Sen. Antonio Muņoz

Filed: 3/13/2020

 

 


 

 


 
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1
AMENDMENT TO SENATE BILL 3346

2    AMENDMENT NO. ______. Amend Senate Bill 3346 by replacing
3everything after the enacting clause with the following:
 
4    "Section 5. The Illinois Credit Union Act is amended by
5changing Sections 12, 23, 51, 57, 59, and 64.7 and by adding
6Section 20.5 as follows:
 
7    (205 ILCS 305/12)  (from Ch. 17, par. 4413)
8    Sec. 12. Regulatory fees.
9    (1) For the fiscal year beginning July 1, 2007, a credit
10union regulated by the Department shall pay a regulatory fee to
11the Department based upon its total assets as shown by its
12Year-end Call Report at the following rates or at a lesser rate
13established by the Secretary in a manner proportionately
14consistent with the following rates and sufficient to fund the
15actual administrative and operational expenses of the
16Department's Credit Union Section pursuant to subsection (4) of

 

 

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1this Section:
2TOTAL ASSETSREGULATORY FEE
3$25,000 or less ................$100
4Over $25,000 and not over
5$100,000 .......................$100 plus $4 per
6$1,000 of assets in excess of
7$25,000
8Over $100,000 and not over
9$200,000 .......................$400 plus $3 per
10$1,000 of assets in excess of
11$100,000
12Over $200,000 and not over
13$500,000 .......................$700 plus $2 per
14$1,000 of assets in excess of
15$200,000
16Over $500,000 and not over
17$1,000,000 .....................$1,300 plus $1.40
18per $1,000 of assets in excess
19of $500,000
20Over $1,000,000 and not
21over $5,000,000.................$2,000 plus $0.50
22per $1,000 of assets in
23excess of $1,000,000
24Over $5,000,000 and not
25over $30,000,000 ............... $4,540 plus $0.397
26per $1,000 of assets

 

 

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1in excess of $5,000,000
2Over $30,000,000 and not over
3$100,000,000....................$14,471 plus $0.34
4per $1,000 of assets
5 in excess of $30,000,000
6Over $100,000,000 and not
7over $500,000,000 ..............$38,306 plus $0.17
8per $1,000 of assets
9in excess of $100,000,000
10Over $500,000,000 ..............$106,406 plus $0.056
11per $1,000 of assets
12in excess of $500,000,000
13    (2) The Secretary shall review the regulatory fee schedule
14in subsection (1) and the projected earnings on those fees on
15an annual basis and adjust the fee schedule no more than 5%
16annually if necessary to defray the estimated administrative
17and operational expenses of the Credit Union Section of the
18Department as defined in subsection (5). However, the fee
19schedule shall not be increased if the amount remaining in the
20Credit Union Fund at the end of any fiscal year is greater than
2125% of the total actual and operational expenses incurred by
22the State in administering and enforcing the Illinois Credit
23Union Act and other laws, rules, and regulations as may apply
24to the administration and enforcement of the foregoing laws,
25rules, and regulations as amended from time to time for the
26preceding fiscal year. The regulatory fee for the next fiscal

 

 

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1year shall be calculated by the Secretary based on the credit
2union's total assets as of December 31 of the preceding
3calendar year. The Secretary shall provide credit unions with
4written notice of any adjustment made in the regulatory fee
5schedule.
6    (3) A credit union shall pay to the Department a regulatory
7fee in quarterly installments equal to one-fourth of the
8regulatory fee due in accordance with the regulatory fee
9schedule in subsection (1), on the basis of assets as of the
10Year-end Call Report of the preceding calendar year. The total
11annual regulatory fee shall not be less than $100 or more than
12$141,875, provided that the regulatory fee cap of $141,875
13shall be adjusted to incorporate the same percentage increase
14as the Secretary makes in the regulatory fee schedule from time
15to time under subsection (2). No regulatory fee shall be
16collected from a credit union until it has been in operation
17for one year. The regulatory fee shall be billed to credit
18unions on a quarterly basis and it shall be payable by credit
19unions on the due date for the Call Report for the subject
20quarter.
21    (4) The aggregate of all fees collected by the Department
22under this Act shall be paid promptly after they are received,
23accompanied by a detailed statement thereof, into the State
24Treasury and shall be set apart in the Credit Union Fund, a
25special fund hereby created in the State treasury. The amount
26from time to time deposited in the Credit Union Fund and shall

