SB 1784 — DEPOSIT OF PUBLIC MONEYS

(1) That the borrower prepare and submit to the lender a personal income and expense statement in a form prescribed by the Commissioner or the Director, who may permit the use of other forms such as the URLA (Fannie Mae Form 1003 (10/92), available from Fannie Mae, 3900 Wisconsin Avenue, NW, Washington, D.C.

20016-2892, and Freddie Mac Form 85 (10/92), available from Freddie Mac at 1101 Pennsylvania Avenue, NW, Suite 950, P.O.

Box 37347, Washington, D.C.

20077-0001, no subsequent amendments or editions) and Transmittal Summary (Fannie Mae Form 1077 (3/97), available from Fannie Mae, 3900 Wisconsin Avenue, NW, Washington, D.C.

20016-2892, and Freddie Mac Form 1008 (3/97), available from Freddie Mac at 1101 Pennsylvania Avenue, NW, Suite 950, P.O.

Box 37347, Washington, D.C.

20077-0001, no subsequent amendments or editions).

(2) That the borrower's income is verified by means of tax returns, pay stubs, accounting statements, or other prudent means.

(3) That a credit report is obtained regarding the borrower.

Section 25.

Good faith dealings;

fraudulent or deceptive practices.

A lender must act in good faith in all relations SB1784 Enrolled -5- LRB093 10148 BDD 11571 b with a borrower, including but not limited to, transferring, dealing in, offering, or making a high risk home loan.

No lender shall employ fraudulent or deceptive acts or practices in the making of a high risk home loan, including deceptive marketing and sales efforts.

Section 30.

Prepayment penalty.

For any loan that is subject to the provisions of this Act and is not subject to the provisions of the Home Ownership and Equity Protection Act of 1994, no lender shall make a high risk home loan that includes a penalty provision for payment made:

(i) after the expiration of the 36-month period following the date the loan was made;

or (ii) that is more than:

(1) 3% of the total loan amount if the prepayment is made within the first 12-month period following the date the loan was made;

(2) 2% of the total loan amount if the prepayment is made within the second 12-month period following the date the loan was made;

or (3) 1% of the total loan amount if the prepayment is made within the third 12-month period following the date the loan was made.

Section 40.

Pre-paid insurance products and warranties.

No lender shall transfer, deal in, offer, or make a high risk home loan that finances a single premium credit life, credit disability, credit unemployment, or any other life or health insurance, directly or indirectly.

Insurance calculated and paid on a monthly basis shall not be considered to be financed by the lender.

Section 45.

Refinancing prohibited in certain cases.

No lender shall refinance any high risk home loan where such refinancing charges additional points and fees within a SB1784 Enrolled -6- LRB093 10148 BDD 11571 b 12-month period after the original loan agreement was signed, unless the refinancing results in a tangible net benefit to the borrower.

Section 55.

Financing of points and fees.

No lender shall transfer, deal in, offer, or make a high risk home loan that finances points and fees in excess of 6% of the total loan amount.

Section 60.

Payments to contractors.

No lender shall make a payment of any proceeds of a high risk home loan directly to a contractor under a home improvement contract other than:

(1) by instrument payable to the borrower or payable jointly to the borrower and contractor;

or (2) at the election of the borrower, by a third-party escrow agent in accordance with the terms established in a written agreement that is signed by the borrower, the lender, and the contractor before the date of payment.

Section 65.

Negative amortization.

No lender shall transfer, deal in, offer, or make a high risk home loan, other than a loan secured only by a reverse mortgage, with terms under which the outstanding balance will increase at any time over the course of the loan because the regular periodic payments do not cover the full amount of the interest due, unless the negative amortization is the consequence of a temporary forbearance sought by the borrower.

Section 70.

Negative equity.

No lender shall transfer, deal in, offer, or make a high risk home loan where the loan amount exceeds the value of the property securing the loan.

SB1784 Enrolled -7- LRB093 10148 BDD 11571 b Section 80.

Late payment fee.

A lender shall not transfer, deal in, offer, or make a high risk home loan that provides for a late payment fee, except under the following conditions:

(1) the late payment fee shall not be in excess of 5% of the amount of the payment past due;

(2) the late payment fee shall only be assessed for a payment past due for 15 days or more;

(3) the late payment fee shall not be imposed more than once with respect to a single late payment;

(4) a late payment fee that the lender has collected shall be reimbursed if the borrower presents proof of having made a timely payment;

and (5) a lender shall treat each payment as posted on the same business day as it was received by the lender, servicer, or lender's agent or at the address provided to the borrower by the lender, servicer, or lender's agent for making payments.

Section 85.

Payment compounding.

No lender shall transfer, deal in, offer, or make a high risk home loan that includes terms under which more than 2 periodic payments required under the loan are consolidated and paid in advance from the loan proceeds provided to the borrower.

Section 90.

Call provision.

No lender shall transfer, deal in, offer, or make a high risk home loan that contains a provision that permits the lender, in its sole discretion, to accelerate the indebtedness, provided that this provision does not prohibit acceleration of a loan in good faith due to a borrower's failure to abide by the material terms of the loan.

Section 95.

Disclosure prior to making a high risk home SB1784 Enrolled -8- LRB093 10148 BDD 11571 b loan.

A lender shall not transfer, deal in, offer, or make a high risk home loan unless the lender has given the following notice or a substantially similar notice in writing, to the borrower, acknowledged in writing and signed by the borrower not later than the time the notice is required under the notice provision contained in 12 CFR 226.31(c):

NOTICE TO BORROWER YOU SHOULD BE AWARE THAT YOU MIGHT BE ABLE TO OBTAIN A LOAN AT A LOWER COST.

YOU SHOULD SHOP AROUND AND COMPARE LOAN RATES AND FEES.

LOAN RATES AND CLOSING COSTS AND FEES VARY BASED ON MANY FACTORS, INCLUDING YOUR PARTICULAR CREDIT AND FINANCIAL CIRCUMSTANCES, YOUR EMPLOYMENT HISTORY, THE LOAN-TO-VALUE REQUESTED, AND THE TYPE OF PROPERTY THAT WILL SECURE YOUR LOAN.

THE LOAN RATE AND FEES COULD ALSO VARY BASED ON WHICH LENDER OR BROKER YOU SELECT.

IF YOU ACCEPT THE TERMS OF THIS LOAN, THE LENDER WILL HAVE A MORTGAGE LIEN ON YOUR HOME.

YOU COULD LOSE YOUR HOME AND ANY MONEY YOU PUT INTO IT IF YOU DO NOT MEET YOUR PAYMENT OBLIGATIONS UNDER THE LOAN.

YOU SHOULD CONSULT AN ATTORNEY-AT-LAW AND AN APPROVED CREDIT COUNSELOR OR OTHER EXPERIENCED FINANCIAL ADVISOR REGARDING THE RATE, FEES, AND PROVISIONS OF THIS LOAN BEFORE YOU PROCEED.

A LIST OF APPROVED CREDIT COUNSELORS IS AVAILABLE BY CONTACTING EITHER THE ILLINOIS DEPARTMENT OF FINANCIAL INSTITUTIONS OR THE ILLINOIS OFFICE OF BANKS AND REAL ESTATE.

YOU ARE NOT REQUIRED TO COMPLETE THIS LOAN AGREEMENT MERELY BECAUSE YOU HAVE RECEIVED THIS DISCLOSURE OR HAVE SIGNED A LOAN APPLICATION.

ALSO, YOUR PAYMENTS ON EXISTING DEBTS CONTRIBUTE TO YOUR CREDIT RATINGS.

YOU SHOULD NOT ACCEPT ANY ADVICE TO IGNORE YOUR REGULAR PAYMENTS TO YOUR EXISTING LENDERS.

Section 100.

Counseling prior to perfecting foreclosure proceedings.

(a) If a high risk home loan becomes delinquent by more SB1784 Enrolled -9- LRB093 10148 BDD 11571 b than 30 days, the servicer shall send a notice advising the borrower that he or she may wish to seek approved credit counseling.

(b) The notice required in subsection (a) shall, at a minimum, include the following language:

"YOUR LOAN IS OR WAS MORE THAN 30 DAYS PAST DUE.

YOU MAY BE EXPERIENCING FINANCIAL DIFFICULTY.

IT MAY BE IN YOUR BEST INTEREST TO SEEK APPROVED CREDIT COUNSELING.

A LIST OF APPROVED CREDIT COUNSELORS MAY BE OBTAINED FROM EITHER THE ILLINOIS DEPARTMENT OF FINANCIAL INSTITUTIONS OR THE ILLINOIS OFFICE OF BANKS AND REAL ESTATE." (c) If, within 15 days after mailing the notice provided for under subsection (b), a lender, servicer, or lender's agent is notified in writing by an approved credit counselor and the approved credit counselor advises the lender, servicer, or lender's agent that the borrower is seeking approved credit counseling, then the lender, servicer, or lender's agent shall not institute legal action under Part 15 of Article XV of the Code of Civil Procedure for 30 days after the date of that notice.

