SB 1778 — BANKING-REGULATION

The Savings and Residential Finance Regulatory Fund.

(Source:

P.A.

85-1209;

86-1213.) (30 ILCS 105/8.12) (from Ch.

127, par.

144.12) Sec.

8.12.

State Pensions Fund.

(a) The moneys in the State Pensions Fund shall be used exclusively for the administration of the Uniform Disposition of Unclaimed Property Act and for the expenses incurred by the SB1778 Engrossed - 6 - LRB098 09391 MGM 39532 b Auditor General for administering the provisions of Section 2-8.1 of the Illinois State Auditing Act and for the funding of the unfunded liabilities of the designated retirement systems.

Beginning in State fiscal year 2014, payments to the designated retirement systems under this Section shall be in addition to, and not in lieu of, any State contributions required under the Illinois Pension Code.

"Designated retirement systems" means:

(1) the State Employees' Retirement System of Illinois;

(2) the Teachers' Retirement System of the State of Illinois;

(3) the State Universities Retirement System;

(4) the Judges Retirement System of Illinois;

and (5) the General Assembly Retirement System.

(b) Each year the General Assembly may make appropriations from the State Pensions Fund for the administration of the Uniform Disposition of Unclaimed Property Act.

Each month, the Commissioner of the Office of Banks and Real Estate shall certify to the State Treasurer the actual expenditures that the Office of Banks and Real Estate incurred conducting unclaimed property examinations under the Uniform Disposition of Unclaimed Property Act during the immediately preceding month.

Within a reasonable time following the acceptance of such certification by the State Treasurer, the State Treasurer shall pay from its appropriation from the State SB1778 Engrossed - 7 - LRB098 09391 MGM 39532 b Pensions Fund to the Bank and Trust Company Fund, the Savings Institutions Regulatory Fund, and the Savings and Residential Finance Regulatory Fund an amount equal to the expenditures incurred by each Fund for that month.

Each month, the Director of Financial Institutions shall certify to the State Treasurer the actual expenditures that the Department of Financial Institutions incurred conducting unclaimed property examinations under the Uniform Disposition of Unclaimed Property Act during the immediately preceding month.

Within a reasonable time following the acceptance of such certification by the State Treasurer, the State Treasurer shall pay from its appropriation from the State Pensions Fund to the Financial Institution Institutions Fund and the Credit Union Fund an amount equal to the expenditures incurred by each Fund for that month.

(c) As soon as possible after the effective date of this amendatory Act of the 93rd General Assembly, the General Assembly shall appropriate from the State Pensions Fund (1) to the State Universities Retirement System the amount certified under Section 15-165 during the prior year, (2) to the Judges Retirement System of Illinois the amount certified under Section 18-140 during the prior year, and (3) to the General Assembly Retirement System the amount certified under Section 2-134 during the prior year as part of the required State contributions to each of those designated retirement systems;

except that amounts appropriated under this subsection (c) in SB1778 Engrossed - 8 - LRB098 09391 MGM 39532 b State fiscal year 2005 shall not reduce the amount in the State Pensions Fund below $5,000,000.

If the amount in the State Pensions Fund does not exceed the sum of the amounts certified in Sections 15-165, 18-140, and 2-134 by at least $5,000,000, the amount paid to each designated retirement system under this subsection shall be reduced in proportion to the amount certified by each of those designated retirement systems.

(c-5) For fiscal years 2006 through 2013, the General Assembly shall appropriate from the State Pensions Fund to the State Universities Retirement System the amount estimated to be available during the fiscal year in the State Pensions Fund;

provided, however, that the amounts appropriated under this subsection (c-5) shall not reduce the amount in the State Pensions Fund below $5,000,000.

(c-6) For fiscal year 2014 and each fiscal year thereafter, as soon as may be practical after any money is deposited into the State Pensions Fund from the Unclaimed Property Trust Fund, the State Treasurer shall apportion the deposited amount among the designated retirement systems as defined in subsection (a) to reduce their actuarial reserve deficiencies.

The State Comptroller and State Treasurer shall pay the apportioned amounts to the designated retirement systems to fund the unfunded liabilities of the designated retirement systems.

The amount apportioned to each designated retirement system shall constitute a portion of the amount estimated to be available for appropriation from the State Pensions Fund that is the same SB1778 Engrossed - 9 - LRB098 09391 MGM 39532 b as that retirement system's portion of the total actual reserve deficiency of the systems, as determined annually by the Governor's Office of Management and Budget at the request of the State Treasurer.

The amounts apportioned under this subsection shall not reduce the amount in the State Pensions Fund below $5,000,000.

(d) The Governor's Office of Management and Budget shall determine the individual and total reserve deficiencies of the designated retirement systems.

For this purpose, the Governor's Office of Management and Budget shall utilize the latest available audit and actuarial reports of each of the retirement systems and the relevant reports and statistics of the Public Employee Pension Fund Division of the Department of Insurance.

(d-1) As soon as practicable after the effective date of this amendatory Act of the 93rd General Assembly, the Comptroller shall direct and the Treasurer shall transfer from the State Pensions Fund to the General Revenue Fund, as funds become available, a sum equal to the amounts that would have been paid from the State Pensions Fund to the Teachers' Retirement System of the State of Illinois, the State Universities Retirement System, the Judges Retirement System of Illinois, the General Assembly Retirement System, and the State Employees' Retirement System of Illinois after the effective date of this amendatory Act during the remainder of fiscal year 2004 to the designated retirement systems from the SB1778 Engrossed - 10 - LRB098 09391 MGM 39532 b appropriations provided for in this Section if the transfers provided in Section 6z-61 had not occurred.

The transfers described in this subsection (d-1) are to partially repay the General Revenue Fund for the costs associated with the bonds used to fund the moneys transferred to the designated retirement systems under Section 6z-61.

(e) The changes to this Section made by this amendatory Act of 1994 shall first apply to distributions from the Fund for State fiscal year 1996.

(Source:

P.A.

96-959, eff.

7-1-10;

97-72, eff.

7-1-11;

97-732, eff.

6-30-12;

revised 10-17-12.) Section 5.

The Illinois Banking Act is amended by changing Sections 48, 48.05 and 48.3 as follows:

(205 ILCS 5/48) Sec.

48.

Secretary's powers;

duties.

The Secretary shall have the powers and authority, and is charged with the duties and responsibilities designated in this Act, and a State bank shall not be subject to any other visitorial power other than as authorized by this Act, except those vested in the courts, or upon prior consultation with the Secretary, a foreign bank regulator with an appropriate supervisory interest in the parent or affiliate of a state bank.

In the performance of the Secretary's duties:

(1) The Commissioner shall call for statements from all SB1778 Engrossed - 11 - LRB098 09391 MGM 39532 b State banks as provided in Section 47 at least one time during each calendar quarter.

(2) (a) The Commissioner, as often as the Commissioner shall deem necessary or proper, and no less frequently than 18 months following the preceding examination, shall appoint a suitable person or persons to make an examination of the affairs of every State bank, except that for every eligible State bank, as defined by regulation, the Commissioner in lieu of the examination may accept on an alternating basis the examination made by the eligible State bank's appropriate federal banking agency pursuant to Section 111 of the Federal Deposit Insurance Corporation Improvement Act of 1991, provided the appropriate federal banking agency has made such an examination.

A person so appointed shall not be a stockholder or officer or employee of any bank which that person may be directed to examine, and shall have powers to make a thorough examination into all the affairs of the bank and in so doing to examine any of the officers or agents or employees thereof on oath and shall make a full and detailed report of the condition of the bank to the Commissioner.

In making the examination the examiners shall include an examination of the affairs of all the affiliates of the bank, as defined in subsection (b) of Section 35.2 of this Act, or subsidiaries of the bank as shall be necessary to disclose fully the conditions of the subsidiaries or affiliates, the relations between the bank and the subsidiaries or affiliates SB1778 Engrossed - 12 - LRB098 09391 MGM 39532 b and the effect of those relations upon the affairs of the bank, and in connection therewith shall have power to examine any of the officers, directors, agents, or employees of the subsidiaries or affiliates on oath.

After May 31, 1997, the Commissioner may enter into cooperative agreements with state regulatory authorities of other states to provide for examination of State bank branches in those states, and the Commissioner may accept reports of examinations of State bank branches from those state regulatory authorities.

These cooperative agreements may set forth the manner in which the other state regulatory authorities may be compensated for examinations prepared for and submitted to the Commissioner.

