Bill Text: IL SB3687 | 2023-2024 | 103rd General Assembly | Engrossed
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Amends the Illinois Credit Union Act. Provides that a credit union regulated by the Department of Financial and Professional Regulation that is a covered financial institution under the Illinois Community Reinvestment Act shall pay an examination fee to the Department subject to the adopted by the Department. Provides that the aggregate of all credit union examination fees collected by the Department under the Illinois Community Reinvestment Act shall be paid and transferred promptly, accompanied by a detailed statement, into the State Treasury and shall be set apart in the Credit Union Community Reinvestment Act Fund. Provides the limits to the amounts of funds that a credit union may invest in the purchase of an investment interest in a pool of loans when the investment is greater than the net worth of the credit union. Provides that credit unions may invest funds in derivatives transactions to aid in the credit union's management of interest rate risk if certain specified conditions are satisfied. Makes changes to provisions concerning conflicts between bylaws adopted by the subscribers of a credit union and the Act. Makes changes to provisions concerning rules adopted by the Secretary of Financial and Professional Regulation and the Act. Makes other changes. Amends the State Finance Act. Creates the Credit Union Community Reinvestment Act Fund. Effective immediately.
Spectrum: Partisan Bill (Democrat 4-0)
Status: (Passed) 2024-08-09 - Public Act . . . . . . . . . 103-1034 [SB3687 Detail]
Download: Illinois-2023-SB3687-Engrossed.html
Bill Title: Amends the Illinois Credit Union Act. Provides that a credit union regulated by the Department of Financial and Professional Regulation that is a covered financial institution under the Illinois Community Reinvestment Act shall pay an examination fee to the Department subject to the adopted by the Department. Provides that the aggregate of all credit union examination fees collected by the Department under the Illinois Community Reinvestment Act shall be paid and transferred promptly, accompanied by a detailed statement, into the State Treasury and shall be set apart in the Credit Union Community Reinvestment Act Fund. Provides the limits to the amounts of funds that a credit union may invest in the purchase of an investment interest in a pool of loans when the investment is greater than the net worth of the credit union. Provides that credit unions may invest funds in derivatives transactions to aid in the credit union's management of interest rate risk if certain specified conditions are satisfied. Makes changes to provisions concerning conflicts between bylaws adopted by the subscribers of a credit union and the Act. Makes changes to provisions concerning rules adopted by the Secretary of Financial and Professional Regulation and the Act. Makes other changes. Amends the State Finance Act. Creates the Credit Union Community Reinvestment Act Fund. Effective immediately.
Spectrum: Partisan Bill (Democrat 4-0)
Status: (Passed) 2024-08-09 - Public Act . . . . . . . . . 103-1034 [SB3687 Detail]
Download: Illinois-2023-SB3687-Engrossed.html
| |||||||
| |||||||
1 | AN ACT concerning regulation.
| ||||||
2 | Be it enacted by the People of the State of Illinois, | ||||||
3 | represented in the General Assembly:
| ||||||
4 | Section 10. The Illinois Credit Union Act is amended by | ||||||
5 | changing Sections 2, 8, 12, 13, 39, and 59 as follows:
| ||||||
6 | (205 ILCS 305/2) (from Ch. 17, par. 4403) | ||||||
7 | Sec. 2. Organization procedure. | ||||||
8 | (1) Any 9 or more persons of legal age, the majority of | ||||||
9 | whom shall be residents of the State of Illinois, who have a | ||||||
10 | common bond referred to in Section 1.1 may organize a credit | ||||||
11 | union or a central credit union by complying with this | ||||||
12 | Section. | ||||||
13 | (2) The subscribers shall execute in duplicate Articles of | ||||||
14 | Incorporation and agree to the terms thereof, which Articles | ||||||
15 | shall state: | ||||||
16 | (a) The name, which shall include the words "credit | ||||||
17 | union" and which shall not be the same as that of any other | ||||||
18 | existing credit union in this state, and the location | ||||||
19 | where the proposed credit union is to have its principal | ||||||
20 | place of business; | ||||||
21 | (b) The common bond of the members of the credit | ||||||
22 | union; | ||||||
23 | (c) The par value of the shares of the credit union, |
| |||||||
| |||||||
1 | which must be at least $1; | ||||||
2 | (d) The names, addresses and Social Security numbers | ||||||
3 | of the subscribers to the Articles of Incorporation, and | ||||||
4 | the number and the value of shares subscribed to by each; | ||||||
5 | (e) That the credit union may exercise such incidental | ||||||
6 | powers as are necessary or requisite to enable it to carry | ||||||
7 | on effectively the purposes for which it is incorporated, | ||||||
8 | and those powers which are inherent in the credit union as | ||||||
9 | a legal entity; | ||||||
10 | (f) That the existence of the credit union shall be | ||||||
11 | perpetual. | ||||||
12 | (3) The subscribers shall prepare and adopt bylaws for the | ||||||
