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ILLINOIS LEGISLATION EFFECTIVE IN 2014

Public Act 98-209 (House Bill 1323): Will amend the Payday Loan Reform Act and the Consumer Installment Loan Act to mandate that the Illinois Department of Financial & Professional Regulation (“IDFPR”) adopt rules for civil monetary penalties (i.e., fines) including a schedule of fines, remedial measures intended to improve compliance, and standards and procedures to be followed when issuing fines. [effective date: January 1, 2014]

Public Act 98-486 (House Bill 3380): Will amend Section 2MM of Illinois’ Consumer Fraud and Deceptive Business Practices Act to allow a guardian appointed under the Probate Act or an agent with power of attorney under the Illinois Power of Attorney Act to request a security freeze on the credit report of a disabled adult; also permits a credit file security freeze to be sought on behalf of a minor by the legal guardian of a minor appointed under the Probate Act; a parent of a minor; or a guardian under the Juvenile Court Act of a minor under age 18 (or, with a court order extending the guardian’s authority, under the Juvenile Court Act for a person between ages 18 and 21). Will prohibit the temporary lifting or suspension of a credit file security freeze in the case of a minor (Section 2MM permits such temporary or transaction-specific lifts of a credit file security freeze by an adult). [effective date: January 1, 2014]

Public Act 98-498 (Senate Bill 2186): Will amend Article 4A of Illinois’ Uniform Commercial Code (the UCC Article governing electronic fund transfers) by clarifying that Section 4A-108, which otherwise defers to the federal Electronic Fund Transfer Act (“federal law”) in cases of redundancy or conflict with Illinois law, still applies in cases of remittance payments made electronically that fall outside of the federal law’s definition of “remittance transfer” (for federal law purposes the recipient of a remittance transfer must be in another country and the dollar amount of the transfer must be above a minimum amount set from time to time by regulation). [effective date: January 1, 2014]

Public Act 98-545 (Senate Bill 1829): Will amend Illinois’ Electronic Fund Transfer Act (“Illinois Act”) to introduce and define the term “general use reloadable card” as an access device not marketed as a gift card that is prepaid, permits funds to be added after its initial purchase and use, is primarily for personal, family or household use, and is redeemable at multiple unaffiliated merchants or usable at ATMs. Will add new Section 46 to the Act mandating “clear and conspicuous” disclosures that a card issuer must provide to the customer in written or electronic form. Before purchase, the issuer must disclose: the card purchase fee; any monthly maintenance fee; any fee for ATM withdrawal or cash advance at point of sale; any reloading fee; any balance inquiry fee (unless customer is advised of a phone number or Internet site at which balance can be checked at no cost); and any other fee that may be charged at the time of issuance or after issuance and, if the fee amount is variable, a description of the formula for calculating the fee and the conditions on which the fee would be imposed. Disclosures on the card must include an expiration date, if any, and a toll free phone number at which the customer can receive information about fees or request a replacement card for a card that is expiring. Compliance with federal Electronic Fund Transfer Act conditions and disclosures pertaining to general use reloadable cards shall constitute compliance with the Illinois Act. [effective date: January 1, 2014, although by its terms the law’s mandates apply to any general use reloadable card sold to a consumer after January 1, 2015]

Miscellaneous non-banking; but still good to know

Public Act 98-0063 (House Bill 0183): Created the Firearm Concealed Carry Act. Establishes the authority for “concealed carry” in Illinois, subject to numerous licensing and training requirements and subject to rulemaking under the jurisdiction of the Department of State Police. Specifies more than 20 locations where firearms are banned by law (schools, taverns, sports arenas, etc.) but also permits any business proprietor (e.g., a bank) to prohibit firearms on the premises of the business if the proprietor posts a sign at the entrance that meets signage specifications yet to be developed by the State Police; provided, that if the proprietor considers a parking area to be part of his/her/its business premises, the licensed firearms owner shall be given a reasonable amount of time to possess the firearm for the exclusive purpose of securing the firearm in his or her vehicle in that parking area. [effective date: July 9, 2013; but realistic projections are that State Police will not be prepared to begin issuing licenses until early 2014]

