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| Public Act 098-0784
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| HB5342 Enrolled | LRB098 19293 ZMM 55277 b |
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AN ACT concerning regulation.
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Be it enacted by the People of the State of Illinois,
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represented in the General Assembly:
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Section 3. The Illinois Banking Act is amended by changing |
Section 48 as follows:
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(205 ILCS 5/48)
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Sec. 48. Secretary's powers; duties. The Secretary shall |
have the
powers and authority, and is charged with the duties |
and responsibilities
designated in this Act, and a State bank |
shall not be subject to any
other visitorial power other than |
as authorized by this Act, except those
vested in the courts, |
or upon prior consultation with the Secretary, a
foreign bank |
regulator with an appropriate supervisory interest in the |
parent
or affiliate of a state bank. In the performance of the |
Secretary's
duties:
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(1) The Commissioner shall call for statements from all |
State banks
as provided in Section 47 at least one time during |
each calendar quarter.
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(2) (a) The Commissioner, as often as the Commissioner |
shall deem
necessary or
proper, and no less frequently than 18 |
months following the preceding
examination, shall appoint a |
suitable person or
persons to make an examination of the |
affairs of every State bank,
except that for every eligible |
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State bank, as defined by regulation, the
Commissioner in lieu |
of the examination may accept on an alternating basis the
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examination made by the eligible State bank's appropriate |
federal banking
agency pursuant to Section 111 of the Federal |
Deposit Insurance Corporation
Improvement Act of 1991, |
provided the appropriate federal banking agency has
made such |
an examination. A person so appointed shall not be a |
stockholder or
officer or employee of
any bank which that |
person may be directed to examine, and shall have
powers to |
make a thorough examination into all the affairs of the bank |
and
in so doing to examine any of the officers or agents or |
employees thereof
on oath and shall make a full and detailed |
report of the condition of the
bank to the Commissioner. In |
making the examination the examiners shall
include an |
examination of the affairs of all the affiliates of the bank, |
as
defined in subsection (b) of Section 35.2 of this Act, or |
subsidiaries of the
bank as shall be
necessary to disclose |
fully the conditions of the subsidiaries or
affiliates, the |
relations
between the bank and the subsidiaries or affiliates |
and the effect of those
relations upon
the affairs of the bank, |
and in connection therewith shall have power to
examine any of |
the officers, directors, agents, or employees of the
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subsidiaries or affiliates
on oath. After May 31, 1997, the |
Commissioner may enter into cooperative
agreements
with state |
regulatory authorities of other states to provide for |
examination of
State bank branches in those states, and the |
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Commissioner may accept reports
of examinations of State bank |
branches from those state regulatory authorities.
These |
cooperative agreements may set forth the manner in which the |
other state
regulatory authorities may be compensated for |
examinations prepared for and
submitted to the Commissioner.
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(b) After May 31, 1997, the Commissioner is authorized to |
examine, as often
as the Commissioner shall deem necessary or |
proper, branches of out-of-state
banks. The Commissioner may |
establish and may assess fees to be paid to the
Commissioner |
for examinations under this subsection (b). The fees shall be
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borne by the out-of-state bank, unless the fees are borne by |
the state
regulatory authority that chartered the out-of-state |
bank, as determined by a
cooperative agreement between the |
Commissioner and the state regulatory
authority that chartered |
the out-of-state bank.
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(2.1) Pursuant to paragraph (a) of subsection (6) of this |
Section, the Secretary shall adopt rules that ensure |
consistency and due process in the examination process. The |
Secretary may also establish guidelines that (i) define the |
scope of the examination process and (ii) clarify examination |
items to be resolved. The rules, formal guidance, interpretive |
letters, or opinions furnished to State banks by the Secretary |
may be relied upon by the State banks. |
(2.5) Whenever any State bank, any subsidiary or affiliate |
of a State
bank, or after May 31, 1997, any branch of an |
out-of-state bank causes to
be performed, by contract or |
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otherwise, any bank services
for itself, whether on or off its |
premises:
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(a) that performance shall be subject to examination by |
the Commissioner
to the same extent as if services were |
being performed by the bank or, after
May 31, 1997, branch |
of the out-of-state bank itself
on its own premises; and
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(b) the bank or, after May 31, 1997, branch of the |
out-of-state bank
shall notify the Commissioner of the |
existence of a service
relationship. The notification |
shall be submitted with the first statement
of condition |
(as required by Section 47 of this Act) due after the |
making
of the service contract or the performance of the |
service, whichever occurs
first. The Commissioner shall be |
notified of each subsequent contract in
the same manner.
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For purposes of this subsection (2.5), the term "bank |
services" means
services such as sorting and posting of checks |
and deposits, computation
and posting of interest and other |
credits and charges, preparation and
mailing of checks, |
statements, notices, and similar items, or any other
clerical, |
bookkeeping, accounting, statistical, or similar functions
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performed for a State bank, including but not limited to |
electronic data
processing related to those bank services.
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(3) The expense of administering this Act, including the |
expense of
the examinations of State banks as provided in this |
Act, shall to the extent
of the amounts resulting from the fees |
provided for in paragraphs (a),
(a-2), and (b) of this |
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subsection (3) be assessed against and borne by the
State |
banks:
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(a) Each bank shall pay to the Secretary a Call Report |
Fee which
shall be paid in quarterly installments equal
to |
one-fourth of the sum of the annual fixed fee of $800, plus |
a variable
fee based on the assets shown on the quarterly |
statement of condition
delivered to the Secretary in |
accordance with Section 47 for the
preceding quarter |
according to the following schedule: 16¢ per $1,000 of
the |
first $5,000,000 of total assets, 15¢ per $1,000 of the |
next
$20,000,000 of total assets, 13¢ per $1,000 of the |
next $75,000,000 of
total assets, 9¢ per $1,000 of the next |
$400,000,000 of total assets, 7¢
per $1,000 of the next |
$500,000,000 of total assets, and 5¢ per $1,000 of
all |
assets in excess of $1,000,000,000, of the State bank. The |
Call Report
Fee shall be calculated by the Secretary and |
billed to the banks for
remittance at the time of the |
quarterly statements of condition
provided for in Section |
47. The Secretary may require payment of the fees
provided |
in this Section by an electronic transfer of funds or an |
automatic
debit of an account of each of the State banks. |
In case more than one
examination of any
bank is deemed by |
the Secretary to be necessary in any examination
frequency |
cycle specified in subsection 2(a) of this Section,
and is |
performed at his direction, the Secretary may
assess a |
reasonable additional fee to recover the cost of the |
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additional
examination; provided, however, that an |
examination conducted at the request
of the State Treasurer |
pursuant to the Uniform Disposition of Unclaimed
Property |
Act shall not be deemed to be an additional examination |
under this
Section.
