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91_SB0815
LRB9105966JSpcA
1 AN ACT to amend the Illinois Banking Act by changing
2 Sections 4, 13, 22, 30, and 30.5.
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
6 changing Sections 4, 13, 22, 30, and 30.5 as follows:
7 (205 ILCS 5/4) (from Ch. 17, par. 310)
8 Sec. 4. Effect on existing banks. The certificates,
9 permits and charters of state banks existing at the time of
10 the adoption of this Act shall continue in full force and
11 effect, and the provisions of this Act shall apply thereto.
12 Any corporation with banking powers availing itself of or
13 accepting the benefits of this Act and all corporations with
14 banking powers existing by virtue of any special charter or
15 general law of this State, shall be subject to the
16 restrictions provisions and requirements of this Act in every
17 particular, as if organized under this Act.
18 (Source: Laws 1955, p. 83.)
19 (205 ILCS 5/13) (from Ch. 17, par. 320)
20 Sec. 13. Issuance of charter.
21 (a) When the directors have organized as provided in
22 Section 12 of this Act, and the capital stock and the
23 preferred stock, if any, together with a surplus of not less
24 than 50% of the capital, has been all fully paid in and a
25 record of the same filed with the Commissioner, the
26 Commissioner or some competent person of the Commissioner's
27 appointment shall make a thorough examination into the
28 affairs of the proposed bank, and if satisfied (i) that all
29 the requirements of this Act have been complied with, (ii)
30 that no intervening circumstance has occurred to change the
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1 Commissioner's findings made pursuant to Section 10 of this
2 Act, and (iii) that the prior involvement by any stockholder
3 who will own a sufficient amount of stock to have control, as
4 defined in Section 18 of this Act, of the proposed bank with
5 any other financial institution, whether as stockholder,
6 director, officer, or customer, was conducted in a safe and
7 sound manner, upon payment into the Commissioner's office of
8 the reasonable expenses of the examination, as determined by
9 the Commissioner, the Commissioner shall issue a charter
10 authorizing the bank to commence business as authorized in
11 this Act. All charters issued by the Commissioner or any
12 predecessor agency which chartered State banks, including any
13 charter outstanding as of September 1, 1989, shall be
14 perpetual. For the 2 years after the Commissioner has issued
15 a charter to a bank, the bank shall request and obtain from
16 the Commissioner prior written approval before it may change
17 senior management personnel or directors.
18 The original charter, duly certified by the Commissioner,
19 or a certified copy shall be evidence in all courts and
20 places of the existence and authority of the bank to do
21 business. Upon the issuance of the charter by the
22 Commissioner, the bank shall be deemed fully organized and
23 may proceed to do business. The Commissioner may, in the
24 Commissioner's discretion, withhold the issuing of the
25 charter when the Commissioner has reason to believe that the
26 bank is organized for any purpose other than that
27 contemplated by this Act or that a commission or fee has been
28 paid in connection with the sale of the stock of the bank.
29 The Commissioner shall revoke the charter and order
30 liquidation in the event that the bank does not commence a
31 general banking business within one year from the date of the
32 issuance of the charter, unless a request has been submitted,
33 in writing, to the Commissioner for an extension and the
34 request has been approved. After commencing a general
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1 banking business, a bank, upon written notice to the
2 Commissioner, may change its name.
3 (b) (1) The Commissioner may also issue a charter to a
4 bank that is owned exclusively by other depository
5 institutions or depository institution holding companies and
6 is organized to engage exclusively in providing services to
7 or for other depository institutions, their holding
8 companies, and the officers, directors, and employees of such
9 institutions and companies, and in providing correspondent
10 banking services at the request of other depository
11 institutions or their holding companies (also referred to as
12 a "bankers' bank").
13 (2) A bank chartered pursuant to paragraph (1) shall,
14 except as otherwise specifically determined by the
15 Commissioner, be vested with the same rights and privileges
16 and subject to the same duties, restrictions, penalties, and
17 liabilities now or hereafter imposed under this Act.
18 (c) A bank chartered under this Act after November 1,
19 1985, and an out-of-state bank that merges with a State bank
20 and establishes or maintains a branch in this State after May
21 31, 1997, that accepts deposits or that is authorized to
22 accept deposits shall obtain from and, at all times while it
23 accepts or retains deposits, maintain with the Federal
24 Deposit Insurance Corporation, or such other instrumentality
25 of or corporation chartered by the United States, deposit
26 insurance as authorized under federal law.