Public Act 98-430 (House Bill 2590): Will create a new State law titled the “Workplace Violence Prevention Act,” authorizing employers to seek an order of protection when one or more employees have been subjected to unlawful violence or there is a credible threat of unlawful violence that can be reasonably construed as threatened to occur at the employer’s place of business. [effective date: January 1, 2014]

Public Act 98-506 (House Bill 1247): Will amend Section 12-610.2 of the Illinois Vehicle Code to extend the current prohibition against text messaging while driving to also ban the use of cell phones while driving. Exempt from this prohibition are “hands-free” (including headset) and voice-operated systems; exemptions also remain for reporting an emergency situation and maintaining a conversation with emergency services personnel as well as use of a cell phone while parked on the shoulder of a roadway. First offense is punishable by a $75 fine; second offense $100 and a reportable “moving violation;” third offense $125 and a moving violation; fourth and subsequent offenses $150 and moving violation(s). [effective date: January 1, 2014]

Public Act 98-507 (House Bill 2585): Will amend the Illinois Vehicle Code to create new, enhanced classifications of vehicular crimes involving distracted driving: aggravated use of a video device if the driver has a video screen forward of the back seat and an accident causes great bodily harm, permanent disability, disfigurement or death to another; aggravated use of a wireless telephone when a driver under age 19 or driving in a school or construction zone causes great bodily harm, permanent disability, disfigurement or death to another; aggravated use of an electronic communication device if driver is texting while driving and causes great bodily harm, permanent disability, disfigurement or death to another; Class A misdemeanors for aggravated violations resulting in great bodily harm, permanent disability, or disfigurement and Class 4 felony for aggravated violations resulting in death. [effective date: January 1, 2014]

Public Act 98-511 (Senate Bill 2356): Will amend the Illinois Vehicle Code to increase rural interstate highway speed limits from 65 m.p.h. to 70 and 65 m.p.h. on divided 4 lane highways; 55 m.p.h. for all other highways. Allows the counties of Cook, DuPage, Lake, Madison, McHenry, St. Clair and Will to adopt ordinances setting lower speed limits for interstates and highways in those counties. Also will lower the floor for a Class B misdemeanor for speeds from 26 to 35 m.p.h. above the speed limit (currently, 31 to 40 over the speed limit) and for a Class A misdemeanor for speeds more than 35 (currently 40) m.p.h. above the limit. [effective date: January 1, 2014]

Public Act 98-527 (Senate Bill 1568): Will amend Section 14 of the Illinois Wage Payment and Collection Act to establish non-waivable fees payable by the employer to the State Department of Labor in cases where the employer failed to timely pay “wages, final compensation, or wage supplements” as required by the Act. The fee payable by the employer will be $250 if the amounts payable to the employee or departed employee are not more than $3,000; a fee of $500 if the amounts payable to the employee or departed employee are not more than $3,000 but less than $10,000; a fee of $1,000 if the amounts payable to the employee or departed employee are $10,000 or more. [effective date: January 1, 2014]

For further information or to obtain a copy of any of these new laws, please contact CBAI General Counsel Jerry Cavanaugh by phone (1/800-736-2224 from within Illinois) or by email (jerryc@cbai.com).

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CBAI Advises Illinois Banks to Disregard $125 Corporate Records Solicitation

December 6, 2013 - - The Community Bankers Association of Illinois has received inquiries from banks regarding whether they are legally required to submit a form which has been circulated by a company calling itself “Corporate Records Service.” The solicitation implies that Illinois law requires the form pertaining to corporate minutes or records to be submitted and directs the recipient to complete the form and send it with a $125 fee to Corporate Records Service by December 23, 2013.

This solicitation is NOT legitimate. There is no Illinois law that requires such a form to be completed or submitted.

Please feel free to contact CBAI General Counsel Jerry Cavanaugh by phone (800-736-2224) or by e-mail (jerryc@cbai.com) with any questions about this matter.

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Rosenbaum Re-elected to FHLB-Chicago Board of Directors

November 8, 2013

Steve Rosenbaum, President of Prospect Federal Savings in Worth, won re-election to a four year term to the Board of Directors of the Federal Home Loan Bank of Chicago.   CBAI’s Board of Directors unanimously supported Rosenbaum’s re-election and congratulates him on this important accomplishment.

