurer  shall
21        fill  out  and sign a form prescribed by the Secretary of
22        State which contains  an  affirmation  under  penalty  of
23        perjury that the vehicle was recovered without damage and
24        the  Secretary  of  State  may,  by  rule  or regulation,
25        require photographs to be submitted.
26             (2)  When a vehicle the ownership of which has  been
27        transferred  to  any  person  through  a  certificate  of
28        purchase  from  acquisition of the vehicle at an auction,
29        other dispositions as set forth  in  Sections  4-208  and
30        4-209  of this Code, a lien arising under Section 18a-501
31        of this Code, or a public sale under the Abandoned Mobile
32        Home Act shall be deemed salvage or junk at the option of
33        the purchaser.  The person acquiring such vehicle in such
34        manner shall promptly deliver or  mail,  within  20  days
SB1528 Engrossed            -77-               LRB9009866JSmg
 1        after  the acquisition of the vehicle, the certificate of
 2        purchase, the proper application and  fee,  and,  if  the
 3        vehicle  is  an abandoned mobile home under the Abandoned
 4        Mobile  Home  Act,  a  certification  from  a  local  law
 5        enforcement agency that  the  vehicle  was  purchased  or
 6        acquired at a public sale under the Abandoned Mobile Home
 7        Act  to  the Secretary of State and a salvage certificate
 8        or junking certificate shall be issued  in  the  name  of
 9        that   person.     The  salvage  certificate  or  junking
10        certificate issued by the Secretary of State  under  this
11        Section  shall  be  free of any lien that existed against
12        the vehicle prior to the time the vehicle was acquired by
13        the applicant under this Code.
14             (3)  A vehicle  which  has  been  repossessed  by  a
15        lienholder  shall  be  considered to be salvage only when
16        the repossessed vehicle, on the date of  repossession  by
17        the  lienholder, has sustained damage by collision, fire,
18        theft, rust corrosion, or other means so that the cost of
19        repairing such damage, including labor, would be  greater
20        than  33  1/3%  of  its  fair  market  value without such
21        damage.  If the lienholder determines that  such  vehicle
22        is  damaged  in  excess  of  33  1/3% of such fair market
23        value, the lienholder shall,  before  sale,  transfer  or
24        assignment of the vehicle, make application for a salvage
25        certificate,  and  shall submit with such application the
26        proper fee and evidence  of  possession.   If  the  facts
27        required  to  be shown in subsection (f) of Section 3-114
28        are satisfied, the  Secretary  of  State  shall  issue  a
29        salvage  certificate in the name of the lienholder making
30        the  application.   In  any  case  wherein  the   vehicle
31        repossessed  is  not  damaged in excess of 33 1/3% of its
32        fair market value, the lienholder shall comply  with  the
33        requirements  of  subsections  (f),  (f-5), and (f-10) of
34        Section 3-114, except that the affidavit of  repossession
SB1528 Engrossed            -78-               LRB9009866JSmg
 1        made  by  or  on  behalf  of  the  lienholder,  after the
 2        original 21 day notice to the debtor has been  fulfilled,
 3        shall within 15 days make an application to the Secretary
 4        of State for a certificate of title, submitting with such
 5        application  evidence  of  possession.   The  application
 6        shall  also  contain  an  affirmation  under  penalty  of
 7        perjury  that  the  vehicle  on  the  date  of  sale such
 8        application for certificate of title is  not  damaged  in
 9        excess of 33 1/3% of its fair market value.  If the facts
10        required  to  be shown in subsection (f) of Section 3-114
11        are satisfied, the  Secretary  of  State  shall  issue  a
12        certificate  of  title  as  set forth in Section 3-116 of
13        this  Code.  The  Secretary  of  State  may  by  rule  or
14        regulation require photographs to be submitted.
15             (4)  A vehicle which is a part of a  fleet  of  more
16        than  5  commercial  vehicles registered in this State or
17        any  other  state  or  registered  proportionately  among
18        several states shall be considered  to  be  salvage  when
19        such  vehicle  has  sustained  damage by collision, fire,
20        theft, rust, corrosion or similar means so that the  cost
21        of  repairing  such  damage,  including  labor,  would be
22        greater than 33 1/3% of the  fair  market  value  of  the
23        vehicle  without  such  damage.   If the owner of a fleet
24        vehicle desires to sell, transfer, or assign his interest
25        in such vehicle to a person within this State other  than
26        an  insurance company licensed to do business within this
27        State, and the owner determines that such vehicle, at the
28        time of the proposed  sale,  transfer  or  assignment  is
29        damaged  in  excess  of 33 1/3% of its fair market value,
30        the  owner  shall,  before   such   sale,   transfer   or
31        assignment,  make  application for a salvage certificate.