13 | general governance government of the credit union, consistent | ||||||
14 | with this Act, and execute same in duplicate. If there is a | ||||||
15 | conflict, inconsistency, or variation between the terms of | ||||||
16 | this Act and the provisions in the bylaws adopted by the credit | ||||||
17 | union, the terms of this Act shall control. A conflict, | ||||||
18 | inconsistency, or variation may not be deemed to exist if the | ||||||
19 | Act specifically requires that a particular matter shall be | ||||||
20 | adopted in the bylaws. | ||||||
21 | (4) The subscribers shall forward the articles of | ||||||
22 | incorporation and the bylaws to the Secretary in duplicate, | ||||||
23 | along with the required charter fee. If they conform to the | ||||||
24 | law, and such rules and regulations as the Secretary and the | ||||||
25 | Director may prescribe, if the Secretary determines that a | ||||||
26 | common bond exists, and that it is economically advisable to |
| |||||||
| |||||||
1 | organize the credit union, he or she shall within 60 days issue | ||||||
2 | a certificate of approval attached to the articles of | ||||||
3 | incorporation and return a copy of the bylaws and the articles | ||||||
4 | of incorporation to the applicants or their representative, | ||||||
5 | which shall be preserved in the permanent files of the credit | ||||||
6 | union. The subscribers shall file the certificate of approval, | ||||||
7 | with the articles of incorporation attached, in the office of | ||||||
8 | the recorder (or, if there is no recorder, in the office of the | ||||||
9 | county clerk) of the county in which the credit union is to | ||||||
10 | locate its principal place of business. The recorder or the | ||||||
11 | county clerk, as the case may be, shall accept and record the | ||||||
12 | documents if they are accompanied by the proper fee. When the | ||||||
13 | documents are so recorded, the credit union is incorporated | ||||||
14 | under this Act. | ||||||
15 | (5) The subscribers for a credit union charter shall not | ||||||
16 | transact any business until the certificate of approval has | ||||||
17 | been received. | ||||||
18 | (Source: P.A. 100-361, eff. 8-25-17.)
| ||||||
19 | (205 ILCS 305/8) (from Ch. 17, par. 4409) | ||||||
20 | Sec. 8. Secretary's powers and duties. Credit unions are | ||||||
21 | regulated by the Department. The Secretary in executing the | ||||||
22 | powers and discharging the duties vested by law in the | ||||||
23 | Department has the following powers and duties: | ||||||
24 | (1) To exercise the rights, powers, and duties set | ||||||
25 | forth in this Act or any related Act. The Director shall |
| |||||||
| |||||||
1 | oversee the functions of the Division and report to the | ||||||
2 | Secretary, with respect to the Director's exercise of any | ||||||
3 | of the rights, powers, and duties vested by law in the | ||||||
4 | Secretary under this Act. All references in this Act to | ||||||
5 | the Secretary shall be deemed to include the Director, as | ||||||
6 | a person authorized by the Secretary or this Act to assume | ||||||
7 | responsibility for the oversight of the functions of the | ||||||
8 | Department relating to the regulatory supervision of | ||||||
9 | credit unions under this Act. | ||||||
10 | (2) To adopt prescribe rules and regulations for the | ||||||
11 | administration of this Act. The provisions of the Illinois | ||||||
12 | Administrative Procedure Act are hereby expressly adopted | ||||||
13 | and incorporated herein as though a part of this Act, and | ||||||
14 | shall apply to all administrative rules and procedures of | ||||||
15 | the Department under this Act. Rules adopted by the | ||||||
16 | Secretary shall be within the statutory authority upon | ||||||
17 | which they are based. If there is a conflict, | ||||||
18 | inconsistency, or variation between the terms of this Act | ||||||
19 | and the provisions in a rule adopted by the Secretary, the | ||||||
20 | terms of this Act shall control. A conflict, | ||||||
21 | inconsistency, or variation may not be deemed to exist if | ||||||
22 | the Act specifically delegates authority to the Secretary | ||||||
23 | to adopt by rule standards or limitations on a particular | ||||||
24 | matter, provided the rule is within the statutory | ||||||
25 | authority upon which it is based. | ||||||
26 | (3) To direct and supervise all the administrative and |
| |||||||
| |||||||
1 | technical activities of the Department including the | ||||||
2 | employment of a Credit Union Supervisor who shall have | ||||||
3 | knowledge in the theory and practice of, or experience in, | ||||||
4 | the operations or supervision of financial institutions, | ||||||
5 | preferably credit unions, and such other persons as are | ||||||
6 | necessary to carry out his functions. The Secretary shall | ||||||
7 | ensure that all examiners appointed or assigned to examine | ||||||
8 | the affairs of State-chartered credit unions possess the | ||||||
9 | necessary training and continuing education to effectively | ||||||
10 | execute their jobs. | ||||||
11 | (4) To issue cease and desist orders when in the | ||||||
12 | opinion of the Secretary, a credit union is engaged or has | ||||||