Only one such 30-day period of forbearance is allowed under this Section per subject loan.

(d) If, within the 30-day period provided under subsection (c), the lender, servicer, or lender's agent, the approved credit counselor, and the borrower agree to a debt management plan, then the lender, servicer, or lender's agent shall not institute legal action under Part 15 of Article XV of the Code of Civil Procedure for as long as the debt management plan is complied with by the borrower.

The agreed debt management plan must be in writing and signed by the lender, servicer, or lender's agent, the approved credit counselor, and the borrower.

No modification of an approved debt management plan can be made without the mutual agreement of the lender, servicer, or lender's agent, the approved credit counselor, and the borrower.

SB1784 Enrolled -10- LRB093 10148 BDD 11571 b Upon written notice to the lender, servicer, or lender's agent, the borrower may change approved credit counselors.

(e) If the borrower fails to comply with the agreed debt management plan, then nothing in this Section shall be construed to impair the legal right of the lender, servicer, or lender's agent to enforce the contract.

Section 105.

Right to cure.

(a) Before an action is filed to foreclose or collect money due pursuant to a high risk home loan or before other action is taken to seize or transfer ownership of property subject to a high risk home loan, the lender or lender's assignee of the loan shall deliver to the borrower a notice of the right to cure the default, informing the borrower of all of the following:

(1) The nature of the default.

(2) The borrower's right to cure the default by paying the sum of money required, provided that a lender or assignee shall accept any partial payment made or tendered in response to the notice.

If the amount necessary to cure the default will change within 30 days of the notice due to the application of a daily interest rate or the addition of late fees, as allowed by the Act, the notice shall give sufficient information to enable the borrower to calculate the amount at any point within the 30-day period.

(3) The date by which the borrower may cure the default to avoid a court action, acceleration and initiation of foreclosure, or other action to seize the property, which date shall not be less than 30 days after the date the notice is delivered, and the name, address, and telephone number of a person to whom the payment or tender shall be made.

(4) That if the borrower does not cure the default SB1784 Enrolled -11- LRB093 10148 BDD 11571 b by the date specified, the lender or assignee may file an action for money due or take steps to terminate the borrower's ownership in the property by requiring payment in full of the high risk home loan and commencing a foreclosure proceeding or other action to seize the property.

(5) The name, address, and telephone number of a person whom the borrower may contact if the borrower disagrees with the assertion that a default has occurred or the correctness of the calculation of the amount required to cure the default.

(b) If a lender or assignee asserts that grounds for acceleration exist and requires the payment in full of all sums secured by the high risk home loan, the borrower or anyone authorized to act on the borrower's behalf may, at any time before the title is transferred by means of foreclosure, by judicial proceeding and sale, or other means, cure the default, and reinstate the high risk home loan.

Cure of the default shall reinstate the borrower to the same position as if the default had not occurred and shall nullify, as of the date of the cure, an acceleration of any obligation under the high risk home loan arising from the default.

(c) To cure a default under this Section, a borrower shall not be required to pay any charge, fee, or penalty attributable to the exercise of the right to cure a default, other than the fees specifically allowed by this subsection.

The borrower shall not be liable for any attorney fees relating to the default that are incurred by the lender or assignee prior to or during the 30-day period set forth in subsection (a) of this Section, nor for any such fees in excess of $100 that are incurred by the lender or assignee after the expiration of the 30-day period but before the lender or assignee files a foreclosure or other judicial action or takes other action to seize or transfer ownership SB1784 Enrolled -12- LRB093 10148 BDD 11571 b of the real estate.

After the lender or assignee files a foreclosure or other judicial action or takes other action to seize or transfer ownership of the real estate, the borrower shall only be liable for attorney fees that are reasonable and actually incurred by the lender or assignee, based on a reasonable hourly rate and a reasonable number of hours.

(d) If a default is cured prior to the initiation of any action to foreclose or to seize the residence, the lender or assignee shall not institute a proceeding or other action for that default.

If a default is cured after the initiation of any action, the lender or assignee shall take such steps as are necessary to terminate the action.

(e) A lender or a lender's assignee of a high risk home loan that has the legal right to foreclose shall use the judicial foreclosure procedures provided by law.

In such a proceeding, the borrower may assert the nonexistence of a default and any other claim or defense to acceleration and foreclosure, including any claim or defense based on a violation of the Act, though no such claim or defense shall be deemed a compulsory counterclaim.

Section 110.

Mortgage Awareness Program.

(a) The Mortgage Awareness Program is a counseling and educational component that must be provided by the Director and the Commissioner.

(b) The core curriculum of the Mortgage Awareness Program shall include all of the following:

(1) Explanation of the amount financed.

(2) Explanation of the finance charge.

(3) Explanation of the annual percentage rate.

(4) Explanation of the total payments.

(5) Explanation of the loan costs, including broker's fees, finance charges, points, and origination fees.

SB1784 Enrolled -13- LRB093 10148 BDD 11571 b (6) Explanation of the right of rescission.

(7) Explanation of foreclosure procedures.

(8) Explanation of the significant debt ratios, including total debt to income, loan debt to income, and loan debt to value of residence.

(9) Explanation of adjustable rate mortgage.

(10) Explanation of balloon payments.

(11) Explanation of credit options.

(12) Explanation of each item that appears on a good faith estimate.

(13) Explanation of pre-payment penalties.

(c) Counseling session attendees must complete a personal income and expense statement, as well as a balance sheet, on forms provided by the Commissioner or the Director.

(d) Prior to signing a certificate of completion, approved credit counselors shall privately discuss with each attendee that attendee's income and expense statement and balance sheet, as well as the terms of any loan the attendee currently has or may be contemplating, and provide a third party review to establish the affordability of the loan.

(e) Counseling session attendees must be given a brochure that contains information covered by the Mortgage Awareness Program.

(f) Any lender, prior to making a high risk home loan, shall inform the borrower in writing of the right to participate in the Mortgage Awareness Program.

(g) No lender shall offer less favorable loan terms to a borrower due to a borrower's participation in the Mortgage Awareness Program.

(h) Except as prohibited elsewhere in this Section, the borrower may waive participation in the program, provided that the waiver occurs no less than 2 business days after the day that the borrower receives the notice required by subsection (f) of this Section and that the waiver is in SB1784 Enrolled -14- LRB093 10148 BDD 11571 b writing in a form approved by the Commissioner and the Director.

Section 115.

Report of default and foreclosure rates on conventional loans.

(a) On or before October 1 and April 1 of each year, each servicer of Illinois residential mortgage loans shall report to the Commissioner or the Director the default and foreclosure data of conventional loans for the 6-month periods ending June 30 and December 31, respectively.

(b) Each servicer shall report the following information:

(1) The average quarterly dollar amount of conventional one to 4 family mortgage loans secured by Illinois real estate.

(2) The average quarterly number of conventional one to 4 family mortgage loans secured by Illinois real estate.

(3) The average quarterly dollar amount of conventional one to 4 family mortgage loans secured by Illinois real estate that are in default over 90 days.

(4) The average quarterly number of conventional one to 4 family mortgage loans secured by Illinois real estate that are in default over 90 days.

(5) The dollar amount of foreclosures on one to 4 family conventional loans completed during the reporting period.

(6) The number of foreclosures on one to 4 family conventional loans completed during the reporting period.

(7) Whether any of the loans where a foreclosure was completed were originated less than 18 months before the completed foreclosure.

(8) Whether any of the loans where a foreclosure was completed had a note rate greater than 10% for first SB1784 Enrolled -15- LRB093 10148 BDD 11571 b lien mortgage loans or greater than 12% in the case of a junior lien.

(c) An officer of the servicer shall sign the form.

Section 120.

Review and analysis.

(a) The Commissioner or Director shall review and analyze the default and foreclosure rate data reports submitted under Section 115.

(b) The reports and their analyses may be used for the following purposes:

(1) In setting the scope of a regularly scheduled examination.

(2) In setting the scope of a special examination.

(3) In comparing the reported information of a servicer.

(c) The Commissioner or the Director may correspond with a servicer to seek clarification of information contained in its report and to gather additional data concerning loans in default or loans in foreclosure.

Section 125.

Third party review of high risk home loans.

(a) In the case of any high risk home loan, the borrower shall be afforded the opportunity to seek independent review by the Office or the Department of the loan terms, in order to determine affordability of the loan, when and if the General Assembly appropriates adequate funding to the Office or the Department specifically for this Section.

(b) The Office or the Department shall inform the borrower of the amount the borrower has available for a monthly mortgage payment based upon the borrower's budget.

(c) The Office or the Department shall review loan information pertaining to balloon payments and adjustable interest rates and other items disclosed by the loan documents affecting amount of payment and shall inform the SB1784 Enrolled -16- LRB093 10148 BDD 11571 b borrower of such items.

(d) If, based upon the review, the borrower determines that the loan is not in his or her best economic interest, the reviewer shall so notify the lender.