32        The  application  shall  contain  with  it  evidence   of
33        possession  of  the vehicle.  If the fleet vehicle at the
34        time of its sale, transfer, or assignment is not  damaged
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 1        in  excess of 33 1/3% of its fair market value, the owner
 2        shall so  state  in  a  written  affirmation  on  a  form
 3        prescribed   by   the  Secretary  of  State  by  rule  or
 4        regulation.  The  Secretary  of  State  may  by  rule  or
 5        regulation  require  photographs  to  be submitted.  Upon
 6        sale, transfer or assignment of  the  fleet  vehicle  the
 7        owner  shall  mail  the  affirmation  to the Secretary of
 8        State.
 9             (5)  A vehicle that has been submerged in  water  to
10        the  point  that  rising  water has reached over the door
11        sill and has entered the passenger or  trunk  compartment
12        is   a   "flood  vehicle".   A  flood  vehicle  shall  be
13        considered  to  be  salvage  only  if  the  vehicle   has
14        sustained  damage  so  that  the  cost  of  repairing the
15        damage, including labor, would be greater than 33 1/3% of
16        the fair market value of the vehicle without that damage.
17        The salvage certificate issued under this  Section  shall
18        indicate  the word "flood", and the word "flood" shall be
19        conspicuously  entered  on  subsequent  titles  for   the
20        vehicle.   A  person  who  possesses  or acquires a flood
21        vehicle that is not damaged in excess of 33 1/3%  of  its
22        fair  market  value  shall  make application for title in
23        accordance with Section 3-116 of this  Code,  designating
24        the  vehicle  as  "flood"  in  a manner prescribed by the
25        Secretary of State.   The  certificate  of  title  issued
26        shall  indicate  the  word  "flood", and the word "flood"
27        shall be conspicuously entered on subsequent  titles  for
28        the vehicle.
29        (c)  Any  person  who  without authority acquires, sells,
30    exchanges, gives away, transfers or  destroys  or  offers  to
31    acquire,  sell,  exchange, give away, transfer or destroy the
32    certificate of title to  any  vehicle  which  is  a  junk  or
33    salvage vehicle shall be guilty of a Class 3 felony.
34        (d)  Any  person  who knowingly fails to surrender to the
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 1    Secretary  of  State  a   certificate   of   title,   salvage
 2    certificate,   certificate   of   purchase   or  a  similarly
 3    acceptable out-of-state document  of  ownership  as  required
 4    under  the  provisions of this Section is guilty of a Class A
 5    misdemeanor for a first offense and a Class 4  felony  for  a
 6    subsequent  offense; except that a person licensed under this
 7    Code who violates paragraph (5) of  subsection  (b)  of  this
 8    Section  is  guilty  of a business offense and shall be fined
 9    not less than $1,000 nor more than $5,000 for a first offense
10    and is guilty of a Class 4 felony for a second or  subsequent
11    violation.
12        (e)  Any  vehicle  which  is  salvage  or junk may not be
13    driven or operated on roads and highways within  this  State.
14    A  violation  of this subsection is a Class A misdemeanor.  A
15    salvage vehicle displaying valid special plates issued  under
16    Section  3-601(b)  of  this Code, which is being driven to or
17    from an inspection conducted  under  Section  3-308  of  this
18    Code,  is  exempt  from the provisions of this subsection.  A
19    salvage vehicle for which a short term permit has been issued
20    under  Section  3-307  of  this  Code  is  exempt  from   the
21    provisions of this subsection for the duration of the permit.
22    (Source: P.A.  88-516;  88-685,  eff.  1-24-95;  89-669, eff.
23    1-1-97.)
24        (625 ILCS 5/3-104.1 rep.)
25        Section 50.  The Illinois  Vehicle  Code  is  amended  by
26    repealing Section 3-104.1.
