Statutes > Illinois Statutes > CHAPTER 205 FINANCIAL REGULATION > 205 ILCS 205/ Savings Bank Act. > Article 4 - Membership

Article 4 - Membership


      (205 ILCS 205/Art. 4 heading)
ARTICLE 4. Membership

    (205 ILCS 205/4001) (from Ch. 17, par. 7304‑1)
    Sec. 4001. Members.
    (a) The membership of a mutual savings bank shall consist solely of every depositor or holder of a deposit account issued by the savings bank.
    (b) The members of a stock savings bank shall be only the owners of its capital stock. Jointly owned stock shall constitute one membership.
    (c) Any savings bank that had legal existence under another statute prior to the date of this Act and which, if it was a mutual, included borrowers as members or, if its ownership was evidenced by stock, included borrowers and depositors as members, or as non‑voting members, may retain that membership structure by resolution of its board of directors to be included in its application for a savings bank charter under this Act. Otherwise, borrowers may not be members of a savings bank operating under this Act, and only mutual savings banks may include depositors as members.
    (d) Joint ownership of an account constitutes one membership.
(Source: P.A. 86‑1213; 87‑498.)

    (205 ILCS 205/4002) (from Ch. 17, par. 7304‑2)
    Sec. 4002. Annual and special meetings. Dates of annual meetings of members or stockholders shall be specified in the bylaws. Failure to hold an annual meeting shall not cause a forfeiture or dissolution of the savings bank. Special meetings may be called by the board of directors, the holders of not less than 25% of the outstanding capital stock shares, or by any other person as the bylaws may designate. The Commissioner may also call a special meeting with not less than 12 hours written or oral notice. Every annual or special meeting shall be held at the business office of the savings bank or, if the space is inadequate, in another place within the same county as shall be specifically designated in the notice of the meeting.
(Source: P.A. 86‑1213.)

    (205 ILCS 205/4003) (from Ch. 17, par. 7304‑3)
    Sec. 4003. Notice of meetings.
    (a) Notice of an annual meeting shall be published once not fewer than 10 days nor more than 40 days before the date of the meeting. The notice shall also be displayed at the place of business of the savings bank in a manner to be prescribed by the Commissioner. The notice must state the time, place, and purpose of the meeting.
    (b) For any special meeting or for any annual meeting that is to consider any proposition that requires an affirmative vote of two‑thirds of the members or stockholders or any proposition to amend the articles of incorporation of the savings bank, the notice must be by mail, postmarked between 10 and 40 days before the date of the meeting, and must also be posted at the savings bank's offices as if for an annual meeting, beginning on the date notice is given. All notices must state the time, place, and purpose of the meeting.
(Source: P.A. 89‑74, eff. 6‑30‑95.)

    (205 ILCS 205/4004) (from Ch. 17, par. 7304‑4)
    Sec. 4004. Quorum of annual or special meetings. The articles of incorporation may specify a quorum requirement, but it may not be less than one‑third of the total number of votes entitled to be voted at a meeting. Any meeting, including one at which a quorum is not present, may be adjourned to a specified date without future notice.
(Source: P.A. 86‑1213.)

    (205 ILCS 205/4005) (from Ch. 17, par. 7304‑5)
    Sec. 4005. Voting.
    (a) Voting at a meeting may be either in person or by proxy executed in writing by the member or stockholder or by his duly authorized attorney‑in‑fact.
    (b) In the determination of all questions requiring ascertainment of who is entitled to vote and of the number of outstanding shares, the following rules shall apply:
        (1) The date of determination shall be the record
     date for voting provided in this Act.
        (2) Each person holding one or more withdrawable
     accounts in a mutual savings bank shall have the vote of one share for each $100 of the aggregate withdrawal value of the accounts and shall have the vote of one share for any fraction of $100; however, subject to regulation of the Commissioner, a mutual savings bank may in its by‑laws limit the number of votes a person may cast to 1,000 votes. A mutual savings bank may adopt a different voting arrangement if the Commissioner finds that the arrangement would not be inequitable to members and if the members approve the arrangement by an affirmative vote of at least two‑thirds of the votes entitled to be cast, however, the voting arrangement need not obtain the foregoing member approval if such voting arrangement is otherwise approved as part of a corporate change under this Act.
        (3) Each holder of capital stock held shall have one
     vote for each share held.
        (4) Shares owned by the savings bank shall not be
     counted or voted.
        (5) A savings bank authorized to issue stock shall
     provide in its articles of incorporation that voting rights shall be vested exclusively in stockholders.
(Source: P.A. 91‑97, eff. 7‑9‑99; 92‑483, eff. 8‑23‑01.)