27 (d) (i) A bank that has a banking charter issued by the
28 Commissioner under this Act may, pursuant to a written
29 purchase and assumption agreement, transfer substantially all
30 of its assets to another State bank or national bank in
31 consideration, in whole or in part, for the transferee banks'
32 assumption of any part or all of its liabilities. Such a
33 transfer shall in no way be deemed to impair the charter of
34 the transferor bank or cause the transferor bank to forfeit
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1 any of its rights, powers, interests, franchises, or
2 privileges as a State bank, nor shall any voluntary reduction
3 in the transferor bank's activities resulting from the
4 transfer have any such effect; provided, however, that a
5 State bank that transfers substantially all of its assets
6 pursuant to this subsection (d) and following the transfer
7 does not accept deposits and make loans, shall not have any
8 rights, powers, interests, franchises, or privileges under
9 subsection (15) of Section 5 of this Act until the bank has
10 resumed accepting deposits and making loans.
11 (ii) The fact that a State bank does not resume
12 accepting deposits and making loans for a period of 24 months
13 commencing on September 11, 1989 or on a date of the transfer
14 of substantially all of a State bank's assets, whichever is
15 later, or such longer period as the Commissioner may allow in
16 writing, may be the basis for a finding by the Commissioner
17 under Section 51 of this Act that the bank is unable to
18 continue operations.
19 (iii) The authority provided by subdivision (i) of this
20 subsection (d) shall terminate on May 31, 1997, and no bank
21 that has transferred substantially all of its assets pursuant
22 to this subsection (d) shall continue in existence after May
23 31, 1997.
24 (Source: P.A. 89-208, eff. 9-29-95; 89-567, eff. 7-26-96;
25 89-603, eff. 8-2-96; 90-14, eff. 7-1-97; 90-301, eff. 8-1-97;
26 90-665, eff. 7-30-98.)
27 (205 ILCS 5/22) (from Ch. 17, par. 329)
28 Sec. 22. Merger procedure; resulting State bank. The
29 merger procedure required of a State bank where there is to
30 be a resulting State bank by consolidation or merger shall
31 be:
32 (1) The board of directors of each merging bank or
33 insured savings association shall, by a majority of the
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1 entire board, approve a merger agreement that shall contain:
2 (a) The name of each merging bank or insured
3 savings association and its location and a list of each
4 merging bank's or insured savings association's
5 stockholders as of the date of the merger agreement;
6 (b) With respect to the resulting bank (i) its name
7 and place of business; (ii) the amount of capital and,
8 surplus and reserve for operating expenses; (iii) the
9 classes and the number of shares of stock and the par
10 value of each share; (iv) the designation of the
11 continuing bank and the charter which is to be the
12 charter of the resulting bank, together with the
13 amendments to the continuing charter and to the
14 continuing by-laws; and (v) a detailed financial
15 Statement showing the assets and liabilities after the
16 proposed merger or consolidation;
17 (c) Provisions stating the method, terms and
18 conditions of carrying the merger into effect, including
19 the manner of converting the shares of the merging banks
20 or insured savings association into the cash, shares of
21 stock or other securities of any corporation or other
22 property, or any combination of the foregoing, Stated in
23 the merger agreement as to be received by the
24 stockholders of each merging bank or insured savings
25 association;
26 (d) A Statement that the agreement is subject to
27 approval by the Commissioner and by the stockholders of
28 each merging bank or insured savings association and that
29 whether approved or disapproved the merging banks or
30 insured savings association will pay the Commissioner's
31 expenses of examination;
32 (e) Provisions governing the manner of disposing of
33 the shares of the resulting bank not taken by the
34 dissenting stockholders of the merging banks or insured
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1 savings association; and
2 (f) Such other provisions as the Commissioner may
3 reasonably require to enable him to discharge his duties
4 with respect to the merger.
5 (2) After approval by the board of directors of each
6 bank or insured savings association, the merger agreement
7 shall be submitted to the Commissioner for approval, together
8 with certified copies of the authorizing resolutions of each
9 board of directors showing approval by a majority of the
10 entire board of each bank or insured savings association.
