Banks and Trust Companies

Interpretive Letters, Policy Statements and Administrative Rules
by Section of the Illinois Banking Act as of  , 

Title

General definitions

"Unimpaired Capital and Unimpaired Surplus"

88-07 - Rescinded

National bank located in Illinois may establish loan production office.

91-05

State banks are authorized to invest in marketable investment securities, projects designed to promote the development of a community and its welfare, and collateralized mortgage obligations, subject to the criteria and limitations set forth in the Illinois Banking Act.

91-09 - Rescinded

Call report must be published in newspaper of general circulation that is published at least weekly and has been in business for at least one year prior to first call report publication.

91-12

Foreign bank representative office that solicits customers for loan, deposit and investment products, but does not accept deposits or make loans, is not engaged in the business of banking.

91-17

Out-of-state bank may establish a loan production office in Illinois to perform representational functions, including the solicitation of deposits, if it obtains a license under the Foreign Bank Representative Office Act.

"Eliminating Violations of Law Pertaining to Lending, Investment and Lease Limitations"

PS 3002

"Goodwill"

General definitions

Illinois state bank may establish an in-state loan production office without prior approval from Commissioner.

91-23

National bank contract with armored car service to count cash, currency and food stamps at armored car company's processing center for bank customers is not a violation of state branching restrictions if deposits are credited when received by bank.

91-31

Loan to fire protection district backed by full faith and credit of district is a general obligation of a municipality that is exempt from lending limits.

92-04

State bank may operate a depository receptacle that is accessible through an ATM.

93-02

State bank using push down accounting should not subtract value of unamortized fixed assets and investments from surplus in calculating lending limits.

93-05

Out-of-state bank holding company may form a de novo Illinois chartered bank to acquire the assets and liabilities of a financial institution in default or in danger of default.

General definitions

A savings and loan association or savings bank owned by a bank holding company is a "bank" for purposes of acting as an "affiliate facility."

94-25

State bank may establish a deposit courier service provided it complies with the requirements for a branch, or customers may use an independent third party to provide the service.

95-06

State bank may repurchase portions of a loan participation that the bank had sold provided the amount of the loan held on its books complies with the current statutory limit.

97-05

Illinois state-chartered banks may provide temporary banking services at colleges or universities. These would include opening checking and savings accounts, soliciting applications for credit cards, and providing information on other bank services and locations. So long as the bank does not receive deposits, pay checks, or make loans, the service would not be considered a branch and would not need to file an application or notice with the agency.

98-04
For a banking facility to be considered a branch, it must engage in one of the core banking functions, must be established by the bank, and must be accessible to the public, giving the bank a competitive advantage in obtaining customers.

Sec. 2
General definitions

Formation and primary powers

"Powers Incidental and Germane to Carrying On a General Banking Business"

38 IAC 350

"Loan Agreements Providing for a Bank to Share in Profits, Income or Earnings"

38 IAC 354

"Administration of Assets Obtained in Collection of a Debt"

State bank may act as futures commission merchant and establish subsidiary to act as futures commission merchant.

86-02

State bank may be limited partner in Small Business Investment Corporation and invest up to 5% of its capital and surplus in it.

88-04

State bank's proposed collection services do not constitute activities of a bill collection agency.

89-05

State bank may purchase certificates of deposit and government securities as agent for its customers and charge a fee for this service as part of its general banking business.

89-07

State bank may provide limited financial advisory services to unaffiliated parties in connection with mergers and acquisitions as part of its general banking business.

89-10

State bank may offer discount brokerage services through affiliation with a registered broker.

91-02

University's use of debit card system for its students is not "general banking business."

91-25

State bank's incidental powers include the authority to contribute to bank trade association's building fund.

Formation and primary powers

State bank that is owned by foreign corporation may purchase a residence for use by bank personnel temporarily assigned to Illinois.

94-11

State bank may offer debt cancellation agreements to its customers as incidental to its authority to loan money and carry on a general banking business and under the authority of Section 5(11).

94-13

State bank may offer guaranteed asset protection plans to car loan customers because such plans are similar to debt cancellation agreements that have been determined as incidental and germane to the business of banking.

94-15

A foreign banking corporation that possesses a certificate of authority under the Foreign Banking Office Act may apply for a certificate of authority to accept and execute trusts under the Corporate Fiduciary Act.

94-19 - Rescinded

Bank may trade energy derivatives for its customers, provided it has the management and controls necessary to ensure safe and sound banking practices.

96-06

State bank may make minority equity investment in limited liability company, corporation or partnership pursuant to conditions outlined.

Formation and primary powers

Illinois state-chartered banks may provide temporary banking services at colleges or universities. These would include opening checking and savings accounts, soliciting applications for credit cards, and providing information on other bank services and locations. So long as the bank does not receive deposits, pay checks, or make loans, the service would not be considered a branch and would not need to file an application or notice with the agency.

Formation and primary powers

State banks may sell title insurance, subject to licensure by the Illinois Department of Financial Institutions.

98-15

State banks may purchase Illinois real estate tax sale certificates.   Banks should have adequate policies, procedures and controls in place to protect against inherent risk and safety and soundness concerns relating to the purchase of such certificates.

99-02

Bank may invest seed money in a mutual fund for which it will also act as an investment subadviser.

99-03
Banks may provide certain tax and accounting services that are incidental to the business of banking.  Such services include accounting, gathering books and records for preparing tax returns, offering routine tax planning and advice, and dealing with the Internal Revenue Service as an enrolled agent on behalf of a tax customer for the public.

02-01

State bank may sell certificates of deposit with returns based on the performance of an established equity market index.  Bank also may engage in related interest rate risk hedging through swap contracts with the Federal Home Loan Bank.

