ARTICLE V. SUPERVISION OF CORPORATE FIDUCIARIES AND POWERS OF THE COMMISSIONER
(205 ILCS 620/Art. V heading)
(205 ILCS 620/5-1) (from Ch. 17, par. 1555-1)
Sec. 5-1. Commissioner's powers. The Commissioner of Banks and Real Estate shall have the following powers and authority and is charged with the duties and responsibilities designated in this Act:
(a) To promulgate, in accordance with the Illinois Administrative Procedure Act, reasonable rules for the purpose of administering the provisions of this Act and for the purpose of incorporating by reference rules promulgated by the Federal Deposit Insurance Corporation, the Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency, the Office of Thrift Supervision, or their successors that pertain to corporate fiduciaries, including, but not limited to, standards for the operation and conduct of the affairs of corporate fiduciaries;
(b) To issue orders for the purpose of administering the provisions of this Act and any rule promulgated in accordance with this Act;
(c) To appoint hearing officers to conduct hearings held pursuant to any of the powers granted to the Commissioner under this Section for the purpose of administering this Act and any rule promulgated in accordance with this Act;
(d) To subpoena witnesses, to compel their attendance, to administer an oath, to examine any person under oath and to require the production of any relevant books, papers, accounts and documents in the course of and pursuant to any investigation being conducted, or any action being taken, by the Commissioner in respect of any matter relating to the duties imposed upon, or the powers vested in, the Commissioner under the provisions of this Act, or any rule or regulation promulgated in accordance with this Act;
(e) To conduct hearings;
(f) To promulgate the form and content of any applications required under this Act;
(g) To impose civil penalties of up to $100,000 against any person or corporate fiduciary for each violation of any provision of this Act, any rule promulgated in accordance with this Act, any order of the Commissioner or any other action which, in the Commissioner's discretion, is a detriment or impediment to accepting or executing trusts; and
(h) To address any inquiries to any corporate fiduciary, or the officers thereof, in relation to its doings and conditions, or any other matter connected with its affairs, and it shall be the duty of any corporate fiduciary or person so addressed, to promptly reply in writing to such inquiries. The Commissioner may also require reports from any corporate fiduciary at any time he may deem desirable.
(Source: P.A. 96-1365, eff. 7-28-10.)
(205 ILCS 620/5-2) (from Ch. 17, par. 1555-2)
Sec. 5-2. Examinations of corporate fiduciaries.
(a) The Commissioner, no less frequently than 18 months following the preceding examination, and whenever in his judgment it is necessary or expedient, either personally or by one or more competent persons appointed by him, shall visit and examine every corporate fiduciary in this State and may, to the extent the Commissioner determines necessary, examine the affairs of the corporate fiduciary's subsidiaries, affiliates, parent companies and contractual service providers for fiduciary services of the corporate fiduciary as shall be necessary to fully disclose the condition of such subsidiaries, affiliates, parent companies and contractual service providers and the relation between the corporate fiduciary and such subsidiaries, affiliates, parent companies and contractual service providers and the effect of such relations upon the affairs of such corporate fiduciary. Instead of the Commissioner making the examination provided by this subsection or appointing a competent person to do so, the Commissioner may accept on an alternating basis the examination made by the corporate fiduciary's appropriate federal regulatory agency, provided the appropriate federal regulatory agency has made such an examination. Fiduciary services shall include, but not be limited to, clerical, accounting, bookkeeping, statistical, data processing, safekeeping or similar functions for a corporate fiduciary.
(b) The Commissioner and every such examiner may administer an oath to any person whose testimony is required on any such examination, and compel the appearance and attendance of any such person for the purpose of examination, by summons, subpoena or attachment, in the manner now authorized in respect to the attendance of persons as witnesses in the circuit court; and all books and papers which are necessary to be examined by the Commissioner or examiner so appointed shall be produced, and their production may be compelled in like manner.
(c) The expense of every examination, if any, shall be paid by the corporate fiduciary examined, in such amount as the Commissioner certifies to be just and reasonable.
