HB0063 98TH GENERAL ASSEMBLY

LRB098 02664 MGM 32669 b

98TH GENERAL ASSEMBLY
State of Illinois
2013 and 2014
HB0063

Introduced 1/9/2013, by Rep. La Shawn K. Ford

SYNOPSIS AS INTRODUCED:

205 ILCS 5/51

from Ch. 17, par. 363

Amends the Illinois Banking Act. Provides that financial institutions have 180 days (was, at least 60 but no more than 180 days) to correct capital impairments before the Commissioner may take possession and control of the bank. Provides that the Commissioner shall not extend the time period for the board of directors to correct a capital impairment for a bank that is critically undercapitalized. Provides that if the Commissioner has given notice to the board of directors requiring the bank to raise capital to correct capital impairment, the Commissioner shall only require a capital raising plan that ensures capital necessary for the bank to be adequately capitalized. Provides that the Commissioner shall not enforce or implement the provisions in a manner inconsistent with the requirements of the Federal Deposit Insurance Corporation. Effective immediately.

FISCAL NOTE ACT MAY APPLY

A BILL FOR

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 51 and 52 as follows:

(205 ILCS 5/51) (from Ch. 17, par. 363)

Sec. 51. Capital impairment, etc.; correction.

(a) If the Commissioner with respect to a State bank shall find:

(1) its capital is impaired or it is otherwise in an unsound condition; or

(2) its business is being conducted in an unlawful, including, without limitation, in violation of any provisions of State or federal law, or in a fraudulent or unsafe manner; or

(3) it is unable to continue operations; or

(4) its examination has been obstructed or impeded; or

(5) that losses have occurred or are likely to occur that have or will deplete all or substantially all of the State bank's capital; the Commissioner may give notice to the board of directors of his or her finding or findings. If the situation so found by the Commissioner shall not be corrected to his satisfaction within a period of at least 60 but no more than 180 days after receipt of such notice, which period shall be determined by the Commissioner and set forth in the notice, the Commissioner at the termination of said period may take possession and control of the bank and its assets as in this Act provided for the purpose of examination, reorganization or liquidation through receivership.

(b) If the Commissioner has given notice to the board of directors of his findings, as provided in subsection (a), and the time period prescribed in that notice has expired, the Commissioner may extend the time period prescribed in that notice for such period as the Commissioner deems appropriate. The Commissioner shall not extend the time period for the board of directors to correct a capital impairment for a bank that is critically undercapitalized. For the purposes of this subsection only, "critically undercapitalized" shall have the meaning provided by 12 C.F.R. 325.103.

(c) If the Commissioner has given notice to the board of directors requiring the bank to raise capital to correct capital impairment, the Commissioner shall only require a capital raising plan that ensures capital necessary for the bank to be adequately capitalized. For the purposes of this subsection only, "adequately capitalized" shall have the meaning provided by 12 C.F.R. 325.103.

(d) The Commissioner shall not enforce or implement the provisions of this Section in a manner inconsistent with the requirements of the Federal Deposit Insurance Corporation.

(Source: P.A. 96-1365, eff. 7-28-10.)

Section 99. Effective date. This Act takes effect upon becoming law.