13 | engaged, or the Secretary has reasonable cause to believe | ||||||
14 | the credit union is about to engage, in an unsafe or | ||||||
15 | unsound practice, or is violating or has violated or the | ||||||
16 | Secretary has reasonable cause to believe is about to | ||||||
17 | violate a law, rule, or regulation or any condition | ||||||
18 | imposed in writing by the Department. | ||||||
19 | (5) To suspend from office and to prohibit from | ||||||
20 | further participation in any manner in the conduct of the | ||||||
21 | affairs of any credit union any director, officer, or | ||||||
22 | committee member who has committed any violation of a law, | ||||||
23 | rule, or regulation or of a cease and desist order or who | ||||||
24 | has engaged or participated in any unsafe or unsound | ||||||
25 | practice in connection with the credit union or who has | ||||||
26 | committed or engaged in any act, omission, or practice |
| |||||||
| |||||||
1 | which constitutes a breach of his fiduciary duty as such | ||||||
2 | director, officer, or committee member, when the Secretary | ||||||
3 | has determined that such action or actions have resulted | ||||||
4 | or will result in substantial financial loss or other | ||||||
5 | damage that seriously prejudices the interests of the | ||||||
6 | members. | ||||||
7 | (6) To assess a civil penalty against a credit union | ||||||
8 | provided that: | ||||||
9 | (A) the Secretary reasonably determines, based on | ||||||
10 | objective facts and an accurate assessment of | ||||||
11 | applicable legal standards, that the credit union has: | ||||||
12 | (i) committed a violation of this Act, any | ||||||
13 | rule adopted in accordance with this Act, or any | ||||||
14 | order of the Secretary issued pursuant to his or | ||||||
15 | her authority under this Act; or | ||||||
16 | (ii) engaged or participated in any unsafe or | ||||||
17 | unsound practice; | ||||||
18 | (B) before a civil penalty is assessed under this | ||||||
19 | item (6), the Secretary must make the further | ||||||
20 | reasonable determination, based on objective facts and | ||||||
21 | an accurate assessment of applicable legal standards, | ||||||
22 | that the credit union's action constituting a | ||||||
23 | violation under subparagraph (i) of paragraph (A) of | ||||||
24 | this item (6) or an unsafe and unsound practice under | ||||||
25 | subparagraph (ii) of paragraph (A) of this item (6): | ||||||
26 | (i) directly resulted in a substantial and |
| |||||||
| |||||||
1 | material financial loss or created a reasonable | ||||||
2 | probability that a substantial and material | ||||||
3 | financial loss will directly result; or | ||||||
4 | (ii) constituted willful misconduct or a | ||||||
5 | material breach of fiduciary duty of any director, | ||||||
6 | officer, or committee member of the credit union; | ||||||
7 | Material financial loss, as referenced in this | ||||||
8 | paragraph (B), shall be assessed in light of | ||||||
9 | surrounding circumstances and the relative size and | ||||||
10 | nature of the financial loss or probable financial | ||||||
11 | loss. Certain benchmarks shall be used in determining | ||||||
12 | whether financial loss is material, such as a | ||||||
13 | percentage of total assets or total gross income for | ||||||
14 | the immediately preceding 12-month period. Absent | ||||||
15 | compelling and extraordinary circumstances, no civil | ||||||
16 | penalty shall be assessed, unless the financial loss | ||||||
17 | or probable financial loss is equal to or greater than | ||||||
18 | either 1% of the credit union's total assets for the | ||||||
19 | immediately preceding 12-month period, or 1% of the | ||||||
20 | credit union's total gross income for the immediately | ||||||
21 | preceding 12-month period, whichever is less; | ||||||
22 | (C) before a civil penalty is assessed under this | ||||||
23 | item (6), the credit union must be expressly advised | ||||||
24 | in writing of the: | ||||||
25 | (i) specific violation that could subject it | ||||||
26 | to a penalty under this item (6); and |
| |||||||
| |||||||
1 | (ii) specific remedial action to be taken | ||||||
2 | within a specific and reasonable time frame to | ||||||
3 | avoid imposition of the penalty; | ||||||
4 | (D) civil penalties assessed under this item (6) | ||||||
5 | shall be remedial, not punitive, and reasonably | ||||||
6 | tailored to ensure future compliance by the credit | ||||||
7 | union with the provisions of this Act and any rules | ||||||
8 | adopted pursuant to this Act; | ||||||
9 | (E) a credit union's failure to take timely | ||||||
10 | remedial action with respect to the specific violation | ||||||
11 | may result in the issuance of an order assessing a | ||||||
12 | civil penalty up to the following maximum amount, | ||||||
13 | based upon the total assets of the credit union: | ||||||
14 | (i) Credit unions with assets of less than $10 | ||||||
15 | million ................................................$1,000 | ||||||
16 | (ii) Credit unions with assets of at least $10 | ||||||
17 | million and less than $50 million ......................$2,500 | ||||||
18 | (iii) Credit unions with assets of at least | ||||||
19 | $50 million and less than $100 million .................$5,000 | ||||||
