Full Text of SB0173 94th General Assembly
SB0173 94TH GENERAL ASSEMBLY
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94TH GENERAL ASSEMBLY
State of Illinois
2005 and 2006 SB0173
Introduced 2/2/2005, by Sen. Terry Link SYNOPSIS AS INTRODUCED: |
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205 ILCS 305/13 |
from Ch. 17, par. 4414 |
205 ILCS 305/42 |
from Ch. 17, par. 4443 |
205 ILCS 305/47 |
from Ch. 17, par. 4448 |
205 ILCS 305/70 |
from Ch. 17, par. 4471 |
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Amends the Illinois Credit Union Act. Authorizes a credit union to: (i) make reasonable contributions to certain civic, charitable, religious, or service organizations and to fundraisers to benefit persons in the credit union's service area and (ii) to act as a trustee or custodian under health savings accounts and similar tax-advantaged plans established under the federal Internal Revenue Code. Provides that loan applications shall be made in the manner prescribed by the Credit Committee, credit manager, or loan officer (now, the applications are made in writing upon a prescribed form) and may be evidenced by an electronically stored or generated record. Provides that the signature on a loan application includes any symbol executed or adopted, or any security procedure employed or adopted, using electronic means or otherwise, by or on behalf of a person with intent to authenticate a record. Prohibits any individual, firm, association, or body politic and corporate, including, without limitation, any corporation, limited liability company, general partnership, limited partnership, or joint venture that is not an authorized user from using any name or title that contains the words "credit union" or any abbreviation thereof. Authorizes the Director of the Division of Financial Institutions to impose a penalty of up to $10,000 for each violation. Effective immediately.
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A BILL FOR
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SB0173 |
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LRB094 06716 MKM 36815 b |
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| AN ACT concerning regulation.
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| Be it enacted by the People of the State of Illinois,
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| represented in the General Assembly:
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| Section 5. The Illinois Credit Union Act is amended by | 5 |
| changing Sections 13, 42, 47, and 70 as follows:
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| (205 ILCS 305/13) (from Ch. 17, par. 4414)
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| Sec. 13. General powers. A credit union may:
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| (1) Make contracts; sue and be sued; and adopt and use | 9 |
| a common seal
and alter the same;
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| (2) Acquire, lease (either as lessee or lessor), hold, | 11 |
| pledge, mortgage,
sell and dispose of real property, either | 12 |
| in whole or in part, or any interest
therein, as may be | 13 |
| necessary or incidental to its present or future
operations | 14 |
| and needs, subject to such limitations as may be imposed
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| thereon in rules and regulations promulgated by the | 16 |
| Director; acquire, lease
(either as lessee or lessor), | 17 |
| hold, pledge, mortgage, sell and dispose of
personal | 18 |
| property, either in whole or in part, or any interest | 19 |
| therein,
as may be necessary or incidental to its present | 20 |
| or future operations
and needs;
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| (3) At the discretion of the Board of Directors, | 22 |
| require the payment of
an entrance fee or annual membership | 23 |
| fee, or both, of any person admitted to
membership;
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| (4) Receive savings from its members in the form of | 25 |
| shares of various
classes, or special purpose share | 26 |
| accounts; act as custodian of its members'
accounts; issue | 27 |
| shares in trust as provided in this Act;
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| (5) Lend its funds to its members and otherwise as | 29 |
| hereinafter provided;
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| (6) Borrow from any source in accordance with policy | 31 |
| established by the
Board of Directors to a maximum of 50% | 32 |
| of capital, surplus and reserves;
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| (7) Discount and sell any obligations owed to the | 2 |
| credit union;
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| (8) Honor requests for withdrawals or transfers of all | 4 |
| or any part of
member share accounts, and any classes | 5 |
| thereof, in any manner approved by
the credit union Board | 6 |
| of Directors;
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| (9) Sell all or substantially all of its assets or | 8 |
| purchase all or
substantially all of the assets of another | 9 |
| credit union, subject to the
prior approval of the | 10 |
| Director;
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| (10) Invest surplus funds as provided in this Act;
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| (11) Make deposits in banks, savings banks, savings and | 13 |
| loan associations,
trust companies; and invest in shares, | 14 |
| classes of shares or share certificates
of other credit | 15 |
| unions;
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| (12) Assess charges and fees to members in accordance | 17 |
| with board
resolution;
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| (13) Hold membership in and pay dues to associations | 19 |
| and organizations;
to invest in shares, stocks or | 20 |
| obligations of any credit union organization;