State bank may purchase certificates of deposit with returns based on the performance of an established equity market index.  However, such purchases may not exceed the basic loaning limits of Section 32.

02-06

National wildcard authority contained in Section 5(11) of the IBA provides for State banks to purchase and hold Trust Preferred Securities as loans.

02-07

A state bank may purchase and hold the minimum amount of Federal Home Loan Bank stock in order to become a member. A state bank may also purchase and hold Federal Home Loan Bank stock in excess of the minimum required for membership, but only in limited circumstances and subject to the same conditions and limitations imposed on a national bank.

General corporate powers

State bank may be limited partner in Small Business Investment Corporation and invest up to 5% of its capital and surplus in it.

89-05

State bank may purchase certificates of deposit and government securities as agent for its customers and charge a fee for this service as part of its general banking business.

92-18

State bank may delegate its discretionary investment authority to unaffiliated third party, provided bank adopts certain oversight procedures and values securities at lesser of cost or market value.

95-07

Risk participation in a loan between branches of the same foreign bank do not constitute an unauthorized guarantee of another bank's loan.

97-02

State Bank may accept and hold stock issued by a borrower, not as an investment per se, but rather as an incident to an attempt to work out a problem loan and maximize the bank's recovery.

"IRA and Keogh Accounts"

PS 2005

"Gold Dealing"

PS 2006

"Bank Purchase of Life Insurance"

PS 2007

"Campaign Contributions"

General corporate powers

General corporate powers

General corporate powers

State bank may provide tax preparation services to its customers or the public, but the Bank may not act as an expert tax consultant, and should take appropriate precautions to inform customers for the service of this fact.

General corporate powers

State bank's appointment of out-of-state banks as agents to issue and pay certificates of deposit does not constitute the establishment of branches.

94-23

State bank may not purchase and hold a vacation home for the use of senior executive officers in a non-qualified employee benefit trust.

General Corporate Powers

State bank may establish a deferred compensation plan for the benefit of senior bank officers and fund the plan with life insurance contracts without regard to investment limitations.

90-19

State bank may purchase insurance contracts for legitimate insurance purposes but not for investment purposes.

94-23

State bank may not purchase and hold a vacation home for the use of senior executive officers in a non-qualified employee benefit trust.

95-02

State bank is not authorized to retain life insurance policy on life of retired director once legitimate insurance need is eliminated.

97-01

State bank may provide tax preparation services to its customers or the public, but the Bank may not act as an expert tax consultant, and should take appropriate precautions to inform customers for the service of this fact.

General corporate powers

Bank may conduct activity as an Internet Service Provider if the activity is undertaken for the enhancement and support of community development and to enrich the lives and educational opportunities for bank customers and community residents.

General corporate powers

Policemen and Firemen's Pension Funds are "public funds" for which a state bank may pledge assets to secure deposits.

89-04

State bank that pledges securities to secure deposits of public funds may hold such securities for safekeeping in an out-of-state bank or in an affiliated trust company.

91-01

State bank may not pledge its assets to secure the deposits of its customers, unless the deposits are public funds.

91-04

State banks may collateralize deposits of grantees of public agencies if the deposited grants are public funds that remain under some control of the public agency.

91-06

Illinois Banking Act does not impose restrictions on state banks as to the type, identification or segregation of assets pledged to secure public funds.

94-04

State bank that assists residents of senior citizens centers and nursing homes on a limited basis is not establishing branches, state bank is authorized to purchase guaranty bonds to secure excess deposits.

00-06

State banks may utilize letters of credit issued by a Federal Home Loan Bank as collateral for the deposit of public funds.

General corporate powers

State bank that is owned by foreign corporation may purchase a residence for use by bank personnel temporarily assigned to Illinois.

93-07.1

State bank is authorized to acquire real estate to swap for property to be used as bank premises.

93-09

State bank may purchase real estate for use as employee parking lot.

94-23

State bank may not purchase and hold a vacation home for the use of senior executive officers in a non-qualified employee benefit trust.

General corporate powers

Foreign bank may establish a non-bank subsidiary to hold title to and administer property obtained in collection of a debt.

91-27

State bank may transfer other real estate owned ("OREO") to its bank holding company as a dividend in order to comply with divestiture rules.

94-08

Other real estate owned ("OREO") that is subject to a lease must still be accounted for as OREO for regulatory reporting purposes.

98-03

If a bank merges with another bank and thereby acquires title to the other bank's residual other real estate owned ("OREO"), the 10 year OREO holding timetable is reset. Furthermore, the Office of Banks and Real Estate no longer has the authority to grant extensions for banks to hold OREO.

00-05

A state bank may dispose of other real estate owned by any transaction that is a sale under accepted accounting principles, including selling the real estate pursuant to a land contract or a contract for deed.  Disposal may also be made by a donation of the real estate, but may not be conditioned by a potential reversion.

General corporate powers

State bank may make a capital contribution to the Federal Agricultural Mortgage Corporation ("Farmer Mac") in exchange for stock in order to participate in Farmer Mac's secondary market program.

General corporate powers

State bank may be limited partner in Small Business Investment Corporation and invest up to 5% of its capital and surplus in it.

87-02 - Rescinded

State bank may invest in securities issued by Student Loan Marketing Association (Sallie Mae) and Federal National Mortgage Association (FNMA) to the same extent as national banks.

90-10
(90-10 rescinded and superceded by 2002-07)

State bank is authorized to purchase stock in and become a member of a Federal Home Loan Bank to the same extent as a national bank.

92-05

State banks are authorized to purchase stock issued by the Federal Home Loan Mortgage Corporation and the Student Loan Marketing Corporation.