20 | (iv) Credit unions with assets of at least | ||||||
21 | $100 million and less than $500 million ...............$10,000 | ||||||
22 | (v) Credit unions with assets of at least $500 | ||||||
23 | million and less than $1 billion ......................$25,000 | ||||||
24 | (vi) Credit unions with assets of $1 billion | ||||||
25 | and greater .....................................$50,000; and | ||||||
26 | (F) an order assessing a civil penalty under this |
| |||||||
| |||||||
1 | item (6) shall take effect upon service of the order, | ||||||
2 | unless the credit union makes a written request for a | ||||||
3 | hearing under 38 Ill. Adm. Code 190.20 of the | ||||||
4 | Department's rules for credit unions within 90 days | ||||||
5 | after issuance of the order; in that event, the order | ||||||
6 | shall be stayed until a final administrative order is | ||||||
7 | entered. | ||||||
8 | This item (6) shall not apply to violations separately | ||||||
9 | addressed in rules as authorized under item (7) of this | ||||||
10 | Section. | ||||||
11 | (7) Except for the fees established in this Act, to | ||||||
12 | prescribe, by rule and regulation, fees and penalties for | ||||||
13 | preparing, approving, and filing reports and other | ||||||
14 | documents; furnishing transcripts; holding hearings; | ||||||
15 | investigating applications for permission to organize, | ||||||
16 | merge, or convert; failure to maintain accurate books and | ||||||
17 | records to enable the Department to conduct an | ||||||
18 | examination; and taking supervisory actions. | ||||||
19 | (8) To destroy, in his discretion, any or all books | ||||||
20 | and records of any credit union in his possession or under | ||||||
21 | his control after the expiration of three years from the | ||||||
22 | date of cancellation of the charter of such credit unions. | ||||||
23 | (9) To make investigations and to conduct research and | ||||||
24 | studies and to publish some of the problems of persons in | ||||||
25 | obtaining credit at reasonable rates of interest and of | ||||||
26 | the methods and benefits of cooperative saving and lending |
| |||||||
| |||||||
1 | for such persons. | ||||||
2 | (10) To authorize, foster, or establish experimental, | ||||||
3 | developmental, demonstration, or pilot projects by public | ||||||
4 | or private organizations including credit unions which: | ||||||
5 | (a) promote more effective operation of credit | ||||||
6 | unions so as to provide members an opportunity to use | ||||||
7 | and control their own money to improve their economic | ||||||
8 | and social conditions; or | ||||||
9 | (b) are in the best interests of credit unions, | ||||||
10 | their members and the people of the State of Illinois. | ||||||
11 | (11) To cooperate in studies, training, or other | ||||||
12 | administrative activities with, but not limited to, the | ||||||
13 | NCUA, other state credit union regulatory agencies and | ||||||
14 | industry trade associations in order to promote more | ||||||
15 | effective and efficient supervision of Illinois chartered | ||||||
16 | credit unions. | ||||||
17 | (12) Notwithstanding the provisions of this Section, | ||||||
18 | the Secretary shall not: | ||||||
19 | (1) issue an order against a credit union | ||||||
20 | organized under this Act for unsafe or unsound banking | ||||||
21 | practices solely because the entity provides or has | ||||||
22 | provided financial services to a cannabis-related | ||||||
23 | legitimate business; | ||||||
24 | (2) prohibit, penalize, or otherwise discourage a | ||||||
25 | credit union from providing financial services to a | ||||||
26 | cannabis-related legitimate business solely because |
| |||||||
| |||||||
1 | the entity provides or has provided financial services | ||||||
2 | to a cannabis-related legitimate business; | ||||||
3 | (3) recommend, incentivize, or encourage a credit | ||||||
4 | union not to offer financial services to an account | ||||||
5 | holder or to downgrade or cancel the financial | ||||||
6 | services offered to an account holder solely because: | ||||||
7 | (A) the account holder is a manufacturer or | ||||||
8 | producer, or is the owner, operator, or employee | ||||||
9 | of a cannabis-related legitimate business; | ||||||
10 | (B) the account holder later becomes an owner | ||||||
11 | or operator of a cannabis-related legitimate | ||||||
12 | business; or | ||||||
13 | (C) the credit union was not aware that the | ||||||
14 | account holder is the owner or operator of a | ||||||
15 | cannabis-related legitimate business; and | ||||||
16 | (4) take any adverse or corrective supervisory | ||||||
17 | action on a loan made to an owner or operator of: | ||||||
18 | (A) a cannabis-related legitimate business | ||||||
19 | solely because the owner or operator owns or | ||||||
20 | operates a cannabis-related legitimate business; | ||||||
21 | or | ||||||
22 | (B) real estate or equipment that is leased to | ||||||
23 | a cannabis-related legitimate business solely | ||||||
24 | because the owner or operator of the real estate | ||||||
25 | or equipment leased the equipment or real estate | ||||||
26 | to a cannabis-related legitimate business. |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
1 | (Source: P.A. 102-858, eff. 5-13-22; 103-154, eff. 6-30-23.)
