Full Text of SB1813 101st General Assembly
SB1813enr 101ST GENERAL ASSEMBLY |
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| 1 | | AN ACT concerning regulation.
| 2 | | Be it enacted by the People of the State of Illinois,
| 3 | | represented in the General Assembly:
| 4 | | Section 5. The Illinois Credit Union Act is amended by | 5 | | changing Sections 15, 23, 57.1, 59, and 63 and by adding | 6 | | Sections 10.2 and 44.1 as follows: | 7 | | (205 ILCS 305/10.2 new) | 8 | | Sec. 10.2. Electronic records. | 9 | | (a) As used in this Section, "electronic" and "electronic | 10 | | record" have the meanings given to those terms in the | 11 | | Electronic Commerce Security Act. | 12 | | (b) If a provision of this Act requires information to be | 13 | | written or delivered in writing, or provides for certain | 14 | | consequences if it is not, an electronic record or electronic | 15 | | delivery satisfies that rule of law. | 16 | | (c) If a provision of this Act requires a policy, record, | 17 | | notice or other document or information to be mailed or | 18 | | otherwise furnished, posted, or disclosed by a credit union, | 19 | | electronic delivery or distribution satisfies that rule of law. | 20 | | Policies and notifications of general interest to or impact on | 21 | | the membership may be posted on a credit union's website or | 22 | | disclosed in membership newsletters or account statements, in | 23 | | addition to, or in lieu of, any other methods of notification |
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| 1 | | or distribution specified in this Act. | 2 | | (205 ILCS 305/15) (from Ch. 17, par. 4416)
| 3 | | Sec. 15. Membership defined.
| 4 | | (1) The membership of a credit union shall
be limited to | 5 | | and consist of the subscribers to the articles of incorporation
| 6 | | and such other persons within the common bond, as defined in | 7 | | this Act and
as set forth in the credit union's articles of | 8 | | incorporation, as have been
duly admitted members, have paid | 9 | | the required entrance fee or membership
fee, or both, if any, | 10 | | have subscribed for one or more shares, and have paid
the | 11 | | initial installment thereon, and have complied with such other | 12 | | requirements
as the articles of incorporation or bylaws | 13 | | specify. Two or more persons
within the common bond who have | 14 | | jointly subscribed for one or more shares under
a joint account | 15 | | and have complied with all membership requirements may each be
| 16 | | admitted to membership. The surviving spouse
of a credit union | 17 | | member may, within 6 months of the member's death, become
a | 18 | | member of the credit union by paying the required entrance fee | 19 | | or membership
fee or both, if any, by subscribing for one or | 20 | | more shares
and paying the initial installment thereon, and by | 21 | | complying with such other
requirements as the articles of | 22 | | incorporation or bylaws specify.
| 23 | | (2) Any member may withdraw from a credit union at any time | 24 | | upon giving
notice of withdrawal as required by the bylaws.
| 25 | | (3) Any member may be expelled
by a 2/3 vote of the members |
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| 1 | | present at any regular or special
meeting
called to consider | 2 | | the matter, but only after an opportunity has been given
to the | 3 | | member to be heard.
| 4 | | (4) A member who has caused a loss to the credit union,
| 5 | | failed
to maintain one or more shares at the credit union, or | 6 | | violated board policy
applicable to members may be expelled by
| 7 | | a majority vote of a quorum of directors if the board has | 8 | | adopted a policy
providing for expulsion for any of the | 9 | | following acts committed by the member: under those | 10 | | circumstances. | 11 | | (i) causing a loss to the credit union; | 12 | | (ii) failing to maintain one or more shares at the | 13 | | credit union; | 14 | | (iii) committing fraud or any similar misdeed against | 15 | | the credit union; | 16 | | (iv) engaging in inappropriate behavior involving | 17 | | another person, such as physical or verbal abuse of another | 18 | | member or an employee of the credit union, while | 19 | | transacting business with the credit union; or | 20 | | (v) otherwise violating board policy applicable to | 21 | | members. | 22 | | In maintaining and
enforcing a policy based on loss, the
| 23 | | board may consider, without limitation, a member's failure to | 24 | | pay amounts due
under a loan, failure to provide collected | 25 | | funds to cover withdrawals or
personal share drafts or credit | 26 | | union drafts where the member is a remitter, or
failure to pay |
