CHAPTER 205 - Regulation - Financial Regulation

(205 ILCS 205/Art. 1 heading)

ARTICLE 1. General Provisions

(205 ILCS 205/1001) (from Ch. 17, par. 7301-1)
Sec. 1001. This Act may be cited as the Savings Bank Act.
(Source: P.A. 86-1213.)

    (205 ILCS 205/1002) (from Ch. 17, par. 7301-2)
    Sec. 1002. Policy and purpose. The purpose of this Act is to provide for the chartering, regulation, and corporate governance of savings banks. The policy of this Act is to encourage growth of the personal savings base of the citizens of Illinois; to provide a healthy savings bank industry with safe and sound methods of investment so that this savings base will be retained in Illinois for Illinois' growth; to counter the flight of capital from Illinois; to build a strong new system of financial institutions in Illinois which will, by their strength, be controlled and owned by Illinois citizens and corporations and shall be the nucleus for a geographically expansive industry.
    To further its purpose and policies, this Act shall be liberally construed except for those provisions that relate to safety and soundness of operations, investments, and management. In those areas, the General Assembly decrees that this Act shall be strictly construed and that each savings bank shall apply the prudent person rule. The Commissioner of Banks and Real Estate shall interpret those Sections of this Act in keeping with that standard.
(Source: P.A. 89-508, eff. 7-3-96.)

(205 ILCS 205/1003) (from Ch. 17, par. 7301-3)
Sec. 1003. Administration. This Act shall be administered by the Commissioner of Banks and Real Estate as provided in the Office of Banks and Real Estate Act.
(Source: P.A. 89-508, eff. 7-3-96.)

    (205 ILCS 205/1004) (from Ch. 17, par. 7301-4)
    Sec. 1004. Applicability.
    (a) This Act shall apply to all financial institutions no matter how named or chartered, if they comply with the provisions of this Act and with the rules of the Commissioner promulgated pursuant to this Act.
    (b) No person or group of persons, except a savings bank duly organized or authorized under this Act, a predecessor Act, or a federal Act may transact business within the scope of this Act or do business under any name or title or circulate or use any advertising or make any representations or give any information to anyone using any media, including electronic media, that indicates or implies the operation of a business within the scope of this Act. Nothing herein shall prohibit the continued use of the name or title "savings bank" by any bank or savings and loan association if the use of that name or title was in effect before January 1, 1990.
(Source: P.A. 86-1213.)

(205 ILCS 205/1005) (from Ch. 17, par. 7301-5)
Sec. 1005. Insurance of accounts. Each savings bank operating under this Act must secure insurance of its deposit accounts backed by the full faith and credit of the United States government prior to commencing business and may, subject to the Commissioner's regulation, secure or participate in efforts to obtain insurance of those deposits that are in excess of the amount eligible for federal insurance of accounts. The insurance shall be known as "excess insurance".
(Source: P.A. 86-1213.)

    (205 ILCS 205/1006) (from Ch. 17, par. 7301-6)
    Sec. 1006. Parity.
    (a) Subject to the regulation of the Commissioner and in addition to the powers granted by this Act, each savings bank operating under this Act shall possess those powers granted by regulation promulgated under the Federal Deposit Insurance Act for state savings banks.
    (b) A savings bank may establish branches or offices at which savings or investments are regularly received or loans approved as follows:
        (1) to the extent branch powers and offices are

granted to State banks under the Illinois Banking Act;

(2) within the geographic area defined in Article 2

of this Act and subject to the provisions of Article 2 of this Act;

(3) within the same geographic areas or states as

those states from which a holding company is permitted to acquire an Illinois savings bank or an Illinois savings bank holding company;

(4) to the same extent that holding companies and

savings and loan associations headquartered outside the State of Illinois are allowed to operate in Illinois by virtue of Articles 1A and 2B of the Illinois Savings and Loan Act of 1985;

(5) as the result of mergers, consolidations, or

bulk sales of facilities in the case of relocations; and

(6) to the extent an out-of-state savings bank has

its main banking premises in a state that is reciprocal with Illinois and would be eligible to establish a branch pursuant to Section 1006.05 of this Act.

    (c) The Commissioner may adopt regulations that provide for the establishment of branches as defined by the Commissioner.
    (d) Notwithstanding any other provision of this Act, a savings bank that purchases or assumes all or any part of the assets or liabilities of a bank, savings bank, or savings and loan association or merges or consolidates with a bank, savings bank, or savings and loan association may retain and maintain the main premises or branches of the former bank, savings bank, or savings and loan association as branches of the purchasing, merging, or consolidating savings bank, provided it assumes the deposit liabilities of the bank, savings bank, or savings and loan association maintained at the main premises or branches.
    (e) A savings bank has any power reasonably incident, convenient, or useful to the accomplishment of the powers conferred upon the savings bank by this Act.
(Source: P.A. 93-965, eff. 8-20-04.)

