Public Act 0963 96TH GENERAL ASSEMBLY

HB4865 Enrolled LRB096 16895 MJR 32207 b

Public Act 096-0963

AN ACT concerning financial regulation.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 5. The Illinois Credit Union Act is amended by changing Sections 19 and 34 as follows:

(205 ILCS 305/19) (from Ch. 17, par. 4420)

Sec. 19. Meeting of members.

(1) The annual meeting shall be held each year during the months of January, February or March or such other month as may be approved by the Department. The meeting shall be held at the time, place and in the manner set forth in the bylaws. Any special meetings of the members of the credit union shall be held at the time, place and in the manner set forth in the bylaws. Unless otherwise set forth in this Act, quorum requirements for meetings of members shall be established by a credit union in its bylaws. Notice of all meetings must be given by the Secretary of the credit union at least 7 days before the date of such meeting, either by handing a written or printed notice to each member of the credit union, by mailing the notice to the member at his address as listed on the books and records of the credit union, or by posting a notice of the meeting in three conspicuous places, including the office of the credit union.

(2) On all questions and at all elections, except election of directors, each member has one vote regardless of the number of his shares. There shall be no voting by proxy except on the election of directors, proposals for merger or voluntary dissolution. All voting on the election of directors shall be by ballot, but when there is no contest, written ballots need not be cast. The record date to be used for the purpose of determining which members are entitled to notice of or to vote at any meeting of members, may be fixed in advance by the directors on a date not more than 90 days nor less than 10 days prior to the date of the meeting. If no record date is fixed by the directors, the first day on which notice of the meeting is given, mailed or posted is the record date.

(3) Regardless of the number of shares owned by a society, association, club, partnership, other credit union or corporation, having membership in the credit union, it shall be entitled to only one vote and it may be represented and have its vote cast by its designated agent acting on its behalf pursuant to a resolution adopted by the organization's board of directors or similar governing authority; provided that the credit union shall obtain a certified copy of such resolution before such vote may be cast.

(4) A member may revoke a proxy by delivery to the credit union of a written statement to that effect, by execution of a subsequently dated proxy, or by attendance at a meeting and voting in person.

(Source: P.A. 89-603, eff. 8-2-96.)

(205 ILCS 305/34) (from Ch. 17, par. 4435)

Sec. 34. Duties of Supervisory Committee.

(1) The Supervisory Committee shall make or cause to be made an annual internal audit of the books and affairs of the credit union to determine that the credit union's accounting records and reports are prepared promptly and accurately reflect operations and results, that internal controls are established and effectively maintained to safeguard the assets of the credit union, and that the policies, procedures and practices established by the Board of Directors and management of the credit union are being properly administered. The Supervisory Committee shall submit a report of that audit to the Board of Directors and a summary of that report to the members at the next annual meeting of the credit union. It shall make or cause to be made such supplementary audits as it deems necessary or as are required by the Director or by the Board of Directors, and submit reports of these supplementary audits to the Director or Board of Directors as applicable. If the Supervisory Committee has not engaged a public accountant registered by the Department of Professional Regulation to make the internal audit, the Supervisory Committee or other officials of the credit union shall not indicate or in any manner imply that such audit has been performed by a public accountant or that the audit represents the independent opinion of a public accountant. The Committee must retain its tapes and working papers of each internal audit for inspection by the Department. The report of this audit must be made on a form approved by the Director. A copy of the report must be promptly mailed to the Director.

(2) The Supervisory Committee shall make or cause to be made at least once each year a reasonable percentage verification of members' share and loan accounts, consistent with rules promulgated by the Director.

(3) The Supervisory Committee of a credit union with assets of $5,000,000 or more shall engage a public accountant registered by the Department of Professional Regulation to perform an annual external independent audit of the credit union's financial statements in accordance with generally accepted auditing standards. The Supervisory Committee of a credit union with assets of $3,000,000 or more, but less than $5,000,000, shall engage a public accountant registered by the Department of Professional Regulation to perform an external independent audit of the credit union's financial statements in accordance with generally accepted auditing standards at least once every 3 years. A copy of an external independent audit shall be completed and mailed to the Director no later than 90 days after December 31 of each year; provided that a credit union or group of credit unions may obtain an extension of the due date upon application to and receipt of written approval from the Director upon completion. If the annual internal audit of such a credit union is conducted by a public accountant registered by the Department of Professional Regulation and the annual internal audit is done in conjunction with the credit union's annual external audit, the requirements of subsection (1) of this Section shall be deemed met.

(4) In determining the appropriate balance in the allowance for loan losses account, a credit union may determine its historical loss rate using a defined period of time of less than 5 years, provided that:

(A) the methodology used to determine the defined period of time is formally documented in the credit union's policies and procedures and is appropriate to the credit union's size, business strategy, and loan portfolio characteristics and the economic environment of the areas and employers served by the credit union;

(B) supporting documentation is maintained for the technique used to develop the credit union loss rates, including the period of time used to accumulate historical loss data and the factors considered in establishing the time frames; and

(C) the external auditor conducting the credit union's financial statement audit has analyzed the methodology employed by the credit union and concludes that the financial statements, including the allowance for loan losses, are fairly stated in all material respects in accordance with U.S. Generally Accepted Accounting Principles, as promulgated by the Financial Accounting Standards Board.

(5) A majority of the members of the Supervisory Committee shall constitute a quorum.

(Source: P.A. 96-141, eff. 8-7-09.)

Section 99. Effective date. This Act takes effect upon becoming law.

Effective Date: 7/2/2010