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| 1 | | fees or charges due the credit union. | 2 | | The policy may delegate the expulsion authority to the | 3 | | senior management officials of the credit union. If a member is | 4 | | expelled by a senior management official of the credit union, | 5 | | the member may, within 30 days after the expulsion, seek | 6 | | reinstatement by appealing the action in writing to the board | 7 | | of directors of the credit union. The board may affirm, | 8 | | disaffirm, or modify the action, and the board's decision is | 9 | | final. As used in this subsection (4), "senior management | 10 | | official" includes the chief management officer of the credit | 11 | | union (including the person holding the title of President or | 12 | | Chief Executive Officer, or both, or Treasurer/Manager) and | 13 | | other management officers of the credit union (including the | 14 | | persons holding the title of Chief Operating Officer, Chief | 15 | | Financial Officer, Chief Administrative Officer, Chief | 16 | | Information Officer, Chief Security Officer, Executive Vice | 17 | | President, Senior Vice President, or Vice President). | 18 | | If a policy
is
adopted by the board pursuant to this | 19 | | subsection (4), written notice of the
policy shall be | 20 | | distributed not fewer than 30 days before the effective date of | 21 | | the policy by: (i) mailing it and the effective date of the | 22 | | policy
shall be mailed to each member of the credit union at | 23 | | the member's current
address appearing on the records of the | 24 | | credit union ; (ii) electronically delivering it to all members | 25 | | by posting it on the credit union's website; or (iii) | 26 | | disclosing it to all members in membership newsletters or |
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| 1 | | account statements . The policy shall be
mailed to members not | 2 | | fewer than 30 days prior to the effective date of the
policy. | 3 | | In addition, new members shall be provided written notice of | 4 | | the
policy prior to or upon applying for membership by using | 5 | | one of the distribution methods described in this subsection | 6 | | (4) .
| 7 | | (5) All or any part of the amount paid on shares
of a | 8 | | withdrawing member
or expelled member with any declared | 9 | | dividends or interest on the date of
withdrawal or expulsion | 10 | | must, after deducting all amounts due from the member
to the | 11 | | credit union, be paid to him. The credit union may require not | 12 | | more
than 60 days' written notice of intention to withdraw | 13 | | shares, but a notice
of withdrawal does not entitle the member | 14 | | to any preferred or prior claim
in the event of liquidation. | 15 | | Withdrawing or expelled members have no further
rights in the | 16 | | credit union, but are not, by withdrawal or expulsion, released
| 17 | | from any obligation they owe to the credit union.
| 18 | | (6) A member who has caused a loss to the credit union or | 19 | | has violated board
policy applicable to members may be denied | 20 | | any
or all credit union services in accordance with board | 21 | | policy, however, members
who are denied services shall be | 22 | | allowed to maintain a share account and to
vote on all issues
| 23 | | put to a vote of the membership.
| 24 | | (7) If a member fails to maintain one fully paid share, the | 25 | | credit union, at its option, may permit the member to | 26 | | re-subscribe and pay for one or more shares within 30 days |
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| 1 | | after the date the member failed to maintain one fully paid | 2 | | share, without affecting the member's status or rights as a | 3 | | member during that period. A member that fails to re-subscribe | 4 | | for at least one fully paid share within the 30-day period | 5 | | shall be automatically expelled from the credit union and | 6 | | treated as an expelled member under subsection (5) of this | 7 | | Section 15.
| 8 | | (Source: P.A. 97-133, eff. 1-1-12; 97-855, eff. 7-27-12.)
| 9 | | (205 ILCS 305/23) (from Ch. 17, par. 4424)
| 10 | | Sec. 23. Compensation of officials.
| 11 | | (1) Directors and committee members No director or | 12 | | committee member may
receive reasonable compensation for their | 13 | | his service as such , the amount of which shall be set by the | 14 | | board of directors. The Department shall, by rule, establish | 15 | | maximum rates of reasonable compensation that are generally | 16 | | applicable to credit unions considering factors the Department | 17 | | may establish from time to time, including, but not limited to, | 18 | | total assets, nonprofit cooperative structure, and the best | 19 | | interests of members .
