Rep. Jay Hoffman

Filed: 3/3/2023

 

 


 

 


 
10300HB2043ham001LRB103 05826 BMS 57697 a

1
AMENDMENT TO HOUSE BILL 2043

2    AMENDMENT NO. ______. Amend House Bill 2043 by replacing
3everything after the enacting clause with the following:
 
4    "Section 5. The Illinois Credit Union Act is amended by
5changing Sections 16, 20, 29, and 48 as follows:
 
6    (205 ILCS 305/16)  (from Ch. 17, par. 4417)
7    Sec. 16. Societies and associations. Societies,
8associations, clubs, partnerships, corporations, and limited
9liability companies in which one or more the majority of the
10members, partners, or shareholders are individuals who are
11eligible for credit union membership may be admitted to
12membership in a credit union in the same manner and under the
13same conditions as individuals, subject to such rules as the
14Secretary and the Director may promulgate hereunder. Any
15members, partners, or shareholders who are ineligible for
16membership in the credit union shall not become eligible by

 

 

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1virtue of the eligibility of the entity in which they hold an
2ownership interest.
3(Source: P.A. 97-133, eff. 1-1-12.)
 
4    (205 ILCS 305/20)  (from Ch. 17, par. 4421)
5    Sec. 20. Election or appointment of officials.
6    (1) The credit union shall be directed by a board of
7directors consisting of no less than 7 in number, to be elected
8at the annual meeting by and from the members. Directors shall
9hold office until the next annual meeting, unless their terms
10are staggered. Upon amendment of its bylaws, a credit union
11may divide the directors into 2 or 3 classes with each class as
12nearly equal in number as possible. The term of office of the
13directors of the first class shall expire at the first annual
14meeting after their election, that of the second class shall
15expire at the second annual meeting after their election, and
16that of the third class, if any, shall expire at the third
17annual meeting after their election. At each annual meeting
18after the classification, the number of directors equal to the
19number of directors whose terms expire at the time of the
20meeting shall be elected to hold office until the second
21succeeding annual meeting if there are 2 classes or until the
22third succeeding annual meeting if there are 3 classes. A
23director shall hold office for the term for which he or she is
24elected and until his or her successor is elected and
25qualified.

 

 

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1    (1.5) Except as provided in subsection (1.10), in all
2elections for directors, every member has the right to vote,
3in person, by proxy, or by electronic record if approved by the
4board of directors, the number of shares owned by him, or in
5the case of a member other than a natural person, the member's
6one vote, for as many persons as there are directors to be
7elected, or to cumulate such shares, and give one candidate as
8many votes as the number of directors multiplied by the number
9of his shares equals, or to distribute them on the same
10principle among as many candidates as he may desire and the
11directors shall not be elected in any other manner. Shares
12held in a joint account owned by more than one member may be
13voted by any one of the members, however, the number of
14cumulative votes cast may not exceed a total equal to the
15number of shares multiplied by the number of directors to be
16elected. A majority of the shares entitled to vote shall be
17represented either in person or by proxy for the election of
18directors. Each director shall wholly take and subscribe to an
19oath that he will diligently and honestly perform his duties
20in administering the affairs of the credit union, that while
21he may delegate to another the performance of those
22administrative duties he is not thereby relieved from his
23responsibility for their performance, that he will not
24knowingly violate or permit to be violated any law applicable
25to the credit union, and that he is the owner of at least one
26share of the credit union.

 

 

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1    (1.10) Upon amendment of a credit union's bylaws, in all
2elections for directors, every member who is a natural person
3shall have the right to cast one vote, regardless of the number
4of his or her shares, in person, by proxy, or by electronic
5record if approved by the board of directors, for as many
6persons as there are directors to be elected.
7    (1.15) If the board of directors has adopted a policy
8addressing age eligibility standards on voting, holding
9office, or petitioning the board, then a credit union may
10require (i) that members be at least 18 years of age by the
11date of the meeting in order to vote at meetings of the
12members, sign nominating petitions, or sign petitions
13requesting special meetings, and (ii) that members be at least
1418 years of age by the date of election or appointment in order
15to hold elective or appointive office.
16    (2) The board of directors shall appoint from among the
17members of the credit union, a supervisory committee of not
18less than 3 members at the organization meeting and within 30
19days following each annual meeting of the members for such
20terms as the bylaws provide. Members of the supervisory
21committee may, but need not be, on the board of directors, but
22shall not be officers of the credit union, members of the
23credit committee, or the credit manager if no credit committee
24has been appointed.
25    (3) The board of directors may appoint, from among the
26members of the credit union, a credit committee consisting of