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||
2 | (205 ILCS 305/12) (from Ch. 17, par. 4413) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
3 | Sec. 12. Regulatory fees. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
4 | (1) For the fiscal year beginning July 1, 2007, a credit | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
5 | union regulated by the Department shall pay a regulatory fee | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
6 | to the Department based upon its total assets as shown by its | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
7 | Year-end Call Report at the following rates or at a lesser rate | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
8 | established by the Secretary in a manner proportionately | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
9 | consistent with the following rates and sufficient to fund the | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
10 | actual administrative and operational expenses of the | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
11 | Department's Credit Union Section pursuant to subsection (4) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
12 | of this Section: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
25 | (2) The Secretary shall review the regulatory fee schedule | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
26 | in subsection (1) and the projected earnings on those fees on |
| |||||||
| |||||||
1 | an annual basis and adjust the fee schedule no more than 5% | ||||||
2 | annually if necessary to defray the estimated administrative | ||||||
3 | and operational expenses of the Credit Union Section of the | ||||||
4 | Department as defined in subsection (5). However, the fee | ||||||
5 | schedule shall not be increased if the amount remaining in the | ||||||
6 | Credit Union Fund at the end of any fiscal year is greater than | ||||||
7 | 25% of the total actual and operational expenses incurred by | ||||||
8 | the State in administering and enforcing the Illinois Credit | ||||||
9 | Union Act and other laws, rules, and regulations as may apply | ||||||
10 | to the administration and enforcement of the foregoing laws, | ||||||
11 | rules, and regulations as amended from time to time for the | ||||||
12 | preceding fiscal year. The regulatory fee for the next fiscal | ||||||
13 | year shall be calculated by the Secretary based on the credit | ||||||
14 | union's total assets as of December 31 of the preceding | ||||||
15 | calendar year. The Secretary shall provide credit unions with | ||||||
16 | written notice of any adjustment made in the regulatory fee | ||||||
17 | schedule. | ||||||
18 | (3) A credit union shall pay to the Department a | ||||||
19 | regulatory fee in quarterly installments equal to one-fourth | ||||||
20 | of the regulatory fee due in accordance with the regulatory | ||||||
21 | fee schedule in subsection (1), on the basis of assets as of | ||||||
22 | the Year-end Call Report of the preceding calendar year. The | ||||||
23 | total annual regulatory fee shall not be less than $100 or more | ||||||
24 | than $210,000, provided that the regulatory fee cap of | ||||||
25 | $210,000 shall be adjusted to incorporate the same percentage | ||||||
26 | increase as the Secretary makes in the regulatory fee schedule |
| |||||||
| |||||||
1 | from time to time under subsection (2). No regulatory fee | ||||||
2 | shall be collected from a credit union until it has been in | ||||||
3 | operation for one year. The regulatory fee shall be billed to | ||||||
4 | credit unions on a quarterly basis and it shall be payable by | ||||||
5 | credit unions on the due date for the Call Report for the | ||||||
6 | subject quarter. | ||||||
7 | (4) (a) The aggregate of all fees collected by the | ||||||
8 | Department under this Act and from credit unions pursuant to | ||||||
9 | the Illinois Community Reinvestment Act shall be paid promptly | ||||||
10 | after they are received, accompanied by a detailed statement | ||||||
11 | thereof, into the State treasury Treasury and shall be set | ||||||
12 | apart in the Credit Union Fund, a special fund hereby created | ||||||
13 | in the State treasury. The amount from time to time deposited | ||||||
14 | in the Credit Union Fund and shall be used to offset the | ||||||
15 | ordinary administrative and operational expenses of the Credit | ||||||
16 | Union Section of the Department under this Act. All earnings | ||||||
17 | received from investments of funds in the Credit Union Fund | ||||||
18 | shall be deposited into the Credit Union Fund and may be used | ||||||
19 | for the same purposes as fees deposited into that fund. Moneys | ||||||
20 | deposited in the Credit Union Fund may be transferred to the | ||||||
21 | Professions Indirect Cost Fund, as authorized under Section | ||||||
22 | 2105-300 of the Department of Professional Regulation Law of | ||||||
