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| [ House Amendment 002 ] |
92_HB3008eng HB3008 Engrossed LRB9203170JSpcA 1 AN ACT concerning credit unions. 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 10, 12, 51, 59, and 70 as follows: 6 (205 ILCS 305/10) (from Ch. 17, par. 4411) 7 Sec. 10. Credit union records; member financial records. 8 (1) A credit union shall establish and maintain books, 9 records, accounting systems and procedures which accurately 10 reflect its operations and which enable the Department to 11 readily ascertain the true financial condition of the credit 12 union and whether it is complying with this Act. 13 (2) A photostatic or photographic reproduction of any 14 credit union records shall be admissible as evidence of 15 transactions with the credit union. 16 (3) (a) For the purpose of this Section, the term 17 "financial records" means any original, any copy, or any 18 summary of (1) a document granting signature authority 19 over an account, (2) a statement, ledger card or other 20 record on any account which shows each transaction in or 21 with respect to that account, (3) a check, draft or money 22 order drawn on a financial institution or other entity or 23 issued and payable by or through a financial institution 24 or other entity, or (4) any other item containing 25 information pertaining to any relationship established in 26 the ordinary course of business between a credit union 27 and its member, including financial statements or other 28 financial information provided by the member. 29 (b) This Section does not prohibit: 30 (1) The preparation, examination, handling or 31 maintenance of any financial records by any officer, HB3008 Engrossed -2- LRB9203170JSpcA 1 employee or agent of a credit union having custody 2 of such records, or the examination of such records 3 by a certified public accountant engaged by the 4 credit union to perform an independent audit; 5 (2) The examination of any financial records 6 by or the furnishing of financial records by a 7 credit union to any officer, employee or agent of 8 the Department, the National Credit Union 9 Administration, Federal Reserve board or any insurer 10 of share accounts for use solely in the exercise of 11 his duties as an officer, employee or agent; 12 (3) The publication of data furnished from 13 financial records relating to members where the data 14 cannot be identified to any particular customer of 15 account; 16 (4) The making of reports or returns required 17 under Chapter 61 of the Internal Revenue Code of 18 1954; 19 (5) Furnishing information concerning the 20 dishonor of any negotiable instrument permitted to 21 be disclosed under the Uniform Commercial Code; 22 (6) The exchange in the regular course of 23 business of (i) credit information between a credit 24 union and other credit unions or financial 25 institutions or commercial enterprises, directly or 26 through a consumer reporting agency or (ii) 27 financial records or information derived from 28 financial records between a credit union and other 29 credit unions or financial institutions or 30 commercial enterprises for the purpose of conducting 31 due diligence pursuant to a merger or a purchase or 32 sale of assets or liabilities of the credit union; 33 (7) The furnishing of information to the 34 appropriate law enforcement authorities where the HB3008 Engrossed -3- LRB9203170JSpcA 1 credit union reasonably believes it has been the 2 victim of a crime; 3 (8) The furnishing of information pursuant to 4 the Uniform Disposition of Unclaimed Property Act; 5 (9) The furnishing of information pursuant to 6 the Illinois Income Tax Act and the Illinois Estate 7 and Generation-Skipping Transfer Tax Act; 8 (10) The furnishing of information pursuant to 9 the federal "Currency and Foreign Transactions 10 Reporting Act", Title 31, United States Code, 11 Section 1051 et sequentia; or 12 (11) The furnishing of information pursuant to 13 any other statute which by its terms or by 14 regulations promulgated thereunder requires the 15 disclosure of financial records other than by 16 subpoena, summons, warrant or court order. 17 (12) The furnishing of information in 18 accordance with the federal Personal Responsibility 19 and Work Opportunity Reconciliation Act of 1996. Any 20 credit union governed by this Act shall enter into 21 an agreement for data exchanges with a State agency 22 provided the State agency pays to the credit union a 23 reasonable fee not to exceed its actual cost 24 incurred. A credit union providing information in 25 accordance with this item shall not be liable to any 26 account holder or other person for any disclosure of 27 information to a State agency, for encumbering or 28 surrendering any assets held by the credit union in 29 response to a lien or order to withhold and deliver 30 issued by a State agency, or for any other action 31 taken pursuant to this item, including individual or 32 mechanical errors, provided the action does not 33 constitute gross negligence or willful misconduct. A 34 credit union shall have no obligation to hold, HB3008 Engrossed -4- LRB9203170JSpcA 1 encumber, or surrender assets until it has been 2 served with a subpoena, summons, warrant, court or 3 administrative order, lien, or levy. 4 (13) The furnishing of information to law 5 