"Compensation" as used in this subsection | 20 | | (1) refers to remuneration expense
to the credit union for | 21 | | services provided by a director or committee member in
his or | 22 | | her capacity as director or committee member. The remuneration | 23 | | expense shall be disclosed on an annual basis to the membership | 24 | | in the financial statement that is part of the annual | 25 | | membership meeting materials. The disclosure shall contain: |
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| 1 | | (i) the amount paid to each director and (ii) the amount paid | 2 | | to the directors as a group. "Compensation" as used in
this | 3 | | subsection (1) does not include | 4 | | (2) The credit union may incur the expense of providing
| 5 | | reasonable life, health,
accident, and similar insurance | 6 | | protection benefits for directors and a director or committee | 7 | | members member .
| 8 | | (3) (2) Directors, committee members and
employees, while | 9 | | on official business of the credit union, may be reimbursed
for | 10 | | reasonable and necessary expenses. Alternatively, the credit | 11 | | union may make direct payment to a third party for such | 12 | | business expenses. Reasonable and necessary expenses may | 13 | | include the payment of travel costs for the foregoing officials | 14 | | and one guest per official. All payment of costs shall be made | 15 | | in accordance with written policies and procedures established | 16 | | by the board of directors.
| 17 | | (4) (3) The board of directors may establish
compensation | 18 | | for officers of the credit union.
| 19 | | (Source: P.A. 97-133, eff. 1-1-12.)
| 20 | | (205 ILCS 305/44.1 new) | 21 | | Sec. 44.1. Unclaimed property; dormancy or escheat fee. A | 22 | | credit union may deduct a dormancy charge or an escheat fee | 23 | | from property required to be paid or delivered to the | 24 | | administrator under the Revised Uniform Unclaimed Property | 25 | | Act, provided the amount of the deduction is consistent with |
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| 1 | | the standards set forth in subsection (b) of Section 15-602 of | 2 | | that Act. In making the deduction, a credit union may allocate, | 3 | | classify, and record all or a portion of the deduction, as | 4 | | applicable, as the minimum share amount required to preserve | 5 | | the member's status as a member of the credit union. | 6 | | (205 ILCS 305/57.1) | 7 | | Sec. 57.1. Services to other credit unions. A credit union | 8 | | may act as a representative of and enter into an agreement with | 9 | | credit unions or other organizations for the purposes of: | 10 | | (1) sharing, utilizing, renting, leasing, purchasing, | 11 | | selling, and joint ownership of fixed assets or engaging in | 12 | | activities and services that relate to the daily operations | 13 | | of credit unions; and | 14 | | (2) providing correspondent services to other credit | 15 | | unions or other organizations that the service provider | 16 | | credit union is authorized to perform for its own members | 17 | | or as part of its operations, including, but not limited | 18 | | to, loan processing, loan servicing, member check cashing | 19 | | services, disbursing share withdrawals and loan proceeds, | 20 | | cashing and selling money orders, ACH and wire transfer | 21 | | services, implementation and
administrative support | 22 | | services related to the use of debit cards, payroll debit
| 23 | | cards, and other prepaid debit cards and
credit cards, coin | 24 | | and currency services, performing internal audits, and | 25 | | automated teller machine deposit services.
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| 1 | | (Source: P.A. 99-78, eff. 7-20-15; 99-149, eff. 1-1-16; | 2 | | 100-201, eff. 8-18-17.) | 3 | | (205 ILCS 305/59) (from Ch. 17, par. 4460)
| 4 | | Sec. 59. Investment of funds.
| 5 | | (a) Funds not used in loans to members may be
invested, | 6 | | pursuant to subsection (7) of Section 30 of this Act, and
| 7 | | subject to Departmental rules and
regulations:
| 8 | | (1) In securities, obligations or other instruments of | 9 | | or issued by or
fully guaranteed as to principal and | 10 | | interest by the United States of America
or any agency | 11 | | thereof or in any trust or trusts established for investing
| 12 | | directly or collectively in the same;
| 13 | | (2) In obligations of any state of the United States, | 14 | | the District of
Columbia, the Commonwealth of Puerto Rico, | 15 | | and the several
territories organized
by Congress, or any | 16 | | political subdivision thereof; however, a credit union
may
| 17 | | not invest more than 10% of its unimpaired capital and | 18 | | surplus in the
obligations of one issuer, exclusive of | 19 | | general obligations of the issuer, and
investments in | 20 | | municipal securities must be limited to securities rated in | 21 | | one
of the 4
highest rating categories by a nationally | 22 | | recognized statistical rating
organization;
| 23 | | (3) In certificates of deposit or passbook type | 24 | | accounts issued by a state
or national bank, mutual savings | 25 | | bank or savings and loan association; provided
that such |
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| 1 | | institutions have their accounts insured by the Federal | 2 | | Deposit