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| (14) Declare dividends and pay interest refunds to | 22 |
| borrowers as provided
in this Act;
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| (15) Collect, receive and disburse monies in | 24 |
| connection with providing
negotiable checks, money orders | 25 |
| and other money-type instruments, and for
such other | 26 |
| purposes as may provide benefit or convenience to its | 27 |
| members,
and charge a reasonable fee for such services;
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| (16) Act as fiscal agent for and receive deposits from | 29 |
| the federal
government, this state or any agency or | 30 |
| political subdivision thereof;
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| (17) Receive savings from nonmembers in the form of | 32 |
| shares or share
accounts in the case of credit unions | 33 |
| serving predominantly low-income
members. The term "low | 34 |
| income
members" shall mean those members who make less than | 35 |
| 80% of the average for
all wage earners as established by | 36 |
| the Bureau of Labor Statistics or those
members whose |
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| annual household income falls at or below 80% of the
median | 2 |
| household income for the nation as established by the | 3 |
| Census Bureau. The
term "predominantly" is defined as a | 4 |
| simple majority;
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| (18) To Establish, maintain, and operate terminals as | 6 |
| authorized by
the Electronic Fund Transfer Act; and
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| (19) Subject to Article XLIV of the Illinois Insurance | 8 |
| Code, to act
as the agent for any fire, life, or other | 9 |
| insurance company authorized by the
State of Illinois, by | 10 |
| soliciting and selling insurance and collecting premiums
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| on policies issued by such company; and may receive for | 12 |
| services so rendered
such fees or commissions as may be | 13 |
| agreed upon between the said credit union
and the insurance | 14 |
| company for which it may act as agent; provided, however,
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| that no such credit union shall in any case assume or | 16 |
| guarantee the payment of
any premium on insurance policies | 17 |
| issued through its agency by its principal;
and provided | 18 |
| further, that the credit union shall not guarantee the | 19 |
| truth of
any statement made by an assured in filing his | 20 |
| application for insurance ; and .
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| (20) Make reasonable contributions to civic, | 22 |
| charitable, or service organizations not organized for | 23 |
| profit; religious corporations; and fundraisers benefiting | 24 |
| persons in the credit union's service area.
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| (Source: P.A. 92-608, eff. 7-1-02; revised 1-20-03.)
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| (205 ILCS 305/42) (from Ch. 17, par. 4443)
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| Sec. 42. Shares in trust.
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| (1) Shares may be issued in trust to a member
as trustee or | 29 |
| to an individual or corporate trustee. If a corporate trustee
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| is a bank or trust company, shares may be issued to the | 31 |
| corporate trustee
only if such bank or trust company is | 32 |
| organized under the laws of
the State of Illinois or is a | 33 |
| nationally chartered bank located principally
in the State of | 34 |
| Illinois. An individual trustee shall be a member of the
credit | 35 |
| union unless the person establishing the trust in respect to |
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| which
such shares are issued or each beneficiary of the trust | 2 |
| is a member of the
credit union and the name of each | 3 |
| beneficiary is disclosed to the credit
union. Shares may also | 4 |
| be issued in the name of an individual or corporate
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| representative under the Illinois Probate Act of 1975 for or
in | 6 |
| respect to a member of a credit union. Shares may also be | 7 |
| issued in
trust under the Illinois Funeral or Burial Funds Act, | 8 |
| for or in respect
to a member of a credit union, to a trustee | 9 |
| licensed under said Act.
Any credit union which issues shares | 10 |
| in trust as provided in this Section
must be insured by the | 11 |
| NCUA or another approved insurer. Payment of part or all of | 12 |
| such shares to such trustee or member
shall, to the extent of | 13 |
| such payment, discharge the liability of the credit
union to | 14 |
| the member and the beneficiary and the credit union shall be | 15 |
| under
no obligation to see to the application of such payment.
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| (2) If a credit union's shares are insured as provided for | 17 |
| in this Act,
such credit union shall have power to act as | 18 |
| trustee or custodian under
individual retirement accounts or | 19 |
| plans , health savings accounts, and similar tax-advantaged | 20 |
| savings plans established pursuant to the Internal Revenue Code | 21 |
| for its members or groups or
organizations
of its members | 22 |
| provided the funds of such accounts or plans are invested
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| solely in (1) share accounts of, or (2) share accounts and | 24 |
| obligations issued
by such credit union. All funds held in such | 25 |
| fiduciary capacity shall be
maintained in accordance with | 26 |
| applicable statutes and regulations promulgated
thereunder by | 27 |
| any authority exercising jurisdiction over such trusts or
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| custodial accounts.