11 (3) After receipt by the Commissioner of the papers
12 specified in paragraph (2), he shall approve or disapprove
13 the merger agreement. The Commissioner shall not approve the
14 merger agreement unless he shall be of the opinion and shall
15 find:
16 (a) That the resulting bank meets the requirements
17 of this Act for the formation of a new bank at the
18 proposed main banking premises of the resulting bank;
19 (b) That the same matters exist with respect to the
20 resulting bank which would have been required under
21 Section 10 of this Act for the organization of a new
22 bank;
23 (c) That the merger agreement is fair to all
24 persons affected; and
25 (d) That the resulting bank will be operated in a
26 safe and sound manner.
27 If the Commissioner disapproves an agreement he shall
28 State his objections and give an opportunity to the merging
29 banks to amend the merger agreement to obviate such
30 objections.
31 (Source: P.A. 87-1226.)
32 (205 ILCS 5/30) (from Ch. 17, par. 337)
33 Sec. 30. Conversion; merger with trust company. Upon
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1 approval by the Commissioner a trust company having power so
2 to do under the law under which it is organized may convert
3 into a state bank or may merge into a state bank as
4 prescribed by this Act; except that the action by a trust
5 company shall be taken in the manner prescribed by and shall
6 be subject to limitations and requirements imposed by the law
7 under which it is organized which law shall also govern the
8 rights of its dissenting stockholders. The rights of
9 dissenting stockholders of a state bank shall be governed by
10 Section 29 of this Act. The conversion or merger procedure
11 shall be:
12 (1) In the case of a merger, the board of directors of
13 both the merging trust company and the merging bank by a
14 majority of the entire board in each case shall approve a
15 merger agreement which shall contain:
16 (a) The name and location of the merging bank and
17 of the merging trust company and a list of the
18 stockholders of each as of the date of the merger
19 agreement;
20 (b) With respect to the resulting bank (i) its name
21 and place of business; (ii) the amount of capital and,
22 surplus and reserve for operating expenses; (iii) the
23 classes and the number of shares of stock and the par
24 value of each share; (iv) the charter which is to be the
25 charter of the resulting bank, together with the
26 amendments to the continuing charter and to the
27 continuing by-laws; and (v) a detailed financial
28 statement showing the assets and liabilities after the
29 proposed merger;
30 (c) Provisions governing the manner of converting
31 the shares of the merging bank and of the merging trust
32 company into shares of the resulting bank;
33 (d) A statement that the merger agreement is
34 subject to approval by the Commissioner and by the
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1 stockholders of the merging bank and the merging trust
2 company, and that whether approved or disapproved, the
3 parties thereto will pay the Commissioner's expenses of
4 examination;
5 (e) Provisions governing the manner of disposing of
6 the shares of the resulting bank not taken by the
7 dissenting stockholders of the merging trust company; and
8 (f) Such other provisions as the Commissioner may
9 reasonably require to enable him to discharge his duties
10 with respect to the merger.
11 (2) After approval by the board of directors of the
12 merging bank and of the merging trust company, the merger
13 agreement shall be submitted to the Commissioner for approval
14 together with the certified copies of the authorizing
15 resolution of each board of directors showing approval by a
16 majority of each board.
17 (3) After receipt by the Commissioner of the papers
18 specified in subsection (2), he shall approve or disapprove
19 the merger agreement. The Commissioner shall not approve the
20 agreement unless he shall be of the opinion and finds:
21 (a) That the resulting bank meets the requirements
22 of this Act for the formation of a new bank at the
23 proposed place of business of the resulting bank;
24 (b) That the same matters exist in respect of the
25 resulting bank which would have been required under
26 Section 10 of this Act for the organization of a new
27 bank; and
28 (c) That the merger agreement is fair to all
29 persons affected. If the Commissioner disapproves the
30 merger agreement, he shall state his objections in
31 writing and give an opportunity to the merging bank and
32 the merging trust company to obviate such objections.
33 (4) To be effective, if approved by the Commissioner, a
34 merger of a bank and a trust company where there is to be a
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1 resulting bank must be approved by the affirmative vote of
2 the holders of at least two-thirds of the outstanding shares
3 of stock of the merging bank entitled to vote at a meeting
4 called to consider such action, unless holders of preferred
5 stock are entitled to vote as a class in respect thereof, in
6 which event the proposed merger shall be adopted upon
7 receiving the affirmative vote of the holders of at least
8 two-thirds of the outstanding shares of each class of shares
9 entitled to vote as a class in respect thereof and of the
10 total outstanding shares entitled to vote at such meeting and
11 must be approved by the stockholders of the merging trust
12 company as provided by the Act under which it is organized.
