Bill Amendment: IL SB1534 | 2021-2022 | 102nd General Assembly
NOTE: For additional amemendments please see the Bill Drafting List
Bill Title: FINANCE-CREDIT UNIONS/VARIOUS
Status: 2023-01-06 - Placed on Calendar Order of Concurrence House Amendment(s) 2, 3, 4, 1 - January 8, 2023 [SB1534 Detail]
Download: Illinois-2021-SB1534-Senate_Amendment_001.html
Bill Title: FINANCE-CREDIT UNIONS/VARIOUS
Status: 2023-01-06 - Placed on Calendar Order of Concurrence House Amendment(s) 2, 3, 4, 1 - January 8, 2023 [SB1534 Detail]
Download: Illinois-2021-SB1534-Senate_Amendment_001.html
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1 | AMENDMENT TO SENATE BILL 1534
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2 | AMENDMENT NO. ______. Amend Senate Bill 1534 by replacing | ||||||
3 | everything after the enacting clause with the following:
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4 | "Section 5. The Illinois Credit Union Act is amended by | ||||||
5 | changing Sections 19, 23, 34, 51, 57, 59, and 64.7 and by | ||||||
6 | adding Section 20.5 as follows:
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7 | (205 ILCS 305/19) (from Ch. 17, par. 4420)
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8 | Sec. 19. Meeting of members.
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9 | (1) (a) The annual meeting shall be held each
year during | ||||||
10 | the months of January, February or March or such other month
as | ||||||
11 | may be approved by the Department. The meeting shall be held at | ||||||
12 | the
time, place and in the manner set forth in the bylaws. Any | ||||||
13 | special
meetings of the members of the credit union shall be | ||||||
14 | held at the time, place
and in the manner set forth in the | ||||||
15 | bylaws. Unless otherwise set forth in
this Act, quorum | ||||||
16 | requirements for meetings of members shall be established
by a |
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1 | credit union in its bylaws. Notice of all meetings must be | ||||||
2 | given by
the secretary of the credit union at least 7 days | ||||||
3 | before the date of such
meeting, either by handing a written or | ||||||
4 | printed notice to each
member of the credit union, by mailing | ||||||
5 | the notice to the member at his address
as listed on the books | ||||||
6 | and records of the credit union, or by posting a
notice of the | ||||||
7 | meeting in three conspicuous places, including the office
of | ||||||
8 | the credit union , by posting the notice of the meeting on the | ||||||
9 | credit union's website, or by disclosing the notice of the | ||||||
10 | meeting in membership newsletters or account statements .
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11 | (b) Unless expressly prohibited by the articles of | ||||||
12 | incorporation or bylaws and subject to applicable requirements | ||||||
13 | of this Act, the board of directors may provide by resolution | ||||||
14 | that members may attend, participate in, act in, and vote at | ||||||
15 | any annual meeting or special meeting through the use of a | ||||||
16 | conference telephone or interactive technology, including, but | ||||||
17 | not limited to, electronic transmission, internet usage, or | ||||||
18 | remote communication, by means of which all persons | ||||||
19 | participating in the meeting can communicate with each other. | ||||||
20 | Participation through the use of a conference telephone or | ||||||
21 | interactive technology shall constitute attendance, presence, | ||||||
22 | and representation in person at the annual meeting or special | ||||||
23 | meeting of the person or persons so participating and count | ||||||
24 | towards the quorum required to conduct business at the | ||||||
25 | meeting. The following conditions shall apply to any virtual | ||||||
26 | meeting of the members: |
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1 | (i) the credit union must internally possess or retain | ||||||
2 | the technological capacity to facilitate virtual meeting | ||||||
3 | attendance, participation, communication, and voting; and | ||||||
4 | (ii) the members must receive notice of the use of a | ||||||
5 | virtual meeting format and appropriate instructions for | ||||||
6 | joining, participating, and voting during the virtual | ||||||
7 | meeting at least 7 days before the virtual meeting. | ||||||
8 | (2) On all questions and at all elections, except election | ||||||
9 | of directors,
each member has one vote regardless of the | ||||||
10 | number of his shares. There
shall be no voting by proxy except | ||||||
11 | on the election of directors, proposals
for merger or | ||||||
12 | voluntary dissolution. Members may vote on questions , | ||||||
13 | including, without limitation, the approval of mergers and | ||||||
14 | voluntary dissolutions under this Act, and in elections by | ||||||
15 | secure electronic record if approved by the board of | ||||||
16 | directors. All voting on the election of directors
shall be by | ||||||
17 | ballot, but when there is no contest, written or electronic | ||||||
18 | ballots need not
be cast. The record date to be used for the | ||||||
19 | purpose of determining which
members are entitled to notice of | ||||||
20 | or to vote at any meeting of members,
may be fixed in advance | ||||||
21 | by the directors on a date not more than 90 days
nor less than | ||||||
22 | 10 days prior to the date of the meeting. If no record date
is | ||||||
23 | fixed by the directors, the first day on which notice of the | ||||||
24 | meeting
is given, mailed or posted is the record date.
