Bill Text: IL SB2885 | 2017-2018 | 100th General Assembly | Engrossed

---

Bill Title: Amends the Illinois Banking Act. Provides that a State bank that has been in existence for 10 years or more and has less than $50,000,000 (rather than $20,000,000) in assets may have a minimum of 3 directors. Extends the exemptions from loan and investment limits described in specified provisions of this Act to any department, bureau, board, commission, or establishment of the United States, including any corporation wholly owned by the United States. Provides that the Secretary shall provide information relating to the prior fiscal year upon the request of the State Banking Board.

Spectrum: Bipartisan Bill

Status: (Failed) 2019-01-09 - Session Sine Die [SB2885 Detail]

Download: Illinois-2017-SB2885-Engrossed.html

---

SB2885 Engrossed LRB100 18302 XWW 33507 b
AN ACT concerning regulation.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Illinois Banking Act is amended by changing
Sections 16 and 35 and by adding Section 80.5 as follows:
(205 ILCS 5/16) (from Ch. 17, par. 323)
Sec. 16. Directors. The business and affairs of a State
bank shall be managed by its board of directors that shall
exercise its powers as follows:
(1) Directors shall be elected as provided in this Act. Any
omission to elect a director or directors shall not impair any
of the rights and privileges of the bank or of any person in
any way interested. The existing directors shall hold office
until their successors are elected and qualify.
(2) (a) Notwithstanding the provisions of any charter
heretofore or hereafter issued, the number of directors,
not fewer than 5 nor more than 25, may be fixed from time
to time by the stockholders at any meeting of the
stockholders called for the purpose of electing directors
or changing the number thereof by the affirmative vote of
at least two-thirds of the outstanding stock entitled to
vote at the meeting, and the number so fixed shall be the
board regardless of vacancies until the number of directors

SB2885 Engrossed - 2 - LRB100 18302 XWW 33507 b
is thereafter changed by similar action.
(b) Notwithstanding the minimum number of directors
specified in paragraph (a) of this subsection, a State bank
that has been in existence for 10 years or more and has
less than $50,000,000 $20,000,000 in assets, as of the
December 31 immediately preceding the annual meeting of
shareholders at which directors are elected, may, subject
to the approval of the Commissioner, have a minimum of 3
directors; provided that if a State bank has fewer than 5
directors, at least one director shall not be an officer or
employee of the bank. The Commissioner shall annually
review the appropriateness of the grant of authority to
have a reduced minimum number of directors pursuant to this
paragraph (b).
(3) Except as otherwise provided in this paragraph (3),
directors shall hold office until the next annual meeting of
the stockholders succeeding their election or until their
successors are elected and qualify. If the board of directors
consists of 6 or more members, in lieu of electing the
membership of the whole board of directors annually, the
charter or by-laws of a State bank may provide that the
directors shall be divided into either 2 or 3 classes, each
class to be as nearly equal in number as is possible. The term
of office of directors of the first class shall expire at the
first annual meeting of the stockholders after their election,
that of the second class shall expire at the second annual

SB2885 Engrossed - 3 - LRB100 18302 XWW 33507 b
meeting after their election, and that of the third class, if
any, shall expire at the third annual meeting after their
election. At each annual meeting after classification, the
number of directors equal to the number of the class whose
terms expire at the time of the meeting shall be elected to
hold office until the second succeeding annual meeting, if
there be 2 classes, or until the third succeeding annual
meeting, if there be 3 classes. Vacancies may be filled by
stockholders at a special meeting called for the purpose.
If authorized by the bank's by-laws or an amendment
thereto, the directors of a State bank may properly fill a
vacancy or vacancies arising between shareholders' meetings,
but at no time may the number of directors selected to fill a
vacancy in this manner during any interim period between
shareholders' meetings exceed 33 1/3% of the total membership
of the board of directors.
(4) The board of directors shall hold regular meetings at
least once each month, provided that, upon prior written
approval by the Commissioner, the board of directors may hold
regular meetings less frequently than once each month but at
least once each calendar quarter. A special meeting of the
board of directors may be held as provided by the by-laws. A
special meeting of the board of directors may also be held upon
call by the Commissioner or a bank examiner appointed under the
provisions of this Act upon not less than 12 hours notice of
the meeting by personal service of the notice or by mailing the