(b) After May 31, 1997, the Commissioner is authorized to examine, as often as the Commissioner shall deem necessary or proper, branches of out-of-state banks.

The Commissioner may establish and may assess fees to be paid to the Commissioner for examinations under this subsection (b).

The fees shall be borne by the out-of-state bank, unless the fees are borne by the state regulatory authority that chartered the out-of-state bank, as determined by a cooperative agreement between the Commissioner and the state regulatory authority that chartered the out-of-state bank.

(2.5) Whenever any State bank, any subsidiary or affiliate of a State bank, or after May 31, 1997, any branch of an out-of-state bank causes to be performed, by contract or otherwise, any bank services for itself, whether on or off its SB1778 Engrossed - 13 - LRB098 09391 MGM 39532 b premises:

(a) that performance shall be subject to examination by the Commissioner to the same extent as if services were being performed by the bank or, after May 31, 1997, branch of the out-of-state bank itself on its own premises;

and (b) the bank or, after May 31, 1997, branch of the out-of-state bank shall notify the Commissioner of the existence of a service relationship.

The notification shall be submitted with the first statement of condition (as required by Section 47 of this Act) due after the making of the service contract or the performance of the service, whichever occurs first.

The Commissioner shall be notified of each subsequent contract in the same manner.

For purposes of this subsection (2.5), the term "bank services" means services such as sorting and posting of checks and deposits, computation and posting of interest and other credits and charges, preparation and mailing of checks, statements, notices, and similar items, or any other clerical, bookkeeping, accounting, statistical, or similar functions performed for a State bank, including but not limited to electronic data processing related to those bank services.

(3) The expense of administering this Act, including the expense of the examinations of State banks as provided in this Act, shall to the extent of the amounts resulting from the fees provided for in paragraphs (a), (a-2), and (b) of this subsection (3) be assessed against and borne by the State SB1778 Engrossed - 14 - LRB098 09391 MGM 39532 b banks:

(a) Each bank shall pay to the Secretary a Call Report Fee which shall be paid in quarterly installments equal to one-fourth of the sum of the annual fixed fee of $800, plus a variable fee based on the assets shown on the quarterly statement of condition delivered to the Secretary in accordance with Section 47 for the preceding quarter according to the following schedule:

16¢ per $1,000 of the first $5,000,000 of total assets, 15¢ per $1,000 of the next $20,000,000 of total assets, 13¢ per $1,000 of the next $75,000,000 of total assets, 9¢ per $1,000 of the next $400,000,000 of total assets, 7¢ per $1,000 of the next $500,000,000 of total assets, and 5¢ per $1,000 of all assets in excess of $1,000,000,000, of the State bank.

The Call Report Fee shall be calculated by the Secretary and billed to the banks for remittance at the time of the quarterly statements of condition provided for in Section 47.

The Secretary may require payment of the fees provided in this Section by an electronic transfer of funds or an automatic debit of an account of each of the State banks.

In case more than one examination of any bank is deemed by the Secretary to be necessary in any examination frequency cycle specified in subsection 2(a) of this Section, and is performed at his direction, the Secretary may assess a reasonable additional fee to recover the cost of the additional examination;

provided, however, that an SB1778 Engrossed - 15 - LRB098 09391 MGM 39532 b examination conducted at the request of the State Treasurer pursuant to the Uniform Disposition of Unclaimed Property Act shall not be deemed to be an additional examination under this Section.

In lieu of the method and amounts set forth in this paragraph (a) for the calculation of the Call Report Fee, the Secretary may specify by rule that the Call Report Fees provided by this Section may be assessed semiannually or some other period and may provide in the rule the formula to be used for calculating and assessing the periodic Call Report Fees to be paid by State banks.

(a-1) If in the opinion of the Commissioner an emergency exists or appears likely, the Commissioner may assign an examiner or examiners to monitor the affairs of a State bank with whatever frequency he deems appropriate, including but not limited to a daily basis.

The reasonable and necessary expenses of the Commissioner during the period of the monitoring shall be borne by the subject bank.

The Commissioner shall furnish the State bank a statement of time and expenses if requested to do so within 30 days of the conclusion of the monitoring period.

(a-2) On and after January 1, 1990, the reasonable and necessary expenses of the Commissioner during examination of the performance of electronic data processing services under subsection (2.5) shall be borne by the banks for which the services are provided.

An amount, based upon a fee structure prescribed by the Commissioner, shall be paid SB1778 Engrossed - 16 - LRB098 09391 MGM 39532 b by the banks or, after May 31, 1997, branches of out-of-state banks receiving the electronic data processing services along with the Call Report Fee assessed under paragraph (a) of this subsection (3).

(a-3) After May 31, 1997, the reasonable and necessary expenses of the Commissioner during examination of the performance of electronic data processing services under subsection (2.5) at or on behalf of branches of out-of-state banks shall be borne by the out-of-state banks, unless those expenses are borne by the state regulatory authorities that chartered the out-of-state banks, as determined by cooperative agreements between the Commissioner and the state regulatory authorities that chartered the out-of-state banks.

(b) "Fiscal year" for purposes of this Section 48 is defined as a period beginning July 1 of any year and ending June 30 of the next year.

The Commissioner shall receive for each fiscal year, commencing with the fiscal year ending June 30, 1987, a contingent fee equal to the lesser of the aggregate of the fees paid by all State banks under paragraph (a) of subsection (3) for that year, or the amount, if any, whereby the aggregate of the administration expenses, as defined in paragraph (c), for that fiscal year exceeds the sum of the aggregate of the fees payable by all State banks for that year under paragraph (a) of subsection (3), plus any amounts transferred into the Bank and Trust SB1778 Engrossed - 17 - LRB098 09391 MGM 39532 b Company Fund from the State Pensions Fund for that year, plus all other amounts collected by the Commissioner for that year under any other provision of this Act, plus the aggregate of all fees collected for that year by the Commissioner under the Corporate Fiduciary Act, excluding the receivership fees provided for in Section 5-10 of the Corporate Fiduciary Act, and the Foreign Banking Office Act.

The aggregate amount of the contingent fee thus arrived at for any fiscal year shall be apportioned amongst, assessed upon, and paid by the State banks and foreign banking corporations, respectively, in the same proportion that the fee of each under paragraph (a) of subsection (3), respectively, for that year bears to the aggregate for that year of the fees collected under paragraph (a) of subsection (3).

The aggregate amount of the contingent fee, and the portion thereof to be assessed upon each State bank and foreign banking corporation, respectively, shall be determined by the Commissioner and shall be paid by each, respectively, within 120 days of the close of the period for which the contingent fee is computed and is payable, and the Commissioner shall give 20 days advance notice of the amount of the contingent fee payable by the State bank and of the date fixed by the Commissioner for payment of the fee.

(c) The "administration expenses" for any fiscal year shall mean the ordinary and contingent expenses for that SB1778 Engrossed - 18 - LRB098 09391 MGM 39532 b year incident to making the examinations provided for by, and for otherwise administering, this Act, the Corporate Fiduciary Act, excluding the expenses paid from the Corporate Fiduciary Receivership account in the Bank and Trust Company Fund, the Foreign Banking Office Act, the Electronic Fund Transfer Act, and the Illinois Bank Examiners' Education Foundation Act, including all salaries and other compensation paid for personal services rendered for the State by officers or employees of the State, including the Commissioner and the Deputy Commissioners, communication equipment and services, office furnishings, surety bond premiums, and travel expenses of those officers and employees, employees, expenditures or charges for the acquisition, enlargement or improvement of, or for the use of, any office space, building, or structure, or expenditures for the maintenance thereof or for furnishing heat, light, or power with respect thereto, all to the extent that those expenditures are directly incidental to such examinations or administration.

The Commissioner shall not be required by paragraphs (c) or (d-1) of this subsection (3) to maintain in any fiscal year's budget appropriated reserves for accrued vacation and accrued sick leave that is required to be paid to employees of the Commissioner upon termination of their service with the Commissioner in an amount that is more than is reasonably anticipated to be SB1778 Engrossed - 19 - LRB098 09391 MGM 39532 b necessary for any anticipated turnover in employees, whether due to normal attrition or due to layoffs, terminations, or resignations.

(d) The aggregate of all fees collected by the Secretary under this Act, the Corporate Fiduciary Act, or the Foreign Banking Office Act on and after July 1, 1979, shall be paid promptly after receipt of the same, accompanied by a detailed statement thereof, into the State treasury and shall be set apart in a special fund to be known as the "Bank and Trust Company Fund", except as provided in paragraph (c) of subsection (11) of this Section.