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25 | (3) Regardless of the number of shares owned by a society, | ||||||
26 | association,
club, partnership, other credit union or |
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1 | corporation, having membership
in the credit union, it shall | ||||||
2 | be entitled to only
one vote and it may be represented and have | ||||||
3 | its vote cast by its
designated agent acting on its
behalf | ||||||
4 | pursuant
to a resolution
adopted by the organization's board | ||||||
5 | of directors or similar governing
authority;
provided that the | ||||||
6 | credit union shall obtain a certified copy of such resolution
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7 | before such vote may be cast. | ||||||
8 | (4) A member may revoke a proxy by delivery to the credit | ||||||
9 | union of a written statement to that effect, by execution of a | ||||||
10 | subsequently dated proxy, by execution of a secure electronic | ||||||
11 | record, or by attendance at a meeting and voting in person.
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12 | (5) As used in this Section, "electronic" and "electronic | ||||||
13 | record" have the meanings ascribed to those terms in the | ||||||
14 | Electronic Commerce Security Act. As used in this Section, | ||||||
15 | "secured electronic record" means an electronic record that | ||||||
16 | meets the criteria set forth in Section 10-105 of the | ||||||
17 | Electronic Commerce Security Act. | ||||||
18 | (Source: P.A. 100-361, eff. 8-25-17.)
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19 | (205 ILCS 305/20.5 new) | ||||||
20 | Sec. 20.5. Appointment of associate directors. | ||||||
21 | (a) The board of directors of a credit union may, in its | ||||||
22 | discretion, appoint one or more associate directors to serve | ||||||
23 | in an advisory capacity. The board shall prescribe the duties | ||||||
24 | of an associate director and the manner in which associate | ||||||
25 | directors are appointed and removed. The board shall not |
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1 | delegate to associate directors any of the duties or | ||||||
2 | responsibilities prescribed by this Act or other applicable | ||||||
3 | law to be performed by directors duly elected by their | ||||||
4 | members. An associate director shall not be deemed or | ||||||
5 | considered to be a director for any purpose under this Act. | ||||||
6 | (b) Before appointing an associate director, the board | ||||||
7 | shall confirm that the person meets all of the requirements to | ||||||
8 | serve as a director, including, without limitation, a working | ||||||
9 | familiarity with the financial and accounting practices of the | ||||||
10 | credit union as set forth in subsection (c) of Section 30. | ||||||
11 | (c) An associate director may participate in meetings of | ||||||
12 | the board but may not vote or otherwise act as a director. With | ||||||
13 | respect to any issue that comes before the board for | ||||||
14 | deliberation, the board may request that all associate | ||||||
15 | directors excuse themselves from the meeting of the board and | ||||||
16 | the associate directors shall immediately comply with the | ||||||
17 | request. | ||||||
18 | (d) The board shall require each associate director to | ||||||
19 | sign a confidentiality or non-disclosure agreement to ensure | ||||||
20 | that information concerning the credit union remains | ||||||
21 | confidential.
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22 | (205 ILCS 305/23) (from Ch. 17, par. 4424)
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23 | Sec. 23. Compensation of officials.
