PART 320 POWERS INCIDENTAL AND GERMANE TO CARRYING ON A GENERAL BANKING BUSINESS : Sections Listing

TITLE 38: FINANCIAL INSTITUTIONS
CHAPTER II: OFFICE OF BANKS AND REAL ESTATE
PART 320 POWERS INCIDENTAL AND GERMANE TO CARRYING ON A GENERAL BANKING BUSINESS

AUTHORITY: Implementing Section 3 and authorized by Section 48(6)(a) of the Illinois Banking Act [205 ILCS 5/3 and 48(6)(a)].

SOURCE: Adopted at 13 Ill. Reg. 19423, effective December 15, 1989; recodified from Chapter II, Commissioner of Banks and Trust Companies, to Chapter II, Office of Banks and Real Estate, pursuant to PA 89-508, at 20 Ill. Reg. 12645.

 

Section 320.10  Purpose

 

The powers of a state bank in Illinois are established and governed by the provisions of the Illinois Banking Act (the "Act") [205 ILCS 5].  Section 3 of the Act authorizes the establishment of banks for the purpose of doing a general banking business.  Section 5 of the Act further enumerates the corporate powers of a state bank.  This Part establishes factors which may be relevant in determining whether an activity is within a state bank's power to do a general banking business or incidental and germane to its power to do a general banking business.

 

Section 320.20  General Banking Business

 

A state bank has the power to do a general banking business and the power to engage in activities which are incidental and germane to carrying on a general banking business (Corbett v. Devon Bank, 299 N.E. 2d 521, 529 (1973)).

 

Section 320.30  Factors to be Considered

 

a)         The following factors are relevant, if applicable, in determining whether an activity is incidental and germane to carrying on a general banking business.

 

1)         Is the activity convenient or useful in connection with the performance of one of the bank's established activities pursuant to its express powers under the Act (i.e., selling traveler's checks, issuing credit cards, issuing license plates)?

 

2)         Is the activity related to ordinary, traditional bank functions (i.e., lending money, paying checks and accepting deposits)?

 

3)         To what extent do other banks participate in this activity?

 

4)         Has the Board of Governors of the Federal Reserve System found the activity appropriate for non-bank subsidiaries of a bank holding company pursuant to 12 U.S.C. 1843(c)(8)?

 

b)         In addition to the above-stated factors, the state bank may offer any other information to support a finding that a particular activity is incidental and germane to carrying on a general banking business.

 

Section 320.40  Procedure

 

A state bank may request a declaratory ruling pursuant to Section 5-150(a) of the Illinois Administrative Procedure Act [5 ILCS 100/5-150(a)] from this Agency that an activity is incidental and germane to carrying on a general banking business by submitting a written request to the Commissioner which describes the proposed activity and contains information addressing the factors set forth in this Part and an analysis of the financial risks associated with this activity.