27        Section  55.  The Fiduciary Obligations Act is amended by
28    changing Section 9 as follows:
29        (760 ILCS 65/9) (from Ch. 17, par. 2009)
30        Sec. 9.  Notwithstanding any other law,  if  a  fiduciary
31    makes  a  deposit  in a bank to his personal credit of checks
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 1    drawn by him upon an account in his own name as fiduciary, or
 2    of checks payable to him as fiduciary, or of checks drawn  by
 3    him  upon  an  account  in the name of his principal if he is
 4    empowered to draw checks thereon, or of checks payable to his
 5    principal and indorsed by him, if he is empowered to  indorse
 6    such checks, or if he otherwise makes a deposit of funds held
 7    by  him  as fiduciary, the bank receiving such deposit is not
 8    bound to inquire whether the fiduciary is committing  thereby
 9    a  breach  of  his  obligation  as fiduciary; and the bank is
10    authorized to pay the amount  of  the  deposit  or  any  part
11    thereof  upon  the  personal  check  of the fiduciary without
12    being liable to the principal, unless the bank  receives  the
13    deposit  or  pays  the  check  with actual knowledge that the
14    fiduciary  is  committing  a  breach  of  his  obligation  as
15    fiduciary in making such deposit or in drawing such check, or
16    with knowledge of such facts that its action in receiving the
17    deposit or paying the check amounts to bad faith.
18    (Source: Laws 1931, p. 676.)
19        Section 60.  The Uniform Commercial Code  is  amended  by
20    changing Sections 9-105, 9-106, and 9-302 as follows:
21        (810 ILCS 5/9-105) (from Ch. 26, par. 9-105)
22        Sec. 9-105.  Definitions and index of definitions.
23        (1)  In   this   Article  unless  the  context  otherwise
24    requires:
25             (a)  "Account  debtor"  means  the  person  who   is
26        obligated   on  an  account,  chattel  paper  or  general
27        intangible;
28             (b)  "Chattel paper" means  a  writing  or  writings
29        which  evidence both a monetary obligation and a security
30        interest in or a lease of specific goods, but  a  charter
31        or  other  contract involving the use or hire of a vessel
32        is not chattel paper. When  a  transaction  is  evidenced
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 1        both  by  such  a security agreement or a lease and by an
 2        instrument or a  series  of  instruments,  the  group  of
 3        writings taken together constitutes chattel paper;
 4             (c)  "Collateral"  means  the  property subject to a
 5        security interest,  and  includes  accounts  and  chattel
 6        paper which have been sold;
 7             (d)  "Debtor"  means  the person who owes payment or
 8        other performance of the obligation secured,  whether  or
 9        not he owns or has rights in the collateral, and includes
10        the seller of accounts or chattel paper. Where the debtor
11        and  the owner of the collateral are not the same person,
12        the term "debtor" means the owner of  the  collateral  in
13        any provision of the Article dealing with the collateral,
14        the obligor in any provision dealing with the obligation,
15        and may include both where the context so requires;
16             (e)  "Deposit   account"   means   a  demand,  time,
17        savings, passbook or like account maintained with a bank,
18        as defined in subsection (1) of Section 4-105 savings and
19        loan association,  credit  union  or  like  organization,
20        other  than  an  account  evidenced  by  a certificate of
21        deposit;
22             (f)  "Document" means document of title  as  defined
23        in  the general definitions of Article 1 (Section 1-201),
24        and a receipt of the kind described in subsection (2)  of
25        Section 7-201;
26             (g)  "Encumbrance"  includes  real  estate mortgages
27        and other liens on real estate and all  other  rights  in
28        real estate that are not ownership interests;
29             (h)  "Goods"  includes  all things which are movable
30        at the time the security interest attaches or  which  are
31        fixtures  (Section  9-313),  but  does not include money,
32        documents, instruments,  investment  property,  commodity
33        contracts,  accounts, chattel paper, general intangibles,
34        or minerals or the like (including oil  and  gas)  before
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 1        extraction.  "Goods"  also includes standing timber which
 2        is to be cut and removed under a conveyance  or  contract
 3        for sale, the unborn young of animals, and growing crops;
 4             (i)  "Instrument"   means  a  negotiable  instrument
 5        (defined   in   Section   3-104),   a    non-transferable
 6        certificate  of  deposit, a non-negotiable certificate of
 7        deposit, or any other writing which evidences a right  to
 8        the  payment  of  money  and  is  not  itself  a security