In lieu
of the method and amounts set |
forth in this paragraph (a) for the calculation
of the Call |
Report Fee, the Secretary may specify by
rule that the Call |
Report Fees provided by this Section may be assessed
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semiannually or some other period and may provide in the |
rule the formula to
be
used for calculating and assessing |
the periodic Call Report Fees to be paid by
State
banks.
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(a-1) If in the opinion of the Commissioner an |
emergency exists or
appears likely, the Commissioner may |
assign an examiner or examiners to
monitor the affairs of a |
State bank with whatever frequency he deems
appropriate, |
including but not limited to a daily basis. The reasonable
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and necessary expenses of the Commissioner during the |
period of the monitoring
shall be borne by the subject |
bank. The Commissioner shall furnish the
State bank a |
statement of time and expenses if requested to do so within |
30
days of the conclusion of the monitoring period.
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(a-2) On and after January 1, 1990, the reasonable and |
necessary
expenses of the Commissioner during examination |
of the performance of
electronic data processing services |
under subsection (2.5) shall be
borne by the banks for |
which the services are provided. An amount, based
upon a |
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fee structure prescribed by the Commissioner, shall be paid |
by the
banks or, after May 31, 1997, branches of |
out-of-state banks receiving the
electronic data |
processing services along with the
Call Report Fee assessed |
under paragraph (a) of this
subsection (3).
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(a-3) After May 31, 1997, the reasonable and necessary |
expenses of the
Commissioner during examination of the |
performance of electronic data
processing services under |
subsection (2.5) at or on behalf of branches of
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out-of-state banks shall be borne by the out-of-state |
banks, unless those
expenses are borne by the state |
regulatory authorities that chartered the
out-of-state |
banks, as determined by cooperative agreements between the
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Commissioner and the state regulatory authorities that |
chartered the
out-of-state banks.
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(b) "Fiscal year" for purposes of this Section 48 is |
defined as a
period beginning July 1 of any year and ending |
June 30 of the next year.
The Commissioner shall receive |
for each fiscal year, commencing with the
fiscal year |
ending June 30, 1987, a contingent fee equal to the lesser |
of
the aggregate of the fees paid by all State banks under |
paragraph (a) of
subsection (3) for that year, or the |
amount, if any, whereby the aggregate
of the administration |
expenses, as defined in paragraph (c), for that
fiscal year |
exceeds the sum of the aggregate of the fees payable by all
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State banks for that year under paragraph (a) of subsection |
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(3),
plus any amounts transferred into the Bank and Trust |
Company Fund from the
State Pensions Fund for that year,
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plus all
other amounts collected by the Commissioner for |
that year under any
other provision of this Act, plus the |
aggregate of all fees
collected for that year by the |
Commissioner under the Corporate Fiduciary
Act, excluding |
the receivership fees provided for in Section 5-10 of the
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Corporate Fiduciary Act, and the Foreign Banking Office |
Act.
The aggregate amount of the contingent
fee thus |
arrived at for any fiscal year shall be apportioned |
amongst,
assessed upon, and paid by the State banks and |
foreign banking corporations,
respectively, in the same |
proportion
that the fee of each under paragraph (a) of |
subsection (3), respectively,
for that year bears to the |
aggregate for that year of the fees collected
under |
paragraph (a) of subsection (3). The aggregate amount of |
the
contingent fee, and the portion thereof to be assessed |
upon each State
bank and foreign banking corporation,
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respectively, shall be determined by the Commissioner and |
shall be paid by
each, respectively, within 120 days of the |
close of the period for which
the contingent fee is |
computed and is payable, and the Commissioner shall
give 20 |
days advance notice of the amount of the contingent fee |
payable by
the State bank and of the date fixed by the |
Commissioner for payment of
the fee.
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(c) The "administration expenses" for any fiscal year |
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shall mean the
ordinary and contingent expenses for that |
year incident to making the
examinations provided for by, |
and for otherwise administering, this Act,
the Corporate |
Fiduciary Act, excluding the expenses paid from the
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Corporate Fiduciary Receivership account in the Bank and |
Trust Company
Fund, the Foreign Banking Office Act,
the |
Electronic Fund Transfer Act,
and the Illinois Bank |
Examiners'
Education Foundation Act, including all |
salaries and other
compensation paid for personal services |
rendered for the State by
officers or employees of the |
State, including the Commissioner and the
Deputy |
Commissioners, communication equipment and services, |
office furnishings, surety bond
premiums, and travel |
expenses of those officers and employees, employees,
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expenditures or charges for the acquisition, enlargement |
or improvement
of, or for the use of, any office space, |
building, or structure, or
expenditures for the |
maintenance thereof or for furnishing heat, light,
or power |
with respect thereto, all to the extent that those |
expenditures
are directly incidental to such examinations |
or administration.
The Commissioner shall not be required |
by paragraphs (c) or (d-1) of this
subsection (3) to |
maintain in any fiscal year's budget appropriated reserves
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for accrued vacation and accrued sick leave that is |
required to be paid to
employees of the Commissioner upon |
termination of their service with the
Commissioner in an |
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amount that is more than is reasonably anticipated to be
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necessary for any anticipated turnover in employees, |
whether due to normal
attrition or due to layoffs, |
terminations, or resignations.
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(d) The aggregate of all fees collected by the |
Secretary under
this Act, the Corporate Fiduciary Act,
or |
the Foreign Banking Office Act on
and after July 1, 1979, |
shall be paid promptly after receipt of the same,
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accompanied by a detailed statement thereof, into the State |
treasury and
shall be set apart in a special fund to be |
known as the "Bank and Trust
Company Fund", except as |
provided in paragraph (c) of subsection (11) of
this |
Section. All earnings received from investments of funds in |
the Bank
and
Trust Company Fund shall be deposited in the |
Bank and Trust Company Fund
and may be used for the same |
purposes as fees deposited in that Fund. The
amount from |
time to time deposited into the Bank and
Trust Company Fund |
shall be used: (i) to offset the ordinary administrative
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expenses of the Secretary as defined in
this Section or |
(ii) as a credit against fees under paragraph (d-1) of this |
subsection (3). Nothing in this amendatory Act of 1979 |
shall prevent
continuing the practice of paying expenses |
involving salaries, retirement,
social security, and |
State-paid insurance premiums of State officers by
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appropriations from the General Revenue Fund. However, the |
General Revenue
Fund shall be reimbursed for those payments |
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made on and after July 1, 1979,
by an annual transfer of |
funds from the Bank and Trust Company Fund. Moneys in the |
Bank and Trust Company Fund may be transferred to the |
Professions Indirect Cost Fund, as authorized under |
Section 2105-300 of the Department of Professional |
Regulation Law of the Civil Administrative Code of |
Illinois.