All earnings received from investments of funds in the Bank and Trust Company Fund shall be deposited in the Bank and Trust Company Fund and may be used for the same purposes as fees deposited in that Fund.

The amount from time to time deposited into the Bank and Trust Company Fund shall be used:

(i) to offset the ordinary administrative expenses of the Secretary as defined in this Section or (ii) as a credit against fees under paragraph (d-1) of this subsection (3).

Nothing in this amendatory Act of 1979 shall prevent continuing the practice of paying expenses involving salaries, retirement, social security, and State-paid insurance premiums of State officers by appropriations from the General Revenue Fund.

However, the General Revenue Fund shall be reimbursed for those payments made on and after July 1, 1979, by an annual transfer of SB1778 Engrossed - 20 - LRB098 09391 MGM 39532 b funds from the Bank and Trust Company Fund.

Moneys in the Bank and Trust Company Fund may be transferred to the Professions Indirect Cost Fund, as authorized under Section 2105-300 of the Department of Professional Regulation Law of the Civil Administrative Code of Illinois.

Notwithstanding provisions in the State Finance Act, as now or hereafter amended, or any other law to the contrary, the sum of $18,788,847 shall be transferred from the Bank and Trust Company Fund to the Financial Institutions Settlement of 2008 Fund on the effective date of this amendatory Act of the 95th General Assembly, or as soon thereafter as practical.

Notwithstanding provisions in the State Finance Act, as now or hereafter amended, or any other law to the contrary, the Governor may, during any fiscal year through January 10, 2011, from time to time direct the State Treasurer and Comptroller to transfer a specified sum not exceeding 10% of the revenues to be deposited into the Bank and Trust Company Fund during that fiscal year from that Fund to the General Revenue Fund in order to help defray the State's operating costs for the fiscal year.

Notwithstanding provisions in the State Finance Act, as now or hereafter amended, or any other law to the contrary, the total sum transferred during any fiscal year through January 10, 2011, from the Bank and Trust Company Fund to SB1778 Engrossed - 21 - LRB098 09391 MGM 39532 b the General Revenue Fund pursuant to this provision shall not exceed during any fiscal year 10% of the revenues to be deposited into the Bank and Trust Company Fund during that fiscal year.

The State Treasurer and Comptroller shall transfer the amounts designated under this Section as soon as may be practicable after receiving the direction to transfer from the Governor.

(d-1) Adequate funds shall be available in the Bank and Trust Company Fund to permit the timely payment of administration expenses.

In each fiscal year the total administration expenses shall be deducted from the total fees collected by the Commissioner and the remainder transferred into the Cash Flow Reserve Account, unless the balance of the Cash Flow Reserve Account prior to the transfer equals or exceeds one-fourth of the total initial appropriations from the Bank and Trust Company Fund for the subsequent year, in which case the remainder shall be credited to State banks and foreign banking corporations and applied against their fees for the subsequent year.

The amount credited to each State bank and foreign banking corporation shall be in the same proportion as the Call Report Fees paid by each for the year bear to the total Call Report Fees collected for the year.

If, after a transfer to the Cash Flow Reserve Account is made or if no remainder is available for transfer, the balance of the Cash Flow Reserve Account is less than one-fourth of the SB1778 Engrossed - 22 - LRB098 09391 MGM 39532 b total initial appropriations for the subsequent year and the amount transferred is less than 5% of the total Call Report Fees for the year, additional amounts needed to make the transfer equal to 5% of the total Call Report Fees for the year shall be apportioned amongst, assessed upon, and paid by the State banks and foreign banking corporations in the same proportion that the Call Report Fees of each, respectively, for the year bear to the total Call Report Fees collected for the year.

The additional amounts assessed shall be transferred into the Cash Flow Reserve Account.

For purposes of this paragraph (d-1), the calculation of the fees collected by the Commissioner shall exclude the receivership fees provided for in Section 5-10 of the Corporate Fiduciary Act.

(e) The Commissioner may upon request certify to any public record in his keeping and shall have authority to levy a reasonable charge for issuing certifications of any public record in his keeping.

(f) In addition to fees authorized elsewhere in this Act, the Commissioner may, in connection with a review, approval, or provision of a service, levy a reasonable charge to recover the cost of the review, approval, or service.

(4) Nothing contained in this Act shall be construed to limit the obligation relative to examinations and reports of any State bank, deposits in which are to any extent insured by SB1778 Engrossed - 23 - LRB098 09391 MGM 39532 b the United States or any agency thereof, nor to limit in any way the powers of the Commissioner with reference to examinations and reports of that bank.

(5) The nature and condition of the assets in or investment of any bonus, pension, or profit sharing plan for officers or employees of every State bank or, after May 31, 1997, branch of an out-of-state bank shall be deemed to be included in the affairs of that State bank or branch of an out-of-state bank subject to examination by the Commissioner under the provisions of subsection (2) of this Section, and if the Commissioner shall find from an examination that the condition of or operation of the investments or assets of the plan is unlawful, fraudulent, or unsafe, or that any trustee has abused his trust, the Commissioner shall, if the situation so found by the Commissioner shall not be corrected to his satisfaction within 60 days after the Commissioner has given notice to the board of directors of the State bank or out-of-state bank of his findings, report the facts to the Attorney General who shall thereupon institute proceedings against the State bank or out-of-state bank, the board of directors thereof, or the trustees under such plan as the nature of the case may require.

(6) The Commissioner shall have the power:

(a) To promulgate reasonable rules for the purpose of administering the provisions of this Act.

(a-5) To impose conditions on any approval issued by the Commissioner if he determines that the conditions are SB1778 Engrossed - 24 - LRB098 09391 MGM 39532 b necessary or appropriate.

These conditions shall be imposed in writing and shall continue in effect for the period prescribed by the Commissioner.

(b) To issue orders against any person, if the Commissioner has reasonable cause to believe that an unsafe or unsound banking practice has occurred, is occurring, or is about to occur, if any person has violated, is violating, or is about to violate any law, rule, or written agreement with the Commissioner, or for the purpose of administering the provisions of this Act and any rule promulgated in accordance with this Act.

(b-1) To enter into agreements with a bank establishing a program to correct the condition of the bank or its practices.

(c) To appoint hearing officers to execute any of the powers granted to the Commissioner under this Section for the purpose of administering this Act and any rule promulgated in accordance with this Act and otherwise to authorize, in writing, an officer or employee of the Office of Banks and Real Estate to exercise his powers under this Act.

(d) To subpoena witnesses, to compel their attendance, to administer an oath, to examine any person under oath, and to require the production of any relevant books, papers, accounts, and documents in the course of and pursuant to any investigation being conducted, or any SB1778 Engrossed - 25 - LRB098 09391 MGM 39532 b action being taken, by the Commissioner in respect of any matter relating to the duties imposed upon, or the powers vested in, the Commissioner under the provisions of this Act or any rule promulgated in accordance with this Act.

(e) To conduct hearings.

(7) Whenever, in the opinion of the Secretary, any director, officer, employee, or agent of a State bank or any subsidiary or bank holding company of the bank or, after May 31, 1997, of any branch of an out-of-state bank or any subsidiary or bank holding company of the bank shall have violated any law, rule, or order relating to that bank or any subsidiary or bank holding company of the bank, shall have obstructed or impeded any examination or investigation by the Secretary, shall have engaged in an unsafe or unsound practice in conducting the business of that bank or any subsidiary or bank holding company of the bank, or shall have violated any law or engaged or participated in any unsafe or unsound practice in connection with any financial institution or other business entity such that the character and fitness of the director, officer, employee, or agent does not assure reasonable promise of safe and sound operation of the State bank, the Secretary may issue an order of removal.

If, in the opinion of the Secretary, any former director, officer, employee, or agent of a State bank or any subsidiary or bank holding company of the bank, prior to the termination of his or her service with that bank or any subsidiary or bank holding SB1778 Engrossed - 26 - LRB098 09391 MGM 39532 b company of the bank, violated any law, rule, or order relating to that State bank or any subsidiary or bank holding company of the bank, obstructed or impeded any examination or investigation by the Secretary, engaged in an unsafe or unsound practice in conducting the business of that bank or any subsidiary or bank holding company of the bank, or violated any law or engaged or participated in any unsafe or unsound practice in connection with any financial institution or other business entity such that the character and fitness of the director, officer, employee, or agent would not have assured reasonable promise of safe and sound operation of the State bank, the Secretary may issue an order prohibiting that person from further service with a bank or any subsidiary or bank holding company of the bank as a director, officer, employee, or agent.