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| (3) Notwithstanding any language to the contrary in this | 30 |
| Section 42, a
credit union may act as trustee or custodian of | 31 |
| individual retirement plans
of its members established | 32 |
| pursuant to the Employee Retirement Income
Security Act of 1974 | 33 |
| or self-employed retirement plans established pursuant
to the | 34 |
| Self-Employed Individuals Retirement Act of 1962, and any laws
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| amendatory or supplementary to such Acts, provided that:
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| (a) All contributions of funds are initially made to a |
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| share account in
the credit union;
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| (b) Any subsequent transfer of funds to other assets is | 3 |
| solely at the
direction of the member and the credit union | 4 |
| performs only custodial
duties, exercises no investment | 5 |
| discretion and provides no investment
advice with respect | 6 |
| to plan assets;
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| (c) The member is notified of the fact that share | 8 |
| insurance coverage is
limited to funds held in share | 9 |
| accounts; and
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| (d) The credit union complies with all applicable | 11 |
| provisions of this Act
and applicable laws and regulations | 12 |
| as may be promulgated by any authority
exercising | 13 |
| jurisdiction over such trust or custodial accounts.
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| (Source: P.A. 91-131, eff. 7-16-99; 92-608, eff. 7-1-02.)
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| (205 ILCS 305/47) (from Ch. 17, par. 4448)
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| Sec. 47. Loan Applications. Every application for a loan | 17 |
| shall be made
in the manner prescribed by
writing upon a form, | 18 |
| which the Credit Committee, credit manager, or loan
officer | 19 |
| prescribes . The application shall state the purpose for which | 20 |
| the
loan is desired, and the security, if any, offered. Each | 21 |
| loan shall be evidenced
by a written document or by a record | 22 |
| electronically stored or generated by any electronic or | 23 |
| computer-generated process that accurately reproduces or | 24 |
| records the agreement, transaction, act, occurrence, or event. | 25 |
| The signature of any party to the loan includes any symbol | 26 |
| executed or adopted, or any security procedure employed or | 27 |
| adopted, using electronic means or otherwise, by or on behalf | 28 |
| of a person with intent to authenticate a record .
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| (Source: P.A. 81-329.)
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| (205 ILCS 305/70) (from Ch. 17, par. 4471)
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| Sec. 70. Use of name, sentence. | 32 |
| (a) No individual
person , firm, association,
or body | 33 |
| politic and corporate, including, without limitation, any | 34 |
| corporation, limited liability company, general partnership, |
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| limited partnership, or joint venture that is not an authorized | 2 |
| user
partnership,
or corporation, except corporations | 3 |
| organized under this Act, the credit
union acts of other | 4 |
| states, or under the Federal Credit Union Act,
associations
of | 5 |
| such corporations, or subsidiaries of such associations, may | 6 |
| use any
name or title which contains the words
"credit union" | 7 |
| or any abbreviation thereof, and such use is a Class A
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| Misdemeanor. For purposes of this Section, "authorized user" | 9 |
| means a corporation organized under this Act, the credit union | 10 |
| act of another state, or the Federal Credit Union Act, any | 11 |
| association of such a corporation, and subsidiaries and | 12 |
| affiliates of such an association.
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| (b) If the Director of the Division of Financial | 14 |
| Institutions of the Department of Financial and Professional | 15 |
| Regulation finds that an individual or entity that is not an | 16 |
| authorized user has transacted or intends to transact business | 17 |
| in this State in a manner that has a substantial likelihood of | 18 |
| misleading the public by: (i) implying that the business is a | 19 |
| credit union or (ii) using or intending to use the words | 20 |
| "credit union", or any abbreviation thereof, in connection with | 21 |
| its business, then the Director of the Division of Financial | 22 |
| Institutions may direct the individual or entity to cease and | 23 |
| desist from transacting its business or using the words "credit | 24 |
| union", or any abbreviation thereof. If the individual or | 25 |
| entity persists in transacting its business or using the words | 26 |
| "credit union", or any abbreviation thereof, then the Director | 27 |
| of the Division of Financial Institutions may impose a civil | 28 |
| penalty of up to $10,000 for each violation. Each day that the | 29 |
| individual or entity continues transacting business or using | 30 |
| the words "credit union", or any abbreviation thereof, in | 31 |
| connection with its business shall constitute a separate | 32 |
| violation of these provisions.
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| (Source: P.A. 92-293, eff. 8-9-01.)
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| Section 99. Effective date. This Act takes effect upon | 35 |
| becoming law.
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