 

 

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1an odd number, not less than 3 for such terms as the bylaws
2provide. Members of the credit committee may, but need not be,
3directors or officers of the credit union, but shall not be
4members of the supervisory committee.
5    (4) The board of directors may appoint from among the
6members of the credit union a membership committee of one or
7more persons. If appointed, the committee shall act upon all
8applications for membership and submit a report of its actions
9to the board of directors at the next regular meeting for
10review. If no membership committee is appointed, credit union
11management shall act upon all applications for membership and
12submit a report of its actions to the board of directors at the
13next regular meeting for review.
14    (5) The board of directors may appoint, from among the
15members of the credit union, a nominating committee of 3 or
16more persons. Members of the nominating committee may, but
17need not, be directors or officers of the credit union, but may
18not be members of the supervisory committee. The appointment,
19if made, shall be made in a timely manner to permit the
20nominating committee to recruit, evaluate, and nominate
21eligible candidates for each position to be filled in the
22election of directors or, in the event of a vacancy in office,
23to be filled by appointment of the board of directors for the
24remainder of the unexpired term of the director creating the
25vacancy. Factors the nominating committee may consider in
26evaluating prospective candidates include whether a candidate

 

 

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1possesses or is willing to acquire through training the
2requisite skills and qualifications to carry out the statutory
3duties of a director. The board of directors may delegate to
4the nominating committee the recruitment, evaluation, and
5nomination of eligible candidates to serve on committees and
6in executive officer positions.
7    (6) The board of directors may create one or more other
8committees in addition to the committees identified in this
9Section and appoint directors or such other persons as the
10board designates to serve on the committee or committees. Any
11such committee shall serve at the pleasure of the board of
12directors and it shall not act on behalf of the credit union or
13bind it to any action, but it may make recommendations to the
14board of directors.
15    (7)(a) The board of directors may appoint an individual as
16a registered agent for the credit union. The name of the
17registered agent appointed by the board of directors shall be
18identified in the annual report filed by the credit union on
19the annual report form supplied by the Department. The
20business office of the registered agent shall be the same as
21the principal place of business of the credit union. Any
22process, notice, or demand required or permitted by law to be
23served upon the credit union may be served upon the registered
24agent appointed by the credit union.
25        (b) A credit union that has appointed a registered
26    agent shall post on its website the name of its registered

 

 

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1    agent, the address of its principal place of business, and
2    that the appointment was authorized by action of the board
3    of directors.
4        (c) A credit union that has appointed a registered
5    agent may change its registered agent at any time by
6    posting on its website a statement setting forth the
7    following:
8            (i) the address of its principal place of
9        business,
10            (ii) the name of its existing registered agent,
11            (iii) the name of its successor registered agent,
12        and
13            (iv) that the change was authorized by action of
14        the board of directors.
15        (d) A registered agent may resign at any time by
16    submitting written notice thereof to the credit union at
17    its principal place of business. The notice shall set
18    forth the following:
19            (i) the name of the credit union for which the
20        registered agent is acting,
21            (ii) the address of the principal place of
22        business of the credit union,
23            (iii) the name of the registered agent,
24            (iv) that the registered agent is resigning, and
25            (v) the effective date of the resignation, which
26        shall not be less than 30 days after the date of filing

 

 

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1        of the notice.
2    (8) (6) The use of electronic records for member voting
3pursuant to this Section shall employ a security procedure
4that meets the attribution criteria set forth in Section 9 of
5the Uniform Electronic Transactions Act.
6    (9) (7) As used in this Section, "electronic", "electronic
7record", and "security procedure" have the meanings ascribed
8to those terms in the Uniform Electronic Transactions Act. the
9(Source: P.A. 102-38, eff. 6-25-21; 102-687, eff. 12-17-21;
10102-774, eff. 5-13-22; 102-858, eff. 5-13-22; revised 8-3-22.)
 