An order issued pursuant to this subsection shall be served upon the director, officer, employee, or agent.

A copy of the order shall be sent to each director of the bank affected by registered mail.

A copy of the order shall also be served upon the bank of which he is a director, officer, employee, or agent, whereupon he shall cease to be a director, officer, employee, or agent of that bank.

The Secretary may institute a civil action against the director, officer, or agent of the State bank or, after May 31, 1997, of the branch of the out-of-state bank against whom any order provided for by this subsection (7) of this Section 48 has been issued, and against the State bank or, after May 31, 1997, out-of-state SB1778 Engrossed - 27 - LRB098 09391 MGM 39532 b bank, to enforce compliance with or to enjoin any violation of the terms of the order.

Any person who has been the subject of an order of removal or an order of prohibition issued by the Secretary under this subsection or Section 5-6 of the Corporate Fiduciary Act may not thereafter serve as director, officer, employee, or agent of any State bank or of any branch of any out-of-state bank, or of any corporate fiduciary, as defined in Section 1-5.05 of the Corporate Fiduciary Act, or of any other entity that is subject to licensure or regulation by the Division of Banking unless the Secretary has granted prior approval in writing.

For purposes of this paragraph (7), "bank holding company" has the meaning prescribed in Section 2 of the Illinois Bank Holding Company Act of 1957.

(8) The Commissioner may impose civil penalties of up to $100,000 against any person for each violation of any provision of this Act, any rule promulgated in accordance with this Act, any order of the Commissioner, or any other action which in the Commissioner's discretion is an unsafe or unsound banking practice.

(9) The Commissioner may impose civil penalties of up to $100 against any person for the first failure to comply with reporting requirements set forth in the report of examination of the bank and up to $200 for the second and subsequent failures to comply with those reporting requirements.

(10) All final administrative decisions of the SB1778 Engrossed - 28 - LRB098 09391 MGM 39532 b Commissioner hereunder shall be subject to judicial review pursuant to the provisions of the Administrative Review Law.

For matters involving administrative review, venue shall be in either Sangamon County or Cook County.

(11) The endowment fund for the Illinois Bank Examiners' Education Foundation shall be administered as follows:

(a) (Blank).

(b) The Foundation is empowered to receive voluntary contributions, gifts, grants, bequests, and donations on behalf of the Illinois Bank Examiners' Education Foundation from national banks and other persons for the purpose of funding the endowment of the Illinois Bank Examiners' Education Foundation.

(c) The aggregate of all special educational fees collected by the Secretary and property received by the Secretary on behalf of the Illinois Bank Examiners' Education Foundation under this subsection (11) on or after June 30, 1986, shall be either (i) promptly paid after receipt of the same, accompanied by a detailed statement thereof, into the State Treasury and shall be set apart in a special fund to be known as "The Illinois Bank Examiners' Education Fund" to be invested by either the Treasurer of the State of Illinois in the Public Treasurers' Investment Pool or in any other investment he is authorized to make or by the Illinois State Board of Investment as the State Banking Board of Illinois may direct or (ii) deposited into SB1778 Engrossed - 29 - LRB098 09391 MGM 39532 b an account maintained in a commercial bank or corporate fiduciary in the name of the Illinois Bank Examiners' Education Foundation pursuant to the order and direction of the Board of Trustees of the Illinois Bank Examiners' Education Foundation.

(12) (Blank).

(13) The Secretary may borrow funds from the General Revenue Fund on behalf of the Bank and Trust Company Fund if the Director of Banking certifies to the Governor that there is an economic emergency affecting banking that requires a borrowing to provide additional funds to the Bank and Trust Company Fund.

The borrowed funds shall be paid back within 3 years and shall not exceed the total funding appropriated to the Agency in the previous year.

(14) The Secretary, when appointed as receiver, or any person appointed as receiver shall have the same powers, rights, and privileges as the Federal Deposit Insurance Corporation.

These powers, rights, and privileges shall originate at the time of the appointment and continue through the term of the receivership.

(Source:

P.A.

96-1163, eff.

1-1-11;

96-1365, eff.

7-28-10;

97-333, eff.

8-12-11.) (205 ILCS 5/48.05) Sec.

48.05.

Regulatory fees.

For the fiscal year beginning July 1, 2007 and every year thereafter, each state bank SB1778 Engrossed - 30 - LRB098 09391 MGM 39532 b regulated by the Department shall pay a regulatory fee to the Department based upon its total assets as reflected in the most recent quarterly report of condition shown by its year-end Call Report at the following rates:

19.295¢ per $1,000 of the first $5,000,000 of total assets;

18.16¢ per $1,000 of the next $20,000,000 of total assets;

15.89¢ per $1,000 of the next $75,000,000 of total assets;

10.7825¢ per $1,000 of the next $400,000,000 of total assets;

8.5125¢ per $1,000 of the next $500,000,000 of total assets;

6.2425¢ per $1,000 of the next $19,000,000,000 of total assets;

2.27¢ per $1,000 of the next $30,000,000,000 of total assets;

1.135¢ per $1,000 of the next $50,000,000,000 of total assets;

and 0.5675¢ per $1,000 of all assets in excess of $100,000,000,000 of the state bank.

(Source:

P.A.

95-1047, eff.

4-6-09.) (205 ILCS 5/48.3) (from Ch.

17, par.

360.2) Sec.

48.3.

Disclosure of reports of examinations and SB1778 Engrossed - 31 - LRB098 09391 MGM 39532 b confidential supervisory information;

limitations.

(a) Any report of examination, visitation, or investigation prepared by the Commissioner under this Act, the Electronic Fund Transfer Act, the Corporate Fiduciary Act, the Illinois Bank Holding Company Act of 1957, and the Foreign Banking Office Act, any report of examination, visitation, or investigation prepared by the state regulatory authority of another state that examines a branch of an Illinois State bank in that state, any document or record prepared or obtained in connection with or relating to any examination, visitation, or investigation, and any record prepared or obtained by the Commissioner to the extent that the record summarizes or contains information derived from any report, document, or record described in this subsection shall be deemed "confidential supervisory information".

Confidential supervisory information shall not include any information or record routinely prepared by a bank or other financial institution and maintained in the ordinary course of business or any information or record that is required to be made publicly available pursuant to State or federal law or rule.

Confidential supervisory information shall be the property of the Commissioner and shall only be disclosed under the circumstances and for the purposes set forth in this Section.

The Commissioner may disclose confidential supervisory information only under the following circumstances:

(1) The Commissioner may furnish confidential SB1778 Engrossed - 32 - LRB098 09391 MGM 39532 b supervisory information to the Board of Governors of the Federal Reserve System, the federal reserve bank of the federal reserve district in which the State bank is located or in which the parent or other affiliate of the State bank is located, any official or examiner thereof duly accredited for the purpose, or any other state regulator, federal regulator, or in the case of a foreign bank possessing a certificate of authority pursuant to the Foreign Banking Office Act or a license pursuant to the Foreign Bank Representative Office Act, the bank regulator in the country where the foreign bank is chartered, that the Commissioner determines to have an appropriate regulatory interest.

Nothing contained in this Act shall be construed to limit the obligation of any member State bank to comply with the requirements relative to examinations and reports of the Federal Reserve Act and of the Board of Governors of the Federal Reserve System or the federal reserve bank of the federal reserve district in which the bank is located, nor to limit in any way the powers of the Commissioner with reference to examinations and reports.

(2) The Commissioner may furnish confidential supervisory information to the United States, any agency thereof that has insured a bank's deposits in whole or in part, or any official or examiner thereof duly accredited for the purpose.

Nothing contained in this Act shall be construed to limit the obligation relative to examinations SB1778 Engrossed - 33 - LRB098 09391 MGM 39532 b and reports of any State bank, deposits in which are to any extent insured by the United States, any agency thereof, nor to limit in any way the powers of the Commissioner with reference to examination and reports of such bank.

(3) The Commissioner may furnish confidential supervisory information to the appropriate law enforcement authorities when the Commissioner reasonably believes a bank, which the Commissioner has caused to be examined, has been a victim of a crime.

