Illinois Compiled Statutes 205 ILCS 5/37 – Loans to officers and loans on and purchases of bank’s own stock
Current as of: 2024 | Check for updates
|
Other versions
(1) No state bank shall make any loan or extension of credit in excess of the limits, as determined by the Commissioner, at any one time outstanding each to its president, or to any of its vice presidents or its salaried officers or employees or directors or to corporations or firms, controlled by them, or in the management of which any of them are actively engaged, unless such loan or extension of credit shall have been first approved, by the board of directors. The Commissioner shall prescribe such limits by rules.
(2) It shall not be lawful for a state bank to make any loan or discount on the security of the shares of its own capital stock or preferred stock or on the security of its own debentures or evidences of debt which are either convertible into capital stock or are junior or subordinate in right of payment to deposit or other liabilities of the bank.
(3)(a) For purposes of this Section, “control” means (i) ownership, control, or power to vote 25% or more of the outstanding shares of any class of voting security of the corporation or firm, directly or indirectly, or acting through or in concert with one or more other persons; (ii) control in any manner over the election of a majority of the directors of the corporation or firm; or (iii) the power to exercise a controlling influence over the management or policies of the corporation or firm, directly or indirectly, or acting through or in concert with one or more persons.
(3)(b) A person does not have the power to exercise a controlling influence over the management or policies of a corporation or firm solely by virtue of the person’s position as an officer or director of the corporation or firm.
(3)(c) A person is presumed to have control, including the power to exercise a controlling influence over the management or policies, of a corporation or firm if:
(i) the person:
(A) is an executive officer, director, or
(2) It shall not be lawful for a state bank to make any loan or discount on the security of the shares of its own capital stock or preferred stock or on the security of its own debentures or evidences of debt which are either convertible into capital stock or are junior or subordinate in right of payment to deposit or other liabilities of the bank.
Terms Used In Illinois Compiled Statutes 205 ILCS 5/37
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
- State: when applied to different parts of the United States, may be construed to include the District of Columbia and the several territories, and the words "United States" may be construed to include the said district and territories. See Illinois Compiled Statutes 5 ILCS 70/1.14
(3)(a) For purposes of this Section, “control” means (i) ownership, control, or power to vote 25% or more of the outstanding shares of any class of voting security of the corporation or firm, directly or indirectly, or acting through or in concert with one or more other persons; (ii) control in any manner over the election of a majority of the directors of the corporation or firm; or (iii) the power to exercise a controlling influence over the management or policies of the corporation or firm, directly or indirectly, or acting through or in concert with one or more persons.
(3)(b) A person does not have the power to exercise a controlling influence over the management or policies of a corporation or firm solely by virtue of the person’s position as an officer or director of the corporation or firm.
(3)(c) A person is presumed to have control, including the power to exercise a controlling influence over the management or policies, of a corporation or firm if:
(i) the person:
(A) is an executive officer, director, or
|
individual exercising similar functions of the corporation or firm; and
|
(B) directly or indirectly owns, controls, or has
|
the power to vote more than 10% of any class of voting securities of the corporation or firm; or
|
(ii) (A) the person directly or indirectly owns,
|
controls, or has the power to vote more than 10% of any class of voting securities of the corporation or firm; and
|
(B) no other person directly or indirectly owns,
|
controls, or has the power to vote a greater percentage of that class of voting securities.
|
(3)(d) A person may rebut a presumption established under subdivision (3)(c) of this Section by submitting written materials that, in the Commissioner’s judgment, demonstrate an absence of control.