 9        agreement or lease and is of a type which is in  ordinary
10        course  of  business  transferred  by  delivery  with any
11        necessary indorsement or assignment.  The term  does  not
12        include investment property;
13             (j)  "Mortgage"  means a consensual interest created
14        by a real estate mortgage, a trust deed on  real  estate,
15        or the like;
16             (j-5)  "Non-negotiable certificate of deposit" means
17        a  written  document  issued  by  a  bank,  as defined in
18        subsection  (1)  of  Section  4-105,  that  contains   an
19        acknowledgement  that a sum of money has been received by
20        the issuer and a promise by the issuer to repay  the  sum
21        of  money,  and is not a negotiable instrument as defined
22        in Section 3-104;
23             (j-7)  "Non-transferable  certificate  of   deposit"
24        means  a  non-negotiable certificate of deposit which may
25        not be transferred except on the  books  of  the  issuer,
26        with  the  consent  of the issuer, or is subject to other
27        restrictions or conditions of the issuer on transfer;
28             (k)  An advance is made "pursuant to commitment"  if
29        the  secured  party has bound himself to make it, whether
30        or not a subsequent event of default or other  event  not
31        within  his  control has relieved or may relieve him from
32        his obligation;
33             (l)  "Security agreement" means an  agreement  which
34        creates or provides for a security interest;
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 1             (m)  "Secured party" means a lender, seller or other
 2        person  in  whose  favor  there  is  a security interest,
 3        including a person to whom accounts or chattel paper have
 4        been sold. When the holders of obligations  issued  under
 5        an  indenture  of trust, equipment trust agreement or the
 6        like are represented by a trustee or  other  person,  the
 7        representative is the secured party;
 8             (n)  "Transmitting   utility"   means   any   person
 9        primarily  engaged  in  the  railroad,  street railway or
10        trolley  bus  business,  the  electric   or   electronics
11        communications transmission business, the transmission of
12        goods  by pipeline, or the distribution, transmission, or
13        the production and transmission  of  electricity,  steam,
14        gas or water, or the provision of sewer service.
15        (o)  "Uncertificated  certificate  of  deposit"  means an
16    obligation of a bank, as defined in subsection (1) of Section
17    4-105, to repay a sum of money it has received, that is not a
18    deposit account and is not represented by a writing, but only
19    by an entry on the books of the bank  and  any  documentation
20    given to the customer by the bank.
21        (2)  Other  definitions  applying to this Article and the
22    Sections in which they appear are:
23        "Account". Section 9-106.
24        "Attach". Section 9-203.
25        "Commodity contract". Section 9-115.
26        "Commodity customer". Section 9-115.
27        "Commodity intermediary". Section 9-115.
28        "Construction mortgage". Section 9-313 (1).
29        "Consumer goods". Section 9-109 (1).
30        "Control". Section 9-115.
31        "Equipment". Section 9-109 (2).
32        "Farm products". Section 9-109 (3).
33        "Fixture". Section 9-313 (1).
34        "Fixture filing". Section 9-313 (1).
SB1528 Engrossed            -85-               LRB9009866JSmg
 1        "General intangibles". Section 9-106.
 2        "Inventory". Section 9-109 (4).
 3        "Investment property". Section 9-115.
 4        "Lien creditor". Section 9-301 (3).
 5        "Proceeds". Section 9-306 (1).
 6        "Purchase money security interest". Section 9-107.
 7        "United States". Section 9-103.
 8        (3)  The following definitions in other Articles apply to
 9    this Article:
10        "Bank".  Section 4-105.
11        "Broker".  Section 8-102.
12        "Certificated security".  Section 8-102.
13        "Check". Section 3-104.
14        "Clearing corporation". Section 8-102.
15        "Contract for sale". Section 2-106.
16        "Control". Section 8-106.
17        "Delivery". Section 8-301.
18        "Entitlement holder". Section 8-102.
19        "Financial asset". Section 8-102.
20        "Holder in due course". Section 3-302.
21        "Letter of credit". Section 5-102.
22        "Note". Section 3-104.
23        "Proceeds of a letter of credit". Section 5-114(a).
24        "Sale". Section 2-106.
25        "Securities intermediary". Section 8-102.
26        "Security". Section 8-102.
27        "Security certificate". Section 8-102.
28        "Security entitlement". Section 8-102.
29        "Uncertificated security". Section 8-102.
30        (4)  In addition Article 1 contains  general  definitions
31    and  principles of construction and interpretation applicable
32    throughout this Article.
33    (Source: P.A. 89-364, eff. 1-1-96; 89-534, eff. 1-1-97.)
