1999 Legislative Update
The following is a summary
of banking related legislation enacted by the Illinois General Assembly
and subsequently approved by Governor Ryan. This summary is provided for
your general reference. For specific guidance concerning the applicability
or effect of legislation on your institution, you should seek the advice
of your legal counsel.
Act 91-16 (House Bill 1281) Transfers the administration of the Unclaimed
Property Act from the Illinois Department of Financial Institutions
to the Office of the State Treasurer. Effective July 1, 1999.
Public Act 91-16 amended various
acts to transfer the responsibility for the administration of the Unclaimed
Property Act from the Illinois Department of Financial Institutions to
the Office of the State Treasurer. This bill gave the Office of Banks
and Real Estate the responsibility of conducting unclaimed property examinations
of state chartered banks, savings banks, and trust companies if the State
Treasurer requests such an examination upon a reasonable belief that the
bank, savings bank or trust company has failed to report unclaimed property.
Unless the State Treasurer requests an accelerated examination, the Commissioner
shall conduct the unclaimed property examination in conjunction with the
next regularly scheduled examination of the institution. The State Treasurer
will pay the Commissioner's office for the costs of the unclaimed property
Act 91-97 (Senate Bill 378) Amends various Acts concerning savings
and loan associations and savings banks. Effective July 9, 1999.
Public Act 91-97 made a number
of changes with respect to savings and loan associations and savings banks.
It amended the Illinois
Savings and Loan Act of 1985 to allow that savings and loan associations
may act as a custodian or trustee. In addition, it gave the Commissioner
the power to defer taking control of a savings and loan association if
that association is resolving its problems in accordance with the direction
of its deposit insurance corporation. This legislation also amended the Savings
Bank Act to delete the requirement that the Commissioner approve the
location and operation of electronic fund transfer terminals. In addition,
it authorized alternative voting arrangements for mutual savings banks,
provided waiver of notice provisions, and authorized a savings bank to
convert to any type of depository institution. Finally, it amended the Corporate
Fiduciary Act to incorporate references to savings banks throughout
Act 91-148 (Senate Bill 461) Amends the Illinois
Savings and Loan Act of 1985. Effective July 16, 1999.
Public Act 91-148 amended the
Illinois Savings and Loan Act of 1985 to delete provisions exempting a
savings and loan association from garnishment proceedings in connection
with capital accounts.
Public Act 91-159 (Senate Bill 795) Amends the Title
Insurance Act. Effective January 1, 2000.
Public Act 91-159 amended the
Title Insurance Act to define "title insurance" and "title
insurance business". This legislation also gives a title insurance
company or a title insurance agent the authority to act as an escrow agent
in certain instances. It does require specific authorization from the
Director of Insurance prior to a title insurance agent acting as an escrow
Act 91-201 (Senate Bill 447) amends the Illinois
Banking Act concerning confidentiality of banking reports. Effective
January 1, 2000.
Public Act 91-201 amended the
Illinois Banking Act to expand the confidentiality protections of bank
examinations and related information. This legislation requires a person
upon whom a demand for production of the confidential information is made,
whether by subpoena, order or other judicial order or process, to notify
the Commissioner of Banks and Real Estate of the demand for production
of the information. The Commissioner must then determine, within 15 days,
whether to approve the disclosure of the confidential supervisory information.
Act 91-211 (Senate Bill 1026) Amends the Public
Funds Deposit Act concerning the deposit of public funds in a savings
bank. Effective July 20, 1999.
Public Act 91-211 amended the
Public Funds Deposit Act to permit a treasurer or custodian of public
funds to deposit those funds into a savings bank. In addition, if the
treasurer or custodian receives securities from the depository institution
in an amount by which the funds exceed the federally insured amount, allows
him or her to enter into an agreement with a savings bank, a federally
insured financial institution or trust company, or a federal agency for
the deposit of such securities.
Act 91-270 (Senate Bill 481) Amends the Consumer
Fraud and Deceptive Business Practices Act concerning holders of retail
installment contracts. Effective January 1, 2000.
Public Act 91-270 amended the
Consumer Fraud and Deceptive Business Practices Act to afford holders
of retail installment contracts certain rights and liability protections
that are afforded to new and used automobile dealers.
Act 91-316 (House Bill 1742) Amends the Uniform
Disposition of Unclaimed Property Act concerning property held by
financial institutions. Effective July 29, 1999.
Public Act 91-316 amended the
Uniform Disposition of Unclaimed Property Act to provide that the presumption
of abandonment does not apply to charges that are lawfully withheld in
connection with a money order issued by a currency exchange.
Act 91-322 (House Bill 2019) Amends the Illinois
Banking Act concerning changing a bank's name or its main premises
and concerning liability of directors. Effective January 1, 2000.
Public Act 91-322 amended the
Illinois Banking Act. This legislation requires that a bank give the Commissioner
of Banks and Real Estate 30 days written notice prior to changing its
name. In addition, it requires written application to the Commissioner,
rather than a charter amendment, prior to changing the bank's main banking
premises. If the Commissioner has not acted on the application within
30 days after its receipt, the application is deemed accepted. This legislation
also eliminates the requirement that the bank obtain a charter amendment
to limit the personal liability of directors.