enforcement authorities, the Illinois Department on 6 Aging and its regional administrative and provider 7 agencies, the Department of Human Services Office of 8 Inspector General, or public guardians, if the 9 credit union suspects that a member who is an 10 elderly or disabled person has been or may become 11 the victim of financial exploitation. For the 12 purposes of this item (13), the term: (i) "elderly 13 person" means a person who is 60 or more years of 14 age, (ii) "disabled person" means a person who has 15 or reasonably appears to the credit union to have a 16 physical or mental disability that impairs his or 17 her ability to seek or obtain protection from or 18 prevent financial exploitation, and (iii) "financial 19 exploitation" means tortious or illegal use of the 20 assets or resources of an elderly or disabled 21 person, and includes, without limitation, 22 misappropriation of the elderly or disabled person's 23 assets or resources by undue influence, breach of 24 fiduciary relationship, intimidation, fraud, 25 deception, extortion, or the use of assets or 26 resources in any manner contrary to law. A credit 27 union or person furnishing information pursuant to 28 this item (13) shall be entitled to the same rights 29 and protections as a person furnishing information 30 under the Elder Abuse and Neglect Act and the 31 Illinois Domestic Violence Act of 1986. 32 (14) The disclosure of financial records or 33 information as necessary to effect, administer, or 34 enforce a transaction requested or authorized by the HB3008 Engrossed -5- LRB9203170JSpcA 1 member, or in connection with: 2 (A) servicing or processing a financial 3 product or service requested or authorized by 4 the member; 5 (B) maintaining or servicing a member's 6 account with the credit union; or 7 (C) a proposed or actual securitization 8 or secondary market sale (including sales of 9 servicing rights) related to a transaction of a 10 member. 11 Nothing in this item (14), however, authorizes the 12 sale of the financial records or information of a member 13 without the consent of the member. 14 (c) Except as otherwise provided by this Act, a credit 15 union may not disclose to any person, except to the member or 16 his duly authorized agent, any financial records relating to 17 that member of the credit union unless: 18 (1) the member has authorized disclosure to the 19 person; 20 (2) the financial records are disclosed in response 21 to a lawful subpoena, summons, warrant or court order 22 that meets the requirements of subparagraph (d) of this 23 Section; or 24 (3) the credit union is attempting to collect an 25 obligation owed to the credit union and the credit union 26 complies with the provisions of Section 2I of the 27 Consumer Fraud and Deceptive Business Practices Act. 28 (d) A credit union shall disclose financial records 29 under subparagraph (c)(2) of this Section pursuant to a 30 lawful subpoena, summons, warrant or court order only after 31 the credit union mails a copy of the subpoena, summons, 32 warrant or court order to the person establishing the 33 relationship with the credit union, if living, and otherwise 34 his personal representative, if known, at his last known HB3008 Engrossed -6- LRB9203170JSpcA 1 address by first class mail, postage prepaid unless the 2 credit union is specifically prohibited from notifying the 3 person by order of court or by applicable State or federal 4 law. In the case of a grand jury subpoena, a credit union 5 shall not mail a copy of a subpoena to any person pursuant to 6 this subsection if the subpoena was issued by a grand jury 7 under the Statewide Grand Jury Act or notifying the person 8 would constitute a violation of the federal Right to 9 Financial Privacy Act of 1978. 10 (e) (1) Any officer or employee of a credit union who 11 knowingly and wilfully furnishes financial records in 12 violation of this Section is guilty of a business offense 13 and upon conviction thereof shall be fined not more than 14 $1,000. 15 (2) Any person who knowingly and wilfully induces 16 or attempts to induce any officer or employee of a credit 17 union to disclose financial records in violation of this 18 Section is guilty of a business offense and upon 19 conviction thereof shall be fined not more than $1,000. 20 (f) A credit union shall be reimbursed for costs which 21 are reasonably necessary and which have been directly 22 incurred in searching for, reproducing or transporting books, 23 papers, records or other data of a member required or 24 requested to be produced pursuant to a lawful subpoena, 25 summons, warrant or court order. The Director may determine, 26 by rule, the rates and conditions under which payment shall 27 be made. Delivery of requested documents may be delayed 28 until final reimbursement of all costs is received. 29 (Source: P.A. 90-18, eff. 7-1-97; 91-929, eff. 12-15-00.) 30 (205 ILCS 305/12) (from Ch. 17, par. 4413) 31 Sec. 12. Regulatory feesfor examination and32administration. 