13 The prescribed vote by the merging bank and the merging trust
14 company shall constitute the adoption of the charter and
15 by-laws of the continuing bank, including the amendments in
16 the merger agreement, as the charter and by-laws of the
17 resulting bank. Written or printed notice of the meeting of
18 the stockholders of the merging bank shall be given to each
19 stockholder of record entitled to vote at such meeting at
20 least thirty days before such meeting and in the manner
21 provided in this Act for the giving of notice of meetings of
22 stockholders. The notice shall state that dissenting
23 stockholders of the merging trust company will be entitled to
24 payment of the value of those shares which are voted against
25 approval of the merger, if a proper demand is made on the
26 resulting bank and the requirements of the Act under which
27 the merging trust company is organized are satisfied.;
28 (5) Unless a later date is specified in the merger
29 agreement, the merger shall become effective upon the filing
30 with the Commissioner of the executed merger agreement,
31 together with copies of the resolutions of the stockholders
32 of the merging bank and the merging trust company approving
33 it, certified by the president or a vice-president or, the
34 cashier and also by the secretary or other officer charged
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1 with keeping the records. The charter of the merging trust
2 company shall thereupon automatically terminate. The
3 Commissioner shall thereupon issue to the continuing bank a
4 certificate of merger which shall specify the name of the
5 merging trust company, the name of the continuing bank and
6 the amendments to the charter of the continuing bank provided
7 for by the merger agreement. Such certificate shall be
8 conclusive evidence of the merger and of the correctness of
9 all proceedings therefor in all courts and places including
10 the office of the Secretary of State, and said certificate
11 shall be recorded.
12 (6) In the case of a conversion, a trust company shall
13 apply for a charter by filing with the Commissioner:
14 (a) A certificate signed by its president, or a
15 vice-president, and by a majority of the entire board of
16 directors setting forth the corporate action taken in
17 compliance with the provisions of the Act under which it
18 is organized governing the conversion of a trust company
19 to a bank or governing the merger of a trust company into
20 another corporation;
21 (b) The plan of conversion and the proposed
22 charter approved by the stockholders for the operation of
23 the trust company as a bank. The plan of conversion shall
24 contain (i) the name and location proposed for the
25 converting trust company; (ii) a list of its stockholders
26 as of the date of the stockholders' approval of the plan
27 of conversion; (iii) the amount of its capital and,
28 surplus and reserve for operating expenses; (iv) the
29 classes and the number of shares of stock and the par
30 value of each share; (v) the charter which is to be the
31 charter of the resulting bank; and (vi) a detailed
32 financial statement showing the assets and liabilities of
33 the converting trust company;
34 (c) A statement that the plan of conversion is
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1 subject to approval by the Commissioner and that, whether
2 approved or disapproved, the converting trust company
3 will pay the Commissioner's expenses of examination; and
4 (d) Such other instruments as the Commissioner may
5 reasonably require to enable him to discharge his duties
6 with respect to the conversion.
7 (7) After receipt by the Commissioner of the papers
8 specified in subsection (6), he shall approve or disapprove
9 the plan of conversion. The Commissioner shall not approve
10 the plan of conversion unless he shall be of the opinion and
11 finds:
12 (a) That the resulting bank meets the requirements
13 of this Act for the formation of a new bank at the
14 proposed place of business of the resulting bank;
15 (b) That the same matters exist in respect of the
16 resulting bank which would have been required under
17 Section 10 of this Act for the organization of a new
18 bank; and
19 (c) That the plan of conversion is fair to all
20 persons affected.
21 If the commissioner disapproves the plan of conversion,
22 he shall state his objections in writing and give an
23 opportunity to the converting trust company to obviate such
24 objections.
25 (8) Unless a later date is specified in the plan of
26 conversion, the conversion shall become effective upon the
27 Commissioner's approval, and the charter proposed in the plan
28 of conversion shall constitute the charter of the resulting
29 bank. The Commissioner shall issue a certificate of
30 conversion which shall specify the name of the converting
31 trust company, the name of the resulting bank and the charter
32 provided for by said plan of conversion. Such certificate
33 shall be conclusive evidence of the conversion and of the
34 correctness of all proceedings therefor in all courts and
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1 places including the office of the Secretary of State, and
2 such certificate shall be recorded.