This determination shall enable the borrower to withdraw from the contemplated loan with no financial penalty.

Section 130.

Circumstances voiding mandatory arbitration provisions.

Without regard to whether a borrower is acting individually or on behalf of others similarly situated, a mandatory arbitration provision of a high risk home loan agreement that is oppressive, unfair, unconscionable, or substantially in derogation of the rights of the borrower is void.

Section 135.

Remedies, enforcement, and limitations of liability.

(a) The remedies provided in this Act are cumulative and apply to persons or entities subject to this Act.

(b) Any knowing violation of this Act constitutes a violation of the Consumer Fraud and Deceptive Business Practices Act.

(c) If any provision of an agreement for a high risk home loan violates this Act, then that provision is unenforceable against the borrower.

(d)(1) Any natural or artificial person who purchases or otherwise is assigned or subsequently holds a high risk home loan shall be subject to all affirmative claims and defenses with respect to the loan that the borrower could assert against the lender or broker of the loan, provided that this item (d)(1) shall not apply if the purchaser, assignee or holder demonstrates by a preponderance of the evidence that it:

(A) has in place, at the time of the purchase, SB1784 Enrolled -17- LRB093 10148 BDD 11571 b assignment or transfer of the loans, policies that expressly prohibit its purchase, acceptance of assignment or holding of any high risk home loans;

(B) requires by contract that a seller, assignor or transferor of high risk home loans to the purchaser, assignee or transferee represents and warrants to the purchaser, assignee or transferee that either (i) the seller, assignor or transferor will not sell, assign or transfer any high risk home loans to the purchaser, assignee or transferee, or (ii) the seller, assignor or transferor is a beneficiary of a representation and warranty from a previous seller, assignor or transferor to that effect;

and (C) exercises reasonable due diligence at the time of the purchase, assignment or transfer of high risk home loans, or within a reasonable period of time after the purchase, assignment or transfer of such home loans, which is intended by the purchaser, assignee or transferee to prevent the purchaser, assignee or transferee from purchasing or taking assignment or otherwise holding any high risk home loans, provided that this reasonable due diligence requirement may be met by sampling and need not require loan-by-loan review.

(2) Limited to the amount required to reduce or extinguish the borrower's liability under the high cost home loan plus the amount required to recover costs, including reasonable attorney fees, a borrower acting only in an individual capacity may assert claims that the borrower could assert against a lender of the home loan against a subsequent holder or assignee of the home loan as follows:

(A) within 5 years of the closing date of a high risk home loan, a violation of this Act in connection with the loan as an original action;

and (B) at any time during the term of a high risk home SB1784 Enrolled -18- LRB093 10148 BDD 11571 b loan, after an action to collect on the home loan or to foreclose on the collateral securing the home loan has been initiated, or the debt arising from the home loan has been accelerated, or the home loan has become 60 days in default, any defense, claim, counterclaim or action to enjoin foreclosure or preserve or obtain possession of the home that secures the loan.

(e) In addition to the limitation of liability afforded to subsequent purchasers, assignees, or holders under subsection (d) of this Section, a lender and a subsequent purchaser, assignee, or holder of the high risk home loan is not liable for a violation of this Act if:

(1) within 30 days of the loan closing and prior to receiving any notice from the borrower of the violation, the lender has made appropriate restitution to the borrower and appropriate adjustments are made to the loan;

or (2) the violation was not intentional and resulted from a bona fide error in fact, notwithstanding the maintenance of procedures reasonably adopted to avoid such errors, and within 60 days of the discovery of the violation and prior to receiving any notice from the borrower of the violation, the borrower is notified of the violation, appropriate restitution is made to the borrower, and appropriate adjustments are made to the loan.

Section 145.

Subterfuge prohibited.

No lender, with the intent to avoid the application or provisions of this Act, shall (i) divide a loan transaction into separate parts or (ii) perform any other subterfuge.

Section 150.

Preemption of administrative rules.

Any relevant administrative rule promulgated before the effective SB1784 Enrolled -19- LRB093 10148 BDD 11571 b date of this Act by the Department or the Office is preempted.

Section 153.

Reporting of violations.

The Office and the Department must report to the Attorney General all violations of this Act of which they become aware.

Section 155.

Rulemaking.

The Office and the Department may adopt reasonable rules to implement and administer this Act.

Section 160.

Judicial review.

All final administrative decisions under this Act are subject to judicial review pursuant to the provisions of the Administrative Review Law and any rules adopted pursuant thereto.

Section 165.

Waiver prohibited.

There shall be no waiver of any provision of this Act, except as explicitly provided in subsection (h) of Section 110.

Section 170.

Superiority of Act.

To the extent this Act conflicts with any other Illinois State financial regulation laws, except the Interest Act, this Act is superior and supersedes those laws for the purposes of regulating high risk home loans in Illinois.

Section 175.

Severability.

The provisions of this Act are severable under Section 1.31 of the Statute on Statutes.

Section 800.

eligible SB1784 Enrolled -20- LRB093 10148 BDD 11571 b collateral.

SB1784 Engrossed -2- LRB093 10148 BDD 11571 b (5) Revenue bonds of any city, town, county, or school district of the State of Illinois.

SB1784 Enrolled -21- LRB093 10148 BDD 11571 b __________________e_____________________k_____________ _h_____________________s______________________t_____________ _i_____________________y______________________i_____________ _o_____________________a______________________d_____________ _r_____________________e______________________r_____________ _o_____________________t_______________________b____________ _o_____________________)______________________t_____________ _n_____________________m__________________ (b) The State Treasurer may establish a system to aggregate permissible securities received as collateral from financial institutions in a collateral pool to secure State deposits of the institutions that have pledged securities to the pool.

(d) Notwithstanding any other provision of this Section, as security the State Treasurer may, in his discretion, accept a bond, executed by a company authorized to transact the kinds of business described in clause (g) of Section 4 of the Illinois Insurance Code, in an amount not less than the amount of the deposits required by this Section to be secured, payable to the State Treasurer for the benefit of the People of the State of Illinois, in a form that is SB1784 Engrossed -3- LRB093 10148 BDD 11571 b acceptable to the State Treasurer.

Such certificate of deposit or share SB1784 Enrolled -22- LRB093 10148 BDD 11571 b certificate shall:

85-803.) Section 10.805.

SB1784 Engrossed -4- LRB093 10148 BDD 11571 b (30 ILCS 225/1) (from Ch.

The treasurer or other custodian of public funds may require such bank, savings bank, or savings and loan association to SB1784 Enrolled -23- LRB093 10148 BDD 11571 b deposit with him or her securities guaranteed by agencies and instrumentalities of the federal government equal in market value to the amount by which the funds deposited exceed the federally insured amount.

7-20-99.) SB1784 Engrossed -5- LRB093 10148 BDD 11571 b Section 15.810.

Every such officer, board, commission, commissioner, department, institution, arm or agency is authorized to demand and receive a bond and securities in amount and kind satisfactory to him from any bank or savings SB1784 Enrolled -24- LRB093 10148 BDD 11571 b and loan association in which moneys held by such officer, board, commission, commissioner, department, institution, arm or agency for or on behalf of the State of Illinois, may be on deposit, such securities to be held by the officer, board, commission, commissioner, department, institution, arm or agency for the period that such moneys are so on deposit and then returned together with interest, dividends and other accruals to the bank or savings and loan association.

Whenever funds deposited with a bank or savings and loan association exceed the amount of federal deposit insurance coverage, a bond,_bond_ -- pledged securities,_________h_____________securities,______t_____________ _____t_____ shall be obtained.

Only the types of securities o __ _______e___________________l_______e___________________ which the State Treasurer may, in his _r___________ discretion, accept for amounts not insured by the Federal Deposit Insurance Corporation or the Federal Savings and Loan Insurance Corporation under Section 11 of "An Act in relation to State moneys", approved June 28, 1919, as amended, may be accepted as pledged securities.

The market value of the bond or pledged securities shall at all times be equal to or greater than the uninsured portion of the deposit _____s_____________________e______________________p__________________s______________________a_____________________r_____________ _____m_____________________h______________________t_____________ _____s_____________________e______________________o__________________s_____________________c______________________r_____________ SB1784 Engrossed -6- LRB093 10148 BDD 11571 b _____t_____________________a______________________e_____________ _____n_____________________p______________________t________.

Should the bank or savings and loan association fail or refuse to pay over the moneys, or any SB1784 Enrolled -25- LRB093 10148 BDD 11571 b part thereof, deposited with it, the officer, board, commission, commissioner, department, institution, arm or agency may sell such securities upon giving 5 days notice to the depositary of his intention to so sell such securities.

85-257.) Section 20.815.

(a) No bank shall receive any public funds unless it has SB1784 Engrossed -7- LRB093 10148 BDD 11571 b furnished the corporate authorities of a public agency submitting a deposit with copies of the last two sworn statements of resources and liabilities which the bank is required to furnish to the Commissioner of Banks and Real Estate or to the Comptroller of the Currency.