33 (1) A credit union regulated by the Department shall pay HB3008 Engrossed -7- LRB9203170JSpcA 1 a regulatory fee to the Department based upon its total 2 assets as shown by its Year-end Call Report at the following 3 rates: 4 TOTAL ASSETS REGULATORY FEE 5 $25,000 or less .............. $100 6 Over $25,000 and not over 7 $100,000 ..................... $100 plus $4 per $1,000 of 8 assets in excess of $25,000 9 Over $100,000 and not over 10 $200,000 ..................... $400 plus $3 per $1,000 of 11 assets in excess of $100,000 12 Over $200,000 and not over 13 $500,000 ..................... $700 plus $2 per $1,000 of 14 assets in excess of $200,000 15 Over $500,000 and not over 16 $1,000,000 ................... $1,300 plus $1.40 per $1,000 17 of assets in excess of 18 $500,000 19 Over $1,000,000 and not 20 over $5,000,000............... $2,000 plus $0.50 per 21 $1,000 of assets in 22 excess of $1,000,000 23 Over $5,000,000 and not 24 over $30,000,000 ............. $4,000 plus $0.35 25 per $1,000 assets 26 in excess of $5,000,000 27 Over $30,000,000 and not 28 over $100,000,000 ............ $12,750 plus $0.30 29 per $1,000 of assets in 30 excess of $30,000,000 31 Over $100,000,000 and not 32 over $500,000,000 ............ $33,750 plus $0.15 per 33 $1,000 of assets in excess 34 of $100,000,000 HB3008 Engrossed -8- LRB9203170JSpcA 1 Over $500,000,000 ............ $93,750 plus $0.05 per 2 $1,000 of assets in excess 3 of $500,000,000 4 (2) The Director shall review the regulatory fee 5 schedule in subsection (1) and the projected earnings on 6 those fees on an annual basis and adjust the fee schedule no 7 more than 5% annually if necessary to defray the estimated 8 administrative and operational expenses of the Department as 9 defined in subsection (5). The Director shall provide credit 10 unions with written notice of any adjustment made in the 11 regulatory fee schedule. 12 (3) Not later than March 1 of each calendar year, a 13 credit union shall pay to the Department, for the preceding14calendar year,a regulatory fee for that calendar year in 15 accordance with the regulatory fee schedule in subsection 16 (1), on the basis of assets as of the Year-end Call Report of 17 the preceding year. The regulatory fee shall not be less 18 than $100 or more than $125,000, provided that the regulatory 19 fee cap of $125,000 shall be adjusted to incorporate the same 20 percentage increase as the Director makes in the regulatory 21 fee schedule from time to time under subsection (2). No 22 regulatory fee shall be collected from a credit union until 23 it has been in operation for one year. 24 (4) The aggregate of all fees collected by the 25 Department under this Act shall be paid promptly after they 26 are receivedreceipt of the same, accompanied by a detailed 27 statement thereof, into the State Treasury and shall be set 28 apart in the Credit Union Fund, a special fund hereby created 29 in the State treasury. The amount from time to time 30 deposited in the Credit Union Fund and shall be used to 31 offset the ordinary administrative and operational expenses 32 of the Department under this Act. All earnings received from 33 investments of funds in the Credit Union Fund shall be 34 deposited into the Credit Union Fund and may be used for the HB3008 Engrossed -9- LRB9203170JSpcA 1 same purposes as fees deposited into that Fund. 2 (5) The administrative and operational expenses for any 3 calendar year shall mean the ordinary and contingent expenses 4 for that year incidental to making the examinations provided 5 for by, and for administering, this Act, including all 6 salaries and other compensation paid for personal services 7 rendered for the State by officers or employees of the State 8 to enforce this Act; all expenditures for telephone and 9 telegraph charges, postage and postal charges, office 10 supplies and services, furniture and equipment, office space 11 and maintenance thereof, travel expenses and other necessary 12 expenses; all to the extent that such expenditures are 13 directly incidental to such examination or administration. 14 (6) When the aggregate of all fees collected by the 15 Department under this Act and all earnings thereon for any 16 calendar year exceeds 150% of the total administrative and 17 operational expenses under this Act for that year, such 18 excess shall be credited to credit unions and applied against 19 their regulatory fees for the subsequent year. The amount 20 credited to a credit union shall be in the same proportion as 21 the fee paid by such credit union for the calendar year in 22 which the excess is produced bears to the aggregate of the 23 fees collected by the Department under this Act for the same 24 year. 25 (7) Examination fees for the year 2000 statutory 26 examinations paid pursuant to the examination fee schedule in 27 effect at that time shall be credited toward the regulatory 28 fee to be assessed the credit union in calendar year 2001. 29 (8) Nothing in this Act shall prohibit the General 30 Assembly from appropriating funds to the Department from the 31 General Revenue Fund for the purpose of administering this 32 Act. 33 (Source: P.A. 91-755, eff. 1-1-01.) HB3008 Engrossed -10- LRB9203170JSpcA 1 (205 ILCS 305/51) (from Ch. 17, par. 4452) 2 Sec. 51. Other Loan Programs. 3 (1) Subject to such rules and regulations as the 4 Director may promulgate, a credit union may participate in 5 loans to credit union members jointly with other credit 6 unions, corporations, or financial institutions. An 7 originating credit union may originate loans only to its own 8 members. A participating credit union that is not the 9 originating lender may participate in loans made to its own 10 members or to members of another participating credit union. 