(a)No savings bank shall make any loan or investment authorized by this Article unless the savings bank first has determined that the type, amount, purpose, and repayment provisions of the loan or investment in relation to the borrower's or issuer's resources and credit standing support the reasonable belief that the loan or investment will be financially sound and will be repaid according to its terms and that the loan or investment is not otherwise unlawful.
(b)Each loan or investment that a savings bank makes or purchases, whether wholly or in part, must be adequately underwritten, reviewed periodically, and reserved against as necessary in accordance with its payment performance, all in accordance with the regulations and directives of the Commissioner.
(c)Every appraisal or reappra
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(a) No savings bank shall make any loan or investment authorized by this Article unless the savings bank first has determined that the type, amount, purpose, and repayment provisions of the loan or investment in relation to the borrower's or issuer's resources and credit standing support the reasonable belief that the loan or investment will be financially sound and will be repaid according to its terms and that the loan or investment is not otherwise unlawful. (b) Each loan or investment that a savings bank makes or purchases, whether wholly or in part, must be adequately underwritten, reviewed periodically, and reserved against as necessary in accordance with its payment performance, all in accordance with the regulations and directives of the Commissioner. (c) Every appraisal or reappraisal of property that a savings bank is required to make shall be made as follows: (1) By an independent qualified appraiser, designated by the board of directors, who is properly licensed or certified by the entity authorized to govern his licensure or certification and who meets the requirements of the Appraisal Subcommittee and of the Federal Act. (2) In the case of an insured or guaranteed loan, by any appraiser appointed by any lending, insuring, or guaranteeing agency of the United States or the State of Illinois that insures or guarantees the loan, wholly or in part. (3) Each appraisal shall be in writing prepared at the request of the lender for the lender's use; disclose the market value of the security offered; contain sufficient information and data concerning the appraised property to substantiate the market value thereof; be certified and signed by the appraiser or appraisers; and state that the appraiser or appraisers have personally examined the described property. The appraisal shall be filed and preserved by the savings bank. In addition, the appraisal shall be prepared and reported in accordance with the Standards of Professional Practice and the ethical rules of the Appraisal Foundation as adopted and promulgated by the Appraisal Subcommittee. (d) If appraisals of real estate securing a savings bank's loans are obtained as part of an examination by the Commissioner, the cost of those appraisals shall promptly be paid by the savings bank directly to the appraiser or appraisers. (e) Any violation of this Article shall constitute an unsafe or unsound practice. Any person who knowingly violates any provision of this Article shall be subject to enforcement action or civil money penalties as provided for in this Act. (f) For purposes of this Article, "underwriting" shall mean the process of compiling information to support a determination as to whether an investment or extension of credit shall be made by a savings bank. It shall include, but not be limited to, evaluating a borrower's creditworthiness, determination of the value of the underlying collateral, market factors, and the appropriateness of the investment or loan for the savings bank. Underwriting as used herein does not include the agreement to purchase unsold portions of public offerings of stocks or bonds as commonly used in corporate securities issuances and sales. (g) For purposes of this Section, the following definitions shall apply: (1) "Federal Act" means Title XI of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 and regulations adopted pursuant thereto. (2) "Appraisal Subcommittee" means the designee of the heads of the Federal Financial Institutions Examination Council Act of 1978 (12 U.S.C. 3301 et seq.). (3) "Appraisal Foundation" means the Appraisal Foundation that was incorporated as an Illinois not-for-profit corporation on November 30, 1987.