Each bank designated as a depository for public funds shall, while acting as such depository, furnish the corporate authorities of a public agency with a copy of all statements of resources SB1784 Enrolled -26- LRB093 10148 BDD 11571 b and liabilities which it is required to furnish to the Commissioner of Banks and Real Estate or to the Comptroller of the Currency;

provided, that if such funds or moneys are deposited in a savings bank or savings and loan association, the amount of all such deposits not SB1784 Engrossed -8- LRB093 10148 BDD 11571 b collateralized or insured by an agency of the federal government shall not exceed 75% of the net worth of such savings bank or savings and loan association as defined by the Federal Deposit Insurance Corporation, and the corporate authorities of a public agency submitting a deposit shall not be discharged from responsibility for any funds or moneys deposited in any savings bank or savings and loan association in excess of such limitation.

SB1784 Enrolled -27- LRB093 10148 BDD 11571 b (c) No credit union shall receive public funds unless it has furnished the corporate authorities of a public agency submitting a share deposit with copies of the last two reports of examination prepared by or submitted to the Illinois Department of Financial Institutions or the National Credit Union Administration.

(d) Whenever a public agency deposits any public funds in a financial institution, the public agency may enter into an agreement with the financial institution requiring any funds not insured by the Federal Deposit Insurance Corporation or the National Credit Union Administration or SB1784 Engrossed -9- LRB093 10148 BDD 11571 b other approved share insurer to be collateralized by _______a _____f_____________________s______________________h___________________ _____o_____________________e______________________e_____________ _____f_____________________o______________________s___________ _________________,_______________________c_____________________________s_______________________c____________ _i_____________________l______________________d______________i_____________________i_______________________S____________ _o______________________s_____________________n_____________ _n______________________o_____________________s______________n_____________________o______________________s_____________ _f_____________________t______________________i_____________ _s_____________________u______________________d_____________SB1784 _o_____________________h______________________e_____________Enrolled -28- LRB093 10148 BDD 11571 b _s_____________________r_______________________S____________ _o_____________________o_______________________e____________ _n_____________________i______________________a_____________ _r__________________ __________________g_____________________b______________________________g______________________o_____________ _t_____________________f________________________t____________t_____________________r______________________o_____________ _t______ _________________d______________________n______________________________s______________________y_____________ _o_____________________s______________________._ _________________g______________________o_______________________________g_____________________b_____________ _i_____________________h______________________r_____________ _f_____________________b_______________________p_____________f______________________s_____________________p_____________ _e_____________________e___ _________________s________________________c____________________________d______________________n_____________ _c______________________S__________________ __________________i_____________________g______________________________i______________________u_____________ _h_____________________n______________________p______________h_____________________n_______________________p____________ _h______________________d_____________________e_____________ _u______________________s_____________________m_____________ _f___________________ _________________f______________________a______________________________o______________________m_____________ _o_____________________n______________________u______________o_____________________f______________________r_____________ _l_____________________o___________ _________________t______________________r_______________________________e_____________________k_____________ _h_____________________e______________________h______________h_____________________s______________________t_____________ _i_____________________b______________________s______________i_____________________y______________________i_____________ SB1784_o_____________________a______________________d_____________ Engrossed_r_____________________e______________________r_____________ -10-_o_____________________t_______________________b____________ LRB093_o_____________________)______________________t_____________ 10148_n_____________________m__________________ BDD__________________o______________________c____________ 11571_s_____________________i______________________d_____________ b_e_____________________g______________________r_____________ _o_____________________i______________________d_____________SB1784 _r_____________________h______________________u_____________Enrolled _o_____________________r______________________y_____________-29- _o_____________________)______________________t_____________LRB093 _n_____________________m__________________10148 ___________________o_____________________c____________BDD _s_____________________r______________________i_____________11571 _e______________________a_____________________c_____________b _m_____________________v______________________e_____________ _u_____________________p______________________c___________ ____________y______________________e_________________________l______________________d_____________ _________________a______________________i______________________________t______________________n_____________ _________________t______________________C______________________________a_______________________C____________ __________________F______________________a_____________________________F______________________a_____________ __________________i_____________________e______________________________h______________________t_____________ _________________s_______________________o____________ _________________e________ ____________s________________________i___________ _________________$______________________n__ ____________s______________________i_________________________s______________________g_____________ _________________g______________________r______________________________n______________________t_____________ _________________a______________________o______________________________n_______________________a____________ __________________b_____________________i_____________ __________________a____________ _h_____________________t______________________a_____________ _____e______________________o_____________________t_____________ _____y_____________________t______________________s__________________y_____________________h______________________i_____________ _____f_____________________i______________________o__________________f_____________________a_______________________a____________ _____r______________________s_______________________d________________r_____________________n______________________o_____________ _______c____________________b_____________________o___________________c_____________________r_____________________n_____________ _____i____ _e______________________m_____________________s_____________ _____S______________________a_____________________e_____________ _____v_____________________r______________________u__________________v_____________________f______________________t_____________ SB1784_____t_____________________p_______________________i____________ Engrossed_____h_____________________e_______________ -11-_f_____________________y_______________________d____________ LRB093_____c_____________________i______________________l_____________ 10148_____e_____________________g______________________s_____________ BDD___ 11571_g_____________________n______________________t_____________ b_____e_____________________c______________________i_____________ _____t_____________________p_______________________i____________SB1784 _____h_____________________e_______________Enrolled _f_____________________c________________________d___________-30- _____c_____________________i______________________l_____________LRB093 _____e_____________________g______________________s_____________10148 ___BDD _g_____________________n______________________t_____________11571 _____c_____________________y______________________o_____________b _______e___________________n______________________a___________________e____________________y______________________c_____________ _____s_____________________l______________________n__________________u_____________________n______________________t_____________ _____o_______________________i____________________l__________________o_____________________n______________________s_____________ _____t_____________________r______________________c__________________t______________________r_____________________e_____________ _____e_____________________u______________________e__________________e_____________________b______________________n_____________ _____e______________________g_____________________o_____________ _____t_____________________c______________t_____________________i__________ --------------m--------------------,------------- -----r---------------------d----------------------L------------------r---------------------y----------------------a------------- ------c--------------------u----------------------l--------------------c-------------------t----------------------I------------- -----o---------------------o-----------------------m-----------------o---------------------n----------------------m------------- -----a---------------------e----------------------h------------------h---------------------s----------------------t------------- -----a------------------------t-------------------i------------------a---------------------t----------------------t------------- -----r---------------------l----------------------i------------------r---------------------o----------------------n------------- ------a--------------------e--.

6-9-00.) Section 99.820.

EffectiveThe date.Illinois Banking Act is amended by changing Sections 2, 5, and 17 and by adding Section 13.6 as follows:

This(205 ActILCS takes5/2) effect(from uponCh. becoming law.

17, par.

302) Sec.

2.

General definitions.

In this Act, unless the context otherwise requires, the following words and phrases shall have the following meanings:

"Accommodation party" shall have the meaning ascribed to that term in Section 3-419 of the Uniform Commercial Code.

SB1784 Enrolled -31- LRB093 10148 BDD 11571 b "Action" in the sense of a judicial proceeding includes recoupments, counterclaims, set-off, and any other proceeding in which rights are determined.

"Affiliate facility" of a bank means a main banking premises or branch of another commonly owned bank.

The main banking premises or any branch of a bank may be an "affiliate facility" with respect to one or more other commonly owned banks.

"Appropriate federal banking agency" means the Federal Deposit Insurance Corporation, the Federal Reserve Bank of Chicago, or the Federal Reserve Bank of St.

Louis, as determined by federal law.

"Bank" means any person doing a banking business whether subject to the laws of this or any other jurisdiction.

A "banking house", "branch", "branch bank" or "branch office" shall mean any place of business of a bank at which deposits are received, checks paid, or loans made, but shall not include any place at which only records thereof are made, posted, or kept.

A place of business at which deposits are received, checks paid, or loans made shall not be deemed to be a branch, branch bank, or branch office if the place of business is adjacent to and connected with the main banking premises, or if it is separated from the main banking premises by not more than an alley;

provided always that (i) if the place of business is separated by an alley from the main banking premises there is a connection between the two by public or private way or by subterranean or overhead passage, and (ii) if the place of business is in a building not wholly occupied by the bank, the place of business shall not be within any office or room in which any other business or service of any kind or nature other than the business of the bank is conducted or carried on.

A place of business at which deposits are received, checks paid, or loans made shall not be deemed to be a branch, branch bank, or branch office SB1784 Enrolled -32- LRB093 10148 BDD 11571 b (i) of any bank if the place is a terminal established and maintained in accordance with paragraph (17) of Section 5 of this Act, or (ii) of a commonly owned bank by virtue of transactions conducted at that place on behalf of the other commonly owned bank under paragraph (23) of Section 5 of this Act if the place is an affiliate facility with respect to the other bank.