(d) On every examination, inquiry shall be made as to the condition and resources of the corporate fiduciary generally, the mode of conducting and managing its affairs, the action of its directors or trustees, the investments of its funds, the safety and prudence of its management, the security afforded to those by whom its engagements are held, and whether the requirements of its charter and of the laws have been complied with in the administration of its affairs. The nature and condition of the assets in or investment of any bonus, pension, or profit sharing plan for officers or employees of a corporate fiduciary shall be deemed to be included in the affairs of that corporate fiduciary subject to examination by the Commissioner.
(e) Whenever any corporate fiduciary causes to be performed, by contract or otherwise, any fiduciary services for itself, whether on or off its premises:
(1) such performance shall be subject to examination
by the Commissioner to the same extent as if the services were being performed by the corporate fiduciary itself on its own premises; and
(2) the corporate fiduciary shall notify the
Commissioner of the existence of the service relationship. Such notification shall be submitted within 30 days after the making of such service contract, or the performance of the service, whichever occurs first. The Commissioner shall be notified of each subsequent contract in the same manner.
For purposes of this subsection (e), the term "fiduciary services" shall include such services as the computation and posting of interest and other credits and charges; preparation and mailing of checks, statements, notices and similar items; clerical, bookkeeping, accounting, statistical or similar functions; and any other function which the corporate fiduciary, in the ordinary course of its business, could have performed itself.
Any report of examination pursuant to this Section and any copies thereof shall be the property of the Commissioner, confidential and may only be disclosed under the circumstances set forth in Section 48.3 of the Illinois Banking Act, as now or hereafter amended.
(Source: P.A. 92-811, eff. 8-21-02.)
(205 ILCS 620/5-3) (from Ch. 17, par. 1555-3)
Sec. 5-3. Violations; orders.
(a) Whenever it appears to the Commissioner from any examination, statement of condition or report, that any corporate fiduciary has committed any violation of law, has made or published a false statement of condition or is conducting its business in an unsafe, unsound or unauthorized manner, he shall, by an order under his signature, direct the discontinuance of such illegal and unsafe, unsound or unauthorized practices and that the corporate fiduciary strictly conform with the requirements of the law, and with safety and security in its transactions.
(b) If a corporate fiduciary refuses or neglects to make a required statement of condition or any report required under this Act, or to comply with an order as above stated, or if it appears to the Commissioner that it is unsafe or inexpedient for the corporate fiduciary to continue to transact business, or that extraordinary withdrawals of money are jeopardizing the interests of remaining depositors, or that any corporate fiduciary or officer of a corporate fiduciary has abused his trust or is guilty of misconduct in his official position, injurious to the corporate fiduciary, or that it has suffered a serious loss, he shall enter an order appropriate to the circumstances, which may include the appointment of a receiver as hereinafter provided, the taking of possession of the corporate fiduciary, or the removal of a director, officer, employee, or agent of the corporate fiduciary, or he may, represented by the Attorney General, seek an injunction or other appropriate order from the court.
(c) No dividends shall be paid by a corporate fiduciary while it continues its business as a corporate fiduciary to an amount greater than its net profits then on hand, deducting first therefrom its losses and bad debts.
(Source: P.A. 92-483, eff. 8-23-01.)
(205 ILCS 620/5-4) (from Ch. 17, par. 1555-4)
Sec. 5-4. If the Commissioner has satisfactory evidence that any statement of condition or other report required or authorized by this Act, made by any officer or officers of a corporate fiduciary is false, the Commissioner may revoke the certificate of authority granted on behalf of such corporate fiduciary and mail a copy of such revocation to that corporate fiduciary and the clerk of the circuit court in each county in the state of Illinois. Such revocation shall not be set aside until satisfactory evidence is given to the Commissioner that such corporate fiduciary is in substance and in fact in the condition set forth in such required statement of condition or report or that a corrected statement of condition, or report as the case may be, is prepared, filed with the Commissioner and published if the original statement or report was required to be published and satisfactory evidence that all the requirements of this Act have been complied with. Such revocation is cause for the removal of such corporate fiduciary from any appointment held by it under this Act.
(Source: P.A. 85-858.)
(205 ILCS 620/5-5) (from Ch. 17, par. 1555-5)
Sec. 5-5. A special meeting of the board of directors may be held upon call by the Commissioner or an examiner appointed under the provisions of this Act, upon not less than 12 hours notice of such meeting by personal service of such notice, or by mailing said notice to each of the directors at his residence as shown by the books of the corporate fiduciary.