 

 

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1be used to offset the ordinary administrative and operational
2expenses of the Credit Union Section of the Department under
3this Act. All earnings received from investments of funds in
4the Credit Union Fund shall be deposited into the Credit Union
5Fund and may be used for the same purposes as fees deposited
6into that fund. Moneys deposited in the Credit Union Fund may
7be transferred to the Professions Indirect Cost Fund, as
8authorized under Section 2105-300 of the Department of
9Professional Regulation Law of the Civil Administrative Code of
10Illinois.
11    Notwithstanding provisions in the State Finance Act, as now
12or hereafter amended, or any other law to the contrary, the
13Governor may, during any fiscal year through January 10, 2011,
14from time to time direct the State Treasurer and Comptroller to
15transfer a specified sum not exceeding 10% of the revenues to
16be deposited into the Credit Union Fund during that fiscal year
17from that Fund to the General Revenue Fund in order to help
18defray the State's operating costs for the fiscal year.
19Notwithstanding provisions in the State Finance Act, as now or
20hereafter amended, or any other law to the contrary, the total
21sum transferred from the Credit Union Fund to the General
22Revenue Fund pursuant to this provision shall not exceed during
23any fiscal year 10% of the revenues to be deposited into the
24Credit Union Fund during that fiscal year. The State Treasurer
25and Comptroller shall transfer the amounts designated under
26this Section as soon as may be practicable after receiving the

 

 

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1direction to transfer from the Governor.
2    (5) The administrative and operational expenses for any
3fiscal year shall mean the ordinary and contingent expenses for
4that year incidental to making the examinations provided for
5by, and for administering, this Act, including all salaries and
6other compensation paid for personal services rendered for the
7State by officers or employees of the State to enforce this
8Act; all expenditures for telephone and telegraph charges,
9postage and postal charges, office supplies and services,
10furniture and equipment, office space and maintenance thereof,
11travel expenses and other necessary expenses; all to the extent
12that such expenditures are directly incidental to such
13examination or administration.
14    (6) When the balance in the Credit Union Fund at the end of
15a fiscal year exceeds 25% of the total administrative and
16operational expenses incurred by the State in administering and
17enforcing the Illinois Credit Union Act and other laws, rules,
18and regulations as may apply to the administration and
19enforcement of the foregoing laws, rules, and regulations as
20amended from time to time for that fiscal year, such excess
21shall be credited to credit unions and applied against their
22regulatory fees for the subsequent fiscal year. The amount
23credited to each credit union shall be in the same proportion
24as the regulatory fee paid by such credit union for the fiscal
25year in which the excess is produced bears to the aggregate
26amount of all fees collected by the Department under this Act

 

 

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1for the same fiscal year.
2    (6.1) Notwithstanding any provision in subsection (6) of
3this Section to the contrary, there shall be no issuance of a
4regulatory fee credit for fiscal years ending June 30, 2020 and
5June 30, 2021. Notwithstanding any provision in subsection (2)
6of this Section to the contrary, there shall be no adjustment
7in the regulatory fee schedule in subsection (1) of this
8Section for fiscal years ending June 30, 2020 and June 30,
92021. This subsection (6.1) is inoperative on and after June
1030, 2021.
11    (7) (Blank).
12    (8) Nothing in this Act shall prohibit the General Assembly
13from appropriating funds to the Department from the General
14Revenue Fund for the purpose of administering this Act.
15    (9) For purposes of this Section, "fiscal year" means a
16period beginning on July 1 of any calendar year and ending on
17June 30 of the next calendar year.
18(Source: P.A. 100-201, eff. 8-18-17.)
 
19    (205 ILCS 305/20.5 new)
20    Sec. 20.5. Appointment of associate directors.
21    (a) The board of directors of a credit union may, in its
22discretion, appoint one or more associate directors to serve in
23an advisory capacity. The board shall prescribe the duties of
24an associate director and the manner in which associate
25directors are appointed and removed. The board shall not

 

 

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1delegate to associate directors any of the duties or
2responsibilities prescribed by this Act or other applicable law
3to be performed by directors duly elected by their members. An
4associate director shall not be deemed or considered to be a
5director for any purpose under this Act.
6    (b) Prior to appointing an associate director, the board
7shall confirm that the person meets all of the requirements to
8serve as a director, including, without limitation, a working
9familiarity with the financial and accounting practices of the
10credit union as set forth in subsection (c) of Section 30.
11    (c) An associate director may participate in meetings of
12the board but may not vote or otherwise act as a director. With
13respect to any issue that comes before the board for
14deliberation, the board may request that all associate
15directors excuse themselves from the meeting of the board and
16the associate directors shall immediately comply with the
17request.
18    (d) The board shall require each associate director to sign
19a confidentiality and nondisclosure agreement to ensure that
20information concerning the credit union remains confidential.
 