92-17

Earn-out portion of sale of state bank subsidiary financed by selling bank is not subject to Section 32 lending limits, provided sale is performed in commercially reasonable manner that minimizes risk to bank in event purchaser defaults.

93-27

State bank may own and lease real property and personal property to a municipality, subject to the same restrictions applicable to a national bank.

General corporate powers

Bank may retain corporate stock received as dividends from investment in "small business investment company."

94-19

Bank may trade energy derivatives for its customers, provided it has the management and controls necessary to ensure safe and sound banking practices.

94-24

State bank may purchase and hold non-rated marketable investment securities under the authority of Section 5(11), subject to the standards and limitations applicable to a national bank for the type of investment, notwithstanding the limitations in Section 33.

95-01

State bank is authorized to purchase the residence of an employee who has been transferred to another area, provided that the bank divests ownership of the property as soon as practicable.

97-01

State bank may provide tax preparation services to its customers or the public, but the Bank may not act as an expert tax consultant, and should take appropriate precautions to inform customers for the service of this fact.

97-02

State Bank may accept and hold stock issued by a borrower, not as an investment per se, but rather as an incident to an attempt to work out a problem loan and maximize the bank's recovery.

General Corporate Powers

State banks may sell title insurance, subject to licensure by the Illinois Department of Financial Institutions.

98-15

State banks may purchase Illinois real estate tax sale certificates.   Banks should have adequate policies, procedures and controls in place to protect against inherent risk and safety and soundness concerns relating to the purchase of such certificates.

00-01

When a bank extends credit to commercial equipment leasing company under a "Without Recourse" note with the leasing company, the lending limit and obligation for repayment will attach to the lessee rather than the leasing company.

01-06

A state chartered bank may provide consumer deposit account holders with the required annual disclosure by electronic means. In addition, a state chartered bank or trust company may provide customers periodic account statements by electronic means.

02-06

National wildcard authority contained in Section 5(11) of the IBA provides for State banks to purchase and hold Trust Preferred Securities as loans.

02-07

A state bank may purchase and hold the minimum amount of Federal Home Loan Bank stock in order to become a member. A state bank may also purchase and hold Federal Home Loan Bank stock in excess of the minimum required for membership, but only in limited circumstances and subject to the same conditions and limitations imposed on a national bank.

10-02

A bank may exchange property obtained in satisfaction of debt previously contracted for an equity interest in an entity which would manage, market, and dispose of the property pursuant to 205 ILCS 5/5(11) because it encompasses a permissible activity for national banks.

General corporate powers

"Administration of Assets Obtained in Collection of a Debt"

State bank may act as futures commission merchant and establish subsidiary to act as futures commission merchant.

90-22

State bank may form subsidiary to hold title to assets acquired in foreclosure, Commissioner will waive 60 day notice period in extenuating circumstances.

91-13

State bank may establish limited purpose national bank which will not accept deposits or pay checks as an operating subsidiary to conduct credit card operations.

91-22

Foreign bank may establish a non-bank subsidiary to hold title to and administer property obtained in collection of a debt.

92-05

State banks are authorized to purchase stock issued by the Federal Home Loan Mortgage Corporation and the Student Loan Marketing Corporation.

92-16

State bank may invest in stock in Delaware corporation that operates an electronic funds transfer network.

96-06

State bank may make minority equity investment in limited liability company, corporation or partnership pursuant to conditions outlined.

10-02

A bank may exchange property obtained in satisfaction of debt previously contracted for an equity interest in an entity which would manage, market, and dispose of the property pursuant to 205 ILCS 5/5(11) because it encompasses a permissible activity for national banks.

General corporate powers

State bank may automatically renew letters of credit, even though it may only accept drafts for payment up to one year from date of acceptance.

General corporate powers

State bank may acquire and lease personal property to county hospital, subject to 20% investment limit, exceptions and exemptions to lending limit in Sections 34 and 35 of Illinois Banking Act do not apply to personal property leases made under Section 35.1 of Act.

93-25

School district is a "person" for purposes of the leasing authority granted by Section 35.1 of the Banking Act.

99-01

State bank may own and lease personal property to a municipality.  The amount of the bank's permissible investment in the personal property subject to the lease is generally 20% of the unimpaired capital and surplus of the bank unless the lease is a general obligation of the municipality, in which case bank's investment is limited to the amount of bank's unimpaired capital and surplus or is limitless.

General corporate powers

"Bank Branches"

20-02

Deposit production activities of a State bank’s foreign parent company

85-01

State bank may arrange independent messenger service for customers, but may not set routes or process billings which include charges imposed by the bank for arranging the service.

88-05

State bank may not operate messenger service for bank's customers that utilizes bank's employees unless it complies with appropriate branching requirements. [See also Interpretive Letter 94-25]

90-03

Transfer of funds using personal computer home banking service is not branch banking.

91-23

National bank contract with armored car service to count cash, currency and food stamps at armored car company's processing center for bank customers is not a violation of state branching restrictions if deposits are credited when received by bank.

92-03

State bank that establishes a banking facility at senior citizen's or long term care facility is not required to file Notice of Intent to Branch with Commissioner.

92-04

State bank may operate a depository receptacle that is accessible through an ATM.

General corporate powers

State bank's appointment of out-of-state banks as agents to issue and pay certificates of deposit does not constitute the establishment of branches.

General corporate powers

Bank that only services ATMs is not establisher of the ATMs.

92-16

State bank may invest in stock in Delaware corporation that operates an electronic funds transfer network.

93-32

Illinois Banking Act does not prohibit establishment of mobile branches, but applicable branch applications and notices may be required for each change in location, mobile ATMs are permitted.

