Bill Text: IL HB2043 | 2023-2024 | 103rd General Assembly | Enrolled

NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Reinserts the provisions of the introduced bill with the following changes. Provides that any members, partners, or shareholders who are ineligible for membership in the credit union shall not become eligible by virtue of the eligibility of the entity in which they hold an ownership interest. Provides that a credit union that has appointed a registered agent shall post on its website the name of its registered agent, the address of its principal place of business, and that the appointment was authorized by action of the board of directors. Provides that a registered agent may resign at any time by submitting written notice to the credit union at its principal place of business (rather than by submitting written notice to the Department). Provides that meetings, minutes of meetings, and reports of the board of directors shall be subject to the confidentiality and redaction standards set forth in the provisions. Removes language providing that the Department of Financial and Professional Regulation shall maintain a registry of credit unions that have appointed a registered agent. Removes provisions concerning privileged information. Removes provisions concerning investment of funds. Effective immediately.

Spectrum: Bipartisan Bill

Status: (Passed) 2023-07-28 - Public Act . . . . . . . . . 103-0289 [HB2043 Detail]

Download: Illinois-2023-HB2043-Enrolled.html



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1 AN ACT concerning regulation.
2 Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
4 Section 5. The Illinois Credit Union Act is amended by
5changing Sections 16, 20, 29, and 48 as follows:
6 (205 ILCS 305/16) (from Ch. 17, par. 4417)
7 Sec. 16. Societies and associations. Societies,
8associations, clubs, partnerships, corporations, and limited
9liability companies in which one or more the majority of the
10members, partners, or shareholders are individuals who are
11eligible for credit union membership may be admitted to
12membership in a credit union in the same manner and under the
13same conditions as individuals, subject to such rules as the
14Secretary and the Director may promulgate hereunder. Any
15members, partners, or shareholders who are ineligible for
16membership in the credit union shall not become eligible by
17virtue of the eligibility of the entity in which they hold an
18ownership interest.
19(Source: P.A. 97-133, eff. 1-1-12.)
20 (205 ILCS 305/20) (from Ch. 17, par. 4421)
21 Sec. 20. Election or appointment of officials.
22 (1) The credit union shall be directed by a board of

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1directors consisting of no less than 7 in number, to be elected
2at the annual meeting by and from the members. Directors shall
3hold office until the next annual meeting, unless their terms
4are staggered. Upon amendment of its bylaws, a credit union
5may divide the directors into 2 or 3 classes with each class as
6nearly equal in number as possible. The term of office of the
7directors of the first class shall expire at the first annual
8meeting after their election, that of the second class shall
9expire at the second annual meeting after their election, and
10that of the third class, if any, shall expire at the third
11annual meeting after their election. At each annual meeting
12after the classification, the number of directors equal to the
13number of directors whose terms expire at the time of the
14meeting shall be elected to hold office until the second
15succeeding annual meeting if there are 2 classes or until the
16third succeeding annual meeting if there are 3 classes. A
17director shall hold office for the term for which he or she is
18elected and until his or her successor is elected and
19qualified.
20 (1.5) Except as provided in subsection (1.10), in all
21elections for directors, every member has the right to vote,
22in person, by proxy, or by electronic record if approved by the
23board of directors, the number of shares owned by him, or in
24the case of a member other than a natural person, the member's
25one vote, for as many persons as there are directors to be
26elected, or to cumulate such shares, and give one candidate as

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1many votes as the number of directors multiplied by the number
2of his shares equals, or to distribute them on the same
3principle among as many candidates as he may desire and the
4directors shall not be elected in any other manner. Shares
5held in a joint account owned by more than one member may be
6voted by any one of the members, however, the number of
7cumulative votes cast may not exceed a total equal to the
8number of shares multiplied by the number of directors to be
9elected. A majority of the shares entitled to vote shall be
10represented either in person or by proxy for the election of
11directors. Each director shall wholly take and subscribe to an
12oath that he will diligently and honestly perform his duties
13in administering the affairs of the credit union, that while
14he may delegate to another the performance of those
15administrative duties he is not thereby relieved from his
16responsibility for their performance, that he will not
17knowingly violate or permit to be violated any law applicable
18to the credit union, and that he is the owner of at least one
19share of the credit union.
20 (1.10) Upon amendment of a credit union's bylaws, in all
21elections for directors, every member who is a natural person
22shall have the right to cast one vote, regardless of the number
23of his or her shares, in person, by proxy, or by electronic
24record if approved by the board of directors, for as many
25persons as there are directors to be elected.
26 (1.15) If the board of directors has adopted a policy