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24 | (1) Directors and committee members may
receive reasonable | ||||||
25 | compensation for their service as such, the amount of which |
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1 | shall be set by the board of directors , in accordance with | ||||||
2 | written policies and procedures established by the board of | ||||||
3 | directors. If the Department determines the payment of | ||||||
4 | director or committee member compensation, or both, creates a | ||||||
5 | safety and soundness issue for a credit union, the Department | ||||||
6 | shall utilize the standards set forth in 38 Ill. Adm. Code | ||||||
7 | 190.25 and supplemental guidelines to address and resolve the | ||||||
8 | issue. An enforcement action taken pursuant to 38 Ill. Adm. | ||||||
9 | Code 190.25 and guidelines and specified by the Act shall be | ||||||
10 | used to reduce or suspend the compensation paid to the | ||||||
11 | directors and committee members . The Department shall, by | ||||||
12 | rule, establish maximum rates of reasonable compensation that | ||||||
13 | are generally applicable to credit unions considering factors | ||||||
14 | the Department may establish from time to time, including, but | ||||||
15 | not limited to, total assets, nonprofit cooperative structure, | ||||||
16 | and the best interests of members.
"Compensation" as used in | ||||||
17 | this subsection (1) refers to remuneration expense to the | ||||||
18 | credit union for services provided by a director or committee | ||||||
19 | member in
his or her capacity as director or committee member. | ||||||
20 | The remuneration expense is in the form of monetary payments | ||||||
21 | and shall be disclosed on an annual basis to the membership in | ||||||
22 | the financial statement that is part of the annual membership | ||||||
23 | meeting materials. The disclosure shall contain: (i) the | ||||||
24 | amount paid to each director and (ii) the amount paid to the | ||||||
25 | directors as a group. "Compensation" does not include any of | ||||||
26 | the expenses described in subsections (2) and (3) of this |
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1 | Section. | ||||||
2 | (2) The credit union may incur the expense of providing
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3 | reasonable life, health,
accident, and similar insurance | ||||||
4 | protection benefits for directors and committee members.
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5 | (3) Directors, committee members and
employees, while on | ||||||
6 | official business of the credit union, may be reimbursed
for | ||||||
7 | reasonable and necessary expenses. Alternatively, the credit | ||||||
8 | union may make direct payment to a third party for such | ||||||
9 | business expenses. Reasonable and necessary expenses may | ||||||
10 | include the payment of travel costs for the foregoing | ||||||
11 | officials and one guest per official. All payment of costs | ||||||
12 | shall be made in accordance with written policies and | ||||||
13 | procedures established by the board of directors.
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14 | (4) The board of directors may establish
compensation for | ||||||
15 | officers of the credit union.
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16 | (Source: P.A. 101-567, eff. 8-23-19.)
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17 | (205 ILCS 305/34) (from Ch. 17, par. 4435)
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18 | Sec. 34. Duties of supervisory committee. | ||||||
19 | (1) The supervisory committee
shall make or cause to be | ||||||
20 | made an annual internal audit of the books and
affairs of the | ||||||
21 | credit union to determine that the credit union's accounting
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22 | records and reports are prepared promptly and accurately | ||||||
23 | reflect operations
and results, that internal controls are | ||||||
24 | established and effectively
maintained to safeguard the assets | ||||||
25 | of the credit union, and that the
policies, procedures and |
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1 | practices established by the board of directors
and management | ||||||
2 | of the credit union are being properly administered. The | ||||||
3 | supervisory committee
shall submit a report of that audit to | ||||||
4 | the board of directors and a summary of that report to the | ||||||
5 | members at the next annual
meeting of the credit union. It | ||||||
6 | shall make or cause to be made such
supplementary audits as it | ||||||
7 | deems necessary or as are required by the Secretary
or by the | ||||||
8 | board of directors, and submit reports of these
supplementary | ||||||
9 | audits to the Secretary or board of directors as applicable.
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10 | If the supervisory committee has not engaged a licensed | ||||||
11 | certified public accountant or licensed certified public | ||||||
12 | accounting firm to make the internal audit,
the supervisory | ||||||
13 | committee or other officials of the credit union shall not
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14 | indicate or in any manner imply that such audit has been | ||||||
15 | performed by a licensed certified
public accountant or | ||||||
16 | licensed certified public accounting firm or that the audit | ||||||
17 | represents the independent opinion of a licensed certified
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18 | public accountant or licensed certified public accounting | ||||||
19 | firm. The supervisory committee must retain its tapes and | ||||||
20 | working papers
of each internal audit for inspection by the | ||||||
21 | Department. The report of this
audit must be made on a form | ||||||
22 | approved by the Secretary. A copy of the report
must be | ||||||
23 | promptly delivered to the Secretary as set forth in paragraph | ||||||
24 | (C) of subsection (3) .