21    (205 ILCS 305/23)  (from Ch. 17, par. 4424)
22    Sec. 23. Compensation of officials.
23    (1) Directors and committee members may receive reasonable
24compensation for their service as such, the amount of which
25shall be set by the board of directors, in accordance with

 

 

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1written policies and procedures established by the board of
2directors. If the Department determines the payment of director
3or committee member compensation, or both, creates a safety and
4soundness issue for a credit union, the Department shall
5utilize the standards set forth in its Regulatory Examination
6Consistency and Due Process Rule, 38 Ill. Adm. Code 190.25, and
7supplemental guidelines to address and resolve the issue. An
8enforcement action taken pursuant to the Rule and guidelines
9and specified by this Act shall be used to reduce or suspend
10the compensation paid to the directors and committee members.
11The Department shall, by rule, establish maximum rates of
12reasonable compensation that are generally applicable to
13credit unions considering factors the Department may establish
14from time to time, including, but not limited to, total assets,
15nonprofit cooperative structure, and the best interests of
16members. "Compensation" as used in this subsection (1) refers
17to remuneration expense to the credit union for services
18provided by a director or committee member in his or her
19capacity as director or committee member. The remuneration
20expense is in the form of monetary payments and shall be
21disclosed on an annual basis to the membership in the financial
22statement that is part of the annual membership meeting
23materials. The disclosure shall contain: (i) the amount paid to
24each director and (ii) the amount paid to the directors as a
25group. "Compensation" does not include any of the expenses
26described in subsections (2) and (3).

 

 

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1    (2) The credit union may incur the expense of providing
2reasonable life, health, accident, and similar insurance
3protection benefits for directors and committee members.
4    (3) Directors, committee members and employees, while on
5official business of the credit union, may be reimbursed for
6reasonable and necessary expenses. Alternatively, the credit
7union may make direct payment to a third party for such
8business expenses. Reasonable and necessary expenses may
9include the payment of travel costs for the foregoing officials
10and one guest per official. All payment of costs shall be made
11in accordance with written policies and procedures established
12by the board of directors.
13    (4) The board of directors may establish compensation for
14officers of the credit union.
15(Source: P.A. 101-567, eff. 8-23-19.)
 
16    (205 ILCS 305/51)  (from Ch. 17, par. 4452)
17    Sec. 51. Other loan programs.
18    (1) Subject to such rules and regulations as the Secretary
19may promulgate, a credit union may participate in loans to
20credit union members jointly with other credit unions,
21corporations, or financial institutions. An originating credit
22union may originate loans only to its own members. A
23participating credit union that is not the originating lender
24may participate in loans made to its own members or to members
25of another participating credit union. "Originating lender"

 

 

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1means the participating credit union with which the member
2contracts. A master participation agreement must be properly
3executed, and the agreement must include provisions for
4identifying, either through documents incorporated by
5reference or directly in the agreement, the participation loan
6or loans prior to their sale.
7    (2) Any credit union with assets of $500,000 or more may
8loan to its members under scholarship programs which are
9subject to a federal or state law providing 100% repayment
10guarantee.
11    (3) A credit union may purchase the conditional sales
12contracts, notes and similar instruments which evidence an
13indebtedness of its members. In the management of its assets,
14liabilities, and liquidity, a credit union may purchase the
15conditional sales contracts, notes, and other similar
16instruments that evidence the consumer indebtedness of the
17members of another credit union. "Consumer indebtedness" means
18indebtedness incurred for personal, family, or household
19purposes.
20    (4) With approval of the board of directors, a credit union
21may make loans, either on its own or jointly with other credit
22unions, corporations or financial institutions, to credit
23union organizations; provided, that the aggregate amount of all
24such loans outstanding shall not at any time exceed the greater
25of 6% 3% of the paid-in and unimpaired capital and surplus of
26the credit union or the amount authorized for federal credit

 

 

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1unions.
2(Source: P.A. 97-133, eff. 1-1-12.)
 