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Notwithstanding provisions in the State Finance Act, |
as now or hereafter amended, or any other law to the |
contrary, the sum of $18,788,847 shall be transferred from |
the Bank and Trust Company Fund to the Financial |
Institutions Settlement of 2008 Fund on the effective date |
of this amendatory Act of the 95th General Assembly, or as |
soon thereafter as practical. |
Notwithstanding provisions in the State Finance Act, |
as now or hereafter amended, or any other law to the |
contrary, the Governor may, during any fiscal year through |
January 10, 2011, from time to time direct the State |
Treasurer and Comptroller to transfer a specified sum not |
exceeding 10% of the revenues to be deposited into the Bank |
and Trust Company Fund during that fiscal year from that |
Fund to the General Revenue Fund in order to help defray |
the State's operating costs for the fiscal year. |
Notwithstanding provisions in the State Finance Act, as now |
or hereafter amended, or any other law to the contrary, the |
total sum transferred during any fiscal year through |
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January 10, 2011, from the Bank and Trust Company Fund to |
the General Revenue Fund pursuant to this provision shall |
not exceed during any fiscal year 10% of the revenues to be |
deposited into the Bank and Trust Company Fund during that |
fiscal year. The State Treasurer and Comptroller shall |
transfer the amounts designated under this Section as soon |
as may be practicable after receiving the direction to |
transfer from the Governor.
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(d-1) Adequate funds shall be available in the Bank and |
Trust
Company Fund to permit the timely payment of |
administration expenses. In
each fiscal year the total |
administration expenses shall be deducted from
the total |
fees collected by the Commissioner and the remainder |
transferred
into the Cash Flow Reserve Account, unless the |
balance of the Cash Flow
Reserve Account prior to the |
transfer equals or exceeds
one-fourth of the total initial |
appropriations from the Bank and Trust
Company Fund for the |
subsequent year, in which case the remainder shall be
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credited to State banks and foreign banking corporations
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and applied against their fees for the subsequent
year. The |
amount credited to each State bank and foreign banking |
corporation
shall be in the same proportion as the
Call |
Report Fees paid by each for the year bear to the total |
Call Report
Fees collected for the year. If, after a |
transfer to the Cash Flow Reserve
Account is made or if no |
remainder is available for transfer, the balance
of the |
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Cash Flow Reserve Account is less than one-fourth of the |
total
initial appropriations for the subsequent year and |
the amount transferred
is less than 5% of the total Call |
Report Fees for the year, additional
amounts needed to make |
the transfer equal to 5% of the total Call Report
Fees for |
the year shall be apportioned amongst, assessed upon, and
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paid by the State banks and foreign banking corporations
in |
the same proportion that the Call Report Fees of each,
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respectively, for the year bear to the total Call Report |
Fees collected for
the year. The additional amounts |
assessed shall be transferred into the
Cash Flow Reserve |
Account. For purposes of this paragraph (d-1), the
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calculation of the fees collected by the Commissioner shall |
exclude the
receivership fees provided for in Section 5-10 |
of the Corporate Fiduciary Act.
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(e) The Commissioner may upon request certify to any |
public record
in his keeping and shall have authority to |
levy a reasonable charge for
issuing certifications of any |
public record in his keeping.
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(f) In addition to fees authorized elsewhere in this |
Act, the
Commissioner
may, in connection with a review, |
approval, or provision of a service, levy a
reasonable |
charge to recover the cost of the review, approval, or |
service.
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(4) Nothing contained in this Act shall be construed to |
limit the
obligation relative to examinations and reports of |
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any State bank, deposits
in which are to any extent insured by |
the United States or any agency
thereof, nor to limit in any |
way the powers of the Commissioner with
reference to |
examinations and reports of that bank.
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(5) The nature and condition of the assets in or investment |
of any
bonus, pension, or profit sharing plan for officers or |
employees of every
State bank or, after May 31, 1997, branch of |
an out-of-state bank shall be
deemed to be included in the |
affairs of that State
bank or branch of an out-of-state bank |
subject to examination by the
Commissioner under the
provisions |
of subsection (2) of this Section, and if the Commissioner
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shall find from an examination that the condition of or |
operation
of the investments or assets of the plan is unlawful, |
fraudulent, or
unsafe, or that any trustee has abused his |
trust, the Commissioner
shall, if the situation so found by the |
Commissioner shall not be
corrected to his satisfaction within |
60 days after the Commissioner has
given notice to the board of |
directors of the State bank or out-of-state
bank of his
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findings, report the facts to the Attorney General who shall |
thereupon
institute proceedings against the State bank or |
out-of-state bank, the
board of directors
thereof, or the |
trustees under such plan as the nature of the case may require.
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(6) The Commissioner shall have the power:
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(a) To promulgate reasonable rules for the purpose of
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administering the provisions of this Act.
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(a-5) To impose conditions on any approval issued by |
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the Commissioner
if he determines that the conditions are |
necessary or appropriate. These
conditions shall be |
imposed in writing and shall continue
in effect for the |
period prescribed by the Commissioner.
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(b) To issue orders
against any person, if the |
Commissioner has
reasonable cause to believe that an unsafe |
or unsound banking practice
has occurred, is occurring, or |
is about to occur, if any person has violated,
is |
violating, or is about to violate any law, rule, or written
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agreement with the Commissioner, or
for the purpose of |
administering the provisions of
this Act and any rule |
promulgated in accordance with this Act.
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(b-1) To enter into agreements with a bank establishing |
a program to
correct the condition of the bank or its |
practices.
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(c) To appoint hearing officers to execute any of the |
powers granted to
the Commissioner under this Section for |
the purpose of administering this
Act and any rule |
promulgated in accordance with this Act
and otherwise to |
authorize, in writing, an officer or employee of the Office
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of
Banks and Real Estate to exercise his powers under this |
Act.
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(d) To subpoena witnesses, to compel their attendance, |
to administer
an oath, to examine any person under oath, |
and to require the production of
any relevant books, |
papers, accounts, and documents in the course of and
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pursuant to any investigation being conducted, or any |
action being taken,
by the Commissioner in respect of any |
matter relating to the duties imposed
upon, or the powers |
vested in, the Commissioner under the provisions of
this |
Act or any rule promulgated in accordance with this Act.
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(e) To conduct hearings.