3 (9) In the case of either a merger or a conversion under
4 this Section 30, the resulting bank shall be considered the
5 same business and corporate entity as each merging bank and
6 merging trust company or as the converting trust company with
7 all the property, rights, powers, duties and obligations of
8 each as specified in Section 28 of this Act.
9 (Source: P.A. 89-541, eff. 7-19-96; revised 10-31-98.)
10 (205 ILCS 5/30.5)
11 Sec. 30.5. Mid-tier bank holding company merger with
12 State bank. Upon approval by the Commissioner, a mid-tier
13 bank holding company having power so to do under the law
14 under which it is organized may merge into its subsidiary
15 State bank as prescribed by this Act; except that the action
16 by the mid-tier bank holding company shall be taken in the
17 manner prescribed by and shall be subject to limitations and
18 requirements imposed by the law under which it is organized.
19 The merger procedure shall be as follows:
20 (1) The board of directors of the parent bank holding
21 company shall, by resolution, approve a merger agreement
22 which shall contain:
23 (a) the name and location of the merging bank and
24 of the mid-tier bank holding company;
25 (b) with respect to the merging bank (i) the amount
26 of capital and, surplus, and reserve for operating
27 expenses; (ii) the classes and the number of shares of
28 stock and the par value of each share; (iii) a detailed
29 financial statement showing the assets and liabilities
30 after the proposed merger; and (iv) any amendments to the
31 charter or by-laws;
32 (c) provisions governing the manner of converting
33 the shares of the merging bank and the mid-tier bank
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1 holding company into shares of the merging bank and the
2 manner of transferring the converted shares to the parent
3 bank holding company;
4 (d) a statement that the merger agreement is
5 subject to approval by the Commissioner and that whether
6 approved or disapproved, the parties thereto will pay the
7 Commissioner's expenses of examination; and
8 (e) such other provisions as the Commissioner may
9 reasonably require to enable him to discharge his duties
10 with respect to the merger.
11 (2) After approval by the board of directors of the
12 parent bank holding company, the merger agreement shall be
13 submitted to the Commissioner for approval.
14 (3) After receipt by the Commissioner of the papers
15 specified in item (2), he shall approve or disapprove the
16 merger agreement. The Commissioner shall not approve the
17 agreement unless he shall be of the opinion and finds that
18 the same matters exist in respect of the continuing bank
19 which would have been required under Section 10 of this Act
20 for the organization of a new bank, that the mid-tier bank
21 holding company has no known liabilities that will become
22 liabilities of the continuing bank, and that the parent bank
23 holding company will indemnify the continuing bank for any
24 known and unknown contingent liabilities for which the
25 continuing bank may become liable as a result of the merger.
26 Nothing in this Section shall authorize a resulting State
27 bank to acquire, hold, or invest any asset or to assume or
28 incur any liability that does not conform to the legal
29 requirements for assets acquired, held, or invested or
30 liabilities assumed or incurred by State banks, or to engage
31 in any activity in which a State bank is not authorized to
32 engage as part of a general banking business. If the
33 Commissioner disapproves the merger agreement, he shall state
34 his objections in writing and give an opportunity to the
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1 merging bank and mid-tier bank holding company to obviate the
2 objections.
3 (4) To be effective, if approved by the Commissioner, a
4 copy of the merger agreement executed by the duly authorized
5 president of the mid-tier bank holding company and president
6 of the merging State bank, together with copies of the
7 resolution of the board of directors of the parent bank
8 holding company, approving the merger agreement, certified by
9 the parent bank holding company's president or vice-president
10 and attested by the secretary, must be filed with the
11 Commissioner. The merger shall, unless a later date is
12 specified in the agreement, become effective when the
13 Commissioner has approved the agreement and issued a
14 certificate of merger to the continuing bank, which shall
15 specify the name of the mid-tier bank holding company, the
16 name of the continuing bank, and the amendments to the
17 charter of the continuing bank provided for by the merger
18 agreement. The charter of the mid-tier bank holding company
19 shall thereupon automatically terminate. Such certificate
20 shall be conclusive evidence of the merger and of the
21 correctness of all proceedings therefor in all courts and
22 places including the office of the Secretary of State, and
23 the certificate shall be recorded.
24 (Source: P.A. 89-364, eff. 8-18-95.)