3    (205 ILCS 305/57)  (from Ch. 17, par. 4458)
4    Sec. 57. Group purchasing and marketing.
5    (a) A credit union may, consistent with rules and
6regulations promulgated by the Secretary, enter into
7cooperative marketing arrangements to facilitate its members'
8voluntary purchase of such goods and services as are in the
9interest of improving economic and social conditions of the
10members.
11    (b) A credit union may create and use descriptive and brand
12references to promote and market its identity, services, and
13products to its members. In the case of a merger pursuant to
14Section 63, the surviving credit union may identify the merging
15credit union as a division, branch, unit, or other descriptive
16reference that ensures the members understand they are dealing
17with one credit union rather than multiple credit unions as of
18the effective date of the merger.
19(Source: P.A. 100-361, eff. 8-25-17.)
 
20    (205 ILCS 305/59)  (from Ch. 17, par. 4460)
21    Sec. 59. Investment of funds.
22    (a) Funds not used in loans to members may be invested,
23pursuant to subsection (7) of Section 30 of this Act, and
24subject to Departmental rules and regulations:

 

 

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1        (1) In securities, obligations or other instruments of
2    or issued by or fully guaranteed as to principal and
3    interest by the United States of America or any agency
4    thereof or in any trust or trusts established for investing
5    directly or collectively in the same;
6        (2) In obligations of any state of the United States,
7    the District of Columbia, the Commonwealth of Puerto Rico,
8    and the several territories organized by Congress, or any
9    political subdivision thereof; however, a credit union may
10    not invest more than 10% of its unimpaired capital and
11    surplus in the obligations of one issuer, exclusive of
12    general obligations of the issuer, and investments in
13    municipal securities must be limited to securities rated in
14    one of the 4 highest rating categories by a nationally
15    recognized statistical rating organization;
16        (3) In certificates of deposit or passbook type
17    accounts issued by a state or national bank, mutual savings
18    bank or savings and loan association; provided that such
19    institutions have their accounts insured by the Federal
20    Deposit Insurance Corporation or the Federal Savings and
21    Loan Insurance Corporation; but provided, further, that a
22    credit union's investment in an account in any one
23    institution may exceed the insured limit on accounts;
24        (4) In shares, classes of shares or share certificates
25    of other credit unions, including, but not limited to
26    corporate credit unions; provided that such credit unions

 

 

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1    have their members' accounts insured by the NCUA or other
2    approved insurers, and that if the members' accounts are so
3    insured, a credit union's investment may exceed the insured
4    limit on accounts;
5        (5) In shares of a cooperative society organized under
6    the laws of this State or the laws of the United States in
7    the total amount not exceeding 10% of the unimpaired
8    capital and surplus of the credit union; provided that such
9    investment shall first be approved by the Department;
10        (6) In obligations of the State of Israel, or
11    obligations fully guaranteed by the State of Israel as to
12    payment of principal and interest;
13        (7) In shares, stocks or obligations of other financial
14    institutions in the total amount not exceeding 5% of the
15    unimpaired capital and surplus of the credit union;
16        (8) In federal funds and bankers' acceptances;
17        (9) In shares or stocks of Credit Union Service
18    Organizations in the total amount not exceeding the greater
19    of 6% 3% of the unimpaired capital and surplus of the
20    credit union or the amount authorized for federal credit
21    unions;
22        (10) In corporate bonds identified as investment grade
23    by at least one nationally recognized statistical rating
24    organization, provided that:
25            (i) the board of directors has established a
26        written policy that addresses corporate bond

 

 

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1        investment procedures and how the credit union will
2        manage credit risk, interest rate risk, liquidity
3        risk, and concentration risk; and
4            (ii) the credit union has documented in its records
5        that a credit analysis of a particular investment and
6        the issuing entity was conducted by the credit union, a
7        third party on behalf of the credit union qualified by
8        education or experience to assess the risk
9        characteristics of corporate bonds, or a nationally
10        recognized statistical rating agency before purchasing
11        the investment and the analysis is updated at least
12        annually for as long as it holds the investment;
13        (11) To aid in the credit union's management of its
14    assets, liabilities, and liquidity in the purchase of an
15    investment interest in a pool of loans, in whole or in part
16    and without regard to the membership of the borrowers, from
17    other depository institutions and financial type
18    institutions, including mortgage banks, finance companies,
19    insurance companies, and other loan sellers, subject to
20    such safety and soundness standards, limitations, and
21    qualifications as the Department may establish by rule or
22    guidance from time to time;
23        (12) To aid in the credit union's management of its
24    assets, liabilities, and liquidity by receiving funds from
25    another financial institution as evidenced by certificates
26    of deposit, share certificates, or other classes of shares