Act 91-324 (House Bill 2047) Amends the Public
Funds Investment Act concerning deposit insurance. Effective January
Public Act 91-324 amended the
Public Funds Investment Act to provide that when an agency deposits public
funds into a financial institution, the agency may require that any amounts
deposited that exceed the federally insured amount be collateralized by
loans covered by a State Guaranty under the Illinois Farm Development
Act 91-330 (House Bill2204) Creates the Banking on Illinois Act to
encourage and provide a favorable environment in Illinois for the chartering
and operating of banks that locate and maintain main banking offices in
this State. The main provisions of PA 91-330 include the following changes
to the Illinois
Section 5(25) was amended
to grant Illinois state-chartered banks parity regarding products
and services offered by a state-chartered bank of any other state
in the country. These provisions specifically exclude the expansion
of insurance powers, real estate brokerage, and branching. To the
extent that a state bank proposes to offer a product or service that
may not be authorized for a national bank to perform, the state bank
should consult with the Federal Deposit Insurance Corporation, (the
"FDIC") to determine whether FDIC approval is required.
Section 48.1(c) was amended
to protect information obtained from financial records, in addition
to the records themselves, from disclosure unless the disclosure is
expressly required by law. This will help ensure that banks avoid
liability when they are maintaining the confidentiality of their customer's
Act 91-411 (House Bill 429) Amends the Motor
Vehicle Retail Installment Sales Act. Effective August 6, 1999.
Public Act 91-411 amended the
Motor Vehicle Retail Installment Sales Act to change the definition of
"amount financed" to include amounts actually paid or to be
paid by the seller under an agreement with the buyer to discharge a security
interest, lien interest or lease interest on the property traded in.
Act 91-433 (House Bill 1286) Creates the Land Trust Fiduciary Duties
Act. Effective August 6, 1999.
Public Act 91-433 created the
Land Trust Fiduciary Duties Act. This legislation is declaratory of existing
law and was adopted to clarify that holders of the power of direction
are accountable to the holders of the beneficial interest in land trusts.
Act 91-452(House Bill 2494) Amends the Illinois
Banking Act concerning the reservation of a corporate name and the
residency of directors. Effective January 1, 2000.
Public Act 91-452 amended the
Illinois Banking Act. It permits an applicant seeking to charter an Illinois
state-chartered bank to reserve its corporate name with the Commissioner
of Banks and Real Estate. In addition, this legislation removes the residency
requirement for directors of state chartered banks, creating an incentive
for Illinois state chartered banks engaging or planning to engage in interstate
banking to remain an Illinois state chartered bank.
Act 91-492 (House Bill 943) Amends the Home
Equity Assurance Act by authorizing the creation of a Low Interest
Home Improvement Loan Program. Effective January 1, 2000.
Public Act 91-492 amended the
Home Equity Assurance Act. With referendum approval, permits the governing
commission of the Home Equity Program to establish a Low Interest Home
Improvement Loan Program in accordance with and subject to procedures
established by a financial institution. The loans and loan guarantees,
if applicable, may not reduce the balance of the guarantee fund to less
Act 91-517 (Senate Bill 109) Amends the Criminal
Code to create the Financial Identity Theft and Asset Forfeiture Law.
Effective August 13, 1999.
Public Act 91-517 creates the
Financial Identity Theft and Asset Forfeiture Law. The Law states that
a person commits an offense of the Law when they knowingly use the personal
identifying information of another in order to obtain credit, money, goods
or services in the name of the other person.
Act 91-607 (Senate Bill 1014) Amends the State
Treasurer Act to create the College Savings Pool. Effective January
Public Act 91-607 amended the
State Treasurer Act. This legislation permits the State Treasurer, beginning
March 1, 2000, to establish and administer a college savings pool in which
participants will deposit funds for tuition, fees, room and board, and
other expenses associated with higher education. Participants in the college
savings pool will deposit funds in a participating financial institution,
which will then transfer the funds in accordance with the directions of
the State Treasurer. Participating financial institutions may impose a
fee, initially not to exceed $30, for the processing of the applications.
The State Treasurer will then invest the funds. The State Treasurer shall
invest a percentage of each deposit with the participating financial institution
that initially processed the deposit, with such percentage depending on
the age of the beneficiary. Deposits shall be limited to amounts set by
the State Treasurer. Penalties may be imposed for improper usage of the
Act 91-645 (Senate Bill 890) Creates the Illinois Financial Institutions
Year 2000 Safety and Soundness Act. Effective August 20, 1999.
Public Act 91-645 created the
Illinois Financial Institutions Year 2000 Safety and Soundness Act. This
legislation provides protection for consumers and financial institutions
in connection with complications that may occur as the result of the Year
2000 date change.
With respect to financial institutions,
the legislation prohibits non-customers from directly suing an institution
in connection with a Y2K claim, requires customers to provide an institution
with prelitigation notice and a period for remediation, and shields employees,
officers, and directors of the institution from liability in the absence
With respect to consumers,
the legislation requires a financial institution to stay any collection
actions, except for collection on a residential mortgage, and late fees
for 30 days if the consumer timely notifies the institution and provides
verification of the Y2K failure that is the cause of the nonpayment or
late payment of a debt. With respect to collection actions on residential
mortgages, protects the consumer from a foreclosure action until the later
of four weeks after January 1, 2000 or four weeks after notification by
the consumer of a Y2K failure, but in no case may a notification be made
after March 14, 2000.
Senate Resolution 121 directs
the Commissioner to annually report to the General Assembly until 2006
on the progress and implementation of the Banking on Illinois Act, focusing
on the effect that the Act has had on the economic, financial, and employment
climate of the State and recommending any changes that appear to be wise,
prudent, and advisable.
Senate Resolution 134 directs
the Commissioner to conduct a study of safety and security issues surrounding
the use of automated teller machines. The study is to focus on different
proposals for increased ATM security measures, including a reverse PIN