(4) The Commissioner may furnish confidential supervisory information relating to a bank or other financial institution, which the Commissioner has caused to be examined, to be sent to the administrator of the Uniform Disposition of Unclaimed Property Act.

(5) The Commissioner may furnish confidential supervisory information relating to a bank or other financial institution, which the Commissioner has caused to be examined, relating to its performance of obligations under the Illinois Income Tax Act and the Illinois Estate and Generation-Skipping Transfer Tax Act to the Illinois Department of Revenue.

(6) The Commissioner may furnish confidential supervisory information relating to a bank or other financial institution, which the Commissioner has caused to be examined, under the federal Currency and Foreign Transactions Reporting Act, Title 31, United States Code, SB1778 Engrossed - 34 - LRB098 09391 MGM 39532 b Section 1051 et seq.

(6.5) The Commissioner may furnish confidential supervisory information to any other agency or entity that the Commissioner determines to have a legitimate regulatory interest.

(7) The Commissioner may furnish confidential supervisory information under any other statute that by its terms or by regulations promulgated thereunder requires the disclosure of financial records other than by subpoena, summons, warrant, or court order.

(8) At the request of the affected bank or other financial institution, the Commissioner may furnish confidential supervisory information relating to a bank or other financial institution, which the Commissioner has caused to be examined, in connection with the obtaining of insurance coverage or the pursuit of an insurance claim for or on behalf of the bank or other financial institution;

provided that, when possible, the Commissioner shall disclose only relevant information while maintaining the confidentiality of financial records not relevant to such insurance coverage or claim and, when appropriate, may delete identifying data relating to any person or individual.

(9) The Commissioner may furnish a copy of a report of any examination performed by the Commissioner of the condition and affairs of any electronic data processing SB1778 Engrossed - 35 - LRB098 09391 MGM 39532 b entity to the banks serviced by the electronic data processing entity.

(10) In addition to the foregoing circumstances, the Commissioner may, but is not required to, furnish confidential supervisory information under the same circumstances authorized for the bank or financial institution pursuant to subsection (b) of this Section, except that the Commissioner shall provide confidential supervisory information under circumstances described in paragraph (3) of subsection (b) of this Section only upon the request of the bank or other financial institution.

(b) A bank or other financial institution or its officers, agents, and employees may disclose confidential supervisory information only under the following circumstances:

(1) to the board of directors of the bank or other financial institution, as well as the president, vice-president, cashier, and other officers of the bank or other financial institution to whom the board of directors may delegate duties with respect to compliance with recommendations for action, and to the board of directors of a bank holding company that owns at least 80% of the outstanding stock of the bank or other financial institution;

(2) to attorneys for the bank or other financial institution and to a certified public accountant engaged by the State bank or financial institution to perform an SB1778 Engrossed - 36 - LRB098 09391 MGM 39532 b independent audit provided that the attorney or certified public accountant shall not permit the confidential supervisory information to be further disseminated;

(3) to any person who seeks to acquire a controlling interest in, or who seeks to merge with, the bank or financial institution, provided that all attorneys, certified public accountants, officers, agents, or employees of that person shall agree to be bound to respect the confidentiality of the confidential supervisory information and to not further disseminate the information therein contained;

(4) (blank);

or (5) to the bank's insurance company in relation to an insurance claim or the effort by the bank to procure insurance coverage, provided that, when possible, the bank shall disclose only information that is relevant to the insurance claim or that is necessary to procure the insurance coverage, while maintaining the confidentiality of financial information pertaining to customers.

When appropriate, the bank may delete identifying data relating to any person.

(6) to any person conducting a review of the bank on behalf of the bank for purposes of complying with any enforcement action taken by a bank regulatory agency so long as the bank obtains approval prior to release of the confidential supervisory information by the Secretary and SB1778 Engrossed - 37 - LRB098 09391 MGM 39532 b the person conducting the review agrees to maintain the confidentiality of the confidential supervisory information and to not further disseminate the confidential supervisory information.

The disclosure of confidential supervisory information by a bank or other financial institution pursuant to this subsection (b) and the disclosure of information to the Commissioner or other regulatory agency in connection with any examination, visitation, or investigation shall not constitute a waiver of any legal privilege otherwise available to the bank or other financial institution with respect to the information.

(c) (1) Notwithstanding any other provision of this Act or any other law, confidential supervisory information shall be the property of the Commissioner and shall be privileged from disclosure to any person except as provided in this Section.

No person in possession of confidential supervisory information may disclose that information for any reason or under any circumstances not specified in this Section without the prior authorization of the Commissioner.

Any person upon whom a demand for production of confidential supervisory information is made, whether by subpoena, order, or other judicial or administrative process, must withhold production of the confidential supervisory information and must notify the Commissioner of the demand, at which time the Commissioner is authorized to intervene for the purpose of enforcing the limitations of this Section or seeking the withdrawal or SB1778 Engrossed - 38 - LRB098 09391 MGM 39532 b termination of the attempt to compel production of the confidential supervisory information.

(2) Any request for discovery or disclosure of confidential supervisory information, whether by subpoena, order, or other judicial or administrative process, shall be made to the Commissioner, and the Commissioner shall determine within 15 days whether to disclose the information pursuant to procedures and standards that the Commissioner shall establish by rule.

If the Commissioner determines that such information will not be disclosed, the Commissioner's decision shall be subject to judicial review under the provisions of the Administrative Review Law, and venue shall be in either Sangamon County or Cook County.

(3) Any court order that compels disclosure of confidential supervisory information may be immediately appealed by the Commissioner, and the order shall be automatically stayed pending the outcome of the appeal.

(d) If any officer, agent, attorney, or employee of a bank or financial institution knowingly and willfully furnishes confidential supervisory information in violation of this Section, the Commissioner may impose a civil monetary penalty up to $1,000 for the violation against the officer, agent, attorney, or employee.

(Source:

P.A.

90-301, eff.

8-1-97;

91-201, eff.

1-1-00.) Section 15.

The Savings Bank Act is amended by changing SB1778 Engrossed - 39 - LRB098 09391 MGM 39532 b Sections 1007.130, 1007, 1008, 2007, 3003, 4007, 4008, 4010, 4013, 6002, 6013, 6014, 8006, 8012, 9002, 9002.5, 9012, 11001, and 11008 and by adding Section 9002.1 and the heading of Article 12.1 and Sections 12101, 12102, 12103, 12104, 12105, 12106, 12107, 12108, 12109, and 12110 and the heading of Article 12.2 and Sections 12201, 12202, and 12203 as follows:

(205 ILCS 205/1007.130) Sec.

1007.130.

Out-of-state savings bank.

"Out-of-state savings bank" means a savings bank or a savings and loan association chartered under the laws of a state other than Illinois, a territory of the United States, or the District of Columbia.

(Source:

P.A.

93-965, eff.

8-20-04.) (205 ILCS 205/1008) (from Ch.

17, par.

7301-8) Sec.

1008.

General corporate powers.

(a) A savings bank operating under this Act shall be a body corporate and politic and shall have all of the powers conferred by this Act including, but not limited to, the following powers:

(1) To sue and be sued, complain, and defend in its corporate name and to have a common seal, which it may alter or renew at pleasure.

(2) To obtain and maintain insurance by a deposit insurance corporation as defined in this Act.

SB1778 Engrossed - 40 - LRB098 09391 MGM 39532 b (3) To act as a fiscal agent for the United States, the State of Illinois or any department, branch, arm, or agency of the State or any unit of local government or school district in the State, when duly designated for that purpose, and as agent to perform reasonable functions as may be required of it.

(4) To become a member of or deal with any corporation or agency of the United States or the State of Illinois, to the extent that the agency assists in furthering or facilitating its purposes or powers and to that end to purchase stock or securities thereof or deposit money therewith, and to comply with any other conditions of membership or credit.

(5) To make donations in reasonable amounts for the public welfare or for charitable, scientific, religious, or educational purposes.

(6) To adopt and operate reasonable insurance, bonus, profit sharing, and retirement plans for officers and employees and for directors including, but not limited to, advisory, honorary, and emeritus directors, who are not officers or employees.

(7) To reject any application for membership;

to retire deposit accounts by enforced retirement as provided in this Act and the bylaws;

and to limit the issuance of, or payments on, deposit accounts, subject, however, to contractual obligations.

SB1778 Engrossed - 41 - LRB098 09391 MGM 39532 b (8) To purchase stock or membership interests in service corporations and to invest in any form of indebtedness of any service corporation as defined in this Act, subject to regulations of the Secretary.