"Meetings by Means of Electronic Device"

General corporate powers

State bank may invest in stock in Delaware corporation that operates an electronic funds transfer network.

96-07

ATM's which only dispense cash may be established in Illinois at any location and by any establisher.

10-03

Branding agreements are permissible for state-chartered banks for the purpose of advertising on non-bank owned ATMs.

General corporate powers

Out-of-state bank holding company does not have to file a change in control or interstate application when it changes its state of incorporation by merger.

General corporate powers

State banks may indemnify officers, directors, employees and agents to same extent that corporations are so authorized provided, however, state banks may not indemnify directors and officers for those acts for which the Illinois Banking Act imposes personal liability.

General corporate powers

General corporate powers

State bank investment in limited partnership that invests in condominiums rented to disabled and low income residents is authorized by Section 5(21) of the Illinois Banking Act.

90-25

State bank may invest in joint venture to expand industrial park as a project that promotes development of the community and its welfare.

91-05

State banks are authorized to invest in marketable investment securities, projects designed to promote the development of a community and its welfare, and collateralized mortgage obligations, subject to the criteria and limitations set forth in the Illinois Banking Act.

96-04

Bank may conduct activity as an Internet Service Provider if the activity is undertaken for the enhancement and support of community development and to enrich the lives and educational opportunities for bank customers and community residents.

General corporate powers

General corporate powers

A savings and loan association or savings bank owned by a bank holding company is a "bank" for purposes of acting as an "affiliate facility."

State banks may sell title insurance, subject to licensure by the Illinois Department of Financial Institutions.

02-02

Bank may engage in a contractual deposit-taking relationship with a nonaffiliated bank, subject to certain conditions

State banks may sell title insurance, subject to licensure by the Illinois Department of Financial Institutions.

98-10

State banks may engage in real estate development activities or projects, subject to the same restrictions that apply to insured savings associations.  State banks' real estate development authority may have to be conducted through a subsidiary with the approval of the FDIC.

98-11

State banks may offer data processing and data transmission services on a for-profit basis either directly, through a subsidiary or through a bank service corporation.

98-12

State banks may pledge assets to secure private deposits.

Reverse mortgage loans

"Reverse Mortgage Loans"

Deposits outside depository

Ownership of a bankers' bank

[Revolving credit loans secured by real property]

Lending authority

Non-recourse mortgage loans

Organization capital requirements

Incorporators

Proposed bank holding company may not be an incorporator of an interim state bank.

95-14 - Rescinded

Incorporators of an Illinois state bank in organization may, to satisfy the requirement of Section 8, subscribe to stock of the bank or stock of the corporation formed to be the bank holding company of the bank.

Contents of application

Permit to organize

Stock subscription

Purchases of stock in the Federal National Mortgage Association ("FNMA") are not subject to investment limits. However, the Agency may still have safety and soundness concerns based on concentrations or lack of diversification of the bank's investments.

Organization

Issuance of charter

Stock

"Statutory Bad Debts"

State bank may transfer other real estate owned ("OREO") to its bank holding company as a dividend in order to comply with divestiture rules.

93-12

State bank may acquire and lease personal property to county hospital, subject to 20% investment limit; exceptions and exemptions to lending limit in Sections 34 and 35 of Illinois Banking Act do not apply to personal property leases made under Section 35.1 of Act.

Quasi-Reorganization of Capital Upon a Change in Control

"Quasi-Reorganization"

Stock and stockholders

State bank must amend its charter in order to eliminate cumulative voting rights.

91-03

Person who is not a bank shareholder is not entitled access to the bank's shareholder list.

Directors

"Reduction in the Number of Required Directors"

Shareholders of state bank may fix number of directors by two-thirds affirmative vote at any meeting called for that purpose.

90-15

Board of state bank may operate with five directors notwithstanding that stockholders fixed number of directors at six.

90-18

State bank may appoint director emeritus or advisory director who does not vote and performs only advisory functions.

91-30

When state bank has less than five directors, at least one director may not be an officer or employee of bank.

91-35

Trust Department of a state bank and its officers may act under a power of attorney that encompasses property and financial matters.

92-18

State bank may delegate its discretionary investment authority to unaffiliated third party, provided bank adopts certain oversight procedures and values securities at lesser of cost or market value.

Directors

"Reduction in the Number of Required Directors"

When the boards of a bank holding company, of the lead bank subsidiary of the bank holding company, and of an affiliated bank holding company are all composed of the identical individuals, and the boards conduct a common meeting for the affiliated entities, then consolidated minutes of such meeting may be kept.

98-02

Shareholders of bank have sole authority to change the number of members on the bank's board of directors. The board may only exercise authority to appoint a new director prescribed in the by-laws if the vacancy on the board arose between shareholder meetings.

[Removal of directors]

Changes in charters

State bank must amend its charter in order to eliminate cumulative voting rights.

92-11

Infusion of funds directly into surplus without issuance of stock or change in par value does not require a charter amendment.

- "Annual Mtg."

- "Stockholder(s) Consent for Corp. Action w/o Mtg."

- "Director's Consent for Corp. Action w/o Mtg."

Change in control

20-03

Change in control (not) – internal reorganization of parent company of a State bank

89-15

Corporate reorganization does not result in change of control requiring the filing of an application for a change of control.

90-11

Employee Stock Ownership Plan that acquires more than 20% outstanding stock of a bank holding company that controls a state bank must file a change of control application.

92-06

Solicitation and receipt of revocable written proxies do not constitute a change of control.

"Quasi-Reorganization"

[Existence of bank]

Date of bank charter resulting from conversion of trust company is date of certificate of authority issued to predecessor trust company.