 

 

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1    issued by the credit union to the financial institution;
2    and
3        (13) In the purchase and assumption of assets held by
4    other financial institutions, with approval of the
5    Secretary and subject to any safety and soundness
6    standards, limitations, and qualifications as the
7    Department may establish by rule or guidance from time to
8    time.
9    (b) As used in this Section:
10    "Political subdivision" includes, but is not limited to,
11counties, townships, cities, villages, incorporated towns,
12school districts, educational service regions, special road
13districts, public water supply districts, fire protection
14districts, drainage districts, levee districts, sewer
15districts, housing authorities, park districts, and any
16agency, corporation, or instrumentality of a state or its
17political subdivisions, whether now or hereafter created and
18whether herein specifically mentioned or not.
19    "Financial institution" includes any bank, savings bank,
20savings and loan association, or credit union established under
21the laws of the United States, this State, or any other state.
22    (c) A credit union investing to fund an employee benefit
23plan obligation is not subject to the investment limitations of
24this Act and this Section and may purchase an investment that
25would otherwise be impermissible if the investment is directly
26related to the credit union's obligation under the employee

 

 

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1benefit plan and the credit union holds the investment only for
2so long as it has an actual or potential obligation under the
3employee benefit plan.
4    (d) If a credit union acquires loans from another financial
5institution or financial-type institution pursuant to this
6Section, the credit union shall be authorized to provide loan
7servicing and collection services in connection with those
8loans.
9(Source: P.A. 100-361, eff. 8-25-17; 100-778, eff. 8-10-18;
10101-567, eff. 8-23-19.)
 
11    (205 ILCS 305/64.7)
12    Sec. 64.7. Network credit unions.
13    (a) Two or more credit unions merging pursuant to Section
1463 of this Act may elect to request a network credit union
15designation for the surviving credit union from the Secretary.
16The request shall be set forth in the plan of merger and
17certificate of merger executed by the credit unions and
18submitted to the Secretary pursuant to subsection (4) of
19Section 63. The Secretary's approval of a certificate of merger
20containing a network credit union designation request shall
21constitute approval of the use of the network designation as a
22brand or other identifier of the surviving credit union. If the
23surviving credit union desires to include the network
24designation in its legal name, make any other change to its
25legal name, or both, it shall proceed with an amendment to the

 

 

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1articles of incorporation and bylaws of the surviving credit
2union pursuant to Section 4 of this Act.
3    (b) A network credit union is a cooperative business
4structure comprised of 2 or more merging credit unions with a
5collective goal of efficiently serving their combined
6membership and gaining economies of scale through common
7vision, strategy and initiative. The merging credit unions
8shall be identified as divisional credit unions, branches, or
9units of the network credit union or by other descriptive
10references that ensure the members understand they are dealing
11with one credit union rather than multiple credit unions.
12Descriptive and brand references may also be created and used
13to promote the identity, services, and products of the network
14credit union to its members.
15    (c) Each divisional credit union may have an advisory board
16of directors and a chief management official to assist in
17maintaining and leveraging its respective local identity for
18the benefit of the surviving credit union. The divisional
19credit union advisory boards shall be appointed by the network
20credit union board of directors. Each divisional credit union's
21advisory board of directors may appoint a divisional credit
22union chief management official and may also appoint one of its
23directors to serve on the network credit union's nominating
24committee. A divisional credit union may determine to identify
25its advisory board as a committee and its divisional chief
26management official with a title it deems reasonable and

 

 

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1appropriate. The network credit union board of directors shall
2require each advisory board member to sign a confidentiality
3and nondisclosure agreement to ensure that information
4concerning the credit union remains confidential.
5    (d) The network credit union is the surviving legal entity
6in the merger and supervision, examination, audit, reporting,
7governance, and management shall be conducted or performed at
8the network credit union level. All share insurance, safety and
9soundness, and statutory and regulatory requirements and
10limitations shall be evaluated at the network credit union
11level.
12(Source: P.A. 99-614, eff. 7-22-16; 100-361, eff. 8-25-17.)
 
13    Section 99. Effective date. This Act takes effect upon
14becoming law.".