(9) To purchase stock of a corporation whose principal purpose is to operate a safe deposit company or escrow service company.

(10) To exercise all the powers necessary to qualify as a trustee or custodian under federal or State law, provided that the authority to accept and execute trusts is subject to the provisions of the Corporate Fiduciary Act and to the supervision of those activities by the Secretary.

(11) (Blank).

(12) To establish, maintain, and operate terminals as authorized by the Electronic Fund Transfer Act.

(13) To pledge its assets:

(A) to enable it to act as agent for the sale of obligations of the United States;

(B) to secure deposits;

(C) to secure deposits of money whenever required by the National Bankruptcy Act;

(D) (blank);

and (E) to secure trust funds commingled with the savings bank's funds, whether deposited by the savings bank or an affiliate of the savings bank, as required under Section 2-8 of the Corporate Fiduciary Act.

SB1778 Engrossed - 42 - LRB098 09391 MGM 39532 b (14) To accept for payment at a future date not to exceed one year from the date of acceptance, drafts drawn upon it by its customers;

and to issue, advise, or confirm letters of credit authorizing holders thereof to draw drafts upon it or its correspondents.

(15) Subject to the regulations of the Secretary, to own and lease personal property acquired by the savings bank at the request of a prospective lessee and, upon the agreement of that person, to lease the personal property.

(16) To establish temporary service booths at any International Fair in this State that is approved by the United States Department of Commerce for the duration of the international fair for the purpose of providing a convenient place for foreign trade customers to exchange their home countries' currency into United States currency or the converse.

To provide temporary periodic service to persons residing in a bona fide nursing home, senior citizens' retirement home, or long-term care facility.

These powers shall not be construed as establishing a new place or change of location for the savings bank providing the service booth.

(17) To indemnify its officers, directors, employees, and agents, as authorized for corporations under Section 8.75 of the Business Corporations Act of 1983.

(18) To provide data processing services to others on a for-profit basis.

SB1778 Engrossed - 43 - LRB098 09391 MGM 39532 b (19) To utilize any electronic technology to provide customers with home banking services.

(20) Subject to the regulations of the Secretary, to enter into an agreement to act as a surety.

(21) Subject to the regulations of the Secretary, to issue credit cards, extend credit therewith, and otherwise engage in or participate in credit card operations.

(22) To purchase for its own account shares of stock of a bankers' bank, described in Section 13(b)(1) of the Illinois Banking Act, on the same terms and conditions as a bank may purchase such shares.

In no event shall the total amount of such stock held by a savings bank in such bankers' bank exceed 10% of its capital and surplus (including undivided profits) and in no event shall a savings bank acquire more than 5% of any class of voting securities of such bankers' bank.

(23) With respect to affiliate facilities:

(A) to conduct at affiliate facilities any of the following transactions for and on behalf of any affiliated depository institution, if so authorized by the affiliate or affiliates:

receiving deposits;

renewing deposits;

cashing and issuing checks, drafts, money orders, travelers checks, or similar instruments;

changing money;

receiving payments on existing indebtedness;

and conducting ministerial functions with respect to loan applications, servicing SB1778 Engrossed - 44 - LRB098 09391 MGM 39532 b loans, and providing loan account information;

and (B) to authorize an affiliated depository institution to conduct for and on behalf of it, any of the transactions listed in this subsection at one or more affiliate facilities.

A savings bank intending to conduct or to authorize an affiliated depository institution to conduct at an affiliate facility any of the transactions specified in this subsection shall give written notice to the Secretary at least 30 days before any such transaction is conducted at an affiliate facility.

All conduct under this subsection shall be on terms consistent with safe and sound banking practices and applicable law.

(24) Subject to Article XLIV of the Illinois Insurance Code, to act as the agent for any fire, life, or other insurance company authorized by the State of Illinois, by soliciting and selling insurance and collecting premiums on policies issued by such company;

and may receive for services so rendered such fees or commissions as may be agreed upon between the said savings bank and the insurance company for which it may act as agent;

provided, however, that no such savings bank shall in any case assume or guarantee the payment of any premium on insurance policies issued through its agency by its principal;

and provided further, that the savings bank shall not guarantee the truth of any statement made by an assured in filing his SB1778 Engrossed - 45 - LRB098 09391 MGM 39532 b application for insurance.

(25) To become a member of the Federal Home Loan Bank and to have the powers granted to a savings association organized under the Illinois Savings and Loan Act of 1985 or the laws of the United States, subject to regulations of the Secretary.

(26) To offer any product or service that is at the time authorized or permitted to a bank by applicable law, but subject always to the same limitations and restrictions that are applicable to the bank for the product or service by such applicable law and subject to the applicable provisions of the Financial Institutions Insurance Sales Law and rules of the Secretary.

(b) If this Act or the regulations adopted under this Act fail to provide specific guidance in matters of corporate governance, the provisions of the Business Corporation Act of 1983 may be used, or if the savings bank is a limited liability company, the provisions of the Limited Liability Company shall be used.

(c) A savings bank may be organized as a limited liability company, may convert to a limited liability company, or may merge with and into a limited liability company, under the applicable laws of this State and of the United States, including any rules promulgated thereunder.

A savings bank organized as a limited liability company shall be subject to the provisions of the Limited Liability Company Act in addition SB1778 Engrossed - 46 - LRB098 09391 MGM 39532 b to this Act, provided that if a provision of the Limited Liability Company Act conflicts with a provision of this Act or with any rule of the Secretary, the provision of this Act or the rule of the Secretary shall apply.

Any filing required to be made under the Limited Liability Company Act shall be made exclusively with the Secretary, and the Secretary shall possess the exclusive authority to regulate the savings bank as provided in this Act.

Any organization as, conversion to, and merger with or into a limited liability company shall be subject to the prior approval of the Secretary.

A savings bank that is a limited liability company shall be subject to all of the provisions of this Act in the same manner as a savings bank that is organized in stock form.

The Secretary may promulgate rules to ensure that a savings bank that is a limited liability company (i) is operating in a safe and sound manner and (ii) is subject to the Secretary's authority in the same manner as a savings bank that is organized in stock form.

(Source:

P.A.

97-492, eff.

1-1-12.) (205 ILCS 205/2007) (from Ch.

17, par.

7302-7) Sec.

2007.

Reorganization to become a holding company.

(a) A savings bank, including a mutual savings bank operating under this Act, may reorganize so as to become a holding company by:

SB1778 Engrossed - 47 - LRB098 09391 MGM 39532 b (1) chartering one or more subsidiary savings banks, the ownership of which shall be evidenced by stock shares, to be owned by the chartering parent savings bank;

and (2) either of the following:

(i) transferring the substantial portion of its assets and all of its insured deposits and part or all of its other liabilities to one or more subsidiary savings banks;

or (ii) reorganizing in any other manner as approved by the Secretary.

(b) In order to effect reorganization under subsection (a), the board of directors of the original savings bank must approve a plan providing for the reorganization that shall be submitted for approval by a majority of the voting members of the savings bank.

Approval must occur in accordance with the savings bank's articles of incorporation and bylaws at a meeting called by the board of directors.

The Secretary may charter mutual and stock holding companies in connection with a mutual savings bank reorganization and may promulgate rules to regulate the formation of and the ongoing business of the subsidiaries and the holding company, including the rights of members, levels of investment in holding company subsidiaries, and stock sales.

(Source:

P.A.

97-492, eff.

1-1-12.) (205 ILCS 205/3003) (from Ch.

17, par.

7303-3) SB1778 Engrossed - 48 - LRB098 09391 MGM 39532 b Sec.

3003.

Contents of articles of incorporation.

(a) The articles of incorporation shall set forth:

(1) The name of the savings bank.

(2) The initial location of the business office.

(3) The duration of existence, which shall be perpetual unless otherwise specified.

(4) The initial number of directors, not less than 5.

(5) The authorization, if any, to issue deposit accounts, the aggregate amount of which may be unlimited.

(6) The authorization, if any, to issue stock, the aggregate number of shares and the par value per share, which shall not be less than $1.

(7) The quorum required for action of members if a quorum other than that specified in this Act is desired.

(8) Any other provision, not inconsistent with law, which the subscribers or members may desire, for the internal regulation of the affairs of the savings bank.

(b) A savings bank may include in its original articles of incorporation or amended articles a requirement that proposed amendments to the articles of incorporation shall be adopted by the affirmative vote of two-thirds of the total number of votes entitled to be cast.