    (205 ILCS 205/1006.05)
    Sec. 1006.05. Out-of-state savings banks establishing branches.
    (a) No out-of-state savings bank whose main banking premises is located in a state other than Illinois shall establish a branch in this State, other than a branch authorized pursuant to any other provision of this Act, unless:
        (1) the laws of the state in which such out-of-state

savings bank has its main banking premises permit the out-of-state savings bank to establish a branch in this State;

(2) the out-of-state savings bank has its main

banking premises in a state that permits an Illinois State savings bank to establish a branch in that state pursuant to terms and conditions that are deemed to be reciprocal with the provisions of this Act; and

(3) the out-of-state savings bank obtains a

certificate of authority from, or provides notice to, the Commissioner as provided in subsection (b) of this Section.

(b) Before the out-of-state savings bank may establish a

branch in this State, the out-of-state savings bank must obtain a certificate of authority from the Commissioner. The out-of-state savings bank must file an application for a certificate of authority on a form prescribed by the Commissioner.

The application for a certificate of authority shall not

be required if the state in which the out-of-state savings bank is chartered permits an Illinois State savings bank to establish a branch in that state without filing an application. An out-of-state savings bank chartered in such a state may establish a branch in this State pursuant to this Section after providing the Commissioner with written notice. The Commissioner may prescribe the form of such notice and may accept a copy of a notice or application provided by the out-of-state savings bank to its chartering authority.

which the out-of-state savings bank has its main banking premises are reciprocal with the provisions of this Act shall be made in writing by the Commissioner. The Commissioner shall not make a finding of reciprocity unless the Commissioner determines that the laws of the other state permit an Illinois State savings bank to establish a branch in the other state under terms and conditions that are substantially similar to the provisions of this Section. The Commissioner shall consider, at a minimum, whether the laws of the other state discriminate in any way against an Illinois State savings bank and whether the laws of the other state impose administrative or regulatory burdens that are substantially more restrictive than those imposed by this Act on an out-of-state savings bank seeking to establish a branch in this State.

(d) After the out-of-state savings bank lawfully

establishes a branch in this State pursuant to the provisions of this Section, the out-of-state savings bank may establish and maintain additional branches in this State to the same extent as an Illinois State savings bank. An out-of-state savings bank shall provide written notice to the Commissioner of its intent to establish an additional branch or additional branches in this State within 30 days after receiving approval from its chartering authority or other appropriate regulatory agency to establish the branch or branches. The form of the notice shall be specified by the Commissioner.

(e) A branch of an out-of-state savings bank may not

conduct any activity that is not authorized for an Illinois State savings bank.

(Source: P.A. 93-965, eff. 8-20-04.)

(205 ILCS 205/1007) (from Ch. 17, par. 7301-7)
Sec. 1007. Definitions. Unless the context otherwise requires, as used in this Act, the terms defined in the Sections following this Section and preceding Section 1008 shall have the meanings therein given.
(Source: P.A. 86-1213.)

    (205 ILCS 205/1007.05) (from Ch. 17, par. 7301-7.05)
    Sec. 1007.05. "Affiliate" means any company that controls, is controlled by, or is under common control with a savings bank operating under this Act.
    The term "affiliated person of a savings bank or insured institution" means the following:
        (1) a director, officer, or controlling person of a

savings bank or insured institution;

(2) a spouse of a director, officer, or controlling

person of a savings bank or institution;

(3) member of the immediate family of a director,

officer, or controlling person of a savings bank or insured institution, who has the same home as that person, or who is a director or officer of any subsidiary of the savings bank or insured institution or of any holding company affiliate of the savings bank or insured institution;

(4) any corporation or organization (other than the

savings bank or insured institution or a corporation or organization through which the savings bank or insured institution operates) of which a director, officer or controlling person of the savings bank or insured institution:

(A) is chief executive officer, chief financial

officer, or a person performing similar functions;

(B) is a general partner;
(C) is a limited partner who directly or

indirectly either alone or with his spouse and the members of his immediate family who are also affiliated persons of the institution, owns an interest of 10% or more in the partnership (based on the value of his contribution) or who, directly or indirectly with other directors, officers, and controlling persons of the institution and their spouses and their immediate family members who are also affiliated persons of the institution, owns an interest of 25% or more in the partnership; or

(D) directly or indirectly either alone or with

his spouse and the members of his immediate family who are also affiliated persons of the institution, owns or controls 10% or more of any class of equity securities or owns or controls, with other directors, officers, and controlling persons of the savings bank or insured institution and their spouses and their immediate family members who are also affiliated persons of the savings bank or insured institution, 25% or more of any class of equity securities.

(Source: P.A. 86-1213.)

(205 ILCS 205/1007.10) (from Ch. 17, par. 7301-7.10)
Sec. 1007.10. "Appraisal" means a professionally derived written conclusion of the value of the present worth of specified interests or rights in a specific piece of real property, which conclusion is supported by stipulated market conditions and explicitly stated assumptions as of a particular point in time and made for a specified party.
(Source: P.A. 86-1213.)