SB1528 Engrossed            -86-               LRB9009866JSmg
 1        (810 ILCS 5/9-106) (from Ch. 26, par. 9-106)
 2        Sec.     9-106.  Definitions:     "account";     "general
 3    intangibles". "Account" means any right to payment for  goods
 4    sold  or  leased  or  for  services  rendered  which  is  not
 5    evidenced  by  an instrument or chattel paper, whether or not
 6    it has been  earned  by  performance.  "General  intangibles"
 7    means  any  personal  property  (including  things in action)
 8    other  than  goods,  accounts,  chattel   paper,   documents,
 9    instruments,  investment  property,  rights  to  proceeds  of
10    written  letters  of credit, deposit accounts, uncertificated
11    certificates of deposit, and money.  All  rights  to  payment
12    earned   or  unearned  under  a  charter  or  other  contract
13    involving the use or hire of a vessel and all rights incident
14    to the charter or contract are accounts.
15    (Source: P.A. 89-364, eff. 1-1-96; 89-534, eff. 1-1-97.)
16        (810 ILCS 5/9-302) (from Ch. 26, par. 9-302)
17        Sec. 9-302. When filing is required to  perfect  security
18    interest;  security  interests  to which filing provisions of
19    this Article do not apply.
20        (1) A financing statement must be filed  to  perfect  all
21    security interests except the following:
22             (a)  a security interest in collateral in possession
23        of the secured party under Section 9-305;
24             (b)  a  security  interest  temporarily perfected in
25        instruments,  certificated   securities,   or   documents
26        without delivery under Section 9-304 or in proceeds for a
27        20 day period under Section 9-306;
28             (c)  a security interest created by an assignment of
29        a beneficial interest in a trust or a decedent's estate;
30             (d)  a  purchase money security interest in consumer
31        goods;  but  filing  is  required  for  a  motor  vehicle
32        required to be registered; and fixture filing is required
33        for priority over conflicting interests  in  fixtures  to
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 1        the extent provided in Section 9-313;
 2             (e)  an  assignment of accounts which does not alone
 3        or in conjunction with  other  assignments  to  the  same
 4        assignee  transfer  a significant part of the outstanding
 5        accounts of the assignor;
 6             (f)  a  security  interest  of  a  collecting   bank
 7        (Section  4-208)  or  arising  under the Article on Sales
 8        (see Section 9-113) or covered in subsection (3) of  this
 9        Section;
10             (g)  an  assignment for the benefit of all creditors
11        of  the  transferor,  and  subsequent  transfers  by  the
12        assignee thereunder;
13             (h)  a  security  interest  in  investment  property
14        which is perfected without filing under Section 9-115  or
15        Section 9-116;
16             (i)  a security interest in a deposit account.  Such
17        a security interest is perfected:
18                  (i)  as  to  a  deposit account maintained with
19             the secured party, when the  security  agreement  is
20             executed;
21                  (ii)  as  to  a deposit account maintained with
22             any organization other than the secured party,  when
23             notice   thereof   is   given   in  writing  to  the
24             organization  with  whom  the  deposit  account   is
25             maintained  and  that  organization provides written
26             acknowledgement of and consent to the notice of  the
27             secured party.
28             (j)  a   security   interest  in  an  uncertificated
29        certificate of deposit.   Such  a  security  interest  is
30        perfected;
31                  (i)  as  to  an  uncertificated  certificate of
32             deposit  issued  by  the  secured  party,  when  the
33             security agreement is executed;
34                  (ii)  as to an  uncertificated  certificate  of
SB1528 Engrossed            -88-               LRB9009866JSmg
 1             deposit  issued  by  any organization other than the
 2             secured party,  when  notice  thereof  is  given  in
 3             writing   to   the   issuer  of  the  uncertificated
 4             certificate  of  deposit  and  the  issuer  provides
 5             written acknowledgement of and consent to the notice
 6             of the secured party.
 7        (2)  If a secured  party  assigns  a  perfected  security
 8    interest,  no  filing under this Article is required in order
 9    to continue the perfected status  of  the  security  interest
10    against  creditors  of  and  transferees  from  the  original
11    debtor.