11    (205 ILCS 305/29)  (from Ch. 17, par. 4430)
12    Sec. 29. Meetings of directors.
13    (1) The board of directors and the executive committee
14shall meet as often as necessary, but one body must meet at
15least monthly and the other at least quarterly, as prescribed
16in the bylaws. Unless a greater number is required by the
17bylaws, a majority of the whole board of directors shall
18constitute a quorum. The act of a majority of the directors
19present at a meeting at which a quorum is present shall be the
20act of the board of directors unless the act of a greater
21number is required by this Act, the credit union's articles of
22incorporation or the bylaws.
23    (1.5) Notwithstanding anything to the contrary in
24subsection (1), the board of directors of a credit union with a
25composite rating of either 1 or 2 under the Uniform Financial

 

 

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1Institutions Rating System known as the CAMELS supervisory
2rating system (or an equivalent rating under a comparable
3rating system) and a management rating under such composite
4rating of either 1 or 2 may meet not less than 6 times
5annually, with at least one meeting held during each fiscal
6quarter. This meeting frequency schedule shall be available to
7an eligible credit union irrespective of whether it has
8appointed an executive committee pursuant to Section 28.
9    (2) Unless specifically prohibited by the articles of
10incorporation or bylaws, directors and committee members may
11participate in and act at any meeting of the board or committee
12through the use of a conference telephone or other
13communications equipment by means of which all persons
14participating in the meeting can communicate with each other.
15Participation in the meeting shall constitute attendance and
16presence in person at the meeting of the person or persons so
17participating.
18    (3) Unless specifically prohibited by the articles of
19incorporation or bylaws, any action required by this Act to be
20taken at a meeting of the board of directors or a committee and
21any other action that may be taken at a meeting of the board of
22directors or a committee may be taken without a meeting if a
23consent in writing setting forth the action taken is signed by
24all the directors entitled to vote with respect to the subject
25matter thereof, or by all members of the committee, as the case
26may be. The consent shall be evidenced by one or more written

 

 

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1approvals, each of which sets forth the action taken and bears
2the signatures of one or more directors or committee members.
3All the approvals evidencing the consent shall be delivered to
4the secretary to be filed in the corporate records of the
5credit union. The action taken shall be effective when all the
6directors or committee members have approved the consent
7unless the consent specifies a different effective date. A
8consent signed by all the directors or all the members of a
9committee shall have the same effect as a unanimous vote, and
10may be stated as such in any document filed with the director
11under this Act.
12    (4)(a) As used in this subsection:
13        "Affiliate" means an organization established to serve
14    the needs of credit unions, the business of which relates
15    to the daily operations of credit unions.
16        "Compliance review documents" means reports, meeting
17    minutes, and other documents prepared in connection with a
18    review or evaluation conducted by or for the board of
19    directors.
20        (b) This subsection applies to the board of directors
21    in relation to its functions to evaluate and seek to
22    improve any of the following:
23            (i) loan policies or underwriting standards;
24            (ii) asset quality;
25            (iii) financial reporting to federal or State
26        governmental or regulatory agencies; or

 

 

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1            (iv) compliance with federal or State statutory or
2        regulatory requirements, including, without
3        limitation, the manner in which it performs its duties
4        under Section 30.
5        (c) Meetings, minutes of meetings, and reports of the
6    board of directors shall be subject to the confidentiality
7    and redaction standards set forth in this subsection.
8        (d) Except as provided in paragraph (e), compliance
9    review documents and the deliberations of the board of
10    directors are confidential. An affiliate of a credit
11    union, a credit union regulatory agency, and the insurer
12    of credit union share accounts shall have access to
13    compliance review documents; however, (i) the documents
14    remain confidential and (ii) delivery of compliance review
15    documents to an affiliate or pursuant to the requirements
16    of a credit union regulatory agency or an insurer of
17    credit union share accounts do not constitute a waiver of
18    the confidentiality granted in this Section.
19        (e) This Section does not apply to any civil or
20    administrative action initiated by a credit union
21    regulatory agency or an insurer of credit union share
22    accounts.
23        (f) This Section shall not be construed to limit the
24    discovery or admissibility in any civil action of any
25    documents, including compliance review documents.
26        (g) Any report required under this Act to be furnished

 

 

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1    to the board of directors by the membership committee,
2    credit committee, or any other committee may be submitted
3    in a summary format that redacts personally identifiable
4    information as defined under applicable State and federal
5    law.
6(Source: P.A. 89-603, eff. 8-2-96.)
 
7    (205 ILCS 305/48)  (from Ch. 17, par. 4449)
8    Sec. 48. Loan limit. Within any limitations set forth in a
9policy adopted by the board of directors, a credit union may
10place a limit upon the aggregate amount to be loaned to or
11cosigned for by any one member provided that no loan shall be
12made to any member in an aggregate amount in excess of 10% of
13the credit union's unimpaired capital and surplus. Such loan
14limits shall not be subject to reduction by rules adopted by
15the Secretary.
16(Source: P.A. 100-361, eff. 8-25-17.)
 
17    Section 99. Effective date. This Act takes effect upon
18becoming law.".