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25 | (2) The supervisory committee shall make or cause to be | ||||||
26 | made at least
once each year a reasonable percentage |
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1 | verification of members' share and
loan accounts, consistent | ||||||
2 | with rules promulgated by the Secretary.
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3 | (3) (A) The supervisory committee of a credit union with | ||||||
4 | assets of $10,000,000
or more shall engage a licensed | ||||||
5 | certified public accountant or licensed certified public | ||||||
6 | accounting firm to perform an annual external
independent | ||||||
7 | audit of the credit union's financial statements in accordance
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8 | with generally accepted auditing standards and the financial | ||||||
9 | statements shall be issued in accordance with accounting | ||||||
10 | principles generally accepted in the United States of America. | ||||||
11 | (B) The supervisory committee of a
credit union with | ||||||
12 | assets of $5,000,000 or more, but less than $10,000,000,
shall | ||||||
13 | engage a licensed certified public accountant or licensed | ||||||
14 | certified public accounting firm to perform on an annual | ||||||
15 | basis: (i) an agreed-upon procedures engagement under | ||||||
16 | attestation standards established by the American Institute of | ||||||
17 | Certified Public Accountants to minimally satisfy the | ||||||
18 | supervisory committee internal audit standards set forth in | ||||||
19 | subsection (1); or (ii) an external independent audit of the | ||||||
20 | credit union's financial statements pursuant to the standards | ||||||
21 | set forth in paragraph (A) of subsection (3).
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22 | (C) Notwithstanding anything to the contrary in Section 6, | ||||||
23 | each credit union organized under this Act shall select the | ||||||
24 | annual period it desires to use for purposes of performing the | ||||||
25 | external independent audit, agreed-upon procedures engagement, | ||||||
26 | or internal audit described in this Section. The annual period |
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1 | may end on the final day of any month and shall be construed to | ||||||
2 | mean once every calendar year and not once every 12-month | ||||||
3 | period. Irrespective of the annual period selected, the credit | ||||||
4 | union shall complete its external independent audit report, | ||||||
5 | agreed-upon procedures report, or internal audit report and | ||||||
6 | deliver a copy to the Secretary no later than 120 days after | ||||||
7 | the effective date of the audit or engagement, which shall | ||||||
8 | mean the last day of the selected annual period. The external | ||||||
9 | independent audit report or agreed-upon procedures report | ||||||
10 | shall be completed and a copy thereof delivered to the | ||||||
11 | Secretary no later than 120 days after the end of the calendar | ||||||
12 | or fiscal year under audit or fiscal period for which the | ||||||
13 | agreed-upon procedures are performed. A credit union or group | ||||||
14 | of credit unions may obtain an extension of the due date upon | ||||||
15 | application to and receipt of written approval from the | ||||||
16 | Secretary. | ||||||
17 | (D) If the credit union engages a licensed certified | ||||||
18 | public accountant or licensed certified public accounting firm | ||||||
19 | to perform an annual external independent audit of the credit | ||||||
20 | union's financial statements pursuant to the standards in | ||||||
21 | paragraph (A) of subsection (3) or an annual agreed-upon | ||||||
22 | procedures engagement pursuant to the standards in paragraph | ||||||
23 | (B) of subsection (3), then the annual internal audit | ||||||
24 | requirements of subsection (1) shall be deemed satisfied and | ||||||
25 | met in all respects. | ||||||
26 | (4) In determining the appropriate balance in the |
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1 | allowance for loan losses account, a credit union may | ||||||
2 | determine its historical loss rate using a defined period of | ||||||
3 | time of less than 5 years, provided that: | ||||||
4 | (A) the methodology used to determine the defined | ||||||
5 | period of time is formally documented in the credit | ||||||
6 | union's policies and procedures and is appropriate to the | ||||||
7 | credit union's size, business strategy, and loan portfolio | ||||||
8 | characteristics and the economic environment of the areas | ||||||
9 | and employers served by the credit union; | ||||||
10 | (B) supporting documentation is maintained for the | ||||||
11 | technique used to develop the credit union loss rates, | ||||||
12 | including the period of time used to accumulate historical | ||||||
13 | loss data and the factors considered in establishing the | ||||||
14 | time frames; and | ||||||
15 | (C) the external auditor conducting the credit union's | ||||||
16 | financial statement audit has analyzed the methodology | ||||||
17 | employed by the credit union and concludes that the | ||||||
18 | financial statements, including the allowance for loan | ||||||
19 | losses, are fairly stated in all material respects in | ||||||
20 | accordance with U.S. Generally Accepted Accounting | ||||||
21 | Principles, as promulgated by the Financial Accounting | ||||||
22 | Standards Board. | ||||||
23 | (5) A majority of the members of the supervisory committee
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24 | shall constitute a quorum.