[Stockholders defined]

Resulting national bank or insured savings association

Resulting State bank

Application for certificate of authority

04-01

Out of State Banks may de novo branch into Illinois, provided the home state statute grants reciprocity to Illinois Banks seeking to establish a de novo out of state bank.

Merger procedure; resulting State bank

Non-rated bonds issued by a public agency are a permitted investment; definition of "public agency."

"Application for Approval of a Merger"

Merger; approval by stockholders

Written notice must be given to shareholders of state bank at least 30 days prior to any meeting at which a vote on a merger will take place.

Effective date of merger; filing

Conversion of national bank or insured savings association into State bank

Converting national banks or insured savings association; issuance of charter to resulting State bank

Commissioner's expenses

Continuation of corporate entity

Dissenting stockholders

Conversion; merger with trust company

"Application for Approval of a Merger"

Mid-tier bank holding company merger with State bank

Emergency sale of assets or merger

Savings association branch; bank branch

Sec. 32

Derivatives

13-01

State chartered banks are authorized to participate in derivative transactions

Participation
"Guarantee"

If a bank makes a loan which is guaranteed by various guarantors and a portion of the loan is subsequently participated to another bank, the guarantees would follow the loan on a pro rata basis.

02-06

National wildcard authority contained in Section 5(11) of the IBA provides for State banks to purchase and hold Trust Preferred Securities as loans.

"Eliminating Violations of Law Pertaining to Lending, Investment and Lease Limitations"

Basic loaning limits

"Lending Limits"

Customer may borrow up to a state bank's lending limit and separately guarantee a loan up to the bank's limit for total "money borrowed or otherwise" to one person.

90-02

Loans to corporation guaranteed by individual will not be aggregated with loans to individual and to partnership in which individual is general partner.

90-08

Loan to individual is not aggregated with loan to limited partnership of which individual is a limited partner.

90-20

State bank that has second mortgage may purchase title to real estate at foreclosure sale, but may not purchase first mortgage prior to foreclosure if aggregate of loans would exceed lending limits.

91-10

State bank may correct technical deficiency by obtaining appraiser's oath for one of two required appraisals in order for loan to be qualified real estate loan.

91-20

Loans collateralized by hospital or nursing home's assignment of rights to Medicaid payments qualify for exceptions and exemptions from lending limits under Section 34 and may also qualify under Section 35.

"Eliminating Violations of Law Pertaining to Lending, Investment and Lease Limitations"

PS 3002

"Goodwill"

Basic loaning limits

State bank that has made a commercial real estate loan in the amount of its lending limit may redeem the property for delinquent taxes and such expenditures will be deemed a liability "otherwise" extended for purposes of Section 32.

92-13

Loans to individuals guaranteed by their corporation are each subject to the lending limit applicable to individuals, while the corporation's guarantees are aggregated for purposes of the limit on a state bank's total liabilities.

92-17

Earn-out portion of sale of state bank subsidiary financed by selling bank is not subject to Section 32 lending limits, provided sale is performed in commercially reasonable manner that minimizes risk to bank in event purchaser defaults.

93-02

State bank using push down accounting should not subtract value of unamortized fixed assets and investments from surplus in calculating lending limits.

93-12

State bank may acquire and lease personal property to county hospital, subject to 20% investment limit; exceptions and exemptions to lending limit in Sections 34 and 35 of Illinois Banking act do not apply to personal property leases made under Section 35.1 of Act.

Basic loaning limits

Lending limits applicable to aggregate guarantees are determined by the forms of the guarantees; guarantees of payment are limited to 20% of unimpaired capital plus 20% of unimpaired surplus, calculated separately from the lending limit; guarantees of collection are limited to 25% of deposits, but may not be more than 50% of unimpaired capital and surplus, calculated by adding such guarantees together with all other liabilities of the guarantor to the bank.

93-14

Bank officer who is certified appraiser may not prepare appraisal for qualified real estate loans.

93-21

For determination of lending limits, language of guarantee must clearly identify guarantee as one of collection or guarantee will be deemed a guarantee of payment.

93-26

Portion of loan collateralized by deposit account of guarantor is exempt from lending limits; limit applicable to aggregate guarantees depends on the form of the guarantees.

93-27

State bank may own and lease real property and personal property to a municipality, subject to the same restrictions applicable to a national bank.

94-06

Loan to limited partnership is not aggregated with other loans to general partner of limited partnership if lending bank's recourse is limited to the assets of the limited partnership by the loan documents.

Basic loaning limits

Higher lending limit under Section 32(3) for qualified real estate loans is not available for the purchase of a participation if both appraisals are not obtained at the time the loan is made or refinanced.

95-06

State bank may repurchase portions of a loan participation that the bank had sold provided the amount of the loan held on its books complies with the current statutory limit.

95-10

A loan to a limited liability company is not aggregated with individual borrowings of a company member unless the bank is actually looking to the member for repayment.

95-11

An Illinois trust company may deal with trust owned farm real estate as trustee or may engage in farm real estate management and brokerage in an agency capacity according to Illinois law.

Basic loaning limits

01-02

A loan to an LLC is not aggregated with a loan to another commonly owned LLC, provided each has sufficient collateral and income to justify the loans.

01-03

A loan to the shareholders of a corporation or to another business entity owned by those shareholders is not aggregated with the borrowings of the corporation, unless the Bank is looking to the corporation for repayment.

01-04

A loan to a land trust is not aggregated with the individual borrowings of a beneficiary unless the bank is actually looking to the beneficiary for repayment.

01-05

A loan to a shell corporation will be aggregated with the borrowings of another corporation when theultimate source of repayment is the other corporation.