12        (3)  The   filing  of  a  financing  statement  otherwise
13    required by this Article is not  necessary  or  effective  to
14    perfect a security interest in property subject to
15             (a)  a  statute or treaty of the United States which
16        provides for a national or international registration  or
17        a national or international certificate of title or which
18        specifies a place of filing different from that specified
19        in this Article for filing of the security interest; or
20             (b)  the  following  statutes  of  this  State:  the
21        Illinois  Vehicle  Code; the Boat Registration and Safety
22        Act;  but  during  any  period  in  which  collateral  is
23        inventory held for  sale  by  a  person  who  is  in  the
24        business  of  selling  goods  of  that  kind,  the filing
25        provisions of this Article (Part 4) apply to  a  security
26        interest in that collateral created by him as debtor; or
27             (c)  a  certificate  of  title  statute  of  another
28        jurisdiction  under  the  law  of  which  indication of a
29        security interest on the certificate  is  required  as  a
30        condition   of  perfection  (subsection  (2)  of  Section
31        9-103).
32        (4)  Compliance with a statute  or  treaty  described  in
33    subsection  (3)  is  equivalent  to the filing of a financing
34    statement under this Article,  and  a  security  interest  in
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 1    property  subject  to  the statute or treaty can be perfected
 2    only by compliance therewith except as  provided  in  Section
 3    9-103 on multiple state transactions. Duration and renewal of
 4    perfection  of  a  security  interest perfected by compliance
 5    with the statute or treaty are governed by the provisions  of
 6    the  statute  or  treaty;  in  other  respects  the  security
 7    interest is subject to this Article.
 8    (Source: P.A. 89-364, eff. 1-1-96.)
 9        Section  65.   The  Illinois  Fairness  in Lending Act is
10    amended by changing Section 6 as follows:
11        (815 ILCS 120/6) (from Ch. 17, par. 856)
12        Sec. 6. Where  a  financial  institution,  other  than  a
13    credit  union,  as  defined  in  Section  1.1 of the Illinois
14    Credit Union Act, as now or hereafter amended, repossesses  a
15    motor  vehicle  that  was  used as a collateral and  which is
16    used  primarily  for  the  borrower's  personal,  family   or
17    household   purposes,  the  financial  institution  shall  be
18    subject  to  the  requirements  of  and  shall  transfer  the
19    certificate  of  title  pursuant  to  Section  3-114  of  the
20    Illinois Vehicle  Code  and  the  borrower  at  the  time  of
21    repossession  has  paid an amount equal to 30% or more of the
22    total of payments due, the  borrower  may,  within  15  days,
23    redeem  the  motor  vehicle from the financial institution by
24    tendering:
25        (a)  the total  of  all  unpaid  amounts,  including  any
26    unpaid   delinquency   or   deferral   charges   due  without
27    acceleration, and
28        (b)  performance necessary to cure any default other than
29    nonpayment of the amounts due; and
30        (c)  any  reasonable  cost  or  fees  incurred   by   the
31    financial institution in the retaking of the goods.
32    Tender  of  payment  and performance pursuant to this Section
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 1    restores to the borrower his rights under the loan as  though
 2    no  default  had occurred. The borrower has a right to redeem
 3    the collateral from the financial institution only once under
 4    this Section. The financial institution may, in the financial
 5    institution's sole discretion, extend the period during which
 6    the borrower may redeem the collateral  beyond  the  15  days
 7    allowed  under  this  Section,  and  the  extension shall not
 8    subject  the  financial  institution  to  liability  to   the
 9    borrower under the laws of this State.
10        The financial institution must give written notice to the
11    borrower,   within   3  days  of  the  repossession,  of  the
12    borrower's right to redeem the collateral  pursuant  to  this
13    Section.  The  written  notice  shall be in substantially the
14    following form:
15                 NOTICE OF RIGHT TO RECOVER VEHICLE
16        Your  vehicle  was  repossessed  on  (specify  date)  for
17    failure to make payments on the loan (or other reason).
18        Under Illinois law, because you have paid at least 30% of
19    the loan before repossession, you may  be  able  to  get  the
20    vehicle  back.  You  have the right to recover the vehicle if
21    you  do  the  following  within  15  days  of  the  date   of
22    repossession:
23        1.   Make  payment of all back payments so
24             that you are current on the loan.       $...........
25        2.   Pay any late charge due.                $...........
26        3.   Pay the costs of repossession.          $...........
27             Total Amount Now Due                    $...........
28        Bring cash, a certified check  or  money  order  for  the
29    total  amount  now  due  that  is  listed above to our office
30    located at (specify address) by (specify date)  to  get  your
31    vehicle back.
32    (Source: P.A. 90-343, eff. 8-8-97.)