"Branch of an out-of-state bank" means a branch established or maintained in Illinois by an out-of-state bank as a result of a merger between an Illinois bank and the out-of-state bank that occurs on or after May 31, 1997, or any branch established by the out-of-state bank following the merger.

_B_____________________y______________________r_____________ _____b_____________________r______________________e_____________ _____a_____________________o_______________________I____________ _____t_____________________i______________________v_____________ ______t____________________e________________ "Call report fee" means the fee to be paid to the Commissioner by each State bank pursuant to paragraph (a) of subsection (3) of Section 48 of this Act.

"Capital" includes the aggregate of outstanding capital stock and preferred stock.

"Cash flow reserve account" means the account within the books and records of the Commissioner of Banks and Real Estate used to record funds designated to maintain a reasonable Bank and Trust Company Fund operating balance to meet agency obligations on a timely basis.

"Charter" includes the original charter and all amendments thereto and articles of merger or consolidation.

"Commissioner" means the Commissioner of Banks and Real Estate or a person authorized by the Commissioner, the Office of Banks and Real Estate Act, or this Act to act in the Commissioner's stead.

SB1784 Enrolled -33- LRB093 10148 BDD 11571 b "Commonly owned banks" means 2 or more banks that each qualify as a bank subsidiary of the same bank holding company pursuant to Section 18 of the Federal Deposit Insurance Act;

"commonly owned bank" refers to one of a group of commonly owned banks but only with respect to one or more of the other banks in the same group.

"Community" means a city, village, or incorporated town and also includes the area served by the banking offices of a bank, but need not be limited or expanded to conform to the geographic boundaries of units of local government.

"Company" means a corporation, limited liability company, partnership, business trust, association, or similar organization and, unless specifically excluded, includes a "State bank" and a "bank".

"Consolidating bank" means a party to a consolidation.

"Consolidation" takes place when 2 or more banks, or a trust company and a bank, are extinguished and by the same process a new bank is created, taking over the assets and assuming the liabilities of the banks or trust company passing out of existence.

"Continuing bank" means a merging bank, the charter of which becomes the charter of the resulting bank.

"Converting bank" means a State bank converting to become a national bank, or a national bank converting to become a State bank.

"Converting trust company" means a trust company converting to become a State bank.

"Court" means a court of competent jurisdiction.

_D_____________________b______________________r_____________ _______I___________________a______________________t_____________ _____n_____________________r______________________t_____________ _____e_____________________n______________________i_____________ _____c_____________________e______________________r_____________ _____n_____________________o______________________r_____________ SB1784 Enrolled -34- LRB093 10148 BDD 11571 b _____t_____________________i______________________t_____________ _____w_____________________i______________________o_____________ _____e_____________________ "Eligible depository institution" means an insured savings association that is in default, an insured savings association that is in danger of default, a State or national bank that is in default or a State or national bank that is in danger of default, as those terms are defined in this Section, or a new bank as that term defined in Section 11(m) of the Federal Deposit Insurance Act or a bridge bank as that term is defined in Section 11(n) of the Federal Deposit Insurance Act or a new federal savings association authorized under Section 11(d)(2)(f) of the Federal Deposit Insurance Act.

"Fiduciary" means trustee, agent, executor, administrator, committee, guardian for a minor or for a person under legal disability, receiver, trustee in bankruptcy, assignee for creditors, or any holder of similar position of trust.

"Financial institution" means a bank, savings and loan association, credit union, or any licensee under the Consumer Installment Loan Act or the Sales Finance Agency Act and, for purposes of Section 48.3, any proprietary network, funds transfer corporation, or other entity providing electronic funds transfer services, or any corporate fiduciary, its subsidiaries, affiliates, parent company, or contractual service provider that is examined by the Commissioner.

"Foundation" means the Illinois Bank Examiners' Education Foundation.

"General obligation" means a bond, note, debenture, security, or other instrument evidencing an obligation of the government entity that is the issuer that is supported by the full available resources of the issuer, the principal and interest of which is payable in whole or in part by taxation.

SB1784 Enrolled -35- LRB093 10148 BDD 11571 b "Guarantee" means an undertaking or promise to answer for payment of another's debt or performance of another's duty, liability, or obligation whether "payment guaranteed" or "collection guaranteed".

"In danger of default" means a State or national bank, a federally chartered insured savings association or an Illinois state chartered insured savings association with respect to which the Commissioner or the appropriate federal banking agency has advised the Federal Deposit Insurance Corporation that:

(1) in the opinion of the Commissioner or the appropriate federal banking agency, (A) the State or national bank or insured savings association is not likely to be able to meet the demands of the State or national bank's or savings association's obligations in the normal course of business;

and (B) there is no reasonable prospect that the State or national bank or insured savings association will be able to meet those demands or pay those obligations without federal assistance;

or (2) in the opinion of the Commissioner or the appropriate federal banking agency, (A) the State or national bank or insured savings association has incurred or is likely to incur losses that will deplete all or substantially all of its capital;

and (B) there is no reasonable prospect that the capital of the State or national bank or insured savings association will be replenished without federal assistance.

"In default" means, with respect to a State or national bank or an insured savings association, any adjudication or other official determination by any court of competent SB1784 Enrolled -36- LRB093 10148 BDD 11571 b jurisdiction, the Commissioner, the appropriate federal banking agency, or other public authority pursuant to which a conservator, receiver, or other legal custodian is appointed for a State or national bank or an insured savings association.

"Insured savings association" means any federal savings association chartered under Section 5 of the federal Home Owners' Loan Act and any State savings association chartered under the Illinois Savings and Loan Act of 1985 or a predecessor Illinois statute, the deposits of which are insured by the Federal Deposit Insurance Corporation.

The term also includes a savings bank organized or operating under the Savings Bank Act.

"Insured savings association in recovery" means an insured savings association that is not an eligible depository institution and that does not meet the minimum capital requirements applicable with respect to the insured savings association.

"Issuer" means for purposes of Section 33 every person who shall have issued or proposed to issue any security;

except that (1) with respect to certificates of deposit, voting trust certificates, collateral-trust certificates, and certificates of interest or shares in an unincorporated investment trust not having a board of directors (or persons performing similar functions), "issuer" means the person or persons performing the acts and assuming the duties of depositor or manager pursuant to the provisions of the trust, agreement, or instrument under which the securities are issued;

(2) with respect to trusts other than those specified in clause (1) above, where the trustee is a corporation authorized to accept and execute trusts, "issuer" means the entrusters, depositors, or creators of the trust and any manager or committee charged with the general direction of the affairs of the trust pursuant to the provisions of the SB1784 Enrolled -37- LRB093 10148 BDD 11571 b agreement or instrument creating the trust;

and (3) with respect to equipment trust certificates or like securities, "issuer" means the person to whom the equipment or property is or is to be leased or conditionally sold.

"Letter of credit" and "customer" shall have the meanings ascribed to those terms in Section 5-102 of the Uniform Commercial Code.

"Main banking premises" means the location that is designated in a bank's charter as its main office.

"Maker or obligor" means for purposes of Section 33 the issuer of a security, the promisor in a debenture or other debt security, or the mortgagor or grantor of a trust deed or similar conveyance of a security interest in real or personal property.

"Merged bank" means a merging bank that is not the continuing, resulting, or surviving bank in a consolidation or merger.

"Merger" includes consolidation.

"Merging bank" means a party to a bank merger.

"Merging trust company" means a trust company party to a merger with a State bank.

"Mid-tier bank holding company" means a corporation that (a) owns 100% of the issued and outstanding shares of each class of stock of a State bank, (b) has no other subsidiaries, and (c) 100% of the issued and outstanding shares of the corporation are owned by a parent bank holding company.

"Municipality" means any municipality, political subdivision, school district, taxing district, or agency.

"National bank" means a national banking association located in this State and after May 31, 1997, means a national banking association without regard to its location.

"Out-of-state bank" means a bank chartered under the laws of a state other than Illinois, a territory of the United SB1784 Enrolled -38- LRB093 10148 BDD 11571 b States, or the District of Columbia.

"Parent bank holding company" means a corporation that is a bank holding company as that term is defined in the Illinois Bank Holding Company Act of 1957 and owns 100% of the issued and outstanding shares of a mid-tier bank holding company.

"Person" means an individual, corporation, limited liability company, partnership, joint venture, trust, estate, or unincorporated association.

"Public agency" means the State of Illinois, the various counties, townships, cities, towns, villages, school districts, educational service regions, special road districts, public water supply districts, fire protection districts, drainage districts, levee districts, sewer districts, housing authorities, the Illinois Bank Examiners' Education Foundation, the Chicago Park District, and all other political corporations or subdivisions of the State of Illinois, whether now or hereafter created, whether herein specifically mentioned or not, and shall also include any other state or any political corporation or subdivision of another state.

"Public funds" or "public money" means current operating funds, special funds, interest and sinking funds, and funds of any kind or character belonging to, in the custody of, or subject to the control or regulation of the United States or a public agency.