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(7) Whenever, in the opinion of the Secretary, any |
director,
officer, employee, or agent of a State bank
or any |
subsidiary or bank holding company of the bank
or, after May |
31, 1997, of any
branch of an out-of-state bank
or any |
subsidiary or bank holding company of the bank
shall have |
violated any law,
rule, or order relating to that bank
or any |
subsidiary or bank holding company of the bank, shall have
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obstructed or impeded any examination or investigation by the |
Secretary, shall have engaged in an unsafe or
unsound practice |
in conducting the business of that bank
or any subsidiary or |
bank holding company of the bank,
or shall have
violated any |
law or engaged or participated in any unsafe or unsound |
practice
in connection with any financial institution or other |
business entity such that
the character and fitness of the |
director, officer, employee, or agent does not
assure |
reasonable promise of safe and sound operation of the State |
bank, the
Secretary
may issue an order of removal.
If, in the |
opinion of the Secretary, any former director, officer,
|
employee,
or agent of a State bank
or any subsidiary or bank |
holding company of the bank, prior to the
termination of his or |
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her service with
that bank
or any subsidiary or bank holding |
company of the bank, violated any law,
rule, or order relating |
to that
State bank
or any subsidiary or bank holding company of |
the bank, obstructed or impeded
any examination or |
investigation by the Secretary, engaged in an unsafe or unsound |
practice in conducting the
business of that bank
or any |
subsidiary or bank holding company of the bank,
or violated any |
law or engaged or participated in any
unsafe or unsound |
practice in connection with any financial institution or
other |
business entity such that the character and fitness of the |
director,
officer, employee, or agent would not have assured |
reasonable promise of safe
and sound operation of the State |
bank, the Secretary may issue an order
prohibiting that person |
from
further
service with a bank
or any subsidiary or bank |
holding company of the bank
as a director, officer, employee, |
or agent. An order
issued pursuant to this subsection shall be |
served upon the
director,
officer, employee, or agent. A copy |
of the order shall be sent to each
director of the bank |
affected by registered mail. A copy of
the order shall also be |
served upon the bank of which he is a director,
officer, |
employee, or agent, whereupon he shall cease to be a director,
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officer, employee, or agent of that bank. The Secretary may
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institute a civil action against the director, officer, or |
agent of the
State bank or, after May 31, 1997, of the branch |
of the out-of-state bank
against whom any order provided for by |
this subsection (7) of
this Section 48 has been issued, and |
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against the State bank or, after May 31,
1997, out-of-state |
bank, to enforce
compliance with or to enjoin any violation of |
the terms of the order.
Any person who has been the subject of |
an order of removal
or
an order of prohibition issued by the |
Secretary under
this subsection or Section 5-6 of the Corporate |
Fiduciary Act may not
thereafter serve as director, officer, |
employee, or agent of any State bank
or of any branch of any |
out-of-state bank,
or of any corporate fiduciary, as defined in |
Section 1-5.05 of the
Corporate
Fiduciary Act, or of any other |
entity that is subject to licensure or
regulation by the |
Division of Banking unless
the Secretary has granted prior |
approval in writing.
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For purposes of this paragraph (7), "bank holding company" |
has the
meaning prescribed in Section 2 of the Illinois Bank |
Holding Company Act of
1957.
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(8) The Commissioner may impose civil penalties of up to |
$100,000 against
any person for each violation of any provision |
of this Act, any rule
promulgated in accordance with this Act, |
any order of the Commissioner, or
any other action which in the |
Commissioner's discretion is an unsafe or
unsound banking |
practice.
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(9) The Commissioner may impose civil penalties of up to |
$100
against any person for the first failure to comply with |
reporting
requirements set forth in the report of examination |
of the bank and up to
$200 for the second and subsequent |
failures to comply with those reporting
requirements.
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(10) All final administrative decisions of the |
Commissioner hereunder
shall be subject to judicial review |
pursuant to the provisions of the
Administrative Review Law. |
For matters involving administrative review,
venue shall be in |
either Sangamon County or Cook County.
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(11) The endowment fund for the Illinois Bank Examiners' |
Education
Foundation shall be administered as follows:
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(a) (Blank).
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(b) The Foundation is empowered to receive voluntary |
contributions,
gifts, grants, bequests, and donations on |
behalf of the Illinois Bank
Examiners' Education |
Foundation from national banks and other persons for
the |
purpose of funding the endowment of the Illinois Bank |
Examiners'
Education Foundation.
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(c) The aggregate of all special educational fees |
collected by the
Secretary and property received by the |
Secretary on behalf of the
Illinois Bank Examiners' |
Education Foundation under this subsection
(11) on or after |
June 30, 1986, shall be either (i) promptly paid after
|
receipt of the same, accompanied by a detailed statement |
thereof, into the
State Treasury and shall be set apart in |
a special fund to be known as "The
Illinois Bank Examiners' |
Education Fund" to be invested by either the
Treasurer of |
the State of Illinois in the Public Treasurers' Investment
|
Pool or in any other investment he is authorized to make or |
by the Illinois
State Board of Investment as the State |
|
Banking Board of Illinois may direct or (ii) deposited into |
an account
maintained in a commercial bank or corporate |
fiduciary in the name of the
Illinois Bank Examiners' |
Education Foundation pursuant to the order and
direction of |
the Board of Trustees of the Illinois Bank Examiners' |
Education
Foundation.
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(12) (Blank).
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(13) The Secretary may borrow funds from the General |
Revenue Fund on behalf of the Bank and Trust Company Fund if |
the Director of Banking certifies to the Governor that there is |
an economic emergency affecting banking that requires a |
borrowing to provide additional funds to the Bank and Trust |
Company Fund. The borrowed funds shall be paid back within 3 |
years and shall not exceed the total funding appropriated to |
the Agency in the previous year. |
(Source: P.A. 96-1163, eff. 1-1-11; 96-1365, eff. 7-28-10; |
97-333, eff. 8-12-11.)
|
Section 4. The Savings Bank Act is amended by changing |
Section 9004 as follows:
|
(205 ILCS 205/9004) (from Ch. 17, par. 7309-4)
|
Sec. 9004. Examination.
|
(a) At least once every 18 months or more often if it is
|
deemed necessary or expedient, the Secretary shall examine the
|
books, records, operations, and affairs of each savings bank
|
|
operating under this Act. In the course of the examination, the |
Secretary may
also examine in the same manner all entities,
|
companies, and individuals which or whom the Secretary |
determines
may have a relationship with the savings bank or any |
subsidiary or
entity affiliated with it, if the relationship |
may adversely affect
the affairs, activities, and safety and |
soundness of the savings
bank, including: (i) companies |
controlled by the savings bank;
(ii) entities, including |
companies controlled by the company,
individual, or |
individuals that control the savings bank;
and (iii) the |
company or other entity which controls or owns the
savings |
bank. Notwithstanding any other provision of this Act, every |
savings bank, as defined by rule, or, if not defined, to the |
same extent as would be permitted in the case of a State bank, |
the Secretary, in lieu of the examination, may accept on an |
alternating basis the examination made by the eligible savings |
bank's appropriate federal banking agency pursuant to Section |
111 of the Federal Deposit Insurance Corporation Improvement |
Act of 1991, provided the appropriate federal banking agency |
has made an examination.