11 "Originating lender" means the participating credit union 12 with which the member contracts. A master participation 13 agreement must be properly executed, and the agreement must 14 include provisions for identifying, either through documents 15 incorporated by reference or directly in the agreement, the 16 participation loan or loans prior to their sale. 17 (2) Any credit union with assets of $500,000 or more may 18 loan to its members under the State Scholarships Law or other 19 scholarship programs which are subject to a federal or state 20 law providing 100% repayment guarantee. 21 (3) A credit union may purchase the conditional sales 22 contracts, notes and similar instruments which evidence an 23 indebtedness of its members. 24 (4) With approval of the Board of Directors, a credit 25 union may make loans, either on its own or jointly with other 26 credit unions, corporations or financial institutions, to 27 credit union organizations; provided, that the aggregate 28 amount of all such loans outstanding shall not at any time 29 exceed 1% of the paid-in and unimpaired capital and surplus 30 of the credit union. 31 (Source: P.A. 81-329.) 32 (205 ILCS 305/59) (from Ch. 17, par. 4460) 33 Sec. 59. Investment of Funds. Funds not used in loans to HB3008 Engrossed -11- LRB9203170JSpcA 1 members may be invested, pursuant to subsection (7) of 2 Section 30 of this Act, and subject to Departmental rules and 3 regulations: 4 (1) In securities, obligations or other instruments of 5 or issued by or fully guaranteed as to principal and interest 6 by the United States of America or any agency thereof or in 7 any trust or trusts established for investing directly or 8 collectively in the same; 9 (2) In obligations of any state of the United States, 10 the District of Columbia, the Commonwealth of Puerto Rico, 11 and the several territories organized by Congress, or any 12 political subdivision thereof; however, a credit union may 13 not invest more than 10% of its unimpaired capital and 14 surplus in the obligations of one issuer, exclusive of 15 general obligations of the issuer, and investments in 16 municipal securities must be limited to securities rated in 17 one of the 4 highest rating categories by a nationally 18 recognized statistical rating organization; 19 (3) In certificates of deposit or passbook type accounts 20 issued by a state or national bank, mutual savings bank or 21 savings and loan association; provided that such institutions 22 have their accounts insured by the Federal Deposit Insurance 23 Corporation or the Federal Savings and Loan Insurance 24 Corporation; but provided, further, that a credit union's 25 investment in an account in any one institution may exceed 26 the insured limit on accounts; 27 (4) In shares, classes of shares or share certificates 28 of other credit unions, including, but not limited to 29 corporate credit unions; provided that such credit unions 30 have their members' accounts insured by the NCUA or other 31 approved insurers, and that if the members' accounts are so 32 insured, a credit union's investment may exceed the insured 33 limit on accounts; 34 (5) In shares of a cooperative society organized under HB3008 Engrossed -12- LRB9203170JSpcA 1 the laws of this State or the laws of the United States in 2 the total amount not exceeding 10% of the unimpaired capital 3 and surplus of the credit union; provided that such 4 investment shall first be approved by the Department; 5 (6) In obligations of the State of Israel, or 6 obligations fully guaranteed by the State of Israel as to 7 payment of principal and interest; 8 (7) In shares, stocks or obligations of other financial 9 institutions in the total amount not exceeding 5% of the 10 unimpaired capital and surplus of the credit union; 11 (8) In federal funds and bankers' acceptances; 12 (9) In shares or stocks of Credit Union Service 13 Organizations in the total amount not exceeding 1% of the 14 unimpaired capital and surplus of the credit union. 15 As used in this Section, "political subdivision" 16 includes, but is not limited to, counties, townships, cities, 17 villages, incorporated towns, school districts, educational 18 service regions, special road districts, public water supply 19 districts, fire protection districts, drainage districts, 20 levee districts, sewer districts, housing authorities, park 21 districts, and any agency, corporation, or instrumentality of 22 a state or its political subdivisions, whether now or 23 hereafter created and whether herein specifically mentioned 24 or not. 25 (Source: P.A. 86-432.) 26 (205 ILCS 305/70) (from Ch. 17, par. 4471) 27 Sec. 70. Use of name, sentence. No person, firm, 28 association, partnership, or corporation, except corporations 29 organized under this Act, the credit union acts of other 30 states, or under the Federal Credit Union Act,or31 associations of such corporations, or subsidiaries of such 32 associations, may use any name or title which contains the 33 words "credit union" or any abbreviation thereof, and such HB3008 Engrossed -13- LRB9203170JSpcA 1 use is a Class A Misdemeanor. 2 (Source: P.A. 81-329.) 3 Section 99. Effective date. This Act takes effect upon 4 becoming law.