23 | the Civil Administrative Code of Illinois. | ||||||
24 | (b) At the conclusion of each fiscal year, beginning in | ||||||
25 | fiscal year 2025, the Department shall separately identify the | ||||||
26 | direct administrative and operational expenses and allocable |
| |||||||
| |||||||
1 | indirect costs of the Credit Union Section of the Department | ||||||
2 | incidental to conducting the examinations required or | ||||||
3 | authorized by the Illinois Community Reinvestment Act and | ||||||
4 | implementing rules adopted by the Department. Pursuant to | ||||||
5 | Section 2105-300 of the Department of Professional Regulation | ||||||
6 | Law of the Civil Administrative Code of Illinois, the | ||||||
7 | Department shall make copies of the analyses available to the | ||||||
8 | credit union industry in a timely manner. The administrative | ||||||
9 | and operational expenses of the Credit Union Section of the | ||||||
10 | Department in conducting examinations required or authorized | ||||||
11 | by the Illinois Community Reinvestment Act shall have the same | ||||||
12 | meaning and scope as the administrative and operational | ||||||
13 | expenses of the Credit Union Section of the Department, as | ||||||
14 | defined in subsection (5) of this Section. | ||||||
15 | (c) Notwithstanding provisions in the State Finance Act, | ||||||
16 | as now or hereafter amended, or any other law to the contrary, | ||||||
17 | the Governor may, during any fiscal year through January 10, | ||||||
18 | 2011, from time to time direct the State Treasurer and | ||||||
19 | Comptroller to transfer a specified sum not exceeding 10% of | ||||||
20 | the revenues to be deposited into the Credit Union Fund during | ||||||
21 | that fiscal year from that Fund to the General Revenue Fund in | ||||||
22 | order to help defray the State's operating costs for the | ||||||
23 | fiscal year. Notwithstanding provisions in the State Finance | ||||||
24 | Act, as now or hereafter amended, or any other law to the | ||||||
25 | contrary, the total sum transferred from the Credit Union Fund | ||||||
26 | to the General Revenue Fund pursuant to this provision shall |
| |||||||
| |||||||
1 | not exceed during any fiscal year 10% of the revenues to be | ||||||
2 | deposited into the Credit Union Fund during that fiscal year. | ||||||
3 | The State Treasurer and Comptroller shall transfer the amounts | ||||||
4 | designated under this Section as soon as may be practicable | ||||||
5 | after receiving the direction to transfer from the Governor. | ||||||
6 | (5) The administrative and operational expenses for any | ||||||
7 | fiscal year shall mean the ordinary and contingent expenses | ||||||
8 | for that year incidental to making the examinations provided | ||||||
9 | for by, and for administering, this Act, including all | ||||||
10 | salaries and other compensation paid for personal services | ||||||
11 | rendered for the State by officers or employees of the State to | ||||||
12 | enforce this Act; all expenditures for telephone and telegraph | ||||||
13 | charges, postage and postal charges, office supplies and | ||||||
14 | services, furniture and equipment, office space and | ||||||
15 | maintenance thereof, travel expenses and other necessary | ||||||
16 | expenses; all to the extent that such expenditures are | ||||||
17 | directly incidental to such examination or administration. | ||||||
18 | (6) When the balance in the Credit Union Fund at the end of | ||||||
19 | a fiscal year exceeds 25% of the total administrative and | ||||||
20 | operational expenses incurred by the State in administering | ||||||
21 | and enforcing the Illinois Credit Union Act and other laws, | ||||||
22 | rules, and regulations as may apply to the administration and | ||||||
23 | enforcement of the foregoing laws, rules, and regulations as | ||||||
24 | amended from time to time for that fiscal year, such excess | ||||||
25 | shall be credited to credit unions and applied against their | ||||||
26 | regulatory fees for the subsequent fiscal year. The amount |
| |||||||
| |||||||
1 | credited to each credit union shall be in the same proportion | ||||||
2 | as the regulatory fee paid by such credit union for the fiscal | ||||||
3 | year in which the excess is produced bears to the aggregate | ||||||
4 | amount of all fees collected by the Department under this Act | ||||||
5 | for the same fiscal year. | ||||||
6 | (7) (Blank). | ||||||
7 | (8) Nothing in this Act shall prohibit the General | ||||||
8 | Assembly from appropriating funds to the Department from the | ||||||
9 | General Revenue Fund for the purpose of administering this | ||||||
10 | Act. | ||||||
11 | (9) For purposes of this Section, "fiscal year" means a | ||||||
12 | period beginning on July 1 of any calendar year and ending on | ||||||
13 | June 30 of the next calendar year. | ||||||
14 | (Source: P.A. 103-107, eff. 6-27-23.)