|
(b) The Secretary shall examine to determine:
|
(1) Quality of financial condition, including safety |
and
soundness and investment and loan quality.
|
(2) Compliance with this Act and other applicable
|
statutes and regulations.
|
(3) Quality of management policies.
|
|
(4) Overall safety and soundness of the savings bank,
|
its parent, subsidiaries, and affiliates.
|
(5) Remedial actions required to correct and to restore
|
compliance with applicable statutes, regulations, and |
proper
business policies.
|
(c) The Secretary may promulgate regulations to
implement |
and administer this Section.
|
(d) If a savings bank, its holding company, or any of its
|
corporate subsidiaries has not been audited at least once in |
the
12 months prior to the Secretary's examination, the |
Secretary may cause an audit of the savings bank's books and |
records to be
made by an independent licensed public |
accountant. The cost of the audit
shall be paid for by the |
entity being audited.
|
(e) The Secretary or his or her examiners or other
formally |
designated agents are authorized to administer oaths and
to |
examine and to take and preserve testimony under oath as to
|
anything in the affairs or ownership of any savings bank or
|
institution or affiliate thereof.
|
(f) Pursuant to subsection (c) of this Section, the |
Secretary shall adopt rules that ensure consistency and due |
process in the examination process. The Secretary may also |
establish guidelines that (i) define the scope of the |
examination process and (ii) clarify examination items to be |
resolved. The rules, formal guidance, interpretive letters, or |
opinions furnished to savings banks by the Secretary may be |
|
relied upon by the savings banks. |
(Source: P.A. 96-1365, eff. 7-28-10; 97-492, eff. 1-1-12.)
|
Section 5. The Illinois Credit Union Act is amended by |
changing Sections 1.1, 9, 30, 34, 39, and 46 and by adding |
Section 57.1 as follows:
|
(205 ILCS 305/1.1) (from Ch. 17, par. 4402)
|
Sec. 1.1. Definitions.
|
Credit Union - The term "credit union" means
a cooperative, |
non-profit association, incorporated under this Act,
under the |
laws of the United States of America or under the laws
of |
another state, for the purposes of encouraging thrift among
its |
members, creating a source of credit at a reasonable rate of
|
interest, and providing an opportunity for its members to use
|
and control their own money in order to improve their economic |
and
social conditions. The membership of a credit union shall |
consist
of a group or groups each having a common
bond as set |
forth in this Act.
|
Common Bond - The term "common bond" refers to groups of |
people
who meet one of the following qualifications:
|
(1) Persons belonging to a specific association, group |
or organization,
such as a church, labor union, club or |
society and members of their immediate
families which shall |
include any relative by blood or marriage or foster
and |
adopted children.
|
|
(2) Persons who reside in a reasonably compact and well |
defined
neighborhood or community, and
members of their |
immediate families which shall include any relative
by |
blood or marriage or foster and adopted children.
|
(3) Persons who have a common employer or who are |
members of an
organized labor union or an organized |
occupational or professional
group within a defined |
geographical area, and members of their
immediate families |
which shall include any relative by blood or
marriage or |
foster and adopted children.
|
Shares - The term "shares" or "share accounts" means any |
form of shares
issued by a credit union and established by a |
member in accordance with
standards specified by a credit |
union, including but not limited to common
shares, share draft |
accounts, classes of shares, share certificates,
special |
purpose share accounts, shares issued in trust, custodial |
accounts,
and individual retirement accounts or other plans |
established pursuant to
Section 401(d) or (f) or Section 408(a) |
of the Internal Revenue Code, as now
or hereafter amended, or |
similar provisions of any tax laws of the United
States that |
may hereafter exist.
|
Credit Union Organization - The term "credit union |
organization" means
any organization established to serve the |
needs of credit unions, the business
of which relates to the |
daily operations of credit unions.
|
Department - The term "Department" means the Illinois |
|
Department of Financial and Professional Regulation.
|
Secretary - The term "Secretary" means the Secretary
of |
Financial and Professional Regulation or a person authorized by |
the Secretary or this Act to act in the Secretary's stead.
|
Division of Financial Institutions - The term "Division of |
Financial Institutions" means the Division of Financial |
Institutions of the Department of Financial and Professional |
Regulation. |
Director - The term "Director of Financial Institutions" |
means the Director of the Division of Financial Institutions of |
the Department of Financial and Professional Regulation. |
Office - The term "office" means the Division of Financial |
Institutions of the Department of Financial and Professional |
Regulation. |
NCUA - The term "NCUA" means the National Credit Union |
Administration, an
agency of the United States Government |
charged with the supervision of
credit unions chartered under |
the laws of the United States of America.
|
Central Credit Union - The term "central credit union" |
means a credit union
incorporated primarily to receive shares |
from and make loans to credit unions
and directors, officers, |
committee members and employees of credit unions.
A central |
credit union may also accept as members persons who were |
members
of credit unions which were liquidated and persons from |
occupational groups
not otherwise served by another credit |
union.
|
|
Corporate Credit Union - The term "corporate credit union" |
means a credit
union which is a cooperative, non-profit |
association, the membership of
which is limited primarily to |
other credit unions.
|
Insolvent - "Insolvent" means the condition that results |
when
the total of all liabilities and shares exceeds net assets |
of the credit union.
|
Danger of insolvency - For purposes of Section 61, a credit |
union is in
"danger of insolvency" if its net worth to
asset |
ratio falls below 2%. In calculating the danger of insolvency |
ratio,
secondary
capital shall be excluded. For purposes of |
Section 61, a credit union is also
in "danger of
insolvency" if |
the Department is unable to
ascertain, upon examination, the |
true financial
condition of the credit union.
|
Net Worth - "Net worth" means the retained earnings balance |
of the credit
union, as determined under generally accepted |
accounting principles, and forms
of secondary capital approved |
by the Secretary and the Director pursuant to rulemaking.
|
Charitable Donation Account – The term "charitable |
donation account" means an account owned by a credit union that |
is held in a segregated custodial account or special purpose |
entity and specifically identified as a charitable donation |
account whereby, no less frequently than every 5 years and upon |
termination of the account, at least 51% of the total return on |
assets in the account is distributed to one or more charitable |
organizations or non-profit entities. |
|
(Source: P.A. 97-133, eff. 1-1-12.)
|
(205 ILCS 305/9) (from Ch. 17, par. 4410)
|
Sec. 9. Reports and examinations.
|
(1) Credit unions shall report to
the Department on forms |
supplied by the Department, in accordance with a
schedule |
published by the Department. A recapitulation of the annual |
reports
shall be compiled and published annually by the |
Department, for the use
of the General Assembly, credit unions, |
various educational institutions
and other interested parties. |
A credit union which fails to file any report
when due shall |
pay to the Department a late filing fee for each
day the report |
is overdue as prescribed by rule. The Secretary may extend
the |
time for filing a
report.
|
(2) The Secretary may require special examinations of and |
special
financial reports from a credit union or a credit
union |
organization in which a credit union loans, invests, or |
delegates
substantially all
managerial duties and |
responsibilities when he determines that such
examinations
and |
reports are necessary to enable the Department
to determine the |
safety of a credit union's operation or its solvency.