02-01

Pursuant to an Illinois Attorney General's Opinion, a state bank's purchases of certificates of deposit may not exceed the basic loaning limits of Section 32.

02-04

For purposes of the lending limit exemption under Section 32 (3) of the Illinois Banking Act, both appraisers must meet the minimum federal standards of state licensure or certification in order to be "qualified".

20-04

Legal Lending Limits – Exemption for SBA Paycheck Protection Program Loans

08-01
Loan collateralized by obligations of State of Illinois from Illinois Underground Storage Tank Fund are exempt from lending limit.

08-03
Lending limit for loan to grain elevator when the loan is collateralized by a warehouse receipt is computed in accordance with Section 34(6). In addition the letter provides best practices for banks doing business with licensees under the Grain Code.

Loans to Single Females

Marketable investment securities limit

State bank may not invest in tax certificates on property in which bank has no security interest.

88-03

Mutual income fund that invests in limited partnerships engaged in general business is not a permitted investment.

89-09

State bank may engage in fixed coupon dollar repo and dollar roll transactions subject to satisfying the criteria established for national banks by the Office of the Comptroller of the Currency.

90-04

State bank may not invest in certificates in closed-end investment company that are not "readily marketable."

90-13

State bank may establish a deferred compensation plan for the benefit of senior bank officers and fund the plan with life insurance contracts without regard to investment limitations.

90-19

State bank may purchase insurance contracts for legitimate insurance purposes but not for investment purposes.

91-05

State banks are authorized to invest in marketable investment securities, projects designed to promote the development of a community and its welfare, and collateralized mortgage obligations, subject to the criteria and limitations set forth in the Illinois Banking Act.

"Eliminating Violations of Law Pertaining to Lending, Investment and Lease Limitations"

Marketable investment securities limit

Universal life insurance policy that lists chairman of board as owner and chairman's sons as beneficiaries is not a permissible investment.

91-20

Loans collateralized by hospital or nursing home's assignment of rights to Medicaid payments qualify for exceptions and exemptions from lending limits under Section 34 and may also qualify under Section 35.

92-15

Marketable investment securities must be rated on a per issue basis; rating requirements do not apply to general obligations issued by municipalities and other public agencies.

92-18

State bank may delegate its discretionary investment authority to unaffiliated third party, provided bank adopts certain oversight procedures and values securities at lesser of cost or market value.

Marketable investment securities limit

Tax increment financing bonds are not general obligations of the issuing municipality and are subject to Section 33 investment limits.

93-12

State bank may acquire and lease personal property to county hospital, subject to 20% investment limit; exceptions and exemptions to lending limit in Sections 34 and 35 of Illinois Banking act do not apply to personal property leases made under Section 35.1 of Act.

93-19

Investments in general obligations of municipalities located in bank's county are not subject to investment limits; investments in revenue bonds secured by obligations of State of Illinois are limited to 50% of bank's unimpaired capital and surplus.

94-24

State bank may purchase and hold non-rated marketable investment securities under the authority of Section 5(11), subject to the standards and limitations applicable to a national bank for the type of investment, notwithstanding the limitations in Section 33.

95-02

State bank is not authorized to retain life insurance policy on life of retired director once legitimate insurance need is eliminated.

99-02

Bank may invest seed money in a mutual fund for which it will also act as an investment subadviser.

02-03

Bank may invest in a mutual fund containing securitites it already owns, directly or indirectly, but the Bank generally must ensure that its total holdings of any particular security do not exceed the applicable investment limits.

02-06

National wildcard authority contained in Section 5(11) of the IBA provides for State banks to purchase and hold Trust Preferred Securities as loans.

08-01
Loan collateralized by obligations of State of Illinois from Illinois Underground Storage Tank Fund are exempt from lending limit.

08-03
Lending limit for loan to grain elevator when the loan is collateralized by a warehouse receipt is computed in accordance with Section 34(6). In addition the letter provides best practices for banks doing business with licensees under the Grain Code.

Investments in general obligations of municipalities located in bank's county are not subject to investment limits; investments in revenue bonds secured by obligations of State of Illinois are limited to 50% of bank's unimpaired capital and surplus.

"Eliminating Violations of Law Pertaining to Lending, Investment and Lease Limitations"

Exceptions to loans and investment limits

State bank may engage in fixed coupon dollar repo and dollar roll transactions subject to satisfying the criteria established for national banks by the Office of the Comptroller of the Currency.

90-16

State bank may accept assignment of letters of credit issued by affiliated bank as security for loans without regard to lending limits.

91-05

State banks are authorized to invest in marketable investment securities, projects designed to promote the development of a community and its welfare, and collateralized mortgage obligations, subject to the criteria and limitations set forth in the Illinois Banking Act.

91-18

Investments in "alternate bonds" that are supported by the full faith and credit of a municipality located in the county in which the state bank is located are exempt from investment limits.

91-20

Loans collateralized by hospital or nursing home's assignment of rights to Medicaid payments qualify for exceptions and exemptions from lending limits under Section 34 and may also qualify under Section 35.

Exceptions to loans and investment limits

State bank may delegate its discretionary investment authority to unaffiliated third party, provided bank adopts certain oversight procedures and values securities at lesser of cost or market value.

99-01

State bank may own and lease personal property to a municipality.  The amount of the bank's permissible investment in the personal property subject to the lease is generally 20% of the unimpaired capital and surplus of the bank unless the lease is a general obligation of the municipality, in which case bank's investment is limited to the amount of bank's unimpaired capital and surplus or is limitless.

When a bank extends credit to commercial equipment leasing company under a "Without Recourse" note with the leasing company, the lending limit and obligation for repayment will attach to the lessee rather than the leasing company.