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25 | (6) On an annual basis commencing January 1, 2015, the | ||||||
26 | members of the supervisory committee shall receive training |
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1 | related to their statutory duties. Supervisory committee | ||||||
2 | members may receive the training through internal credit union | ||||||
3 | training, external training offered by the credit union's | ||||||
4 | retained auditors, trade associations, vendors, regulatory | ||||||
5 | agencies, or any other sources or on-the-job experience, or a | ||||||
6 | combination of those activities. The training may be received | ||||||
7 | through any medium, including, but not limited to, | ||||||
8 | conferences, workshops, audit closing meetings, seminars, | ||||||
9 | teleconferences, webinars, and other Internet-based delivery | ||||||
10 | channels. | ||||||
11 | (Source: P.A. 100-778, eff. 8-10-18; 101-81, eff. 7-12-19.)
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12 | (205 ILCS 305/51) (from Ch. 17, par. 4452)
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13 | Sec. 51. Other loan programs.
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14 | (1) Subject to such rules and regulations
as the Secretary | ||||||
15 | may promulgate, a credit union may participate in loans
to | ||||||
16 | credit union members jointly with other credit unions, | ||||||
17 | corporations, or
financial institutions. An originating credit | ||||||
18 | union may originate
loans only to its own members. A | ||||||
19 | participating credit union that is
not the originating lender | ||||||
20 | may participate in loans made to its own members or
to members | ||||||
21 | of another participating credit union.
"Originating lender" | ||||||
22 | means the participating credit union with which the member
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23 | contracts. A master participation agreement must be properly | ||||||
24 | executed, and the
agreement must include provisions for | ||||||
25 | identifying, either through documents
incorporated by |
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1 | reference or directly in the agreement, the participation loan
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2 | or loans prior to their sale.
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3 | (2) Any credit union with assets of $500,000 or more may | ||||||
4 | loan to its members
under scholarship programs which are
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5 | subject to a federal or state law providing 100% repayment | ||||||
6 | guarantee.
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7 | (3) A credit union may purchase the conditional sales
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8 | contracts, notes
and similar instruments which evidence an | ||||||
9 | indebtedness of its members. In the management of its assets, | ||||||
10 | liabilities, and liquidity, a credit union may purchase the | ||||||
11 | conditional sales contracts, notes, and other similar | ||||||
12 | instruments that evidence the consumer indebtedness of the | ||||||
13 | members of another credit union. "Consumer indebtedness" means | ||||||
14 | indebtedness incurred for personal, family, or household | ||||||
15 | purposes.
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16 | (4) With approval of the board of directors, a credit | ||||||
17 | union may make loans,
either on its own or jointly with other | ||||||
18 | credit unions, corporations or
financial
institutions, to | ||||||
19 | credit union organizations; provided, that the aggregate
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20 | amount of all such loans outstanding shall not at any time | ||||||
21 | exceed the greater
of 6% 3% of the paid-in and unimpaired | ||||||
22 | capital and surplus of the credit
union or the amount | ||||||
23 | authorized for federal credit unions.
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24 | (5) With the 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 |
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1 | community development financial institutions as defined in | ||||||
2 | regulations issued by the U.S. Department of the Treasury and | ||||||
3 | minority depository institutions as defined by the National | ||||||
4 | Credit Union Administration. The aggregate amount of all such | ||||||
5 | loans outstanding shall not at any time exceed 5% of the | ||||||
6 | paid-in and unimpaired capital and surplus of the credit | ||||||
7 | union. | ||||||
8 | (Source: P.A. 97-133, eff. 1-1-12.)