| ||||||
15 | (205 ILCS 305/13) (from Ch. 17, par. 4414) | ||||||
16 | Sec. 13. General powers. A credit union may: | ||||||
17 | (1) Make contracts; sue and be sued; and adopt and use | ||||||
18 | a common seal and alter the same; | ||||||
19 | (2) Acquire, lease (either as lessee or lessor), hold, | ||||||
20 | pledge, mortgage, sell and dispose of real property, | ||||||
21 | either in whole or in part, or any interest therein, as may | ||||||
22 | be necessary or incidental to its present or future | ||||||
23 | operations and needs, subject to such limitations as may | ||||||
24 | be imposed thereon in rules and regulations promulgated by | ||||||
25 | the Secretary; acquire, lease (either as lessee or |
| |||||||
| |||||||
1 | lessor), hold, pledge, mortgage, sell and dispose of | ||||||
2 | personal property, either in whole or in part, or any | ||||||
3 | interest therein, as may be necessary or incidental to its | ||||||
4 | present or future operations and needs; | ||||||
5 | (3) At the discretion of the board of directors, | ||||||
6 | require the payment of an entrance fee or annual | ||||||
7 | membership fee, or both, of any person admitted to | ||||||
8 | membership; | ||||||
9 | (4) Receive savings from its members in the form of | ||||||
10 | shares of various classes, or special purpose share | ||||||
11 | accounts; act as custodian of its members' accounts; issue | ||||||
12 | shares in trust as provided in this Act; | ||||||
13 | (5) Lend its funds to its members and otherwise as | ||||||
14 | hereinafter provided; | ||||||
15 | (6) Borrow from any source in accordance with policy | ||||||
16 | established by the board of directors to a maximum of 50% | ||||||
17 | of capital, surplus and reserves; | ||||||
18 | (7) Discount and sell any obligations owed to the | ||||||
19 | credit union; | ||||||
20 | (8) Honor requests for withdrawals or transfers of all | ||||||
21 | or any part of member share accounts, and any classes | ||||||
22 | thereof, in any manner approved by the credit union board | ||||||
23 | of directors; | ||||||
24 | (9) Sell all or a part of its assets or purchase all or | ||||||
25 | a part of the assets of another credit union and assume the | ||||||
26 | liabilities of the selling credit union, subject to the |
| |||||||
| |||||||
1 | prior approval of the Director, which approval shall not | ||||||
2 | be required in the case of loan transactions otherwise | ||||||
3 | authorized under applicable law; | ||||||
4 | (10) Invest surplus funds as provided in this Act; | ||||||
5 | (11) Make deposits in banks, savings banks, savings | ||||||
6 | and loan associations, trust companies; and invest in | ||||||
7 | shares, classes of shares or share certificates of other | ||||||
8 | credit unions; | ||||||
9 | (12) Assess charges and fees to members in accordance | ||||||
10 | with board resolution; | ||||||
11 | (13) Hold membership in and pay dues to associations | ||||||
12 | and organizations; to invest in shares, stocks or | ||||||
13 | obligations of any credit union organization; | ||||||
14 | (14) Declare dividends and pay interest refunds to | ||||||
15 | borrowers as provided in this Act; | ||||||
16 | (15) Collect, receive and disburse monies in | ||||||
17 | connection with providing negotiable checks, money orders | ||||||
18 | and other money-type instruments, and for such other | ||||||
19 | purposes as may provide benefit or convenience to its | ||||||
20 | members, and charge a reasonable fee for such services; | ||||||
21 | (16) Act as fiscal agent for and receive deposits from | ||||||
22 | the federal government, this State, or any other state, | ||||||
23 | state or any agency or political subdivision thereof , | ||||||
24 | including, but not limited to, political subdivisions as | ||||||
25 | defined in subsection (b) of Section 59. The receipt of | ||||||
26 | deposits from any state other than Illinois, or any agency |
| |||||||
| |||||||
1 | or political subdivision thereof, shall not exceed the | ||||||
2 | total limit of the greater of 50% of paid-in and | ||||||
3 | unimpaired capital and surplus or $3,000,000 as described | ||||||
4 | in 12 CFR 701.32 and shall otherwise comply with the | ||||||
5 | requirements of 12 CFR 701.32 ; | ||||||
6 | (17) Receive savings from nonmembers in the form of | ||||||
7 | shares or share accounts in the case of credit unions | ||||||
8 | serving predominantly low-income members. The term "low | ||||||
9 | income members" shall mean those members who make less | ||||||
10 | than 80% of the average for all wage earners as | ||||||
11 | established by the Bureau of Labor Statistics or those | ||||||
12 | members whose annual household income falls at or below | ||||||
13 | 80% of the median household income for the nation as | ||||||
14 | established by the Census Bureau. The term "predominantly" | ||||||
15 | is defined as a simple majority; | ||||||
16 | (18) Establish, maintain, and operate terminals as | ||||||
17 | authorized by the Electronic Fund Transfer Act; | ||||||
18 | (19) Subject to Article XLIV of the Illinois Insurance | ||||||
19 | Code, act as the agent for any fire, life, or other | ||||||
20 | insurance company authorized by the State of Illinois, by | ||||||
21 | soliciting and selling insurance and collecting premiums | ||||||
22 | on policies issued by such company; and may receive for | ||||||
23 | services so rendered such fees or commissions as may be | ||||||
24 | agreed upon between the said credit union and the | ||||||
25 | insurance company for which it may act as agent; provided, | ||||||
26 | however, that no such credit union shall in any case |
| |||||||
| |||||||
1 | assume or guarantee the payment of any premium on | ||||||
2 | insurance policies issued through its agency by its | ||||||
3 | principal; and provided further, that the credit union | ||||||
4 | shall not guarantee the truth of any statement made by an | ||||||
5 | assured in filing his application for insurance; and | ||||||
6 | (20) Make reasonable contributions to civic, | ||||||
7 | charitable, or service organizations not organized for | ||||||
8 | profit; religious corporations; and fundraisers benefiting | ||||||
9 | persons in the credit union's service area. | ||||||
10 | (Source: P.A. 97-133, eff. 1-1-12.)