20-04

Legal Lending Limits – Exemption for SBA Paycheck Protection Program Loans

08-01
Loan collateralized by obligations of State of Illinois from Illinois Underground Storage Tank Fund are exempt from lending limit.

Exemptions from loan and investment limits

Marketable investment securities must be rated on a per issue basis; rating requirements do not apply to general obligations issued by municipalities and other public agencies.

92-18

State bank may delegate its discretionary investment authority to unaffiliated third party, provided bank adopts certain oversight procedures and values securities at lesser of cost or market value.

93-11

Tax increment financing bonds are not general obligations of the issuing municipality and are subject to Section 33 investment limits.

93-25

School district is a "person" for purposes of the leasing authority granted by Section 35.1 of the Banking Act. ag

89-09

State bank may engage in fixed coupon dollar repo and dollar roll transactions subject to satisfying the criteria established for national banks by the Office of the Comptroller of the Currency.

90-07

State bank may factor account receivables due from the U.S. Government with respect to any one contractor without limitation.

90-10
(90-10 rescinded and superceded by 2002-07)

"Eliminating Violations of Law Pertaining to Lending, Investment and Lease Limitations"

State banks are authorized to invest in marketable investment securities, projects designed to promote the development of a community and its welfare, and collateralized mortgage obligations, subject to the criteria and limitations set forth in the Illinois Banking Act.

91-11

Certificate of deposit in lending bank that is pledged as collateral for a loan may be used as a segregated deposit account for purposes of the lending limit exemptions.

91-18

Investments in "alternate bonds" that are supported by the full faith and credit of a municipality located in the county in which the state bank is located are exempt from investment limits.

91-20

Loans collateralized by hospital or nursing home's assignment of rights to Medicaid payments qualify for exceptions and exemptions from lending limits under Section 34 and may also qualify under Section 35.

91-31

Loan to fire protection district backed by full faith and credit of district is a general obligation of a municipality that is exempt from lending limits.

93-19

Investments in general obligations of municipalities located in bank's county are not subject to investment limits; investments in revenue bonds secured by obligations of State of Illinois are limited to 50% of bank's unimpaired capital and surplus.

Sec. 35(4)

School district is a "person" for purposes of the leasing authority granted by Section 35.1 of the Banking Act.

93-26

Portion of loan collateralized by deposit account of guarantor is exempt from lending limits; limit applicable to aggregate guarantees depends on the form of the guarantees.

93-27

State bank may own and lease real property and personal property to a municipality, subject to the same restrictions applicable to a national bank.

99-01

State bank may own and lease personal property to a municipality.  The amount of the bank's permissible investment in the personal property subject to the lease is generally 20% of the unimpaired capital and surplus of the bank unless the lease is a general obligation of the municipality, in which case bank's investment is limited to the amount of bank's unimpaired capital and surplus or is limitless.

Lease limitations

State bank may acquire and lease personal property to county hospital, subject to 20% investment limit; exceptions and exemptions to lending limit in Sections 34 and 35 of Illinois Banking act do not apply to personal property leases made under Section 35.1 of Act.

93-25

School district is a "person" for purposes of the leasing authority granted by Section 35.1 of the Banking Act.

93-27

State bank may own and lease real property and personal property to a municipality, subject to the same restrictions applicable to a national bank.

99-01

State bank may own and lease personal property to a municipality.  The amount of the bank's permissible investment in the personal property subject to the lease is generally 20% of the unimpaired capital and surplus of the bank unless the lease is a general obligation of the municipality, in which case bank's investment is limited to the amount of bank's unimpaired capital and surplus or is limitless.

"Eliminating Violations of Law Pertaining to Lending, Investment and Lease Limitations"

Limitations on investments in and loans to affiliates

State bank may act as futures commission merchant and establish subsidiary to act as futures commission merchant.

85-06

Purchase by a state bank of certificate of deposit from another bank is limited to 10% of capital, surplus and undivided profits when the second bank is owned by a bank holding company owned by two persons, one of whom controls 30% of the first bank.

87-01

Loan from unaffiliated party to purchase stock of the bank holding company which owns the bank is a "covered transaction" subject to the restrictions on loans to affiliates.

87-04

State bank may not sell participation in credit card receivables to its affiliated state bank because past due accounts included in portfolio are low quality assets and proposed transaction is not a true participation.

93-28

Loans secured by bank holding company stock are "covered transactions" that are aggregated for lending limit purposes.

93-31

Loans among affiliates, the stock of which is at least 80% owned by parent company, are exempt from lending limit and collateral requirements.

"Eliminating Violations of Law Pertaining to Lending, Investment and Lease Limitations"

Limitations on investments in and loans to affiliates

Transactions between affiliates that are at least 80% commonly owned are not subject to the limitations set forth in Section 35.2 if conducted in a safe and sound manner and do not involve purchase of low quality assets.

Classification of loans and investments

Loans to officers and loans on and purchases of bank's own stock

"Loans to Bank Officers, Employees, Directors, or to Corporations or Firms Controlled by Them"

State bank may extend loan secured by stock of its bank holding company without violating prohibition against making a loan secured by bank's own stock.

89-12

State bank may not extend line of credit secured by a reverse repurchase agreement collateralized by the bank's own pledge of its government securities.

Validation of loans and investments

Directors' and officers' liability

State banks may indemnify officers, directors, employees and agents to same extent that corporations are so authorized provided, however, state banks may not indemnify directors and officers for those acts for which the Illinois Banking Act imposes personal liability.