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9 | (205 ILCS 305/57) (from Ch. 17, par. 4458)
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10 | Sec. 57. Group purchasing and marketing. | ||||||
11 | (a) A credit union may, consistent with rules
and | ||||||
12 | regulations promulgated by the Secretary, enter into | ||||||
13 | cooperative marketing
arrangements to facilitate its members' | ||||||
14 | voluntary purchase of such goods
and services as are in the | ||||||
15 | interest of improving economic and social conditions
of the | ||||||
16 | members.
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17 | (b) A credit union may create and use descriptive and | ||||||
18 | brand references to promote and market its identity, services, | ||||||
19 | and products to its members. In the case of a merger pursuant | ||||||
20 | to Section 63, the surviving credit union may identify the | ||||||
21 | merging credit union as a division, branch, unit, or other | ||||||
22 | descriptive reference that ensures the members understand they | ||||||
23 | are dealing with one credit union rather than multiple credit | ||||||
24 | unions, as of the effective date of the merger. | ||||||
25 | (Source: P.A. 100-361, eff. 8-25-17.)
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1 | (205 ILCS 305/59) (from Ch. 17, par. 4460)
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2 | Sec. 59. Investment of funds.
| ||||||
3 | (a) Funds not used in loans to members may be
invested, | ||||||
4 | pursuant to subsection (7) of Section 30 of this Act, and
| ||||||
5 | subject to Departmental rules and
regulations:
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6 | (1) In securities, obligations or other instruments of | ||||||
7 | or issued by or
fully guaranteed as to principal and | ||||||
8 | interest by the United States of America
or any agency | ||||||
9 | thereof or in any trust or trusts established for | ||||||
10 | investing
directly or collectively in the same;
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11 | (2) In obligations of any state of the United States, | ||||||
12 | the District of
Columbia, the Commonwealth of Puerto Rico, | ||||||
13 | and the several
territories organized
by Congress, or any | ||||||
14 | political subdivision thereof; however, a credit union
may
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15 | not invest more than 10% of its unimpaired capital and | ||||||
16 | surplus in the
obligations of one issuer, exclusive of | ||||||
17 | general obligations of the issuer, and
investments in | ||||||
18 | municipal securities must be limited to securities rated | ||||||
19 | in one
of the 4
highest rating categories by a nationally | ||||||
20 | recognized statistical rating
organization;
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21 | (3) In certificates of deposit or passbook type | ||||||
22 | accounts issued by a state
or national bank, mutual | ||||||
23 | savings bank or savings and loan association; provided
| ||||||
24 | that such institutions have their accounts insured by the | ||||||
25 | Federal Deposit
Insurance Corporation or the Federal |
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| |||||||
1 | Savings and Loan Insurance Corporation;
but provided, | ||||||
2 | further, that a credit union's investment in an account in
| ||||||
3 | any one institution may exceed the insured limit on | ||||||
4 | accounts;
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5 | (4) In shares, classes of shares or share certificates | ||||||
6 | of other credit
unions, including, but not limited to | ||||||
7 | corporate credit unions; provided
that such credit unions | ||||||
8 | have their members' accounts insured by the NCUA
or other | ||||||
9 | approved insurers, and that if the members' accounts are | ||||||
10 | so insured,
a credit union's investment may exceed the | ||||||
11 | insured limit on accounts;
| ||||||
12 | (5) In shares of a cooperative society organized under | ||||||
13 | the laws of this
State or the laws of the United States in | ||||||
14 | the total amount not exceeding
10% of the unimpaired | ||||||
15 | capital and surplus of the credit union; provided
that | ||||||
16 | such investment shall first be approved by the Department;
| ||||||
17 | (6) In obligations of the State of Israel, or | ||||||
18 | obligations fully guaranteed
by the State of Israel as to | ||||||
19 | payment of principal and interest;
| ||||||
20 | (7) In shares, stocks or obligations of other | ||||||
21 | financial institutions in
the total amount not exceeding | ||||||
22 | 5% of the unimpaired capital and surplus
of the credit | ||||||
23 | union;
| ||||||
24 | (8) In federal funds and bankers' acceptances;
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25 | (9) In shares or stocks of Credit Union Service | ||||||