The cost |
to the Department of the aforesaid special examinations shall |
be
borne by the credit union being examined as prescribed by |
rule.
|
(3) All credit unions incorporated under this Act shall be |
examined at
least biennially by the Department or, at the |
|
discretion of
the Secretary,
by a public accountant registered |
by the Department of Financial and Professional
Regulation. The |
costs of an examination shall be paid by the
credit union. The |
scope of all examinations by a public accountant shall
be at |
least equal to the examinations made by the Department. The |
examiners
shall have full access to, and may compel the |
production of, all the books,
papers, securities and accounts |
of any credit union. A special examination
shall be made by the |
Department or by a public accountant approved by the
Department |
upon written request of 5 or more members, who guarantee the
|
expense of the same. Any credit union refusing to submit to an |
examination
when ordered by the Department shall be reported to |
the Attorney General,
who shall institute proceedings to have |
its charter revoked. If the Secretary
determines that the |
examination of a credit
union is to be
conducted by a public |
accountant registered by the Department of Financial and
|
Professional Regulation and the examination is
done in |
conjunction
with the credit union's external independent audit |
of financial
statements, the requirements of this Section and |
subsection (3) of Section
34 shall be deemed met.
|
(3.5) Pursuant to Section 8, the Secretary shall adopt |
rules that ensure consistency and due process in the |
examination process. The Secretary may also establish |
guidelines that (i) define the scope of the examination process |
and (ii) clarify examination items to be resolved. The rules, |
formal guidance, interpretative letters, or opinions furnished |
|
to credit unions by the Secretary may be relied upon by the |
credit unions. |
(4) A copy of the completed report of examination and a |
review comment
letter, if any, citing exceptions revealed |
during the examination, shall
be submitted to the credit union |
by the Department. A detailed report stating
the corrective |
actions taken by the board of directors on each exception
set |
forth in the review comment letter shall be filed with the |
Department
within 40 days after the date of the review comment |
letter, or as otherwise
directed by the Department. Any credit |
union through its officers, directors,
committee members or |
employees, which willfully provides fraudulent or
misleading |
information regarding the corrective actions taken on |
exceptions
appearing in a review comment letter may have its |
operations restricted to
the collection of principal and |
interest on loans outstanding and the
payment of normal |
expenses and salaries until all exceptions are corrected
and |
accepted by the Department.
|
(Source: P.A. 97-133, eff. 1-1-12.)
|
(205 ILCS 305/30) (from Ch. 17, par. 4431)
|
Sec. 30. Duties of directors. |
(a) It shall be the duty of the directors to:
|
(1) Review actions on applications
for membership. A |
record of the membership committee's approval or
denial of |
membership or management's approval or denial of |
|
membership if no membership committee
has been appointed |
shall be available to the board of
directors for |
inspection. A person denied membership by the membership |
committee or credit union management may appeal the denial |
to the board;
|
(2) Provide adequate fidelity bond coverage for |
officers,
employees, directors and committee members, and |
for losses caused by
persons outside of the credit union, |
subject to rules and regulations
promulgated by the |
Secretary;
|
(3) Determine from time to time the interest rates, not |
in excess of that
allowed under this Act, which shall be |
charged on loans to members and to
authorize interest |
refunds, if any, to members from income earned and received
|
in proportion to the interest paid by them on such classes |
of loans and
under such conditions as the board prescribes. |
The directors may establish
different interest rates to be |
charged on different classes of loans;
|
(4) Within any limitations set forth in the credit |
union's bylaws, fix
the maximum amount which may be loaned |
with and without security to a member;
|
(5) Declare dividends on various classes of shares in |
the manner and form
as provided in the bylaws;
|
(6) Limit the number of shares which may be owned by a |
member;
such limitations to apply alike to all members;
|
(7) Have charge of the investment of funds, except that |
|
the board of
directors may designate an investment |
committee or any qualified individual
or entity to have |
charge of making investments under policies established
by |
the board of directors;
|
(8) Authorize the employment of or contracting with |
such persons or
organizations as may be necessary to carry |
on the
operations of the credit union, provided that prior |
approval is received from
the
Department before delegating |
substantially all managerial duties and
responsibilities |
to a credit union organization, and fix
the compensation, |
if any, of the officers and provide for compensation for
|
other employees within
policies established by the board of
|
directors;
|
(9) Authorize the conveyance of property;
|
(10) Borrow or lend money consistent with the |
provisions of this Act;
|
(11) Designate a depository or depositories for the |
funds of the credit
union and supervise the investment of |
funds;
|
(12) Suspend or remove, or both, any or all officers or |
any
or all members of the membership, credit, or other |
committees
whenever, in the judgment of the board of
|
directors, the best interests of the credit union will be |
served thereby; provided that members of the supervisory |
committee may not be suspended or removed except for |
failure to perform their duties; and provided that removal |
|
of any officer shall be without prejudice to the contract |
rights, if any, of the person so removed;
|
(13) Appoint any special committees deemed necessary; |
and
|
(14) Perform such other duties as the members may |
direct, and perform
or authorize any action not |
inconsistent with this Act and not specifically
reserved by |
the bylaws to the members. |
(b) The board of
directors may delegate to the chief |
management official, according to guidelines established by |
the board that may include the authority to further delegate |
one or more duties, all of the following duties: |
(1) determining the interest rates on loans; |
(2) determining the dividend rates on share accounts;
|
and |
(3) hiring employees other than the chief management |
official and fixing their compensation.
