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91_SB0047
LRB9100973JSpcA
1 AN ACT to amend the Illinois Banking Act by adding
2 Section 6.5.
3 Be it enacted by the People of the State of Illinois,
4 represented in the General Assembly:
5 Section 5. The Illinois Banking Act is amended by adding
6 Section 6.5 as follows:
7 (205 ILCS 5/6.5 new)
8 Sec. 6.5. Reliance on power of attorney; notice to
9 customer.
10 (a) Within 10 days after a bank acts in reliance upon a
11 written power of attorney naming a bank customer as the
12 principal, the bank shall notify the customer in writing of
13 the reliance. The notice shall be mailed to the customer at
14 the customer's address, as set forth in the bank's records,
15 and shall set forth sufficient information to allow the
16 customer to identify the transaction and must include a copy
17 of the power of attorney.
18 (b) The customer must examine the notice to determine
19 whether any transaction was not authorized because of an
20 alteration of the power of attorney or because a purported
21 signature by or on behalf of the customer was not authorized.
22 Within 10 days after receipt of the notice made pursuant to
23 subsection (a), the customer must notify the bank of any
24 unauthorized transaction discovered or that should have been
25 discovered from an examination of the notice.
26 (c) If the bank proves that the customer failed, with
27 respect to a transaction disclosed in a notice, to comply
28 with the duties imposed on the customer by subsection (b),
29 the customer is precluded from asserting a claim against the
30 bank based upon:
31 (1) the customer's unauthorized signature or any
-2- LRB9100973JSpcA
1 alteration of the power of attorney, if the bank also
2 proves that it suffered a loss by reason of the failure;
3 and
4 (2) the customer's unauthorized signature or
5 alteration by the same wrongdoer on any other power of
6 attorney relied on in good faith by the bank if the
7 transaction was consummated before the bank received
8 notice from the customer of the unauthorized signature or
9 alteration.
10 (d) If subsection (c) applies and the customer proves
11 that the bank failed to exercise ordinary care in relying on
12 the power of attorney and that the failure substantially
13 contributed to loss, the loss is allocated between the
14 customer precluded and the bank asserting the preclusion
15 according to the extent to which the failure of the customer
16 to comply with subsection (c) and the failure of the bank to
17 exercise ordinary care contributed to the loss. If the
18 customer proves that the bank did not rely on the power of
19 attorney in good faith, the preclusion under subsection (c)
20 does not apply.