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1addressing age eligibility standards on voting, holding
2office, or petitioning the board, then a credit union may
3require (i) that members be at least 18 years of age by the
4date of the meeting in order to vote at meetings of the
5members, sign nominating petitions, or sign petitions
6requesting special meetings, and (ii) that members be at least
718 years of age by the date of election or appointment in order
8to hold elective or appointive office.
9 (2) The board of directors shall appoint from among the
10members of the credit union, a supervisory committee of not
11less than 3 members at the organization meeting and within 30
12days following each annual meeting of the members for such
13terms as the bylaws provide. Members of the supervisory
14committee may, but need not be, on the board of directors, but
15shall not be officers of the credit union, members of the
16credit committee, or the credit manager if no credit committee
17has been appointed.
18 (3) The board of directors may appoint, from among the
19members of the credit union, a credit committee consisting of
20an odd number, not less than 3 for such terms as the bylaws
21provide. Members of the credit committee may, but need not be,
22directors or officers of the credit union, but shall not be
23members of the supervisory committee.
24 (4) The board of directors may appoint from among the
25members of the credit union a membership committee of one or
26more persons. If appointed, the committee shall act upon all

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1applications for membership and submit a report of its actions
2to the board of directors at the next regular meeting for
3review. If no membership committee is appointed, credit union
4management shall act upon all applications for membership and
5submit a report of its actions to the board of directors at the
6next regular meeting for review.
7 (5) The board of directors may appoint, from among the
8members of the credit union, a nominating committee of 3 or
9more persons. Members of the nominating committee may, but
10need not, be directors or officers of the credit union, but may
11not be members of the supervisory committee. The appointment,
12if made, shall be made in a timely manner to permit the
13nominating committee to recruit, evaluate, and nominate
14eligible candidates for each position to be filled in the
15election of directors or, in the event of a vacancy in office,
16to be filled by appointment of the board of directors for the
17remainder of the unexpired term of the director creating the
18vacancy. Factors the nominating committee may consider in
19evaluating prospective candidates include whether a candidate
20possesses or is willing to acquire through training the
21requisite skills and qualifications to carry out the statutory
22duties of a director. The board of directors may delegate to
23the nominating committee the recruitment, evaluation, and
24nomination of eligible candidates to serve on committees and
25in executive officer positions.
26 (6) The board of directors may create one or more other

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1committees in addition to the committees identified in this
2Section and appoint directors or such other persons as the
3board designates to serve on the committee or committees. Any
4such committee shall serve at the pleasure of the board of
5directors and it shall not act on behalf of the credit union or
6bind it to any action, but it may make recommendations to the
7board of directors.
8 (7)(a) The board of directors may appoint an individual as
9a registered agent for the credit union. The name of the
10registered agent appointed by the board of directors shall be
11identified in the annual report filed by the credit union on
12the annual report form supplied by the Department. The
13business office of the registered agent shall be the same as
14the principal place of business of the credit union. Any
15process, notice, or demand required or permitted by law to be
16served upon the credit union may be served upon the registered
17agent appointed by the credit union.
18 (b) A credit union that has appointed a registered
19 agent shall post on its website the name of its registered
20 agent, the address of its principal place of business, and
21 that the appointment was authorized by action of the board
22 of directors.
23 (c) A credit union that has appointed a registered
24 agent may change its registered agent at any time by
25 posting on its website a statement setting forth the
26 following:

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1 (i) the address of its principal place of
2 business,
3 (ii) the name of its existing registered agent,
4 (iii) the name of its successor registered agent,
5 and
6 (iv) that the change was authorized by action of
7 the board of directors.
8 (d) A registered agent may resign at any time by
9 submitting written notice thereof to the credit union at
10 its principal place of business. The notice shall set
11 forth the following:
12 (i) the name of the credit union for which the
13 registered agent is acting,
14 (ii) the address of the principal place of
15 business of the credit union,
16 (iii) the name of the registered agent,
17 (iv) that the registered agent is resigning, and
18 (v) the effective date of the resignation, which
19 shall not be less than 30 days after the date of filing
20 of the notice.
21 (8) (6) The use of electronic records for member voting
22pursuant to this Section shall employ a security procedure
23that meets the attribution criteria set forth in Section 9 of
24the Uniform Electronic Transactions Act.
25 (9) (7) As used in this Section, "electronic", "electronic
26record", and "security procedure" have the meanings ascribed

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1to those terms in the Uniform Electronic Transactions Act. the
2(Source: P.A. 102-38, eff. 6-25-21; 102-687, eff. 12-17-21;
3102-774, eff. 5-13-22; 102-858, eff. 5-13-22; revised 8-3-22.)
4 (205 ILCS 305/29) (from Ch. 17, par. 4430)
5 Sec. 29. Meetings of directors.
6 (1) The board of directors and the executive committee
7shall meet as often as necessary, but one body must meet at
8least monthly and the other at least quarterly, as prescribed
9in the bylaws. Unless a greater number is required by the
10bylaws, a majority of the whole board of directors shall
11constitute a quorum. The act of a majority of the directors
12present at a meeting at which a quorum is present shall be the
13act of the board of directors unless the act of a greater
14number is required by this Act, the credit union's articles of
15incorporation or the bylaws.
16 (1.5) Notwithstanding anything to the contrary in
17subsection (1), the board of directors of a credit union with a
18composite rating of either 1 or 2 under the Uniform Financial
19Institutions Rating System known as the CAMELS supervisory
20rating system (or an equivalent rating under a comparable
21rating system) and a management rating under such composite
22rating of either 1 or 2 may meet not less than 6 times
23annually, with at least one meeting held during each fiscal
24quarter. This meeting frequency schedule shall be available to
25an eligible credit union irrespective of whether it has