|
(c) Each director shall have a working familiarity with |
basic finance and accounting practices consistent with the size |
and complexity of the credit union operation they serve, |
including the ability to read and understand the credit union's |
balance sheet and income and expense statements and the ability |
to ask, when appropriate, substantive questions of management |
and auditors. For the purposes of this subsection (c), |
substantive questions include queries concerning financial |
services and products offered to the membership; how those |
|
activities generate revenue for the credit union; the credit, |
liquidity, interest rate, compliance, strategic, transaction, |
and reputation risks associated with those activities; and the |
internal control structures maintained by the credit union that |
limit and manage those risks. |
A director who was elected or appointed on or after January |
1, 2015 and who comes to the position without the requisite |
financial skills shall have until 6 months after the date of |
election or appointment to acquire the enumerated skills. |
An incumbent director who was elected or appointed before |
January 1, 2015 and does not possess the requisite financial |
skills shall have until July 1, 2015 to acquire the enumerated |
skills. |
An incumbent director or a director who is elected or |
appointed on or after January 1, 2015 who already understands |
his or her credit union's financial statements shall not be |
required to do anything further to satisfy the financial skills |
requirement set forth in subsection (c). |
It is the intent of the Department that all credit union |
directors possess a basic understanding of their credit union's |
financial condition. It is not the intent of the Department to |
subject credit union directors to examiner scrutiny of their |
financial skills. Rather, the Department shall evaluate |
whether the credit union has in place a policy to make |
available to their directors appropriate training to enhance |
their financial knowledge of the credit union. Directors may |
|
receive the training through internal credit union training, |
external training offered by the credit union's retained |
auditors, trade associations, vendors, regulatory agencies, or |
any other sources or on-the-job experience, or a combination of |
those activities. The training may be received through any |
medium, including, but not limited to, conferences, workshops, |
audit closing meetings, seminars, teleconferences, webinars, |
and other internet based delivery channels. |
(Source: P.A. 97-133, eff. 1-1-12.)
|
(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 Secretary
or by the |
|
board of directors, and submit reports of these
supplementary |
audits to the Secretary or board of directors as applicable.
If |
the supervisory committee has not engaged a public accountant |
registered
by the Department of Financial and 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 supervisory |
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 Secretary. A |
copy of the report
must be promptly mailed to the Secretary.
|
(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 Secretary.
|
(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 Financial and 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 Financial and
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 Secretary 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 |
Secretary. If the
annual internal audit of such a credit union |
is conducted by a public
accountant registered by the |
Department of Financial and 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.
|
(6) On an annual basis commencing January 1, 2015, the |
members of the supervisory committee shall receive training |
related to their statutory duties. Supervisory committee |
members may receive the training through internal credit union |
training, external training offered by the credit union's |
retained auditors, trade associations, vendors, regulatory |
agencies, or any other sources or on-the-job experience, or a |
combination of those activities. The training may be received |
through any medium, including, but not limited to, conferences, |
workshops, audit closing meetings, seminars, teleconferences, |
webinars, and other Internet-based delivery channels. |
(Source: P.A. 96-141, eff. 8-7-09; 96-963, eff. 7-2-10; 97-133, |
eff. 1-1-12.)
|
|
(205 ILCS 305/39) (from Ch. 17, par. 4440)
|
Sec. 39. Special purpose share accounts; charitable |
donation accounts. |
(1) If provided for in and consistent
with the bylaws, |
Christmas clubs, vacation clubs and other special purpose
share |
accounts may be established and offered under conditions and |
restrictions
established by the board of directors.
|
(2) Pursuant to a policy adopted by the board of directors, |
which may be amended from time to time, a credit union may |
establish one or more charitable donation accounts. The |
investments and purchases to fund a charitable donation account |
are not subject to the investment limitations of this Act, |
provided the charitable donation account is structured in |
accordance with this Act. At their time of purchase, the book |
value of the investments in all charitable donation accounts, |
in the aggregate, shall not exceed 5% of the credit union's net |
worth. |
(a) If a credit union chooses to establish a charitable |
donation account using a trust vehicle, the trustee must be |
an entity regulated by the Office of the Comptroller of the |
Currency, the U.S. Securities and Exchange Commission, |
another federal regulatory agency, or a State financial |
regulatory agency. A regulated trustee or other person who |
is authorized to make investment decisions for a charitable |
donation account, other than the credit union itself, shall |
|
either be registered with the U.S. Securities and Exchange |
Commission as an investment advisor or regulated by the |
Office of the Comptroller of the Currency. |
(b) The parties to the charitable donation account must |
document the terms and conditions controlling the account |
in a written operating agreement, trust agreement, or |
similar instrument. The terms of the agreement shall be |
consistent with the requirements and conditions set forth |
in this Section. The agreement, if applicable, and policies |
must document the investment strategies of the charitable |
donation account trustee or other manager in administering |
the charitable donation account and provide for the |
accounting of all aspects of the account, including its |
distributions and liquidation, in accordance with |
generally accepted accounting principles. |
(c) A credit union's charitable donation account |
agreement, if applicable, and policies shall provide that |
the charitable organization or non-profit entity |
recipients of any charitable donation account funds must be |
identified in the policy and be exempt from taxation under |
Section 501(c)(3) of the Internal Revenue Code. |
(d) Upon termination of a charitable donation account, |
the credit union may receive a distribution of the |
remaining assets in cash, or a distribution in kind of the |
remaining assets, but only if those assets are permissible |
investments for credit unions pursuant to this Act. |
|
(Source: P.A. 97-133, eff. 1-1-12.)
|
(205 ILCS 305/46) (from Ch. 17, par. 4447)
|
Sec. 46. Loans and interest rate.
|
(1) A credit union may make loans
to its members for such |
purpose and upon such security and terms, including
rates of |
interest, as the credit committee, credit manager, or loan |
officer
approves.
Notwithstanding the provisions of any other |
law in connection with extensions
of credit, a credit union may |
elect to
contract for and receive interest and fees and other |
charges for extensions of
credit subject only to the provisions |
of this Act and rules promulgated under
this Act, except that |
extensions of credit secured by residential real estate
shall |
be subject to the laws applicable thereto.