(c) The articles of incorporation need not set forth any of the powers that this Act confers.

(Source:

P.A.

89-74, eff.

6-30-95.) SB1778 Engrossed - 49 - LRB098 09391 MGM 39532 b (205 ILCS 205/4007) (from Ch.

17, par.

7304-7) Sec.

4007.

Proxies.

(a) Voting at a meeting may be either in person or by proxy executed in writing by the member or shareholder or by his duly authorized attorney-in-fact.

The forms and wording of all proxies must receive prior approval of the Commissioner.

(b) No proxy shall be valid:

(1) After 11 months from the date of its execution, unless otherwise provided in the proxy.

(2) Unless executed in an instrument separate from other forms or documents relating to the member's accounts.

(3) For any meeting at which the member who gave it is present, provided that notice is given by the member in writing, prior to the taking of any vote, to an official whom the savings bank shall identify at the meeting as having responsibility for the matter.

(4) Unless the member giving the proxy is told by the person to whom it is given that the proxy is optional and that the voting rights it represents can be exercised by the member himself.

(Source:

P.A.

86-1213.) (205 ILCS 205/4008) (from Ch.

17, par.

7304-8) Sec.

4008.

Directors.

The business and affairs of the savings bank shall be exercised by its elected board of directors.

The board of directors shall consist of the number SB1778 Engrossed - 50 - LRB098 09391 MGM 39532 b of directors fixed by the bylaws, but shall not be fewer than 5.

No more than 40% of the directors shall be salaried employees of the savings bank, except that a higher percentage may be allowed with the prior written approval of the Commissioner.

At least two-thirds of the directors shall be residents of this State.

(Source:

P.A.

90-301, eff.

8-1-97.) (205 ILCS 205/4010) (from Ch.

17, par.

7304-10) Sec.

4010.

Conduct of directors and officers.

(a) Directors and officers occupy a fiduciary relationship to the savings bank of which they are directors or officers, and a director or officer shall not engage or participate, directly or indirectly, in any business or transaction conducted on behalf of or involving the savings bank that would result in a conflict of their own personal interests with those of the savings bank which they serve, unless:

(i) the business or transactions are conducted in good faith and are honest, fair, and reasonable to the savings bank;

(ii) a full disclosure of the business or transaction and the nature of the director's or officer's interest is made to the board of directors;

and (iii) the business or transaction is approved in good faith by the board of directors with any interested director abstaining.

The approval of the business or transaction shall be recorded in the minutes.

Any profits inuring to the officer or director shall not be at the expense SB1778 Engrossed - 51 - LRB098 09391 MGM 39532 b of the savings bank.

The business or transaction shall not represent a breach of the officer's or director's fiduciary duty and shall not be fraudulent or illegal.

Notwithstanding any other provisions of this Section, the Secretary Commissioner may require the disclosure by directors, officers, and employees of their personal interest, directly or indirectly, in any business or transaction on behalf of or involving the savings bank and of their control of or active participation in enterprises having activities related to the business of the savings bank.

The following restrictions governing the conduct of directors and officers expressly are specified, but that specification does not excuse those persons from the observance of any other aspect of the general fiduciary duty owed by them to the savings bank which they serve:

(1) An officer or director of a mutual savings bank shall not hold office or status as a director or officer of another mutual savings bank subject to this Act.

(2) A director shall receive as remuneration only reasonable fees for services as a director or for service as a member of a committee of directors.

A director who is also an officer or employee of the savings bank may receive compensation for service as an officer or employee.

(3) A director or officer shall not have any interest, direct or indirect, in the purchase at less than its face value of any evidence of a savings account, deposit, or SB1778 Engrossed - 52 - LRB098 09391 MGM 39532 b other indebtedness issued by the savings bank.

(4) A savings bank or director or officer thereof shall not directly or indirectly require, as a condition to the granting of any loan or the extension of any other service by the savings bank or its affiliates that the borrower or any other person undertake a contract of insurance or any other agreement or understanding with respect to the direct or indirect furnishing of any other goods or services with any specific company, agency, or individual.

(5) An officer or director acting as proxy for a member of a mutual savings bank shall not exercise, transfer, or delegate that right in any consideration of a private benefit or advantage, direct or indirect, accruing to himself nor surrender control or pass his office to any other for any consideration of a private benefit or advantage, direct or indirect.

The voting rights of members shall not be the subject of sale or similar transaction, either directly or indirectly.

Any officer or director who violates the provisions of this subsection shall be held accountable to the savings bank for any increment.

(6) A director or officer shall not solicit, accept, or agree to accept, directly or indirectly, from any person other than the savings bank any gratuity, compensation, or other personal benefit for any action taken by the savings bank or for endeavoring to procure any action by the savings bank.

SB1778 Engrossed - 53 - LRB098 09391 MGM 39532 b (7) A Subject to the approval of the Commissioner, a savings bank's bylaws may provide for reasonable indemnification to its officers, directors, and employees in connection with the faithful performance of their duties for the savings bank.

The Secretary Commissioner may promulgate model indemnification provisions and may consider provisions available under the Business Corporation Act of 1983, the Illinois Banking Act, and those available to national banks.

(b) The bylaws of a savings bank may contain a provision providing that a director is not personally liable to the savings bank or its shareholders for monetary damages for a breach of the director's fiduciary duty;

provided, however, that such provision may not eliminate or limit the liability of a director for any of the following:

(1) An act or omission that is grossly negligent.

(2) A breach of the director's duty of loyalty to the savings bank or its shareholders.

(3) Acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law.

(4) A transaction from which the director derived an improper personal benefit.

(5) An act or omission occurring before the effective date of the provision in the bylaws authorized by this subsection.

(Source:

P.A.

89-320, eff.

1-1-96.) SB1778 Engrossed - 54 - LRB098 09391 MGM 39532 b (205 ILCS 205/4013) (from Ch.

17, par.

7304-13) Sec.

4013.

Access to books and records;

communication with members and shareholders.

(a) Every customer member or shareholder shall have the right to inspect financial books and records of the savings bank that pertain to his or her accounts.

Otherwise, the right of inspection and examination of the books and records shall be limited as provided in this Act.

Only members shall be entitled to a list of members of the savings bank , and no other person shall have access to the books and records nor shall be entitled to a list of the members or shareholders.

(b) For the purpose of this Section, the term "financial records" means any original, any copy, or any summary of (1) a document granting signature authority over a deposit or account;

(2) a statement, ledger card, or other record on any deposit or account that shows each transaction in or with respect to that account;

(3) a check, draft, or money order drawn on a savings bank or issued and payable by a savings bank;

or (4) any other item containing information pertaining to any relationship established in the ordinary course of a savings bank's business between a savings bank and its customer, including financial statements or other financial information provided by the customer member or shareholder.

(b-5) For purposes of this Section, subject to the Secretary's rules, the term "customer" means a person who SB1778 Engrossed - 55 - LRB098 09391 MGM 39532 b applies for or is provided with a financial service or product by the savings bank.

"Customer" does not include a person who (i) is a customer of another financial institution and the savings bank acts solely as agent for, or provides processing or other services to, that other financial institution;

(ii) solely has designated the savings bank as trustee for a trust;

(iii) solely is a beneficiary of a trust for which the savings bank is a trustee;

or (iv) solely is a participant or a beneficiary of an employee benefit plan that the savings bank sponsors or for which the savings bank acts as a trustee or fiduciary.

(c) This Section does not prohibit:

(1) The preparation examination, handling, or maintenance of any financial records by any officer, employee, or agent of a savings bank having custody of records or examination of records by a certified public accountant engaged by the savings bank to perform an independent audit.

(2) The examination of any financial records by, or the furnishing of financial records by a savings bank to, any officer, employee, or agent of the Secretary Commissioner of Banks and Real Estate or the federal depository institution regulator for use solely in the exercise of his duties as an officer, employee, or agent.

(3) The publication of data furnished from financial records relating to customers members or holders of capital SB1778 Engrossed - 56 - LRB098 09391 MGM 39532 b where the data cannot be identified to any particular customer member, shareholder, or account.

(4) The making of reports or returns required under Chapter 61 of the Internal Revenue Code of 1986.

(5) Furnishing information concerning the dishonor of any negotiable instrument permitted to be disclosed under the Uniform Commercial Code.