"Public funds" or "public money" shall include funds held by any of the officers, agents, or employees of the United States or of a public agency in the course of their official duties and, with respect to public money of the United States, shall include Postal Savings funds.

"Published" means, unless the context requires otherwise, the publishing of the notice or instrument referred to in some newspaper of general circulation in the community in SB1784 Enrolled -39- LRB093 10148 BDD 11571 b which the bank is located at least once each week for 3 successive weeks.

Publishing shall be accomplished by, and at the expense of, the bank required to publish.

Where publishing is required, the bank shall submit to the Commissioner that evidence of the publication as the Commissioner shall deem appropriate.

"Qualified financial contract" means any security contract, commodity contract, forward contract, including spot and forward foreign exchange contracts, repurchase agreement, swap agreement, and any similar agreement, any option to enter into any such agreement, including any combination of the foregoing, and any master agreement for such agreements.

A master agreement, together with all supplements thereto, shall be treated as one qualified financial contract.

The contract, option, agreement, or combination of contracts, options, or agreements shall be reflected upon the books, accounts, or records of the bank, or a party to the contract shall provide documentary evidence of such agreement.

"Recorded" means the filing or recording of the notice or instrument referred to in the office of the Recorder of the county wherein the bank is located.

"Resulting bank" means the bank resulting from a merger or conversion.

"Securities" means stocks, bonds, debentures, notes, or other similar obligations.

"Stand-by letter of credit" means a letter of credit under which drafts are payable upon the condition the customer has defaulted in performance of a duty, liability, or obligation.

"State bank" means any banking corporation that has a banking charter issued by the Commissioner under this Act.

"State Banking Board" means the State Banking Board of Illinois.

SB1784 Enrolled -40- LRB093 10148 BDD 11571 b "Subsidiary" with respect to a specified company means a company that is controlled by the specified company.

For purposes of paragraphs (8) and (12) of Section 5 of this Act, "control" means the exercise of operational or managerial control of a corporation by the bank, either alone or together with other affiliates of the bank.

"Surplus" means the aggregate of (i) amounts paid in excess of the par value of capital stock and preferred stock;

(ii) amounts contributed other than for capital stock and preferred stock and allocated to the surplus account;

and (iii) amounts transferred from undivided profits.

"Tier 1 Capital" and "Tier 2 Capital" have the meanings assigned to those terms in regulations promulgated for the appropriate federal banking agency of a state bank, as those regulations are now or hereafter amended.

"Trust company" means a limited liability company or corporation incorporated in this State for the purpose of accepting and executing trusts.

"Undivided profits" means undistributed earnings less discretionary transfers to surplus.

"Unimpaired capital and unimpaired surplus", for the purposes of paragraph (21) of Section 5 and Sections 32, 33, 34, 35.1, 35.2, and 47 of this Act means the sum of the state bank's Tier 1 Capital and Tier 2 Capital plus such other shareholder equity as may be included by regulation of the Commissioner.

Unimpaired capital and unimpaired surplus shall be calculated on the basis of the date of the last quarterly call report filed with the Commissioner preceding the date of the transaction for which the calculation is made, provided that:

(i) when a material event occurs after the date of the last quarterly call report filed with the Commissioner that reduces or increases the bank's unimpaired capital and unimpaired surplus by 10% or more, then the unimpaired capital and unimpaired surplus shall be calculated SB1784 Enrolled -41- LRB093 10148 BDD 11571 b from the date of the material event for a transaction conducted after the date of the material event;

and (ii) if the Commissioner determines for safety and soundness reasons that a state bank should calculate unimpaired capital and unimpaired surplus more frequently than provided by this paragraph, the Commissioner may by written notice direct the bank to calculate unimpaired capital and unimpaired surplus at a more frequent interval.

In the case of a state bank newly chartered under Section 13 or a state bank resulting from a merger, consolidation, or conversion under Sections 21 through 26 for which no preceding quarterly call report has been filed with the Commissioner, unimpaired capital and unimpaired surplus shall be calculated for the first calendar quarter on the basis of the effective date of the charter, merger, consolidation, or conversion.

(Source:

P.A.

92-483, eff.

8-23-01.) (205 ILCS 5/5) (from Ch.

17, par.

311) Sec.

5.

General corporate powers.

A bank organized under this Act or subject hereto shall be a body corporate and politic and shall, without specific mention thereof in the charter, have all the powers conferred by this Act and the following additional general corporate powers:

(1) To sue and be sued, complain, and defend in its corporate name.

(2) To have a corporate seal, which may be altered at pleasure, and to use the same by causing it or a facsimile thereof to be impressed or affixed or in any manner reproduced, provided that the affixing of a corporate seal to an instrument shall not give the instrument additional force or effect, or change the construction thereof, and the use of a corporate seal is not mandatory.

(3) To make, alter, amend, and repeal bylaws, not inconsistent with its charter or with law, for the SB1784 Enrolled -42- LRB093 10148 BDD 11571 b administration of the affairs of the bank.

If this Act does not provide specific guidance in matters of corporate governance, the provisions of the Business Corporation Act of 1983 may be used if so provided in the bylaws, ____________ _____i_____________________y______________________i_____________ _____e_____________________A_________________.

(4) To elect or appoint and remove officers and agents of the bank and define their duties and fix their compensation.

(5) To adopt and operate reasonable bonus plans, profit-sharing plans, stock-bonus plans, stock-option plans, pension plans and similar incentive plans for its directors, officers and employees.

(5.1) To manage, operate and administer a fund for the investment of funds by a public agency or agencies, including any unit of local government or school district, or any person.

The fund for a public agency shall invest in the same type of investments and be subject to the same limitations provided for the investment of public funds.

The fund for public agencies shall maintain a separate ledger showing the amount of investment for each public agency in the fund.

"Public funds" and "public agency" as used in this Section shall have the meanings ascribed to them in Section 1 of the Public Funds Investment Act.

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

(7) To borrow or incur an obligation;

and to pledge its assets:

(a) to secure its borrowings, its lease of personal or real property or its other nondeposit obligations;

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

(c) to secure deposits of public money of the SB1784 Enrolled -43- LRB093 10148 BDD 11571 b United States, whenever required by the laws of the United States, including without being limited to, revenues and funds the deposit of which is subject to the control or regulation of the United States or any of its officers, agents, or employees and Postal Savings funds;

(d) to secure deposits of public money of any state or of any political corporation or subdivision thereof including, without being limited to, revenues and funds the deposit of which is subject to the control or regulation of any state or of any political corporation or subdivisions thereof or of any of their officers, agents, or employees;

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

(f) (blank);

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

(8) To own, possess, and carry as assets all or part of the real estate necessary in or with which to do its banking business, either directly or indirectly through the ownership of all or part of the capital stock, shares or interests in any corporation, association, trust engaged in holding any part or parts or all of the bank premises, engaged in such business and in conducting a safe deposit business in the premises or part of them, or engaged in any activity that the bank is permitted to conduct in a subsidiary pursuant to paragraph (12) of this Section 5.

(9) To own, possess, and carry as assets other real estate to which it may obtain title in the collection of its debts or that was formerly used as a part of the bank premises, but title to any real estate except as herein permitted shall not be retained by the bank, either directly SB1784 Enrolled -44- LRB093 10148 BDD 11571 b or by or through a subsidiary, as permitted by subsection (12) of this Section for a total period of more than 10 years after acquiring title, either directly or indirectly.

(10) To do any act, including the acquisition of stock, necessary to obtain insurance of its deposits, or part thereof, and any act necessary to obtain a guaranty, in whole or in part, of any of its loans or investments by the United States or any agency thereof, and any act necessary to sell or otherwise dispose of any of its loans or investments to the United States or any agency thereof, and to acquire and hold membership in the Federal Reserve System.

(11) Notwithstanding any other provisions of this Act or any other law, to do any act and to own, possess, and carry as assets property of the character, including stock, that is at the time authorized or permitted to national banks by an Act of Congress, but subject always to the same limitations and restrictions as are applicable to national banks by the pertinent federal law and subject to applicable provisions of the Financial Institutions Insurance Sales Law.

(12) To own, possess, and carry as assets stock of one or more corporations that is, or are, engaged in one or more of the following businesses:

(a) holding title to and administering assets acquired as a result of the collection or liquidating of loans, investments, or discounts;

or (b) holding title to and administering personal property acquired by the bank, directly or indirectly through a subsidiary, for the purpose of leasing to others, provided the lease or leases and the investment of the bank, directly or through a subsidiary, in that personal property otherwise comply with Section 35.1 of this Act;

or (c) carrying on or administering any of the activities excepting the receipt of deposits or the SB1784 Enrolled -45- LRB093 10148 BDD 11571 b payment of checks or other orders for the payment of money in which a bank may engage in carrying on its general banking business;

provided, however, that nothing contained in this paragraph (c) shall be deemed to permit a bank organized under this Act or subject hereto to do, either directly or indirectly through any subsidiary, any act, including the making of any loan or investment, or to own, possess, or carry as assets any property that if done by or owned, possessed, or carried by the State bank would be in violation of or prohibited by any provision of this Act.