The rates of |
interest to be charged on loans to members shall be
set by the |
board of directors of each individual credit union in |
accordance with Section 30 of this Act and such
rates may be |
less than, but may not exceed, the maximum rate set forth in
|
this Section. A borrower may repay his loan prior to maturity, |
in whole or
in part, without penalty. The credit contract may |
provide for the payment
by the member and receipt by the credit |
union of all costs and
disbursements, including reasonable |
attorney's fees and collection agency
charges, incurred by the |
credit union to collect or enforce the debt in the
event of a |
delinquency by the member, or in the event of a breach of any
|
obligation of the member under the credit contract. A |
|
contingency or
hourly arrangement established under an |
agreement entered into by a credit
union with an attorney or |
collection agency to collect a loan of a member
in default |
shall be presumed prima facie reasonable.
|
(2) Credit unions may make loans based upon the security of |
any
interest or equity in real estate, subject to rules and |
regulations
promulgated by the Secretary. In any contract or |
loan which
is secured by a mortgage, deed of
trust, or |
conveyance in the nature of a mortgage, on residential real
|
estate, the interest which is computed, calculated, charged, or |
collected
pursuant to such contract or loan, or pursuant to any |
regulation or rule
promulgated pursuant to this Act, may not be |
computed, calculated, charged
or collected for any period of |
time occurring after the date on which the
total indebtedness, |
with the exception of late payment penalties, is paid
in full.
|
For purposes of this subsection (2) of this Section 46, a |
prepayment
shall mean the payment of the total indebtedness, |
with the exception of
late payment penalties if incurred or |
charged, on any date before the date
specified in the contract |
or loan agreement on which the total indebtedness
shall be paid |
in full, or before the date on which all payments, if timely
|
made, shall have been made. In the event of a prepayment of the
|
indebtedness which is made on a date
after the date on which |
interest on the indebtedness was last computed,
calculated, |
charged, or collected but before the next date on which |
interest
on the indebtedness was to be calculated, computed, |
|
charged, or collected,
the lender may calculate, charge and |
collect interest on the indebtedness
for the period which |
elapsed between the date on which the prepayment is
made and |
the date on which interest on the indebtedness was last |
computed,
calculated, charged or collected at a rate equal to |
1/360 of the annual
rate for each day which so elapsed, which |
rate shall be applied to the
indebtedness outstanding as of the |
date of prepayment. The lender shall
refund to the borrower any |
interest charged or collected which exceeds that
which the |
lender may charge or collect pursuant to the preceding |
sentence.
The provisions of this amendatory Act of 1985 shall |
apply only to contracts
or loans entered into on or after the |
effective date of this amendatory
Act.
|
(3) Notwithstanding any other provision of this Act, a |
credit union
authorized under this Act to make loans secured by |
an interest or equity in
real estate may engage in making |
"reverse mortgage" loans to persons for
the purpose of making |
home improvements or repairs, paying insurance
premiums or |
paying real estate taxes on the homestead properties
of such |
persons. If made, such loans shall be made on such terms and
|
conditions as the credit union shall determine and as shall be |
consistent
with the provisions of this Section and such rules |
and regulations as the Secretary
shall promulgate hereunder. |
For purposes of this Section, a
"reverse mortgage" loan shall |
be a loan extended on the basis of existing
equity in homestead |
property and secured by a mortgage on such property.
Such loans |
|
shall be repaid upon the sale of the property or upon the death
|
of the owner or, if the property is in joint tenancy, upon the |
death of the
last surviving joint tenant who had such an |
interest in the property at the
time the loan was initiated, |
provided, however, that the credit union and
its member may by |
mutual agreement, establish other repayment terms. A
credit |
union, in making a "reverse mortgage" loan, may add deferred
|
interest to principal or otherwise provide for the charging of |
interest or
premiums on such deferred interest. "Homestead" |
property, for purposes of
this Section, means the domicile and |
contiguous real estate owned and
occupied by the mortgagor.
|
(4) Notwithstanding any other provisions of this Act, a |
credit union
authorized under this Act to make loans secured by |
an interest or equity
in real property may engage in making |
revolving credit loans secured by
mortgages or deeds of trust |
on such real property or by security
assignments of beneficial |
interests in land trusts.
|
For purposes of this Section, "revolving credit" has the |
meaning defined
in Section 4.1 of the Interest Act.
|
Any mortgage or deed of trust given to secure a revolving |
credit loan may,
and when so expressed therein shall, secure |
not only the existing indebtedness
but also such future |
advances, whether such advances are obligatory or to
be made at |
the option of the lender, or otherwise, as are made within |
twenty
years from the date thereof, to the same extent as if |
such future advances
were made on the date of the execution of |
|
such mortgage or deed of trust,
although there may be no |
advance made at the time of execution of such mortgage
or other |
instrument, and although there may be no indebtedness |
outstanding
at the time any advance is made. The lien of such |
mortgage or deed of trust,
as to third persons
without actual |
notice thereof, shall be valid as to all such indebtedness
and |
future advances form the time said mortgage or deed of trust is |
filed
for record in the office of the recorder of deeds or the |
registrar of titles
of the county where the real property |
described therein is located. The
total amount of indebtedness |
that may be so secured may increase or decrease
from time to |
time, but the total unpaid balance so secured at any one time
|
shall not exceed a maximum principal amount which must be |
specified in such
mortgage or deed of trust, plus interest |
thereon, and any disbursements
made for the payment of taxes, |
special assessments, or insurance on said
real property, with |
interest on such disbursements.
|
Any such mortgage or deed of trust shall be valid and have |
priority over
all subsequent liens and encumbrances, including |
statutory liens, except
taxes and assessments levied on said |
real property.
|
(5) Compliance with federal or Illinois preemptive laws or |
regulations
governing loans made by a credit union chartered |
under this Act shall
constitute compliance with this Act.
|
(6) Credit unions may make residential real estate mortgage |
loans on terms and conditions established by the United States |
|
Department of Agriculture through its Rural Development |
Housing and Community Facilities Program. The portion of any |
loan in excess of the appraised value of the real estate shall |
be allocable only to the guarantee fee required under the |
program. |
(7) For a renewal, refinancing, or restructuring of an |
existing loan that is secured by an interest or equity in real |
estate, a new appraisal of the collateral shall not be required |
when the transaction involves an existing extension of credit |
at the credit union, no new moneys are advanced other than |
funds necessary to cover reasonable closing costs, and there |
has been no obvious or material change in market conditions or |
physical aspects of the real estate that threatens the adequacy |
of the credit union's real estate collateral protection after |
the transaction. |
(Source: P.A. 96-141, eff. 8-7-09; 97-133, eff. 1-1-12.)
|
(205 ILCS 305/57.1 new) |
Sec. 57.1. Services to other credit unions. |
(a) A credit union may act as a representative of and enter |
into an agreement with credit unions or other organizations for |
the purpose of: |
(1) sharing, utilizing, renting, leasing, purchasing, |
selling, and joint ownership of fixed assets or engaging in |
activities and services that relate to the daily operations |
of credit unions; and |
|
(2) providing correspondent services to other credit |
unions that the service provider credit union is authorized |
to perform for its own members or as part of its |
operations, including, but not limited to, loan |
processing, loan servicing, member check cashing services, |
disbursing share withdrawals and loan proceeds, cashing |
and selling money orders, ACH and wire transfer services, |
coin and currency services, performing internal audits, |
and automated teller machine deposit services.
|