(Source: P.A. 85-858.)
(205 ILCS 620/5-6) (from Ch. 17, par. 1555-6)
Sec. 5-6. Removal orders. Whenever, in the opinion of the Secretary, any director, officer, employee, or agent of a corporate fiduciary or subsidiary or corporate parent of the corporate fiduciary shall have violated any law, rule, or order relating to the corporate fiduciary or subsidiary or corporate parent of the corporate fiduciary, shall have engaged in an unsafe or unsound practice in conducting the business of the corporate fiduciary or subsidiary or corporate parent of the corporate fiduciary, or shall have violated any law or engaged or participated in any unsafe or unsound practice in connection with any financial institution or other business entity such that the character and fitness of the director, officer, employee, or agent does not assure reasonable promise of safe and sound operation of the corporate fiduciary or subsidiary or corporate parent of the corporate fiduciary, the Secretary may issue an order of removal. If in the opinion of the Secretary, any former director, officer, employee, or agent of a corporate fiduciary or subsidiary or corporate parent of the corporate fiduciary, prior to the termination of his or her service with the corporate fiduciary or subsidiary or corporate parent of the corporate fiduciary, violated any law, rule, or order relating to the corporate fiduciary or subsidiary or corporate parent of the corporate fiduciary or engaged in an unsafe or unsound practice in conducting the business of the corporate fiduciary or subsidiary or corporate parent of the corporate fiduciary or violated any law or engaged or participated in any unsafe or unsound practice in connection with any financial institution or other business entity such that the character and fitness of the director, officer, employee, or agent would not have assured reasonable promise of safe and sound operation of the corporate fiduciary or subsidiary or corporate parent of the corporate fiduciary, the Secretary may issue an order prohibiting that person from further service with a corporate fiduciary or subsidiary or corporate parent of the corporate fiduciary as a director, officer, employee, or agent. An order issued pursuant to this Section shall be served upon the director, officer, employee, or agent. A copy of the order shall be sent to each director of the corporate fiduciary affected by personal service, certified mail return receipt requested, or any other method that provides proof of service and receipt. A copy of the order shall be served upon the corporate fiduciary of which the person is a director, officer, employee, or agent, whereupon the person shall cease to be a director, officer, employee, or agent of the corporate fiduciary. Any person who has been removed or prohibited by an order of the Secretary under this Section or subsection (7) of Section 48 of the Illinois Banking Act may not thereafter serve as director, officer, employee, or agent of any State bank or corporate fiduciary, or of any other entity that is subject to licensure or regulation by the Division of Banking unless the Secretary has granted prior approval in writing. The Secretary may institute a civil action against the director, officer, employee, or agent subject to an order issued under this Section and against the corporate fiduciary to enforce compliance with or to enjoin any violation of the terms of the order.
(Source: P.A. 96-1163, eff. 1-1-11.)
(205 ILCS 620/5-7) (from Ch. 17, par. 1555-7)
Sec. 5-7. Any person or corporate fiduciary affected by any action under this Act, other than under Section 5-6, may request a hearing before the Commissioner within 10 days after receipt of notice of such action. The hearing shall be held by the Commissioner within 30 days after such request has been received by the Commissioner. At the conclusion of such hearing, the Commissioner shall make a determination approving, modifying or disapproving the action taken as the final administrative decision.
(Source: P.A. 86-754.)
(205 ILCS 620/5-8) (from Ch. 17, par. 1555-8)
Sec. 5-8. All final administrative decisions of the Secretary shall be subject to review pursuant to the provisions of the Administrative Review Law, as now or hereafter amended, and the rules adopted pursuant thereto. For matters involving administrative review, venue shall be in either Sangamon County or Cook County.
(Source: P.A. 96-1163, eff. 1-1-11.)
(205 ILCS 620/5-9) (from Ch. 17, par. 1555-9)
Sec. 5-9. Statement of condition.
(a) Each corporate fiduciary shall file with the Commissioner, when requested, a statement under oath, of the condition of such corporate fiduciary as of the date requested. The statement of condition shall be in such form and contain such statements, returns and information, as to the affairs, business conditions, and resources of the corporate fiduciary or of its trust department, as the case may be, as the said Commissioner may, from time to time prescribe or require.