The provisions of this subsection (12) shall not apply to and shall not be deemed to limit the powers of a State bank with respect to the ownership, possession, and carrying of stock that a State bank is permitted to own, possess, or carry under this Act.

Any bank intending to establish a subsidiary under this subsection (12) shall give written notice to the Commissioner 60 days prior to the subsidiary's commencing of business or, as the case may be, prior to acquiring stock in a corporation that has already commenced business.

After receiving the notice, the Commissioner may waive or reduce the balance of the 60 day notice period.

The Commissioner may specify the form of the notice and may promulgate rules and regulations to administer this subsection (12).

(13) To accept for payment at a future date not exceeding one year from the date of acceptance, drafts drawn upon it by its customers;

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

(14) To own and lease personal property acquired by the bank at the request of a prospective lessee and upon the agreement of that person to lease the personal property provided that the lease, the agreement with respect thereto, SB1784 Enrolled -46- LRB093 10148 BDD 11571 b and the amount of the investment of the bank in the property comply with Section 35.1 of this Act.

(15) (a) To establish and maintain, in addition to the main banking premises, branches offering any banking services permitted at the main banking premises of a State bank.

(b) To establish and maintain, after May 31, 1997, branches in another state that may conduct any activity in that state that is authorized or permitted for any bank that has a banking charter issued by that state, subject to the same limitations and restrictions that are applicable to banks chartered by that state.

(16) (Blank).

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

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

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

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

(20) To own, possess, and carry as assets stock of, or be or become a member of, any corporation, mutual company, association, trust, or other entity formed exclusively for the purpose of providing directors' and officers' liability and bankers' blanket bond insurance or reinsurance to and for the benefit of the stockholders, members, or beneficiaries, or their assets or businesses, or their officers, directors, SB1784 Enrolled -47- LRB093 10148 BDD 11571 b employees, or agents, and not to or for the benefit of any other person or entity or the public generally.

(21) To make debt or equity investments in corporations or projects, whether for profit or not for profit, designed to promote the development of the community and its welfare, provided that the aggregate investment in all of these corporations and in all of these projects does not exceed 10% of the unimpaired capital and unimpaired surplus of the bank and provided that this limitation shall not apply to creditworthy loans by the bank to those corporations or projects.

Upon written application to the Commissioner, a bank may make an investment that would, when aggregated with all other such investments, exceed 10% of the unimpaired capital and unimpaired surplus of the bank.

The Commissioner may approve the investment if he is of the opinion and finds that the proposed investment will not have a material adverse effect on the safety and soundness of the bank.

(22) To own, possess, and carry as assets the stock of a corporation engaged in the ownership or operation of a travel agency or to operate a travel agency as a part of its business.

(23) With respect to affiliate facilities:

(a) to conduct at affiliate facilities for and on behalf of another commonly owned bank, if so authorized by the other bank, all transactions that the other bank is authorized or permitted to perform;

and (b) to authorize a commonly owned bank to conduct for and on behalf of it any of the transactions it is authorized or permitted to perform at one or more affiliate facilities.

Any bank intending to conduct or to authorize a commonly owned bank to conduct at an affiliate facility any of the transactions specified in this paragraph (23) shall give written notice to the Commissioner at least 30 days before SB1784 Enrolled -48- LRB093 10148 BDD 11571 b any such transaction is conducted at the affiliate facility.

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

provided, however, that no such 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 bank shall not guarantee the truth of any statement made by an assured in filing his application for insurance.

(25) Notwithstanding any other provisions of this Act or any other law, to offer any product or service that is at the time authorized or permitted to any insured savings association or out-of-state bank by applicable law, provided that powers conferred only by this subsection (25):

(a) shall always be subject to the same limitations and restrictions that are applicable to the insured savings association or out-of-state bank for the product or service by such applicable law;

(b) shall be subject to applicable provisions of the Financial Institutions Insurance Sales Law;

(c) shall not include the right to own or conduct a real estate brokerage business for which a license would be required under the laws of this State;

and (d) shall not be construed to include the establishment or maintenance of a branch, nor shall they be construed to limit the establishment or maintenance of a branch pursuant to subsection (11).

Not less than 30 days before engaging in any activity under the authority of this subsection, a bank shall provide written notice to the Commissioner of its intent to engage in SB1784 Enrolled -49- LRB093 10148 BDD 11571 b the activity.

The notice shall indicate the specific federal or state law, rule, regulation, or interpretation the bank intends to use as authority to engage in the activity.

(Source:

P.A.

91-330, eff.

7-29-99;

91-849, eff.

6-22-00;

92-483, eff.

8-23-01;

92-811, eff.

8-21-02.) (205 ILCS 5/13.6 new) _e_____________________m______________________i____ _a_____________________r______________________e_____________ _____n_____________________a______________________m_____________ ______w____________________t______________________y_____________ _____c_______________________S____________________n_____________ _____d_____________________g______________________n_____________ _______l____________________c_____________________u_____________ _____s_____________________L_______________________i____________ _____h_____________________t______________________f_____________ _____l_____________________l_______________________o____________ _____i_____________________C______________________i_____________ _____r_____________________m______________________ _b_____________________d_______________________t____________ _____l_____________________h______________________v_____________ _____s_____________________o______________________p_____________ _____s_____________________g______________________v_____________ ____ _c_____________________s_______________________m____________ _____n_____________________i______________________u_____________ ______a____________________i_________ _d_____________________i______________________n_____________ _____c______________________p_____________________t_____________ _____r_____________________r______________________._ _e_____________________a_______________________e____________ _____n______________________l______________________i____________ _____s_____________________e______________________j_____________ _____s_____________________n_______________________b____________ SB1784 Enrolled -50- LRB093 10148 BDD 11571 b _____i___________________ (205 ILCS 5/17) (from Ch.

17, par.

324) Sec.

17.

Changes in charter.

(a) By compliance with the provisions of this Act a State bank may:

(1) (blank);

(2) increase, decrease or change its capital stock, whether issued or unissued, provided that in no case shall the capital be diminished to the prejudice of its creditors;

(3) provide for authorized but unissued capital stock reserved for issuance for one or more of the purposes provided for in subsection (5) of Section 14 hereof;

(4) authorize preferred stock, or increase, decrease or change the preferences, qualifications, limitations, restrictions or special or relative rights of its preferred stock, whether issued or unissued, o __ _e_____________________i_______________________a____________ _n___________________ provided that in no case shall the capital be diminished to the prejudice of its creditors;

(5) increase, decrease or change the par value of its shares of its capital stock or preferred stock, whether issued or unissued, __________________o_____________ _o_____________________p_______________________(___;

(6) (blank);

(7) eliminate cumulative voting rights under all or specified circumstances, or eliminate voting rights entirely, as to any class or classes or series of stock of the bank pursuant to paragraph (3) of Section 15, provided that one class of shares or series thereof shall always have voting in respect to all matters in the bank, and provided further that the proposal to eliminate such SB1784 Enrolled -51- LRB093 10148 BDD 11571 b voting rights receives the approval of the holders of 70% of the outstanding shares of stock entitled to vote as provided in paragraph (7) of subsection (b) of this Section 17;

(8) increase, decrease, or change its capital stock or preferred stock, whether issued or unissued, for the purpose of eliminating fractional shares or avoiding the issuance of fractional shares, provided that in no case shall the capital be diminished to the prejudice of its creditors;

or (9) make such other change in its charter as may be authorized in this Act.

(b) To effect a change or changes in a State bank's charter as provided for in this Section 17:

(1) The board of directors shall adopt a resolution setting forth the proposed amendment and directing that it be submitted to a vote at a meeting of stockholders, which may be either an annual or special meeting.

(2) If the meeting is a special meeting, written or printed notice setting forth the proposed amendment or summary thereof shall be given to each stockholder of record entitled to vote at such meeting at least 30 days before such meeting and in the manner provided in this Act for the giving of notice of meetings of stockholders.

(3) At such special meeting, a vote of the stockholders entitled to vote shall be taken on the proposed amendment.

Except as provided in paragraph (7) of this subsection (b), the proposed amendment shall be adopted upon receiving the affirmative vote of the holders of at least two-thirds of the outstanding shares of stock entitled to vote at such meeting, unless holders of preferred stock are entitled to vote as a class in respect thereof, in which event the proposed amendment shall be adopted upon receiving the affirmative vote of SB1784 Enrolled -52- LRB093 10148 BDD 11571 b the holders of at least two-thirds of the outstanding shares of each class of shares entitled to vote as a class in respect thereof and of the total outstanding shares entitled to vote at such meeting.

Any number of amendments may be submitted to the stockholders and voted upon by them at one meeting.

A certificate of the amendment, or amendments, verified by the president, or a vice-president, or the cashier, shall be filed immediately in the office of the Commissioner.