    (205 ILCS 205/4006) (from Ch. 17, par. 7304‑6)
    Sec. 4006. Record date for voting, dividend, and other purposes.
    (a) For the purposes of determining the holders of stock, capital accounts, and membership entitled to notice of or to vote at any meeting of the members or in order to make a determination of the members, holders, or other persons for any other proper purpose, the bylaws may provide for a record date, not fewer than 10 days nor more than 40 days before the meeting or other event or transaction with regard to which the determination is to be made. This determination shall be made as of the close of business on the record date.
    (b) If the bylaws do not provide for a record date, the board of directors may fix a record date for each determination to be made, within the time limits set forth in subsection (a). If the board of directors fails to fix a record date, the record date for a meeting shall be the date on which the first notice of meeting is given.
    (c) Shares of stock or deposit accounts withdrawn or retired after the record date shall not be voted or counted in determining the number of shares outstanding. This Section shall be applicable to the dividend payments on capital stock, but dividends on deposit accounts shall be governed by Section 5008 of this Act.
(Source: P.A. 86‑1213.)

    (205 ILCS 205/4007) (from Ch. 17, par. 7304‑7)
    Sec. 4007. Proxies.
    (a) Voting at a meeting may be either in person or by proxy executed in writing by the member or shareholder or by his duly authorized attorney‑in‑fact. The forms and wording of all proxies must receive prior approval of the Commissioner.
    (b) No proxy shall be valid:
        (1) After 11 months from the date of its execution,
     unless otherwise provided in the proxy.
        (2) Unless executed in an instrument separate from
     other forms or documents relating to the member's accounts.
        (3) For any meeting at which the member who gave it
     is present, provided that notice is given by the member in writing, prior to the taking of any vote, to an official whom the savings bank shall identify at the meeting as having responsibility for the matter.
        (4) Unless the member giving the proxy is told by
     the person to whom it is given that the proxy is optional and that the voting rights it represents can be exercised by the member himself.
(Source: P.A. 86‑1213.)

    (205 ILCS 205/4008) (from Ch. 17, par. 7304‑8)
    Sec. 4008. Directors. The business and affairs of the savings bank shall be exercised by its elected board of directors. The board of directors shall consist of the number of directors fixed by the bylaws, but shall not be fewer than 5. No more than 40% of the directors shall be salaried employees of the savings bank, except that a higher percentage may be allowed with the prior written approval of the Commissioner. At least two‑thirds of the directors shall be residents of this State.
(Source: P.A. 90‑301, eff. 8‑1‑97.)

    (205 ILCS 205/4009) (from Ch. 17, par. 7304‑9)
    Sec. 4009. Bonds of officers and directors.
    (a) Every person appointed or elected to any position requiring the receipt, payment, management, or use of money belonging to a savings bank or whose duties permit or require access to or custody of any of the savings bank's money or securities or whose duties permit the regular making of entries in the books or other records of the savings bank shall become bonded in some trust or company authorized to issue bonds in this State or in a fidelity insurance company licensed to do business in this State before assuming any duties. Each bond shall be on a form or forms as the Commissioner shall require and in the amount as the board of directors shall fix and approve. Each bond, payable to the savings bank, shall be an indemnity for any loss the savings bank may sustain in money or other property through any dishonest or criminal act or omission by any person required to be bonded, committed either alone or in concert with others. The bond shall be in the form and amount prescribed by the Commissioner, who may at any time require one or more additional bonds. A true copy of every bond, including all riders and endorsements executed subsequent to the effective date of the bond, shall be filed at all times with the Commissioner. Each bond shall provide that a cancellation thereof either by the surety or by the insured shall not become effective unless and until 30 days notice in writing first shall have been given to the Commissioner, unless he shall have approved the cancellation earlier.
    (b) Nothing contained in this Section shall preclude the Commissioner from proceeding against a savings bank as provided in this Act should he believe that it is being conducted in an unsafe manner in that the form or amount of bonds so fixed and approved by the board of directors is inadequate to give reasonable protection to the savings bank.
(Source: P.A. 86‑1213.)