Insurance Corporation or the Federal Savings and | 3 | | Loan Insurance Corporation;
but provided, further, that a | 4 | | credit union's investment in an account in
any one | 5 | | institution may exceed the insured limit on accounts;
| 6 | | (4) In shares, classes of shares or share certificates | 7 | | of other credit
unions, including, but not limited to | 8 | | corporate credit unions; provided
that such credit unions | 9 | | have their members' accounts insured by the NCUA
or other | 10 | | approved insurers, and that if the members' accounts are so | 11 | | insured,
a credit union's investment may exceed the insured | 12 | | limit on accounts;
| 13 | | (5) In shares of a cooperative society organized under | 14 | | the laws of this
State or the laws of the United States in | 15 | | the total amount not exceeding
10% of the unimpaired | 16 | | capital and surplus of the credit union; provided
that such | 17 | | investment shall first be approved by the Department;
| 18 | | (6) In obligations of the State of Israel, or | 19 | | obligations fully guaranteed
by the State of Israel as to | 20 | | payment of principal and interest;
| 21 | | (7) In shares, stocks or obligations of other financial | 22 | | institutions in
the total amount not exceeding 5% of the | 23 | | unimpaired capital and surplus
of the credit union;
| 24 | | (8) In federal funds and bankers' acceptances;
| 25 | | (9) In shares or stocks of Credit Union Service | 26 | | Organizations in the
total amount not exceeding the greater |
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| 1 | | of 3% of the unimpaired
capital and surplus of the
credit | 2 | | union or the amount authorized for federal credit unions;
| 3 | | (10) In corporate bonds identified as investment grade | 4 | | by at least one nationally recognized statistical rating | 5 | | organization, provided that: | 6 | | (i) the board of directors has established a | 7 | | written policy that addresses corporate bond | 8 | | investment procedures and how the credit union will | 9 | | manage credit risk, interest rate risk, liquidity | 10 | | risk, and concentration risk; and | 11 | | (ii) the credit union has documented in its records | 12 | | that a credit analysis of a particular investment and | 13 | | the issuing entity was conducted by the credit union, a | 14 | | third party on behalf of the credit union qualified by | 15 | | education or experience to assess the risk | 16 | | characteristics of corporate bonds, or a nationally | 17 | | recognized statistical rating agency before purchasing | 18 | | the investment and the analysis is updated at least | 19 | | annually for as long as it holds the investment; | 20 | | (11) To aid in the credit union's management of its | 21 | | assets, liabilities, and liquidity in the purchase of an | 22 | | investment interest in a pool of loans, in whole or in part | 23 | | and without regard to the membership of the borrowers, from | 24 | | other depository institutions and financial type | 25 | | institutions, including mortgage banks, finance companies, | 26 | | insurance companies, and other loan sellers, subject to |
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| 1 | | such safety and soundness standards, limitations, and | 2 | | qualifications as the Department may establish by rule or | 3 | | guidance from time to time; | 4 | | (12) To aid in the credit union's management of its | 5 | | assets, liabilities, and liquidity by receiving funds from | 6 | | another financial institution as evidenced by certificates | 7 | | of deposit, share certificates, or other classes of shares | 8 | | issued by the credit union to the financial institution; | 9 | | and | 10 | | (13) In the purchase and assumption of assets held by | 11 | | other financial institutions, with approval of the | 12 | | Secretary and subject to any safety and soundness | 13 | | standards, limitations, and qualifications as the | 14 | | Department may establish by rule or guidance from time to | 15 | | time. | 16 | | (b) As used in this Section: | 17 | | "Political subdivision" includes, but is not
limited to, | 18 | | counties,
townships, cities, villages, incorporated towns, | 19 | | school districts, educational
service regions, special road | 20 | | districts, public water supply districts, fire
protection | 21 | | districts, drainage districts, levee districts, sewer | 22 | | districts,
housing authorities, park districts, and any
| 23 | | agency, corporation, or instrumentality of a state or its | 24 | | political
subdivisions, whether now or hereafter created and | 25 | | whether herein specifically
mentioned or not.
| 26 | | "Financial institution" includes any bank, savings bank, |
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| 1 | | savings and loan association, or credit union established under | 2 | | the laws of the United States, this State, or any other state. | 3 | | (c) A credit union investing to fund an employee benefit | 4 | | plan obligation is not subject to the investment limitations of | 5 | | this Act and this Section and may purchase an investment that | 6 | | would otherwise be impermissible if the investment is directly | 7 | | related to the credit union's obligation under the employee | 8 | | benefit plan and the credit union holds the investment only for | 9 | | so long as it has an actual or potential obligation under the | 10 | | employee benefit plan.