SB2885 Engrossed - 4 - LRB100 18302 XWW 33507 b
notice to each of the directors at his residence as shown by
the books of the bank. A majority of the board of directors
shall constitute a quorum for the transaction of business
unless a greater number is required by the charter or the
by-laws. The act of the majority of the directors present at a
meeting at which a quorum is present shall be the act of the
board of directors unless the act of a greater number is
required by the charter or by the by-laws.
(5) A member of the board of directors shall be elected
president. The board of directors may appoint other officers,
as the by-laws may provide, and fix their salaries to carry on
the business of the bank. The board of directors may make and
amend by-laws (not inconsistent with this Act) for the
government of the bank and may, by the affirmative vote of a
majority of the board of directors, establish reasonable
compensation of all directors for services to the corporation
as directors, officers, or otherwise. An officer, whether
elected or appointed by the board of directors or appointed
pursuant to the by-laws, may be removed by the board of
directors at any time.
(6) The board of directors shall cause suitable books and
records of all the bank's transactions to be kept.
(7) (a) In discharging the duties of their respective
positions, the board of directors, committees of the board,
and individual directors may, in considering the best long
term and short term interests of the bank, consider the

SB2885 Engrossed - 5 - LRB100 18302 XWW 33507 b
effects of any action (including, without limitation,
action that may involve or relate to a merger or potential
merger or to a change or potential change in control of the
bank) upon employees, depositors, suppliers, and customers
of the corporation or its subsidiaries, communities in
which the main banking premises, branches, offices, or
other establishments of the bank or its subsidiaries are
located, and all pertinent factors.
(b) In discharging the duties of their respective
positions, the board of directors, committees of the board,
and individual directors shall be entitled to rely on
advice, information, opinions, reports or statements,
including financial statements and financial data,
prepared or presented by: (i) one or more officers or
employees of the bank whom the director believes to be
reliable and competent in the matter presented; (ii) one or
more counsels, accountants, or other consultants as to
matters that the director believes to be within that
person's professional or expert competence; or (iii) a
committee of the board upon which the director does not
serve, as to matters within that committee's designated
authority; provided that the director's reliance under
this paragraph (b) is placed in good faith, after
reasonable inquiry if the need for such inquiry is apparent
under the circumstances and without knowledge that would
cause such reliance to be unreasonable.

SB2885 Engrossed - 6 - LRB100 18302 XWW 33507 b
(Source: P.A. 91-452, eff. 1-1-00; 92-476, eff. 8-23-01.)
(205 ILCS 5/35) (from Ch. 17, par. 343)
Sec. 35. Exemptions from loan and investment limits. The
limitations in Sections 32, 33, 34, and 35.1 upon the
liabilities of any one person and upon the purchase or holding
of marketable investment securities shall not apply to the
following as to which there shall be no limitation:
(1) Obligations of, or guaranteed by the United States or
any department, bureau, board, commission, or establishment of
the United States, including any corporation wholly owned,
directly or indirectly, by the United States.
(2) Loans to or obligations of any person to the extent
that they are secured by not less than a like amount of bonds
or notes of the United States, or certificates of indebtedness
of the United States, or Treasury Bills of the United States or
obligations fully guaranteed as to both principal and interest
by the United States, or to the extent that the same shall be
secured or covered by guaranty or by commitment or agreement to
take over or purchase, made by any Federal Reserve Bank or by
the United States or any department, bureau, board, commission
or establishment of the United States, including any
corporation wholly owned, directly or indirectly, by the United
States.
(3) Obligations of any corporation wholly owned, directly
or indirectly, by the United States or of any agency or

SB2885 Engrossed - 7 - LRB100 18302 XWW 33507 b
instrumentality of the United States.
(4) General obligations and tax anticipation warrants of
each state of the United States and general obligations of each
municipality located in whole or in part in the county in which
the bank is located.
(5) Loans to or obligations of any person to the extent
that they are secured by not less than the same amount of
general obligations and tax anticipation warrants of each state
of the United States and of each municipality located in whole
or in part in the county in which the bank is located.
(6) Loans to or obligations of or investments in those
subsidiaries, established or acquired pursuant to subsection
(12) of Section 5 of this Act, all of the stock of which is
owned by the bank.
(7) Loans or extensions of credit secured by a segregated
deposit account in the lending bank.
(8) Obligations of the State of Illinois, and obligations
guaranteed by the State of Illinois to the extent of the
guarantee.
(9) To the ownership of certificates of participation in
open-end investment companies registered with the Securities
and Exchange Commission under the Investment Company Act of
1940 and Securities Act of 1933, provided the portfolios of
such investment companies consist wholly of investments in
which the bank could invest directly without limitation.
(Source: P.A. 90-301, eff. 8-1-97.)

SB2885 Engrossed - 8 - LRB100 18302 XWW 33507 b
(205 ILCS 5/80.5 new)
Sec. 80.5. Accounting of Administrative Expenses. Upon
request of the Board, the Secretary shall provide information
relating to the prior fiscal year, including:
(1) all fees collected under Section 48 of this Act;
(2) the total amount deposited into the Bank and Trust
Company Fund;
(3) the total administrative expenses for the fiscal
year; and
(4) the amount available to be applied as a credit
against fees for the subsequent year as required by
subsection (d-1) of Section 48 and the actual amount so
credited.