Print

Section 11 of Conveyances Act Clarified as of June 1, 2013

The uncertainty stemming from bankruptcy court decisions in 2012 regarding whether a mortgage could be voided following bankruptcy filing if the mortgage did not specify all components, including interest rate and term of the underlying note, should now be put to rest with the June 1st effective date of CBAI-initiated legislation that was enacted as part of Public Act 97-1164. Section 11 of the Conveyances Act now unambiguously states that the suggested mortgage language therein is discretionary; has never been intended as mandatory; and that any mortgage lacking one or more of those suggested terms remains valid and fully enforceable, regardless of when the mortgage was recorded.

On a related note, the federal Court of Appeals recently issued a favorable decision in the last lingering case in which an argument was made that Section 11 contained a mandate that would make a mortgage filing deficient if it lacked the Section 11 components. To read CBAI General Counsel Jerry Cavanaugh’s report on that case, click here.

Print

ICBA Releases Report on Ending Too-Big-To-Fail

The ICBA released a report that examines the impact of too-big-to-fail (TBTF) financial institutions on the U.S. economy, and provides an overview of the reasons why Congress, regulators, and the American people must take a united and bi-partisan stand against too-big-to-fail to ensure a healthy, robust, and diverse economy.

The Report addresses common myths that have been used by TBTF paid cheerleaders with clearly understandable facts, including that ending too-big-to-fail would make U.S. banks stronger and more globally competitive - not less.

The Ending Too-Big-To-Fail report encourages everyone to vigorously peruse practical solutions that will restore a free and safe financial market for financial services. READ THE ICBA REPORT

Print

Federal District Court Overturns Unfavorable Conveyances Act Decision

On February 28th, federal judge Michael McCuskey of the United States District Court for the Central District of Illinois reversed the decision of a bankruptcy court judge last year in which the bankruptcy court judge had concluded that Section 11 of Illinois’ Conveyances Act requires that a recorded mortgage must include the interest rate and maturity date of the underlying promissory note in order for the mortgage to survive a challenge by a Trustee in bankruptcy.

In ruling that the mortgage terms recited in Section 11 of the Conveyances Act represented a discretionary safe harbor rather than a mandate, Judge McCuskey cited for support recently enacted legislation initiated by CBAI that amended the Conveyances Act in a manner consistent with his February 28th opinion. Any CBAI member can request a copy of Judge McCuskey’s opinion in the case of Crane vs. The Gifford State Bank from CBAI General Counsel Jerry Cavanaugh or CBAI Paralegal Levette Shade by calling CBAI (800-736-2224) or e-mailing Jerry at jerryc@cbai.com or Levette at levettes@cbai.com.

Preparation required Following Disappointing TAG Vote

December 18, 2012

Earlier this month the United States Senate failed to advance legislation that would extend the Transaction Account Guarantee (TAG) program. Although the TAG measure cleared the first procedural hurdle by a comfortable 70-22 vote, it failed on the second vote by not receiving the required three-fifths majority.

While there are still some limited opportunities to advance this important legislation by year-end, community banks must brace for the possibility the program will expire. The FDIC has issued a FIL on how to notify customers in the event the TAG is not extended. See FDIC Release.

Illinois Senator Richard Durbin voted in favor of the two motions to move the legislation forward, but Senator Kirk did not vote as he is still recovering from a stroke suffered earlier this year.

TAG Suffers Setback in the U.S. Senate

December 14, 2012

Legislation to extend the Transaction Account Guarantee (TAG) program (S. 3637) suffered a significant setback in the U.S. Senate when it failed to clear a procedural hurdle. It is particularly disappointing that the Senate legislation failed on a procedural motion versus its merits. ICBA and CBAI will continue to work with Congress to pass a TAG extension before the program expires on December 31, 2012.

CBAI thanks community bankers from across the state for e-mailing and calling Senator Durbin’s office to express support for a TAG extension. Although the legislation failed to move forward we are gratified that Senator Durbin voted “YES” on the procedural votes to move this legislation forward.

Thank you again for your grass roots support.