BANKING BOARD OF ILLINOIS
of Wednesday, October 7, 1998
CALL TO ORDER
of the State Banking Board of Illinois was called to order at 10:07 a.m.
by Chairman Jack Schaffer. Roll call was taken and a quorum was present.
The Farmers State Bank and Trust Company, Jacksonville, Illinois
Thomas Bugielski, President and CEO
Founders Bank, Worth, Illinois
Craig S. Burkhardt
Public Member, Springfield, Illinois
Susan J. Dubs, President
State Financial Bank, Richmond, Illinois
John G. Eck, Senior Vice President
ABN AMRO Bank, N.V., Chicago, Illinois
Gary N. Edwards, Chairman
Wemple State Bank, Waverly, Illinois
Mark G. Field, Chairman, President and CEO
The Farmers Bank of Liberty, Liberty, Illinois
Public Member, Norridge, Illinois
Jack Schaffer, Chairman
Office of Banks and Real Estate
A. Dean Decker, President
Central Trust and Savings Bank, Geneseo, Illinois
Public Member, Winnetka, Illinois
Dennis B. Long, Chairman and CEO
Bank of Rantoul, Rantoul, Illinois
Paul V. Reagan, Senior Vice President and U.S. General Counsel
Harris Trust and Savings Bank, Chicago, Illinois
Judith Quesenberry, CEO and Vice President
The First State Bank, Grand Chain, Illinois
Charles Waterman, Chairman and CEO
South Holland Trust & Savings Bank, South Holland, Illinois
Arthur J. Appl,
Jr., Director, Division of International Bank Supervision
Patrick A. Brady, Deputy Commissioner
Jerry D. Cavanaugh, Assistant General Counsel
Scott D. Clarke, Assistant Commissioner, Bureau of Banks and Trust
Russell E. Curry, Director, Division of Commercial Bank Supervision-Springfield
Kathy Glynn, Administrative Assistant, Bureau of Banks and Trust
Dina Mansour, Senior Corporate Attorney, Corporate Activities Section
Wesley Maynard, Assistant Director, Division of Commercial Bank
Dale Turner, General Counsel
APPROVAL OF MARCH 19, 1998 MINUTES
Chairman Schaffer requested
additions or corrections to the March 19, 1998 minutes. There being
none, Mr. Eck moved to approve and Ms. Dubs seconded. The motion carried
Mr. Art Appl, Director of International
Bank Supervision, provided an overview of the divisions responsibilities
and briefly explained the numerical rating system used by the division.
He noted the effects of the
European Union are beginning to show up as potential mergers of European
banks which could have an affect on local revenues.
Mr. Appl explained the new
FBO Desktop information system being implemented which will allow the
agency to receive and transmit reports and input data into the national
Mr. Russ Curry, Director of
Commercial Bank Supervision, Springfield, provided an explanation of the
divisions function and responsibilities and discussed the bank rating
system in detail.
Mr. Wesley Maynard, Assistant
Director of Commercial Bank Supervision, Chicago, provided a report on
the activities of the division and gave an overview of the status of banks
under their supervision. He briefly discussed the ELVIS examination documentation
system and noted the name would be changing soon.
Ms. Dina Mansour, Senior Corporate
Attorney, Corporate Activities Section, reported seeing high activity
in the area of de novo banks. She stated six permits have been issued
for new charters and several applications are pending. She is also seeing
increased interest in branches, interstate activity, and insurance subsidiaries.
BUREAU OF BANKS AND TRUST COMPANIES UPDATE
Mr. Scott Clarke, Assistant
Commissioner, Bureau of Banks and Trust Companies, updated the Board on
The Bureau of Banks and Trust
Companies is planning two Day with the Commissioner programs in October
for officers and directors of banks and trust companies. All Board members
are invited to attend.
Also in October, a two-day
training session for all bank examiners within the Bureau of Banks and
Trust Companies is planned. This is an opportunity to have all examiners
from all the divisions together for updates similar to those presented
at the Day with the Commissioner programs, and also provides and opportunity
for recognition of outstanding performance and accomplishments throughout
The agency has three examiners
participating with the International Monetary Fund (IMF) in the Ukraine.