33        Section  70.   The Motor Vehicle Retail Installment Sales
SB1528 Engrossed            -91-               LRB9009866JSmg
 1    Act is amended by changing Section 20 as follows:
 2        (815 ILCS 375/20) (from Ch. 121 1/2, par. 580)
 3        Sec. 20.  Unless  otherwise  limited  by  this  Act,  the
 4    parties  shall  have  the  rights  and  remedies  provided in
 5    Article 9 of the Uniform  Commercial  Code  with  respect  to
 6    default   and,   disposition,   and  recovery  redemption  of
 7    collateral. If the holder of a  retail  installment  contract
 8    repossesses  a motor vehicle that was used as collateral, the
 9    holder shall be subject to  the  requirements  of  and  shall
10    transfer  the  certificate of title pursuant to Section 3-114
11    of the Illinois Vehicle Code.
12        If the buyer has paid an amount equal to 60% or  more  of
13    the  deferred  payment price at the time of his default under
14    the contract and if the buyer, at the request of  the  holder
15    and  without  legal  proceedings, surrenders the goods to the
16    holder in ordinary condition and free from malicious  damage,
17    the  holder  must, within a period of 5 days from the date of
18    receipt of the goods at his place of business,  elect  either
19    (a)  to  retain  the goods and release the buyer from further
20    obligation under the contract, or (b) to return the goods  to
21    the buyer at the holder's expense and be limited to an action
22    to recover the balance of the indebtedness.
23        If  the  buyer has paid an amount equal to 30% or more of
24    the deferred payment price at the time of  repossession,  the
25    buyer  shall  have  the  right  to reinstate the contract and
26    recover the collateral from the holder within  15  days  from
27    the  date  of repossession by tendering (a)  the total of all
28    unpaid amounts, including any unpaid delinquency or  deferral
29    charges  due at the time of tender, without acceleration, and
30    (b) performance necessary to  cure  any  default  other  than
31    nonpayment of the amounts due; and (c) any reasonable cost or
32    fees  incurred  by  the  holder in the retaking of the goods.
33    Tender of payment and performance pursuant  to  this  Section
SB1528 Engrossed            -92-               LRB9009866JSmg
 1    restores to the buyer his rights under the contract as though
 2    no  default had occurred.  The buyer has a right to reinstate
 3    the contract and recover the collateral from the holder  only
 4    once under this Section. The holder may, in the holder's sole
 5    discretion,  extend  the  period  during  which the buyer may
 6    reinstate the contract  and  recover  redeem  the  collateral
 7    beyond  the  15  days  allowed  under  this  Section, and the
 8    extension shall not subject the holder to  liability  to  the
 9    buyer under the laws of this State.
10        The  holder must give written notice to the buyer, within
11    3 days of the repossession, of the buyer's right to reinstate
12    the contract and recover  the  collateral  pursuant  to  this
13    Section.   The  written  notice shall be in substantially the
14    following form:
15                 NOTICE OF RIGHT TO RECOVER VEHICLE
16        Your  vehicle  was  repossessed  on  (specify  date)  for
17    failure to make payments on the contract (or other reason).
18        Under Illinois law, because you have paid at least 30% of
19    the deferred payment price before repossession,  you  may  be
20    able  to get the vehicle back.  You have the right to recover
21    the vehicle if you do the following within  15  days  of  the
22    date of repossession:
23        1.  Make payment of all back payments due as
24             of the date of this notice.                        $
25        2.  Pay any late charges due.                           $
26        3.  Pay the costs of repossession.                      $
27               TOTAL  AMOUNT  DUE  as of the date of
28                  this notice:                                  $
29        4.  Plus pay any  additional  amounts  which
30             may become due between the date of this
31             the    notice    and    the   date   of
32             reinstatement.                                     $
33             AMOUNT NOW DUE
34        Bring cash, a certified check or a money  order  for  the
SB1528 Engrossed            -93-               LRB9009866JSmg
 1    total  amount  now  due  that  is plus any additional amounts
 2    which may become due between the date of this notice and  the
 3    date  of  the reinstatement to our office located at (specify
 4    address) by (specify date) to get your vehicle back.
 5    (Source: P.A.  90-343,  eff.  8-8-97;  90-437,  eff.  1-1-98;
 6    revised 2-7-98.)
 7        Section  99.  Effective date.  This Act takes effect upon
 8    becoming law, except that Sections 35, 45,  50,  65,  and  70
 9    take effect January 1, 1999.

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