26 | Organizations in the
total amount not exceeding the |
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1 | greater of 6% 3% of the unimpaired
capital and surplus of | ||||||
2 | the
credit union or the amount authorized for federal | ||||||
3 | credit unions;
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4 | (10) In corporate bonds identified as investment grade | ||||||
5 | by at least one nationally recognized statistical rating | ||||||
6 | organization, provided that: | ||||||
7 | (i) the board of directors has established a | ||||||
8 | written policy that addresses corporate bond | ||||||
9 | investment procedures and how the credit union will | ||||||
10 | manage credit risk, interest rate risk, liquidity | ||||||
11 | risk, and concentration risk; and | ||||||
12 | (ii) the credit union has documented in its | ||||||
13 | records that a credit analysis of a particular | ||||||
14 | investment and the issuing entity was conducted by the | ||||||
15 | credit union, a third party on behalf of the credit | ||||||
16 | union qualified by education or experience to assess | ||||||
17 | the risk characteristics of corporate bonds, or a | ||||||
18 | nationally recognized statistical rating agency before | ||||||
19 | purchasing the investment and the analysis is updated | ||||||
20 | at least annually for as long as it holds the | ||||||
21 | investment; | ||||||
22 | (11) To aid in the credit union's management of its | ||||||
23 | assets, liabilities, and liquidity in the purchase of an | ||||||
24 | investment interest in a pool of loans, in whole or in part | ||||||
25 | and without regard to the membership of the borrowers, | ||||||
26 | from other depository institutions and financial type |
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1 | institutions, including mortgage banks, finance companies, | ||||||
2 | insurance companies, and other loan sellers, subject to | ||||||
3 | such safety and soundness standards, limitations, and | ||||||
4 | qualifications as the Department may establish by rule or | ||||||
5 | guidance from time to time; | ||||||
6 | (12) To aid in the credit union's management of its | ||||||
7 | assets, liabilities, and liquidity by receiving funds from | ||||||
8 | another financial institution as evidenced by certificates | ||||||
9 | of deposit, share certificates, or other classes of shares | ||||||
10 | issued by the credit union to the financial institution; | ||||||
11 | and | ||||||
12 | (13) In the purchase and assumption of assets held by | ||||||
13 | other financial institutions, with approval of the | ||||||
14 | Secretary and subject to any safety and soundness | ||||||
15 | standards, limitations, and qualifications as the | ||||||
16 | Department may establish by rule or guidance from time to | ||||||
17 | time ; and . | ||||||
18 | (14) In the shares, stocks, or obligations of | ||||||
19 | community development financial institutions as defined in | ||||||
20 | regulations issued by the U.S. Department of the Treasury | ||||||
21 | and minority depository institutions as defined by the | ||||||
22 | National Credit Union Administration; however the | ||||||
23 | aggregate amount of all such investments shall not at any | ||||||
24 | time exceed 5% of the paid-in and unimpaired capital and | ||||||
25 | surplus of the credit union. | ||||||
26 | (b) As used in this Section: |
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1 | "Political subdivision" includes, but is not
limited to, | ||||||
2 | counties,
townships, cities, villages, incorporated towns, | ||||||
3 | school districts, educational
service regions, special road | ||||||
4 | districts, public water supply districts, fire
protection | ||||||
5 | districts, drainage districts, levee districts, sewer | ||||||
6 | districts,
housing authorities, park districts, and any
| ||||||
7 | agency, corporation, or instrumentality of a state or its | ||||||
8 | political
subdivisions, whether now or hereafter created and | ||||||
9 | whether herein specifically
mentioned or not.
| ||||||
10 | "Financial institution" includes any bank, savings bank, | ||||||
11 | savings and loan association, or credit union established | ||||||
12 | under the laws of the United States, this State, or any other | ||||||
13 | state. | ||||||
14 | (c) A credit union investing to fund an employee benefit | ||||||
15 | plan obligation is not subject to the investment limitations | ||||||
16 | of this Act and this Section and may purchase an investment | ||||||
17 | that would otherwise be impermissible if the investment is | ||||||
18 | directly related to the credit union's obligation under the | ||||||
19 | employee benefit plan and the credit union holds the | ||||||
20 | investment only for so long as it has an actual or potential | ||||||
21 | obligation under the employee benefit plan.