Prohibited activities

Waivers; corporate action by unanimously signed writing

Shareholders of bank have sole authority to change the number of members on the bank's board of directors. The board may only exercise authority to appoint a new director prescribed in the by-laws if the vacancy on the board arose between shareholder meetings.

02-08

Board of Directors may use Electronic mail to conduct business of the Bank.

- "Stockholder(s) Consent for Corp. Action w/o Mtg."

- "Director's Consent for Corp. Action w/o Mtg."

School or institutional deposits

Services at care facilities

State bank that establishes a banking facility at senior citizen's or long term care facility is not required to file Notice of Intent to Branch with Commissioner.

94-04

State bank that assists residents of senior citizens centers and nursing homes on a limited basis is not establishing branches, state bank is authorized to purchase guaranty bonds to secure excess deposits.

98-08

The provision of basic banking services, including check cashing, deposit transactions, and statment reconciliation on a limited basis to residents of a retirement apartment complex is authorized by Section 44.1 of the Illinois Banking Act and does not constitute the establishment of a branch by the bank.

Accounts for minors

Misleading practices and names prohibited; penalty

Use of the terms "bancorp, bancorporation or bancshares" does not violate prohibition against use of the terms "bank, banker or banking."

90-06

Business may not use the term "merchant bank" in its corporate name if such use may mislead the public.

93-20

Corporation that only provides equipment financing to other corporations is not doing a general banking business.

Reports to Commissioner

Call report must be published in newspaper of general circulation that is published at least weekly and has been in business for at least one year prior to first call report publication.

94-20 - Rescinded

Bank may publish its call reports in any newspaper of general circulation in the community in which the bank is located.

Commissioner's powers; duties

"Calculation, Assessment and Collection of Periodic Fees"

38 IAC 380

"Eligible State Bank"

38 IAC 385

"Request for Reconsideration of Examination Findings"

38 IAC 392

"Hearings Before the Office of Banks and Real Estate"

38 IAC 900

"Hearings for Removal of Directors, Officers, Employees or Agents of a State Bank"

State bank's appointment of out-of-state banks as agents to issue and pay certificates of deposit does not constitute the establishment of branches.

95-03

Illinois Department of Employment Security may visit state bank despite exclusive visitation provision of Section 48 solely for purpose of verifying unemployment tax records.

PS 1002

"Disclosure of Enforcement Actions"

PS 2002

"Special Mention and Adverse Classification Guidelines"

Customer financial records; confidentiality

"Reimbursement to Banks and Corporate Fiduciaries for Financial Records"

State bank may reveal customer information to its bonding company in order to process a claim.

89-08

State bank is not authorized to produce examination report pursuant to a "Request to Produce" issued to it in litigation.

92-07

Examination report that includes bank customers' names or loan accounts is not a financial record of such customers, and bank is not authorized to notify specific customers of subpoena for examination report.

93-03

Federal law that prohibits bank from disclosing subpoena requesting customer's financial records preempts state law that requires bank to mail copy of subpoena to customer.

93-10 - Rescinded

Bank may not share customers' financial records with an affiliate.

95-13

When the boards of a bank holding company, of the lead bank subsidiary of the bank holding company, and of an affiliated bank holding company are all composed of the identical individuals, and the boards conduct a common meeting for the affiliated entities, then consolidated minutes of such meeting may be kept.

01-01

Scope and effect of Section 48.1 of the IBA as compared to the federal privacy regulations enacted pursuant to the Gramm-Leach-Bliley Act.

04-02

Illinois financial privacy laws are not inconsistent with the privacy provisions of Gramm-Leach- Bliley and are not pre-empted.

10-01

Banks may invite employees of affiliated banks to attend their quarterly trust committee meetings.

Prohibition against certain activities

State bank may sell credit life, accident and health insurance, but may not receive commissions for this service.

Disclosure of reports of examinations; limitations

State bank is not authorized to produce examination report pursuant to a "Request to Produce" issued to it in litigation.

91-07

Commissioner may share examination report of an Illinois bank with out-of-state bank regulator who has a legitimate regulatory interest.

92-07

Examination report that includes bank customers' names or loan accounts is not a financial record of such customers, and bank is not authorized to notify specific customers of subpoena for examination report.

95-13

When the boards of a bank holding company, of the lead bank subsidiary of the bank holding company, and of an affiliated bank holding company are all composed of the identical individuals, and the boards conduct a common meeting for the affiliated entities, then consolidated minutes of such meeting may be kept.

02-05

Bank may provide confidential supervisory information to insurance carriers for the purpose of obtaining or renewing bond coverage, subject to conditions.

False statements; penalty

Commissioner's proceedings exclusive

Capital impairment, etc.; correction

"Goodwill"

Capital impairment, etc.; emergency

"Goodwill"

Commissioner's possession; power

Commissioner's possession; limitation of actions

Reorganization

Requirements of reorganization plan

Reorganization; emergency

Appointment of receiver; court proceeding

Notice of receivership

Receiver's powers; duties

Receiver's powers; court directions

Change of receiver

Insured deposits; subrogation

Expenses and fees

Dividends; dissolution

Validation of dividends; destruction of records

Judicial review

Voluntary dissolution

Voluntary dissolution; deposit with Commissioner

Voluntary dissolution; Commissioner's payments

Voluntary dissolution; Commissioner's fee

Voluntary dissolution; dissolving bank

Voluntary dissolution; limitation on claims

Voluntary dissolution; termination of charter

Voluntary dissolution of less active bank

Separability

Effective date

Repealer

Board of banks and trust companies; creation, members, appointment

Board, terms of office

Board; powers

"Hearings for Removal of Directors, Officers, Employees or Agents of a State Bank"

Board; compensation

Commissioner, board; civil liability

Compliance review