(205 ILCS 205/1007.15) (from Ch. 17, par. 7301-7.15)
Sec. 1007.15. "Bank" means a commercial bank chartered by the Comptroller of the Currency or by the Illinois Commissioner of Banks and Real Estate under the Illinois Banking Act.
(Source: P.A. 89-508, eff. 7-3-96.)

(205 ILCS 205/1007.20) (from Ch. 17, par. 7301-7.20)
Sec. 1007.20. "Branch" or "branch office" includes any location established by a savings bank where deposits are received, loans are made, or checks are paid, but shall not include any place where only records thereof are made, posted, or kept. A place where the savings bank's business is conducted only through an automatic teller machine or an affiliate facility shall not be deemed a branch.
(Source: P.A. 90-301, eff. 8-1-97.)

(205 ILCS 205/1007.25) (from Ch. 17, par. 7301-7.25)
Sec. 1007.25. "Capital" includes net worth, paid-in-surplus, capital stock equity, undivided profits, and earnings, as further defined in Section 5002.
(Source: P.A. 86-1213.)

(205 ILCS 205/1007.30) (from Ch. 17, par. 7301-7.30)
Sec. 1007.30. "Commissioner" means the Commissioner of Banks and Real Estate or a person authorized by the Commissioner, the Office of Banks and Real Estate Act, or this Act to act in the Commissioner's stead.
(Source: P.A. 89-508, eff. 7-3-96.)

    (205 ILCS 205/1007.35) (from Ch. 17, par. 7301-7.35)
    Sec. 1007.35. "Control", unless specified otherwise in this Act, shall mean:
        (1) the ability of any person, entity, persons, or

entities acting alone or in concert with one or more persons or entities, to own, hold, or direct with power to vote, or to hold proxies representing, 10% or more of the voting shares or rights of a savings bank, savings bank subsidiary, savings bank affiliate, or savings bank holding company;

(2) the ability to achieve in any manner the

election or appointment of a majority of the directors of a savings bank; or

(3) the power to direct or exercise significant

influence over the management or policies of the savings bank or savings bank affiliate.

"Control" does not include the voting of proxies obtained from depositors if the proxies are voted as directed by a majority of the board of directors of the savings bank or of a committee of directors when the committee's composition and powers may be revoked by a majority vote of the board of directors.
(Source: P.A. 92-483, eff. 8-23-01.)

(205 ILCS 205/1007.40) (from Ch. 17, par. 7301-7.40)
Sec. 1007.40. "Default" and "in danger of default" shall have the respective meanings ascribed to these terms in the Illinois Banking Act.
(Source: P.A. 86-1213.)

(205 ILCS 205/1007.45) (from Ch. 17, par. 7301-7.45)
Sec. 1007.45. "Deposit insurance corporation" means the Federal Deposit Insurance Corporation or other instrumentality of or corporation chartered by the United States that is supported by the "Full faith and credit of the United States government" as stated in a congressional resolution.
(Source: P.A. 86-1213.)

(205 ILCS 205/1007.50) (from Ch. 17, par. 7301-7.50)
Sec. 1007.50. "Depository institution", as used in this Act, shall mean a commercial bank, a savings bank, a savings and loan association, a trust company, a homestead association, a building and loan association, a cooperative bank, an industrial bank, or a credit union, whether chartered by a state or territory or under the laws of the United States.
(Source: P.A. 86-1213.)

(205 ILCS 205/1007.55) (from Ch. 17, par. 7301-7.55)
Sec. 1007.55. "Director" means any director, trustee, or other person performing similar functions with respect to any organization whether incorporated or unincorporated. In the case of a manager-managed limited liability company, however, "director" means a manager of the savings bank, and in the case of a member-managed limited liability company, "director" means a member of the savings bank. The term "director" does not include an advisory director, honorary director, director emeritus, or similar person, unless the person is otherwise performing functions similar to those of a director.
(Source: P.A. 93-561, eff. 1-1-04.)

(205 ILCS 205/1007.60) (from Ch. 17, par. 7301-7.60)
Sec. 1007.60. "Eligible insured bank" means an insured bank, having its main banking premises in Illinois, that is in default or in danger of default as those terms are defined in this Act.
(Source: P.A. 86-1213.)

(205 ILCS 205/1007.65) (from Ch. 17, par. 7301-7.65)
Sec. 1007.65. "Fiduciary" means a trustee, executor, administrator, guardian, agent, receiver, trustee in bankruptcy, assignee for creditors, or any holder of a similar position of trust. It also describes the relationship of a director to a savings bank as stipulated in Section 4010 of this Act.
(Source: P.A. 86-1213.)

(205 ILCS 205/1007.70) (from Ch. 17, par. 7301-7.70)
Sec. 1007.70. "Impairment" means, with respect to capital, a condition in which the value of the savings bank's assets is less than the aggregate amount of the savings bank's liabilities to creditors and members and the aggregate par value of its capital stock.
(Source: P.A. 86-1213.)