    (205 ILCS 205/4010) (from Ch. 17, par. 7304‑10)
    Sec. 4010. Conduct of directors and officers.
    (a) Directors and officers occupy a fiduciary relationship to the savings bank of which they are directors or officers, and a director or officer shall not engage or participate, directly or indirectly, in any business or transaction conducted on behalf of or involving the savings bank that would result in a conflict of their own personal interests with those of the savings bank which they serve, unless: (i) the business or transactions are conducted in good faith and are honest, fair, and reasonable to the savings bank; (ii) a full disclosure of the business or transaction and the nature of the director's or officer's interest is made to the board of directors; and (iii) the business or transaction is approved in good faith by the board of directors with any interested director abstaining. The approval of the business or transaction shall be recorded in the minutes. Any profits inuring to the officer or director shall not be at the expense of the savings bank. The business or transaction shall not represent a breach of the officer's or director's fiduciary duty and shall not be fraudulent or illegal. Notwithstanding any other provisions of this Section, the Commissioner may require the disclosure by directors, officers, and employees of their personal interest, directly or indirectly, in any business or transaction on behalf of or involving the savings bank and of their control of or active participation in enterprises having activities related to the business of the savings bank. The following restrictions governing the conduct of directors and officers expressly are specified, but that specification does not excuse those persons from the observance of any other aspect of the general fiduciary duty owed by them to the savings bank which they serve:
        (1) An officer or director of a mutual savings bank
     shall not hold office or status as a director or officer of another mutual savings bank subject to this Act.
        (2) A director shall receive as remuneration only
     reasonable fees for services as a director or for service as a member of a committee of directors. A director who is also an officer or employee of the savings bank may receive compensation for service as an officer or employee.
        (3) A director or officer shall not have any
     interest, direct or indirect, in the purchase at less than its face value of any evidence of a savings account, deposit, or other indebtedness issued by the savings bank.
        (4) A savings bank or director or officer thereof
     shall not directly or indirectly require, as a condition to the granting of any loan or the extension of any other service by the savings bank or its affiliates that the borrower or any other person undertake a contract of insurance or any other agreement or understanding with respect to the direct or indirect furnishing of any other goods or services with any specific company, agency, or individual.
        (5) An officer or director acting as proxy for a
     member of a mutual savings bank shall not exercise, transfer, or delegate that right in any consideration of a private benefit or advantage, direct or indirect, accruing to himself nor surrender control or pass his office to any other for any consideration of a private benefit or advantage, direct or indirect. The voting rights of members shall not be the subject of sale or similar transaction, either directly or indirectly. Any officer or director who violates the provisions of this subsection shall be held accountable to the savings bank for any increment.
        (6) A director or officer shall not solicit, accept,
     or agree to accept, directly or indirectly, from any person other than the savings bank any gratuity, compensation, or other personal benefit for any action taken by the savings bank or for endeavoring to procure any action by the savings bank.
        (7) Subject to the approval of the Commissioner, a
     savings bank's bylaws may provide for reasonable indemnification to its officers, directors, and employees in connection with the faithful performance of their duties for the savings bank. The Commissioner may promulgate model indemnification provisions and may consider provisions available under the Business Corporation Act of 1983, the Illinois Banking Act, and those available to national banks.
    (b) The bylaws of a savings bank may contain a provision providing that a director is not personally liable to the savings bank or its shareholders for monetary damages for a breach of the director's fiduciary duty; provided, however, that such provision may not eliminate or limit the liability of a director for any of the following:
        (1) An act or omission that is grossly negligent.
        (2) A breach of the director's duty of loyalty to
     the savings bank or its shareholders.
        (3) Acts or omissions not in good faith or that
     involve intentional misconduct or a knowing violation of law.
        (4) A transaction from which the director derived an
     improper personal benefit.
        (5) An act or omission occurring before the
     effective date of the provision in the bylaws authorized by this subsection.
(Source: P.A. 89‑320, eff. 1‑1‑96.)