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1appointed an executive committee pursuant to Section 28.
2 (2) Unless specifically prohibited by the articles of
3incorporation or bylaws, directors and committee members may
4participate in and act at any meeting of the board or committee
5through the use of a conference telephone or other
6communications equipment by means of which all persons
7participating in the meeting can communicate with each other.
8Participation in the meeting shall constitute attendance and
9presence in person at the meeting of the person or persons so
10participating.
11 (3) Unless specifically prohibited by the articles of
12incorporation or bylaws, any action required by this Act to be
13taken at a meeting of the board of directors or a committee and
14any other action that may be taken at a meeting of the board of
15directors or a committee may be taken without a meeting if a
16consent in writing setting forth the action taken is signed by
17all the directors entitled to vote with respect to the subject
18matter thereof, or by all members of the committee, as the case
19may be. The consent shall be evidenced by one or more written
20approvals, each of which sets forth the action taken and bears
21the signatures of one or more directors or committee members.
22All the approvals evidencing the consent shall be delivered to
23the secretary to be filed in the corporate records of the
24credit union. The action taken shall be effective when all the
25directors or committee members have approved the consent
26unless the consent specifies a different effective date. A

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1consent signed by all the directors or all the members of a
2committee shall have the same effect as a unanimous vote, and
3may be stated as such in any document filed with the director
4under this Act.
5 (4)(a) As used in this subsection:
6 "Affiliate" means an organization established to serve
7 the needs of credit unions, the business of which relates
8 to the daily operations of credit unions.
9 "Compliance review documents" means reports, meeting
10 minutes, and other documents prepared in connection with a
11 review or evaluation conducted by or for the board of
12 directors.
13 (b) This subsection applies to the board of directors
14 in relation to its functions to evaluate and seek to
15 improve any of the following:
16 (i) loan policies or underwriting standards;
17 (ii) asset quality;
18 (iii) financial reporting to federal or State
19 governmental or regulatory agencies; or
20 (iv) compliance with federal or State statutory or
21 regulatory requirements, including, without
22 limitation, the manner in which it performs its duties
23 under Section 30.
24 (c) Meetings, minutes of meetings, and reports of the
25 board of directors shall be subject to the confidentiality
26 and redaction standards set forth in this subsection.

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1 (d) Except as provided in paragraph (e), compliance
2 review documents and the deliberations of the board of
3 directors are confidential. An affiliate of a credit
4 union, a credit union regulatory agency, and the insurer
5 of credit union share accounts shall have access to
6 compliance review documents; however, (i) the documents
7 remain confidential and (ii) delivery of compliance review
8 documents to an affiliate or pursuant to the requirements
9 of a credit union regulatory agency or an insurer of
10 credit union share accounts do not constitute a waiver of
11 the confidentiality granted in this Section.
12 (e) This Section does not apply to any civil or
13 administrative action initiated by a credit union
14 regulatory agency or an insurer of credit union share
15 accounts.
16 (f) This Section shall not be construed to limit the
17 discovery or admissibility in any civil action of any
18 documents, including compliance review documents.
19 (g) Any report required under this Act to be furnished
20 to the board of directors by the membership committee,
21 credit committee, or any other committee may be submitted
22 in a summary format that redacts personally identifiable
23 information as defined under applicable State and federal
24 law.
25 (h) Compliance review documents may be disclosed by
26 the Secretary or a credit union to any person or entity to

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1 whom confidential supervisory information may be disclosed
2 pursuant to subsection (3) of Section 9.1.
3(Source: P.A. 89-603, eff. 8-2-96.)
4 (205 ILCS 305/48) (from Ch. 17, par. 4449)
5 Sec. 48. Loan limit. Within any limitations set forth in a
6policy adopted by the board of directors, a credit union may
7place a limit upon the aggregate amount to be loaned to or
8cosigned for by any one member provided that no loan shall be
9made to any member in an aggregate amount in excess of 10% of
10the credit union's unimpaired capital and surplus. Such loan
11limits shall not be subject to reduction by rules adopted by
12the Secretary.
13(Source: P.A. 100-361, eff. 8-25-17.)
14 Section 99. Effective date. This Act takes effect upon
15becoming law.
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