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22 | (d) If a credit union acquires loans from another | ||||||
23 | financial institution or financial-type institution pursuant | ||||||
24 | to this Section, the credit union shall be authorized to | ||||||
25 | provide loan servicing and collection services in connection | ||||||
26 | with those loans. |
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1 | (Source: P.A. 100-361, eff. 8-25-17; 100-778, eff. 8-10-18; | ||||||
2 | 101-567, eff. 8-23-19.)
| ||||||
3 | (205 ILCS 305/64.7) | ||||||
4 | Sec. 64.7. Network credit unions. | ||||||
5 | (a) Two or more credit unions merging pursuant to Section | ||||||
6 | 63 of this Act may elect to request a network credit union | ||||||
7 | designation for the surviving credit union from the Secretary. | ||||||
8 | The request shall be set forth in the plan of merger and | ||||||
9 | certificate of merger executed by the credit unions and | ||||||
10 | submitted to the Secretary pursuant to subsection (4) of | ||||||
11 | Section 63. The Secretary's approval of a certificate of | ||||||
12 | merger containing a network credit union designation request | ||||||
13 | shall constitute approval of the use of the network | ||||||
14 | designation as a brand or other identifier of the surviving | ||||||
15 | credit union. If the surviving credit union desires to include | ||||||
16 | the network designation in its legal name, make any other | ||||||
17 | change to its legal name, or both, it shall proceed with an | ||||||
18 | amendment to the articles of incorporation and bylaws of the | ||||||
19 | surviving credit union pursuant to Section 4 of this Act. | ||||||
20 | (b) A network credit union is a cooperative business | ||||||
21 | structure comprised of 2 or more merging credit unions with a | ||||||
22 | collective goal of efficiently serving their combined | ||||||
23 | membership and gaining economies of scale through common | ||||||
24 | vision, strategy and initiative. The merging credit unions | ||||||
25 | shall be identified as divisional credit unions, branches, or |
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1 | units of the network credit union or by other descriptive | ||||||
2 | references that ensure the members understand they are dealing | ||||||
3 | with one credit union rather than multiple credit unions. | ||||||
4 | Descriptive and brand references may also be created and used | ||||||
5 | to promote the identity, services, and products of the network | ||||||
6 | credit union to its members. | ||||||
7 | (c) Each divisional credit union may have an advisory | ||||||
8 | board of directors and a chief management official to assist | ||||||
9 | in maintaining and leveraging its respective local identity | ||||||
10 | for the benefit of the surviving credit union. The divisional | ||||||
11 | credit union advisory boards shall be appointed by the network | ||||||
12 | credit union board of directors. Each divisional credit | ||||||
13 | union's advisory board of directors may appoint a divisional | ||||||
14 | credit union chief management official and may also appoint | ||||||
15 | one of its directors to serve on the network credit union's | ||||||
16 | nominating committee. A divisional credit union may determine | ||||||
17 | to identify its advisory board as a committee and its | ||||||
18 | divisional chief management official with a title it deems | ||||||
19 | reasonable and appropriate. The network credit union board of | ||||||
20 | directors shall require each advisory board member to sign a | ||||||
21 | confidentiality or non-disclosure agreement to ensure that | ||||||
22 | information concerning the credit union remains confidential. | ||||||
23 | (d) The network credit union is the surviving legal entity | ||||||
24 | in the merger and supervision, examination, audit, reporting, | ||||||
25 | governance, and management shall be conducted or performed at | ||||||
26 | the network credit union level. All share insurance, safety |
| |||||||
| |||||||
1 | and soundness, and statutory and regulatory requirements and | ||||||
2 | limitations shall be evaluated at the network credit union | ||||||
3 | level.
| ||||||
4 | (Source: P.A. 99-614, eff. 7-22-16; 100-361, eff. 8-25-17.)
| ||||||
5 | Section 99. Effective date. This Act takes effect upon | ||||||
6 | becoming law.".
|