(6) The exchange in the regular course of business of (i) credit information between a savings bank and other savings banks or financial institutions or commercial enterprises, directly or through a consumer reporting agency or (ii) financial records or information derived from financial records between a savings bank and other savings banks or financial institutions or commercial enterprises for the purpose of conducting due diligence pursuant to a purchase or sale involving the savings bank or assets or liabilities of the savings bank.

(7) The furnishing of information to the appropriate law enforcement authorities where the savings bank reasonably believes it has been the victim of a crime.

(8) The furnishing of information pursuant to the Uniform Disposition of Unclaimed Property Act.

(9) The furnishing of information pursuant to the Illinois Income Tax Act and the Illinois Estate and Generation-Skipping Transfer Tax Act.

(10) The furnishing of information pursuant to the SB1778 Engrossed - 57 - LRB098 09391 MGM 39532 b federal "Currency and Foreign Transactions Reporting Act", (Title 31, United States Code, Section 1051 et seq.).

(11) The furnishing of information pursuant to any other statute which by its terms or by regulations promulgated thereunder requires the disclosure of financial records other than by subpoena, summons, warrant, or court order.

(12) The furnishing of information in accordance with the federal Personal Responsibility and Work Opportunity Reconciliation Act of 1996.

Any savings bank governed by this Act shall enter into an agreement for data exchanges with a State agency provided the State agency pays to the savings bank a reasonable fee not to exceed its actual cost incurred.

A savings bank providing information in accordance with this item shall not be liable to any account holder or other person for any disclosure of information to a State agency, for encumbering or surrendering any assets held by the savings bank in response to a lien or order to withhold and deliver issued by a State agency, or for any other action taken pursuant to this item, including individual or mechanical errors, provided the action does not constitute gross negligence or willful misconduct.

A savings bank shall have no obligation to hold, encumber, or surrender assets until it has been served with a subpoena, summons, warrant, court or administrative order, lien, or levy.

SB1778 Engrossed - 58 - LRB098 09391 MGM 39532 b (13) The furnishing of information to law enforcement authorities, the Illinois Department on Aging and its regional administrative and provider agencies, the Department of Human Services Office of Inspector General, or public guardians:

(i) upon subpoena by the investigatory entity or the guardian, or (ii) if there is suspicion by the savings bank that a customer who is an elderly or disabled person has been or may become the victim of financial exploitation.

For the purposes of this item (13), the term:

(i) "elderly person" means a person who is 60 or more years of age, (ii) "disabled person" means a person who has or reasonably appears to the savings bank to have a physical or mental disability that impairs his or her ability to seek or obtain protection from or prevent financial exploitation, and (iii) "financial exploitation" means tortious or illegal use of the assets or resources of an elderly or disabled person, and includes, without limitation, misappropriation of the elderly or disabled person's assets or resources by undue influence, breach of fiduciary relationship, intimidation, fraud, deception, extortion, or the use of assets or resources in any manner contrary to law.

A savings bank or person furnishing information pursuant to this item (13) shall be entitled to the same rights and protections as a person furnishing information under the Elder Abuse and Neglect Act, the Illinois Domestic Violence Act of 1986, and the Abuse of SB1778 Engrossed - 59 - LRB098 09391 MGM 39532 b Adults with Disabilities Intervention Act.

(14) The disclosure of financial records or information as necessary to effect, administer, or enforce a transaction requested or authorized by the member or holder of capital, or in connection with:

(A) servicing or processing a financial product or service requested or authorized by the customer member or holder of capital;

(B) maintaining or servicing an account of a customer member or holder of capital with the savings bank;

or (C) a proposed or actual securitization or secondary market sale (including sales of servicing rights) related to a transaction of a customer member or holder of capital.

Nothing in this item (14), however, authorizes the sale of the financial records or information of a customer member or holder of capital without the consent of the customer member or holder of capital.

(15) The exchange in the regular course of business of information between a savings bank and any commonly owned affiliate of the savings bank, subject to the provisions of the Financial Institutions Insurance Sales Law.

(16) The disclosure of financial records or information as necessary to protect against or prevent actual or potential fraud, unauthorized transactions, SB1778 Engrossed - 60 - LRB098 09391 MGM 39532 b claims, or other liability.

(17)(a) The disclosure of financial records or information related to a private label credit program between a financial institution and a private label party in connection with that private label credit program.

Such information is limited to outstanding balance, available credit, payment and performance and account history, product references, purchase information, and information related to the identity of the customer.

(b)(l) For purposes of this paragraph (17) of subsection (c) of Section 4013, a "private label credit program" means a credit program involving a financial institution and a private label party that is used by a customer of the financial institution and the private label party primarily for payment for goods or services sold, manufactured, or distributed by a private label party.

(2) For purposes of this paragraph (17) of subsection (c) of Section 4013, a "private label party" means, with respect to a private label credit program, any of the following:

a retailer, a merchant, a manufacturer, a trade group, or any such person's affiliate, subsidiary, member, agent, or service provider.

(d) A savings bank may not disclose to any person, except to the customer member or holder of capital or his duly authorized agent, any financial records relating to that customer member or shareholder of the savings bank unless:

SB1778 Engrossed - 61 - LRB098 09391 MGM 39532 b (1) the customer member or shareholder has authorized disclosure to the person;

or (2) the financial records are disclosed in response to a lawful subpoena, summons, warrant, citation to discover assets, or court order that meets the requirements of subsection (e) of this Section.

(e) A savings bank shall disclose financial records under subsection (d) of this Section pursuant to a lawful subpoena, summons, warrant, citation to discover assets, or court order only after the savings bank mails a copy of the subpoena, summons, warrant, citation to discover assets, or court order to the person establishing the relationship with the savings bank, if living, and otherwise, his personal representative, if known, at his last known address by first class mail, postage prepaid, unless the savings bank is specifically prohibited from notifying the person by order of court.

(f) Any officer or employee of a savings bank who knowingly and willfully furnishes financial records in violation of this Section is guilty of a business offense and, upon conviction, shall be fined not more than $1,000.

(g) Any person who knowingly and willfully induces or attempts to induce any officer or employee of a savings bank to disclose financial records in violation of this Section is guilty of a business offense and, upon conviction, shall be fined not more than $1,000.

(h) If any member or shareholder desires to communicate SB1778 Engrossed - 62 - LRB098 09391 MGM 39532 b with the other members or shareholders of the savings bank with reference to any question pending or to be presented at an annual or special meeting, the savings bank shall give that person, upon request, a statement of the approximate number of members or shareholders entitled to vote at the meeting and an estimate of the cost of preparing and mailing the communication.

The requesting member shall submit the communication to the Secretary Commissioner who, upon finding it to be appropriate and truthful, shall direct that it be prepared and mailed to the members upon the requesting member's or shareholder's payment or adequate provision for payment of the expenses of preparation and mailing.

(i) A savings bank shall be reimbursed for costs that are necessary and that have been directly incurred in searching for, reproducing, or transporting books, papers, records, or other data of a customer required to be reproduced pursuant to a lawful subpoena, warrant, citation to discover assets, or court order.

(j) Notwithstanding the provisions of this Section, a savings bank may sell or otherwise make use of lists of customers' names and addresses.

All other information regarding a customer's account are subject to the disclosure provisions of this Section.

At the request of any customer, that customer's name and address shall be deleted from any list that is to be sold or used in any other manner beyond identification of the customer's accounts.

SB1778 Engrossed - 63 - LRB098 09391 MGM 39532 b (Source:

P.A.

94-495, eff.

8-8-05;

94-851, eff.

6-13-06;

95-661, eff.

1-1-08.) (205 ILCS 205/6002) (from Ch.

17, par.

7306-2) Sec.

6002.

Investment in loans.

Subject to the regulations of the Secretary Commissioner, a savings bank may loan funds as follows:

(1) On the security of deposit accounts, but no such loan shall exceed the withdrawal value of the pledged account.

(2) On the security of real estate:

(A) of a value, determined in accordance with this Act, sufficient to provide good and ample security for the loan;

(B) with a fee simple title or a leasehold title;

(C) with the title established by evidence of title as is consistent with sound lending practices in the locality;

(D) with the security interest in the real estate evidenced by an appropriate written instrument and the loan evidenced by a note, bond, or similar written instrument;

a loan on the security of the whole of the beneficial interest in a land trust satisfies the requirements of this paragraph if the title to the land is held by a corporate trustee and if the real estate held in the land trust meets the other requirements of this subsection;