| 11 | | (d) If a credit union acquires loans from another financial | 12 | | institution or financial-type institution pursuant to this | 13 | | Section, the credit union shall be authorized to provide loan | 14 | | servicing and collection services in connection with those | 15 | | loans. | 16 | | (Source: P.A. 100-361, eff. 8-25-17; 100-778, eff. 8-10-18.)
| 17 | | (205 ILCS 305/63) (from Ch. 17, par. 4464)
| 18 | | Sec. 63. Merger and consolidation. | 19 | | (1) Any two or more credit unions,
regardless of whether or | 20 | | not they have the same common bond, may merge or
consolidate | 21 | | into a single credit union. A merger or consolidation may be
| 22 | | with a credit union organized under the laws of this State or | 23 | | of another
state or of the United States and is subject to the | 24 | | approval of the Secretary. It must be made on such terms as | 25 | | have been agreed upon by a vote
of a majority of the board of |
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| 1 | | directors of each credit union, and approved
by an affirmative | 2 | | vote of a majority of the members of the merging credit
union | 3 | | being absorbed present at a meeting, either in person or by | 4 | | proxy,
duly called for that purpose, except as hereinafter | 5 | | specified. Notice
of the meeting stating the purpose must be | 6 | | sent by the
Secretary of each merging credit union being | 7 | | absorbed to each member by
mail at least 45 but no more than 90 | 8 | | 7 days before the date of the meeting.
| 9 | | (2) One of the merging credit unions may continue after the | 10 | | merger or
consolidation either as a surviving credit union | 11 | | retaining its identity
or as a new credit
union as has been | 12 | | agreed upon under the terms of the merger. At least
9 members | 13 | | of the new proposed credit union must apply to the Department
| 14 | | for permission to organize the new credit union. The same | 15 | | procedure shall
be followed as provided for the organization of | 16 | | a new credit union.
| 17 | | (3) After approval by the members of the credit union which | 18 | | is to be absorbed
by the merger or consolidation, the chairman | 19 | | or president and the secretary
of each credit union shall | 20 | | execute a certificate of merger or consolidation,
which shall | 21 | | set forth all of the following:
| 22 | | (a) The time and place of the meeting of each board of | 23 | | directors at which
the plan was agreed upon;
| 24 | | (b) The vote in favor of the adoption of the plan;
| 25 | | (c) A copy of each resolution or other action by which | 26 | | the plan was agreed upon;
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| 1 | | (d) The time and place of the meeting of the members of | 2 | | the absorbed credit
union at which the plan agreed upon was | 3 | | approved; and,
| 4 | | (e) The vote by which the plan was approved by the | 5 | | members of the absorbed
credit union.
| 6 | | (4) Such certificate and a copy of the plan of merger or | 7 | | consolidation
agreed upon shall be mailed to the Secretary for | 8 | | review. If the provisions
of this Act have been complied with, | 9 | | the certificate shall be approved by
him, and returned to the | 10 | | credit unions which are parties to the merger or
consolidation | 11 | | within 30 days. When so approved by the Secretary the | 12 | | certificate
shall constitute the Department's certificate of | 13 | | approval of the merger
or consolidation.
| 14 | | (5) Upon issuance of the certificate of approval, each | 15 | | merging credit
union which was absorbed shall cease operation. | 16 | | Each party to the merger shall file
the certificate of approval | 17 | | with the Recorder or County Clerk of
the county in which the | 18 | | credit union has or had its principal office.
| 19 | | (6) Each credit union absorbed by the merger or | 20 | | consolidation shall return
to the Secretary the original | 21 | | statement of incorporation, certificate of
approval of | 22 | | incorporation, and the bylaws of the credit union. The | 23 | | surviving
credit union shall continue its operation under its | 24 | | existing certificate of
approval, articles of incorporation, | 25 | | and the bylaws or if a new credit
union has been formed, under | 26 | | the new certificate of
approval, articles of incorporation, and |
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| 1 | | bylaws.
| 2 | | (7) All rights of membership in and any obligation or | 3 | | liability of any
member to any credit union which is party to a | 4 | | consolidation or merger are
continued in the surviving or new | 5 | | credit union without reservation or diminution.
| 6 | | (8) A pending action or other judicial proceeding to which | 7 | | any of the
consolidating or merging credit unions is a party | 8 | | does not abate by reason
of the consolidation or merger.
| 9 | | (Source: P.A. 97-133, eff. 1-1-12.)
| 10 | | Section 99. Effective date. This Act takes effect upon | 11 | | becoming law.
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