(4) At any annual meeting without a resolution of the board of directors and without a notice and prior publication, as hereinabove provided, a proposition for a change in the bank's charter as provided for in this Section 17 may be submitted to a vote of the stockholders entitled to vote at the annual meeting, except that no proposition for authorized but unissued capital stock reserved for issuance for one or more of the purposes provided for in subsection (5) of Section 14 hereof shall be submitted without complying with the provisions of said subsection.

The proposed amendment shall be adopted upon receiving the affirmative vote of the holders of at least two-thirds of the outstanding shares of stock entitled to vote at such meeting, unless holders of preferred stock are entitled to vote as a class in respect thereof, in which event the proposed amendment shall be adopted upon receiving the affirmative vote of the holders of at least two-thirds of the outstanding shares of each class of shares entitled to vote as a class in respect thereof and the total outstanding shares entitled to vote at such meeting.

A certificate of the amendment, or amendments, verified by the president, or a vice-president or cashier, shall be filed immediately in the office of the Commissioner.

(5) If an amendment or amendments shall be approved SB1784 Enrolled -53- LRB093 10148 BDD 11571 b in writing by the Commissioner, the amendment or amendments so adopted and so approved shall be accomplished in accordance with the vote of the stockholders.

The Commissioner may impose such terms and conditions on the approval of the amendment or amendments as he deems necessary or appropriate.

The Commissioner shall revoke such approval in the event such amendment or amendments are not effected within one year from the date of the issuance of the Commissioner's certificate and written approval except for transactions permitted under subsection (5) of Section 14 of this Act.

(6) No amendment or amendments shall affect suits in which the bank is a party, nor affect causes of action, nor affect rights of persons in any particular, nor shall actions brought against such bank by its former name be abated by a change of name.

(7) A proposal to amend the charter to eliminate cumulative voting rights under all or specified circumstances, or to eliminate voting rights entirely, as to any class or classes or series or stock of a bank, pursuant to paragraph (3) of Section 15 and paragraph (7) of subsection (a) of this Section 17, shall be adopted only upon such proposal receiving the approval of the holders of 70% of the outstanding shares of stock entitled to vote at the meeting where the proposal is presented for approval, unless holders of preferred stock are entitled to vote as a class in respect thereof, in which event the proposed amendment shall be adopted upon receiving the approval of the holders of 70% of the outstanding shares of each class of shares entitled to vote as a class in respect thereof and of the total outstanding shares entitled to vote at the meeting where the proposal is presented for approval.

The proposal to amend the charter pursuant to this paragraph (7) may be SB1784 Enrolled -54- LRB093 10148 BDD 11571 b voted upon at the annual meeting or a special meeting.

(8) Written or printed notice of a stockholders' meeting to vote on a proposal to increase, decrease or change the capital stock or preferred stock pursuant to paragraph (8) of subsection (a) of this Section 17 and to eliminate fractional shares or avoid the issuance of fractional shares shall be given to each stockholder of record entitled to vote at the meeting at least 30 days before the meeting and in the manner provided in this Act for the giving of notice of meetings of stockholders, and shall include all of the following information:

(A) A statement of the purpose of the proposed reverse stock split.

(B) A statement of the amount of consideration being offered for the bank's stock.

(C) A statement that the bank considers the transaction fair to the stockholders, and a statement of the material facts upon which this belief is based.

(D) A statement that the bank has secured an opinion from a third party with respect to the fairness, from a financial point of view, of the consideration to be paid, the identity and qualifications of the third party, how the third party was selected, and any material relationship between the third party and the bank.

(E) A summary of the opinion including the basis for and the methods of arriving at the findings and any limitation imposed by the bank in arriving at fair value and a statement making the opinion available for reviewing or copying by any stockholder.

(F) A statement that objecting stockholders will be entitled to the fair value of those shares SB1784 Enrolled -55- LRB093 10148 BDD 11571 b that are voted against the charter amendment, if a proper demand is made on the bank and the requirements are satisfied as specified in this Section.

If a stockholder shall file with the bank, prior to or at the meeting of stockholders at which the proposed charter amendment is submitted to a vote, a written objection to the proposed charter amendment and shall not vote in favor thereof, and if the stockholder, within 20 days after receiving written notice of the date the charter amendment was accomplished pursuant to paragraph (5) of subsection (a) of this Section 17, shall make written demand on the bank for payment of the fair value of the stockholder's shares as of the day prior to the date on which the vote was taken approving the charter amendment, the bank shall pay to the stockholder, upon surrender of the certificate or certificates representing the stock, the fair value thereof.

The demand shall state the number of shares owned by the objecting stockholder.

The bank shall provide written notice of the date on which the charter amendment was accomplished to all stockholders who have filed written objections in order that the objecting stockholders may know when they must file written demand if they choose to do so.

Any stockholder failing to make demand within the 20-day period shall be conclusively presumed to have consented to the charter amendment and shall be bound by the terms thereof.

If within 30 days after the date on which a charter amendment was accomplished the value of the shares is agreed upon between the objecting stockholders and the bank, payment therefor shall be made within 90 days after the date on which the charter amendment was accomplished, upon the surrender of the stockholder's certificate or certificates representing the shares.

Upon payment of the agreed value the objecting stockholder shall cease to have any interest in the shares or SB1784 Enrolled -56- LRB093 10148 BDD 11571 b in the bank.

If within such period of 30 days the stockholder and the bank do not so agree, then the objecting stockholder may, within 60 days after the expiration of the 30-day period, file a complaint in the circuit court asking for a finding and determination of the fair value of the shares, and shall be entitled to judgment against the bank for the amount of the fair value as of the day prior to the date on which the vote was taken approving the charter amendment with interest thereon to the date of the judgment.

The practice, procedure and judgment shall be governed by the Civil Practice Law.

The judgment shall be payable only upon and simultaneously with the surrender to the bank of the certificate or certificates representing the shares.

Upon payment of the judgment, the objecting stockholder shall cease to have any interest in the shares or the bank.

The shares may be held and disposed of by the bank.

Unless the objecting stockholder shall file such complaint within the time herein limited, the stockholder and all persons claiming under the stockholder shall be conclusively presumed to have approved and ratified the charter amendment, and shall be bound by the terms thereof.

The right of an objecting stockholder to be paid the fair value of the stockholder's shares of stock as herein provided shall cease if and when the bank shall abandon the charter amendment.

(c) The purchase and holding and later resale of treasury stock of a state bank pursuant to the provisions of subsection (6) of Section 14 may be accomplished without a change in its charter reflecting any decrease or increase in capital stock.

_d_____________________a_______________________t____________ _____u_____________________d______________________s_____________ _____;_____________________s______________________a_____________ _____s_____________________o_______________________u____________ _____i________________________o____________________p____________ SB1784 Enrolled -57- LRB093 10148 BDD 11571 b _____f_____________________n________________________s___________ _____i______________________p_____________________h_____________ _____u_______________________n______________________c___________ _____i_____________________d______________________c_____________ _____m_____________________a______________________t_____________ _____l_____________________,______________________h_____________ _____v_____________________e______________________n_____________ _____e____________ _n_____________________e_______________________a____________ _____d_____________________t______________________h_____________ _____a_____________________h______________________i_____________ _____r_____________________e_______________________t____________ ______i____________________r______________________e_____________ ______m____________________t_______________________t____________ _____u_____________________i______________________o_____________ _____r_____________________,______________________a_____________ _____n_____________________i______________________t_____________ _____i_____________________i________________________t___________ _____e___ __r____________________y______________________i_____________ _______b___________________t______________________a_____________ _____s_____________________e______________________r_____________ _____t_____________________u______________________y_____________ _____p_____________________n______________________o_____________ _____t_____________________y______________________h_____________ _____,_____________________i______________________p_____________ _____s_____________________v_________________________s__________ _____p_____________________n______________________a_____________ ______m____________________t______________________o_____________ _____u______ (Source:

P.A.

91-322, eff.

1-1-00;

92-483, eff.

8-23-01.) Section 825.

The Savings Bank Act is amended by changing Sections 1007.55 and 1008 and by adding Section 1007.125 as SB1784 Enrolled -58- LRB093 10148 BDD 11571 b follows:

(205 ILCS 205/1007.55) (from Ch.

17, par.

7301-7.55) Sec.

1007.55.

"Director" means any director, trustee, or other person performing similar functions with respect to any organization whether incorporated or unincorporated.

_______ _____o_____________________l______________________a_____________ _____c_____________________g______________________k_____________ ______o____________________e______________________t_____________ _____c_____________________e______________________a____ The term _____c_____ does not include an advisory director, honorary director, director emeritus, or similar person, unless the person is otherwise performing functions similar to those of a director.

(205 ILCS 205/1007.125 new) _e_____________________w_______________________o____________ ______t____________________b______________________'_____________ _____t_____________________f______________________d_____________ _____h_____________________f______________________b_____________ _____l_____________________p______________________"_____________ _____t______________________s_____________ (Source:

P.A.