Rosenbaum13Rosenbaum is the current Vice Chairman of the FHLB-Chicago where he serves as Chairman of the Human Resources and Compensation Committee, and as a member of the Executive & Governance and Audit Committees. In addition, he is one of three members from the FHLB-Chicago serving on the Council of Federal Home Loan Banks which represents the positions and views of the Council's members to Washington policymakers.FHLBlogo

Rosenbaum is a strong supporter of community banks.  He believes his knowledge of the FHLB-Chicago will be valuable to his continued service on the Board and to help the Bank carry out its member focused mission. 

Other CBAI members serving on the Chicago FHLB board are Jim Ashworth, President of CNB Bank and Trust, N.A., Carlinville; and Roger Lehmann, Chairman and CEO of Harvard State Bank. 

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FRB’s Supervisory View on Community Banking

November 1, 2013

On November 1, 2013, CBAI members and staff attended the 9th Annual Community Bankers Symposium which was jointly sponsored by the Federal Reserve Bank of Chicago, the FDIC, and the OCC. The symposium was titled GPS for Success: Navigating the New Community Banking Environment. Kevin Bertsch, Associate Director of the FRB, presented a View from the Board of Governors, and highlighted the following with insightful graphs and statistics to support the Fed’s observations.

  • Community bank performance and conditions are improving.
  • Community banks have taken steps to address the crisis.
  • The number of problem banks is declining.
  • Challenges to return to historic performance levels remain including: tighter margins, pre-provision operating income is lower, interest rate risks, and lending has still not recovered.
  • Supervisory priorities reflect current conditions including: loan portfolio quality and adequacy of reserves, managing interest rate risk, and risk mitigation before entering new lines of business.
  • The Federal Reserve’s is making efforts to improve the supervisory programs for community banks.

This material is appropriate to inform your Board on community banks’ progress in addressing the financial crisis and the current state of the profession. See FRB Presentation Report.

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CBAI Meets with Federal Reserve of Chicago President Charles Evans

October 18, 2013

Representatives from CBAI met this week with Federal Reserve Bank of Chicago President and CEO Charles L. Evans.OhlendorfEvansSchroeder13 Participating in the meeting were:  David Schroeder, CBAI’s Vice President Federal Governmental Relations; Greg Ohlendorf, Fed Reserve (and CBAI) bank member, President and CEO  of First Community Bank and Trust in Beecher; and Chairman of the ICBA’s Policy Development Committee; Julie Williams, Fed Reserve SVP (Community Bank  and Consumer Compliance Division / Supervision and Regulation); and Steven Durfey, SVP (Risk Specialist Division / Supervision and Regulation).  A wide range of topics were discussed during the meeting including: the new Fed Chairman nomination, monetary policy, too-big-to-fail, regulatory relief, tiered regulation for community banks, and final observations on Basel III.

Schroeder stated that for the first time CBAI has included in its Federal Policy Priorities opposition to excessive central bank monetary policy intervention. The sustained record-low interest rates are negatively impacting community banks, senior citizens and savers. Admittedly, in a recession, an accommodative monetary policy can assist in an economic recovery. However, continued years of low interest rates are not temporary intervention but long-term manipulation. The longer interest rate normalization is delayed the longer community banks will be harmed by low net interest margins and earnings, negatively impacting their ability to serve their customers and communities.

Ohlendorf said that a priority for Congress and banking regulators should be the continued reform of our financial system to significantly reduce the probability and severity of a future financial crisis. An unfortunate result of the previous financial crisis is that the largest banks have grown larger and remain candidates for future bailouts. The mega banks, not community banks, caused the recent financial crisis, and we must all be protected from a repeat of the massive financial destruction they caused.

Both Schroeder and Ohlendorf highlighted the need for regulatory relief and tiered regulation for community banks. The financial crisis clearly demonstrated that the relationship-based business model of community banks is very different from the Wall Street mega banks and that difference should be reflected in the regulations. Tiered regulation for community banks has recently established a welcomed and necessary beachhead. Now is the time to broaden that beachhead and ensure that every new banking law, rule, and regulation clearly distinguishes and appropriately regulates community banks.

Schroeder and Ohlendorf thanked the Fed Reserve officers for participating in this meeting and promised future opportunities to discuss issues of importance to Illinois community banks.