(b) Such statement of condition shall be verified by the affidavit of the president, vice president or principal accounting officer of said corporate fiduciary, who shall also state in such affidavit that he has examined the books and accounts of said corporate fiduciary or of its trust department, as the case may be for the purpose of making said report or statement, and that the information contained in the statement or report is accurate to the best of his knowledge and belief. If the statement is submitted in electronic form, the Commissioner may, in the call for the report, specify the manner in which the appropriate officer of the corporate fiduciary shall verify the statement of condition.
(d) Any corporate fiduciary which fails to file an accurate statement of condition on or before the date it is due may be fined $100 for each day of noncompliance.
(e) Any corporate fiduciary which is the victim of a robbery or experiences a shortage of funds in excess of $10,000, an apparent misapplication of the corporate fiduciary's funds by an officer, employee, director, or agent, a charge-off of assets of the corporate fiduciary, or any adverse legal action in an amount in excess of 10% of total capital and surplus of the corporate fiduciary, including but not limited to, the entry of an adverse money judgment against the corporate fiduciary shall report that information in writing to the Commissioner within 7 days. Neither the corporate fiduciary, its directors, officers, employees or agents, in the preparation or filing of the reports required by this subsection, shall be subject to any liability for libel, slander or other charges resulting from information supplied in such reports, except when the supplying of such information is done in a corrupt or malicious manner or otherwise not in good faith.
(Source: P.A. 97-492, eff. 1-1-12.)
(205 ILCS 620/5-10) (from Ch. 17, par. 1555-10)
Sec. 5-10. Fees; receivership account.
(a) There shall be paid to the Commissioner by every corporate fiduciary including each trust company, bank, savings and loan association, and savings bank to which this Act shall apply, reasonable fees that the Commissioner shall assess to recover the costs of administration, certification, examination and supervision of trusts authorized under this Act.
(b) In addition to the fees authorized in subsection (a) of this Section the Commissioner shall assess reasonable receivership fees and establish a Non-insured Institutions Receivership account in the Bank and Trust Company Fund to provide for the expenses that arise from the administration of the receivership of a corporate fiduciary under this Act. The aggregate of such assessments shall be paid into the Non-insured Institutions Receivership account in the Bank and Trust Company Fund. The assessments for this account shall be levied until the sum of $4,000,000 has been deposited into the account from assessments authorized herein, whereupon the Non-insured Institutions Receivership account assessment shall be abated. If a receivership of a corporate fiduciary under this Act requires expenditures from this account, assessments may be reinstituted until the balance in the Non-insured Institutions Receivership account arising from assessments is restored to $4,000,000.
(c) The Commissioner may, by rule, establish a reasonable manner of assessing the receivership assessments under this Section.
(Source: P.A. 96-1365, eff. 7-28-10.)
(205 ILCS 620/5-10.5)
Sec. 5-10.5. Disclosure of records. A corporate fiduciary may not disclose to any person, except to the customer or the customer's duly authorized agent, any records pertaining to the fiduciary relationship between the corporate fiduciary and the customer unless:
(1) the instrument or court order establishing the
fiduciary relationship permits the record to be disclosed under the circumstances;
(2) applicable law authorizes the disclosure;
(3) disclosure by the corporate fiduciary is
necessary to perform a transaction or act that is authorized by the instrument or court order establishing the fiduciary relationship; or
(4) Section 48.1 of the Illinois Banking Act would
permit a bank to disclose the record to the same extent under the circumstances.
For purposes of this Section, "customer" means the person or individual who contracted to establish the fiduciary relationship or who executed any instrument or document from which the fiduciary relationship was established, a person authorized by the customer to provide such direction or, if the instrument, law, or court order so permits, the beneficiaries of the fiduciary relationship.
(Source: P.A. 99-642, eff. 7-28-16.)
(205 ILCS 620/5-11) (from Ch. 17, par. 1555-11)
Sec. 5-11. A corporate fiduciary shall be reimbursed for costs which are reasonably necessary and which have been directly incurred in searching for, reproducing or transporting books, papers, records or other data of a customer required or requested to be produced pursuant to a lawful subpoena, summons, warrant or court order. The Commissioner shall determine the rates and conditions under which payment may be made.
(Source: P.A. 85-1402.)