Case Title: People Ex Rel. Lignoul v. City of Chicago

Citation: 368 N.E.2d 100, 67 Ill. 2d 480

Docket Number: 48787

State: illinois

Court: Illinois Supreme Court

Date: 1977-09-20T00:00:00Z

Document:
67 Ill. 2d 480 (1977)
368 N.E.2d 100
THE PEOPLE ex rel. RICHARD K. LIGNOUL, Commissioner of Banks and Trust Companies, Appellee,
v.
THE CITY OF CHICAGO et al., Appellants.
No. 48787.

Supreme Court of Illinois.
Opinion filed September 20, 1977.
William R. Quinlan, Corporation Counsel, of Chicago (Daniel Pascale, Assistant Corporation Counsel, of counsel), for appellants City of Chicago et al.
Ray H. Greenblatt, Wayne W. Whalen and Thaddeus J. Marciniak, of Chicago (Mayer, Brown & Platt, of Chicago, of counsel), for appellant Continental Illinois National Bank & Trust Company of Chicago.
*481 Joseph DuCoeur and Alan I. Becker, of Chicago (Kirkland & Ellis, of counsel), for appellant First National Bank of Chicago.
William J. Scott, Attorney General, of Springfield (Jerome Webb, Assistant Attorney General, of Chicago, of counsel), for appellee.
O'Brien, Carey, McNamara & Scheuneman, Ltd., of Chicago (Barry T. McNamara, Peter B. Carey, Tom Scheuneman and Marilyn F. Kalata, of counsel), for amicus curiae Independent Community Banks in Illinois.
Donald X. Murray, of the Illinois Bankers Association, and Edwin H. Conger and Sari S. Escovitz, of Tenney & Bentley, of Chicago, for amicus curiae the Illinois Bankers Association.
Coffield & Ungaretti, Ltd. (Michael W. Coffield and James E. Dahl, of counsel), for amicus curiae the Association for Modern Banking in Illinois.
Judgment affirmed.
MR. JUSTICE DOOLEY delivered the opinion of the court:
In 1976 the Chicago city council passed what is known as the Chicago Financial Services Ordinance. The People of the State of Illinois, on relation of the commissioner of banks and trust companies, filed this action against the city of Chicago and its city clerk seeking to have the law declared unconstitutional. Two Chicago banks were permitted to intervene as defendants. Summary judgment was entered in the circuit court of Cook County for plaintiff on the basis that the ordinance permitted branch banking and hence was void under article XIII, section 8, of the Illinois Constitution of 1970. Defendants have appealed directly to this court under Rule 302(b) (58 Ill.2d R. 302(b)).
The sole question before us is the constitutionality of this ordinance.
*482 The ordinance permits both State and federally chartered banks to perform banking functions at certain facilities and electronic banking machines in community offices located away from the main office of the bank. The ordinance in part provides:
Section 6 of the Illinois Banking Act (Ill. Rev. Stat. 1975, ch. 16 1/2, par. 106) states:
What constitutes branch banking is further defined by section 2 of the Act (Ill. Rev. Stat. 1975, ch. 16 1/2, par. 102). When originally enacted in 1955 (1955 Ill. Laws 84, sec. 2) section 2 provided:
In 1965 section 2 was amended by an amendment adopted at a referendum election in 1966 to add what is presently the last sentence (1965 Ill. Laws 2020, 2021), which reads:
Subsection 15 of section 5, added by the same amendment (Ill. Rev. Stat. 1975, ch. 16 1/2, par. 105, 1965 Ill. Laws 2026-27), empowered banks to establish a "facility," defined as a place restricted to "receiving deposits, cashing and issuing checks, drafts and money orders, changing money and receiving payments on existing indebtedness."
What services would the community offices and the electronic banking machines proposed by the ordinance perform? They would solicit loans, advise customers concerning any inquiries about business which the customers may have with the bank, accept deposits, make possible transfer of funds from one account to another in the financial institution, make possible cash withdrawals, *484 disburse proceeds of loans and serve as a vehicle to discharge debts to the financial institutions. Obviously, the functions to be performed by these community offices and electronic banking machines under the ordinance in question are of a banking character.
In Illinois ex. rel. Lignoul v. Continental Illinois National Bank & Trust Co. of Chicago (7th Cir.1976), 536 F.2d 176, cert. denied (1976), 429 U.S. 871, 50 L. Ed. 2d 151, 97 S. Ct. 184, the Continental Illinois National Bank & Trust Company of Chicago had customer bank communication terminals which perform similar banking services at remote locations. These were held to be banks within 12 U.S.C. sec. 36(f) (1970), which in language very similar to that of our statute provides: "The term `branch' as used in this section shall be held to include any branch bank, branch office, branch agency, additional office, or any branch place of business * * * at which deposits are received, or checks paid, or money lent."