    (205 ILCS 205/4011) (from Ch. 17, par. 7304‑11)
    Sec. 4011. Right to dissent.
    (a) A shareholder of a savings bank is entitled to dissent from and obtain payment for his shares in the event of any of the following actions:
        (1) Consummation of a plan of merger or
     consolidation or a plan of share exchange to which the savings bank is a party if (i) shareholder authorization for the merger or consolidation or the share exchange is required by this Act or the articles of incorporation, or (ii) the savings bank is a subsidiary that is merged with its parent or another subsidiary.
        (2) Consummation of a sale, lease, or exchange of
     all or substantially all of the property and assets of the savings bank other than in the usual and regular course of business.
        (3) An amendment of the articles of incorporation
     that materially and adversely affects rights in respect of a dissenter's shares because it:
            (A) alters or abolishes a preferential right of
         shares;
            (B) alters or abolishes a right in respect of
         redemption, including a provision respecting a sinking fund for the redemption or repurchase, of shares;
            (C) limits or eliminates cumulative voting
         rights with respect to shares.
        (4) Any other action taken pursuant to a shareholder
     vote if the articles of incorporation, bylaws, or a resolution of the board of directors provide that shareholders are entitled to dissent and obtain payment for their shares in accordance with the procedures set forth in this Act or as may be otherwise provided in the articles, bylaws, or resolution.
    (b) A shareholder entitled to dissent and obtain payment for his shares under this Section may not challenge the corporate action creating his entitlement unless the action is fraudulent with respect to the shareholder or the corporation or constitutes a breach of a fiduciary duty owed to the shareholder.
    (c) A record owner of shares may assert dissenters' rights as to fewer than all the shares recorded in the person's name only if the person dissents with respect to all shares beneficially owned by any one person and notifies the savings bank in writing of the name and address of each person on whose behalf the record owner asserts dissenters' rights. The rights of a partial dissenter are determined as if the shares as to which dissent is made and the other shares were recorded in the names of different shareholders. A beneficial owner of shares who is not the record owner may assert dissenters' rights as to shares held on that person's behalf only if the beneficial owner submits to the savings bank the record owner's written consent to the dissent before or at the same time the beneficial owner asserts dissenters' rights.
(Source: P.A. 86‑1213.)

    (205 ILCS 205/4012) (from Ch. 17, par. 7304‑12)
    Sec. 4012. Procedure to dissent.
    (a) If the action giving rise to the right to dissent is to be approved at a meeting of shareholders, the notice of meeting shall inform the shareholders of their right to dissent and the procedure to dissent. Prior to the meeting, the savings bank shall furnish to the shareholders material information with respect to the transaction that will enable a shareholder to objectively vote on the transaction and to determine whether or not to exercise dissenters' rights. A shareholder may assert dissenters' rights only if the shareholder delivers to the savings bank, before the vote is taken, a written demand for payment for his shares if the proposed action is consummated and the shareholder does not vote in favor of the proposed action.
    (b) If the action giving rise to the right to dissent is not to be approved at a meeting of shareholders, the notice to shareholders describing the action taken shall inform the shareholders of their right to dissent and the procedure to dissent. Prior to, or concurrently with, the notice the savings bank shall furnish to the shareholders material information with respect to the transaction that will enable a shareholder to objectively determine whether or not to exercise dissenters' rights. A shareholder may assert dissenters' rights only if he delivers to the savings bank within 30 days from the date of mailing the notice a written demand for payment for his shares.
    (c) The Commissioner shall promulgate rules to govern the procedure to be used by savings banks and dissenters in arriving at a value and price for dissenters' shares, as well as how distribution shall be made. In no case shall the rules be more restrictive than the provisions applicable to ordinary corporations under the Business Corporation Act of 1983.
(Source: P.A. 86‑1213.)