There are several Illinois companies that, to different extents, have
trading activities in the Ukraine. Our focus is to determine if our Illinois
companies have stable financial institutions with which to deal.
The agencys web site
continues to expand. A handout sampling the different types of information
available was distributed. The agency will add our own web server within
the next week that adds an additional firewall protection.
For the fourth year in a row
we were pleased to be able to give a rebate to our banks at the end of
the fiscal year. This years revenues were higher than expenses,
which allowed us to rebate banks in proportion to the amount they paid
in for quarterly assessments, application fees, and various other fees
Mr. Clarke reported on behalf
of the Specialized Activities Division who was unable to attend due to
Y2K training. The division is seeing additional activity in the formation
of trust companies. There are currently 34 independent trust companies
and 250 departments of banks, savings and loans, and savings banks with
trust assets exceeding $1.6 trillion supervised by the agency.
A current version of the Illinois
Banking Act and Related Laws publication is now available. Every bank
will receive two complimentary copies which contain all the new banking
laws and the agencys administrative rules.
Commissioner Schaffer will
host a meeting of the District II Midwest Banking Commissioners in October.
In addition to discussing Y2K efforts, they will also work on developing
individual agreements with other banking departments to help enhance supervision
of each states institutions.
There is a potential need to
restructure the agencys fee schedule. The agency is putting in a
considerable amount of extra time and effort to ensure banks are Y2K compliant.
Some fees that have never been increased may need to be and there is the
possibility of establishing a minimum fee for each institution. Fees are
set by Administrative Rule. By the end of this calendar year we hope to
have the Administrative Rule amended and out for Public Comment. Mr. Clarke
encouraged the Boards input and wanted to alert them of the possible
restructuring prior to publishing the issue for public comment. The consensus
of the board was they did not want to see a decrease of training provided
to examiners or not providing examiners with equipment to do their jobs.
The board indicated that a modest increase in fees along with restructuring
the fee schedule would be appropriate.
LEGISLATIVE, RULEMAKING AND INTERPRETIVE LETTER UPDATE
They agencys major piece
of legislation this year was the expansion of the wild card provision
covered in the Illinois Banking Act. The wild card provision states a
state chartered bank has the ability to do anything a national bank can,
not withstanding the provisions outlined in the Illinois Banking Act,
which gave them a competitive edge. With support of the agency and trade
associations, the governor signed into law a bill which modified the wild
card to provide that not withstanding the provisions of any state law,
a state chartered bank can provide any product or service an insured savings
association could do as well. Clarifications in the bill do not allow
for real estate brokerage activity or expand or restrict branching activities.
Mr. Jerry Cavanaugh, Assistant
General Counsel, provided an update on additional legislation and overviewed
the interpretive letters covered in the handout provided in the meeting
YEAR 2000 UPDATE
Mr. Clarke briefly outlined
the issues related to Year 2000 (Y2K) readiness and stated our examiners,
along with all the federal regulators, have been examining banks specifically
to determine Y2K readiness. Every bank has been examined for Phase I of
Y2K readiness which covers awareness and planning issues. By March 31,
1999 every bank in the state will receive an on-site Phase II exam conducted
by either the Office of Banks & Real Estate or one of the federal
Our general estimate is that
most banks are well underway with their Y2K preparedness and we do not
anticipating many problems.
ROLE OF THE STATE BANKING BOARD WITH RESPECT TO ORDERS OF REMOVAL AND
Mr. Cavanaugh distributed a
handout addressing issues raised covering the role of the State Banking
Board in relation to Orders of Removal and Orders of Prohibition in addition
to procedures to be followed in such an event. He invited the board members
to review the memoranda and contact him with questions.
1999 LEGISLATIVE PROPOSALS
Commissioner Schaffer noted
this had been a relatively quiet year for legislation. Mr. Clarke referred
to a handout outlining the 1999 legislative proposals in detail. He noted
the bills are still in the draft stage and invited board members to review
and provide any thoughts or comments they may have.
OPEN DISCUSSION FOR BOARD MEMBERS
There were no additional items
There being no further business
before the board, Mr. Eck moved to adjourn the meeting. Ms. Becker seconded. The motion carried unanimously. The meeting adjourned at 12:02 p.m.