To the same effect are Driscoll v. Northwestern National Bank (8th Cir.1973), 484 F.2d 173; Independent Bankers Association of America v. Smith (D.C. Cir.1976), 534 F.2d 921; Missouri ex rel. Kostman v. First National Bank (8th Cir.1976), 538 F.2d 219; Colorado ex rel. State Banking Board v. First National Bank (10th Cir.1976), 540 F.2d 497. See also First National Bank v. Walker Bank & Trust Co. (1966), 385 U.S. 252, 17 L. Ed. 2d 343, 87 S. Ct. 492; First National Bank v. Dickinson (1969), 396 U.S. 122, 24 L. Ed. 2d 312, 90 S. Ct. 337.
We are, of course, aware that Federal decisions are not binding upon us in construing Illinois law, but they are of course persuasive when they construe a statute similar to one of our own. People v. Crawford Distributing Co. (1973), 53 Ill. 2d 332, 339.
It is urged that to be a "branch bank" in Illinois, the facilities must provide such banking services as in effect a second bank would. This argument is answered by the language of our statute. The terms "include any * * * place *485 of business" and "any of a bank's other business" are decisive. Since we conclude both community offices and electronic banking machines are branch banks within the meaning of the Illinois Banking Act, the constitutional prohibition contained in article XIII, section 8, of the Constitution of 1970 becomes relevant. It states:
Under the 1870 Constitution no such provision appeared. Instead, article XI, section 5, required that all banking laws be subject to approval at a referendum.
The 1970 Constitution makes manifest that only the General Assembly may make branch banking possible and only with an extraordinary majority. That only the General Assembly, not any city council, can make branch banking a reality is pointed out in the Constitutional Commentary to this section of the Constitution:
Although the language of the Constitution itself is sufficient, reference to the proceedings makes manifest that home rule units are without jurisdiction over such predominantly State and national matters as banking. The report of the Local Government Committee states:
The Local Government Committee gave the following examples of the limitation on a local government's authority in matters pertaining to its government and affairs:
So here, too, the business of banking is one that is pervasively regulated by the State and Federal governments.
Appellant relies on article VII, section 6(a), of the Constitution, which provides:
But, as we have seen, article XIII, section 8, of the 1970 Constitution mandates that the subject of and regulation of banking in general and branch banking in particular is one reserved to the General Assembly, and is not granted to home rule units.
In Ampersand, Inc. v. Finley (1975), 61 Ill. 2d 537, this court held invalid a Cook County ordinance which imposed an additional filing fee on the filing of a civil complaint, with the proceeds to be used to support the county law library. In view of article VI of the Constitution  the judicial article  it was concluded (61 Ill. 2d 537, 542):
See also Bridgman v. Korzen (1972), 54 Ill. 2d 74.
The proceedings of the constitutional convention show that the major debate regarding the constitutional provisions for banking was whether the banking provisions of the 1870 Constitution (art. XI, secs. 5 through 8) should be retained or should simply be eliminated in their entirety. The latter course was recommended by the General Government Committee in its Proposal No. 8 (6 Proceedings 533-54). A minority report (Proposal No. 8A) proposed that the substance of article XI, section 5, of the 1870 Constitution be retained (6 Proceedings 555-62). That section provided in effect that all legislation affecting banking must be submitted to a referendum.
The minority report noted that a major concern underlying its proposal was a fear that if the General Assembly were not limited by the referendum requirement it might authorize branch banking, a development which *488 many persons opposed as a threat to smaller banks through expansion by larger banks. There was extensive debate on this question during the proceedings (see 2 Proceedings 1109-53). The ultimate result was article XIII, section 8, of the present constitution, which eliminated the referendum requirement but imposed the requirement of a three-fifths majority in the General Assembly.
This history of article XIII, section 8, reinforces our conclusion that branch banking is a matter of concern primarily to the State as a whole, and that unitary control of it should rest with the General Assembly. It cannot be subject to erosion through the exercise of concurrent regulation by local home rule entities.
For the reasons expressed, we conclude that the city ordinance is void, and we accordingly affirm the judgment of the circuit court.
Judgment affirmed.