Current through Register Vol. 47, No. 38, September 22, 2023
To enable the Director to examine a savings bank, holding
company, service corporation or affiliate of a savings bank pursuant to Section
9004 of the Act, each savings bank shall establish and maintain accounting and
other records of all business transacted, and the documents, files and other
material comprising such records shall at all times be available for
examination wherever any of such files, documents or materials may be. At a
minimum, a savings bank and service corporations shall establish and maintain
the following records.
a) Disbursement
Records
A savings bank's funds shall be disbursed in accordance with
a resolution adopted by the board of directors and reviewed at least annually.
Each disbursement shall be documented to show the date, the amount and the
purpose of the disbursement and the names of the person or persons or other
entities receiving such disbursements whether paid directly, indirectly or
through an escrow.
b)
Record Retention
1) Before approving any loan
or issuing any commitment, a savings bank shall determine that every person
that proposes to become liable to the savings bank has the financial ability to
service the proposed debt. The procedure for determining the financial capacity
of every person that proposes to become liable to the savings bank shall be in
accordance with procedures adopted by the board of directors and reviewed at
least annually. Thereafter, a savings bank shall retain the application and
other documentation supporting each loan, as well as the complete servicing
record, as part of the records of the savings bank throughout the duration of
the savings bank's investment in the respective loan.
2) A savings bank shall retain each rejected
loan application and the information in support thereof for a period of
thirty-six (36) months following such rejection.
c) The savings bank shall:
1) require every borrower that is:
A) a trust to provide a certification by the
trustee listing the current beneficiaries of the trust;
B) a corporation to provide a certification
by the corporate secretary listing the names and percentage of ownership of all
10% or more shareholders; and
C) a
partnership to provide a certified list of partners.
2) retain such documents as a part of the
savings bank's records and that shall be maintained throughout the duration of
the savings bank's investment in the respective loan.
d) Loan Registers
1) A savings bank shall maintain one or more
loan registers which shall contain the original entry and be a permanent
record, and shall show for every loan the account number, date of the loan,
amount of the loan, name of the borrower, nature of security by types, the
amount of fees, the amount of the note, including precomputed loans, rate of
interest, the term of the loan, and such other information as desired by the
savings bank.
2) All loan registers
shall be kept numerically by number of loans in order made.
e) Loans Secured by Real Estate
1) An application for the loan, signed by the
borrower or its agent, in such form and containing information as will disclose
the purpose for the loan, that is construction, purchase, refinancing, and the
identity of any security property.
2) A note evidencing the borrower's debt to
repay the amount of the loan, executed by the borrower or its agent.
3) A copy of the deed of trust or mortgage
instrument on the real estate or other document customarily used in the
jurisdiction in which the real estate security is located, evidencing the
creation of a security interest in the real estate for the benefit of the
lender, which deed of trust, mortgage instrument, or other document has been
signed by the borrower or the borrower's agent; and, if the loan is made to
finance the purchase of the real estate security for the loan, a signed
statement by the borrower or its agent, as part of or as an attachment to the
application for the loan, disclosing the purchase price of such real estate
security.
4) One or more written
appraisal reports, prepared at the request of the lender or its agent and for
the lender's use, and signed before the approval of the application (except in
the case of an approval conditioned upon obtaining an appraisal) or, if the
loan is an insured loan or a guaranteed loan, a certification of the valuation
assigned to real estate security by the appraiser accepted by the insuring or
guaranteeing agency and furnished to the lender by the agency. Loans of less
than $250,000 may be supported by estimates of value other than an appraisal,
such as in-house appraisals and valuations, previous appraisals, tax
assessments, tax assessment valuations, and insurance evaluations.
5) Documentation showing the financial
ability of the borrower to repay the loan, or a written credit report prepared
by the savings bank or by others at the request of the savings bank.
6) Documentation showing when and by whom the
loan was approved and any terms of the approval.
7) Documentation showing the date, amount,
purpose, the recipient of every disbursement of the proceeds of the loan, and
to the best of the lender's knowledge, any actual recipient of any proceeds
when the stated recipient is acting as an agent or intermediary for
another.
8) An opinion signed by
the lender's attorney, a title insurance policy, or other documentary evidence
customarily used in the jurisdiction in which the real estate security is
located, affirming the quality and validity of the lender's lien on the real
estate security for the loan.
9)
Documentation showing that the savings bank, upon the closing of the loan,
furnished to the borrower, a loan settlement statement setting forth in detail
the charges or fees the borrower has paid or is obligated to pay to such
savings bank or to any other concern or person in connection with the loan,
which documentation shall include a copy of the loan settlement
statement.
10) A record showing the
status and current payment of taxes, assessments, insurance premiums, other
charges on the security for the loan, and documenting any loss incurred on the
loan security, as well as any amounts recovered pursuant to an insurance
settlement of the loss.
11)
Documentation evidencing any modifications of the original documents by which a
security interest for the benefit of the lender was created, showing
appropriate approval of each party to the modification.
12) Documentation evidencing any release of
any portion of the collateral pledged to secure the loan, showing the portion
of the collateral released, the consideration, if any, paid to effect the
release, and a record of the appropriate approval of each release.
f) Loans Not Secured by Real
Estate
The records with respect to each unsecured loan or loan not
secured by real estate that the savings bank makes shall include the documents
referred to in subsection (g) that are relevant to the loan. If the loan is
secured by collateral other than real estate, the lender's records also shall
include documents evidencing the creation and perfection of a security interest
in the collateral, including any financing statement. In addition, if the loan
is made to a business entity, the records shall include documentation showing
whether the obligor on the loan can generate sufficient cash flow to meet
scheduled interest and debt reduction payments, and if not sufficient, the
records shall include documentation demonstrating the anticipated source of the
borrower's payments.
g)
Transfer of Records
A savings bank shall not transfer the location of any of its
general accounting or control records from its home office to a branch or other
office, or from a branch or other office to its home office or to another
branch or office unless the savings bank has sent prior written notice of the
transfer to the Director.
h) Data Processing
1) A savings bank that maintains it records
by a data processing service shall, before establishing such service, notify
the Director in writing. The notice shall be delivered at least 90 days before
the date on which the maintenance of records will begin. The notification shall
include identification of the records to be maintained by data processing
services and a statement as to the location at which the information will be
maintained. Any contract shall expressly provide that the records to be
maintained by the services shall at all times be available for examination by
the Director.
2) A savings bank's
data processing service center shall provide, annually, a copy of the third
party audit review, if performed.
Amended at 30 Ill. Reg. 19068, effective December 1,
2006