    (205 ILCS 205/4013)(from Ch. 17, par. 7304‑13)
    Sec. 4013. Access to books and records; communication with members and shareholders.
    (a) Every member or shareholder shall have the right to inspect books and records of the savings bank that pertain to his accounts. Otherwise, the right of inspection and examination of the books and records shall be limited as provided in this Act, and no other person shall have access to the books and records nor shall be entitled to a list of the members or shareholders.
    (b) For the purpose of this Section, the term "financial records" means any original, any copy, or any summary of (1) a document granting signature authority over a deposit or account; (2) a statement, ledger card, or other record on any deposit or account that shows each transaction in or with respect to that account; (3) a check, draft, or money order drawn on a savings bank or issued and payable by a savings bank; or (4) any other item containing information pertaining to any relationship established in the ordinary course of a savings bank's business between a savings bank and its customer, including financial statements or other financial information provided by the member or shareholder.
    (c) This Section does not prohibit:
        (1) The preparation examination, handling, or
     maintenance of any financial records by any officer, employee, or agent of a savings bank having custody of records or examination of records by a certified public accountant engaged by the savings bank to perform an independent audit.
        (2) The examination of any financial records by, or
     the furnishing of financial records by a savings bank to, any officer, employee, or agent of the Commissioner of Banks and Real Estate or the federal depository institution regulator for use solely in the exercise of his duties as an officer, employee, or agent.
        (3) The publication of data furnished from financial
     records relating to members or holders of capital where the data cannot be identified to any particular member, shareholder, or account.
        (4) The making of reports or returns required under
     Chapter 61 of the Internal Revenue Code of 1986.
        (5) Furnishing information concerning the dishonor
     of any negotiable instrument permitted to be disclosed under the Uniform Commercial Code.
        (6) The exchange in the regular course of business
     of (i) credit information between a savings bank and other savings banks or financial institutions or commercial enterprises, directly or through a consumer reporting agency or (ii) financial records or information derived from financial records between a savings bank and other savings banks or financial institutions or commercial enterprises for the purpose of conducting due diligence pursuant to a purchase or sale involving the savings bank or assets or liabilities of the savings bank.
        (7) The furnishing of information to the appropriate
     law enforcement authorities where the savings bank reasonably believes it has been the victim of a crime.
        (8) The furnishing of information pursuant to the
     Uniform Disposition of Unclaimed Property Act.
        (9) The furnishing of information pursuant to the
     Illinois Income Tax Act and the Illinois Estate and Generation‑Skipping Transfer Tax Act.
        (10) The furnishing of information pursuant to the
     federal "Currency and Foreign Transactions Reporting Act", (Title 31, United States Code, Section 1051 et seq.).
        (11) The furnishing of information pursuant to any
     other statute which by its terms or by regulations promulgated thereunder requires the disclosure of financial records other than by subpoena, summons, warrant, or court order.
        (12) The furnishing of information in accordance
     with the federal Personal Responsibility and Work Opportunity Reconciliation Act of 1996. Any savings bank governed by this Act shall enter into an agreement for data exchanges with a State agency provided the State agency pays to the savings bank a reasonable fee not to exceed its actual cost incurred. A savings bank providing information in accordance with this item shall not be liable to any account holder or other person for any disclosure of information to a State agency, for encumbering or surrendering any assets held by the savings bank in response to a lien or order to withhold and deliver issued by a State agency, or for any other action taken pursuant to this item, including individual or mechanical errors, provided the action does not constitute gross