| ||||||
11 | (205 ILCS 305/39) (from Ch. 17, par. 4440) | ||||||
12 | Sec. 39. Special purpose share accounts; charitable | ||||||
13 | donation accounts. | ||||||
14 | (1) If provided for in and consistent with the bylaws, | ||||||
15 | Christmas clubs, vacation clubs and other special purpose | ||||||
16 | share accounts may be established and offered under conditions | ||||||
17 | and restrictions established by the board of directors. | ||||||
18 | (2) Pursuant to a policy adopted by the board of | ||||||
19 | directors, which may be amended from time to time, a credit | ||||||
20 | union may establish one or more charitable donation accounts. | ||||||
21 | The investments and purchases to fund a charitable donation | ||||||
22 | account are not subject to the investment limitations of this | ||||||
23 | Act, provided the charitable donation account is structured in | ||||||
24 | accordance with this Act. At their time of purchase, the book | ||||||
25 | value of the investments in all charitable donation accounts, |
| |||||||
| |||||||
1 | in the aggregate, shall not exceed 5% of the credit union's net | ||||||
2 | worth. | ||||||
3 | (a) If a credit union chooses to establish a | ||||||
4 | charitable donation account using a trust vehicle, the | ||||||
5 | trustee must be an entity regulated by the Office of the | ||||||
6 | Comptroller of the Currency, the U.S. Securities and | ||||||
7 | Exchange Commission, another federal regulatory agency, or | ||||||
8 | a State financial regulatory agency. A regulated trustee | ||||||
9 | or other person who is authorized to make investment | ||||||
10 | decisions for a charitable donation account, other than | ||||||
11 | the credit union itself, shall either be registered with | ||||||
12 | the U.S. Securities and Exchange Commission as an | ||||||
13 | investment advisor or regulated by the Office of the | ||||||
14 | Comptroller of the Currency. | ||||||
15 | (b) The parties to the charitable donation account | ||||||
16 | must document the terms and conditions controlling the | ||||||
17 | account in a written operating agreement, trust agreement, | ||||||
18 | or similar instrument. The terms of the agreement shall be | ||||||
19 | consistent with the requirements and conditions set forth | ||||||
20 | in this Section. The agreement, if applicable, and | ||||||
21 | policies must document the investment strategies of the | ||||||
22 | charitable donation account trustee or other manager in | ||||||
23 | administering the charitable donation account and provide | ||||||
24 | for the accounting of all aspects of the account, | ||||||
25 | including its distributions and liquidation, in accordance | ||||||
26 | with generally accepted accounting principles. |
| |||||||
| |||||||
1 | (c) A credit union's charitable donation account | ||||||
2 | agreement, if applicable, and policies shall provide that | ||||||
3 | the charitable organization or non-profit entity | ||||||
4 | recipients of any charitable donation account funds must | ||||||
5 | be identified in the policy and be exempt from taxation | ||||||
6 | under Section 501(c)(3) or Section 501(c)(19) of the | ||||||
7 | Internal Revenue Code. | ||||||
8 | (d) Upon termination of a charitable donation account, | ||||||
9 | the credit union may receive a distribution of the | ||||||
10 | remaining assets in cash, or a distribution in kind of the | ||||||
11 | remaining assets, but only if those assets are permissible | ||||||
12 | investments for credit unions pursuant to this Act. | ||||||
13 | (3) Pursuant to subsection (20) of Section 13 authorizing | ||||||
14 | a credit union to make reasonable contributions to civic, | ||||||
15 | charitable, service, or religious corporations and to avoid | ||||||
16 | the cost, administrative expenses, and reporting requirements | ||||||
17 | associated with establishing its own private foundation, a | ||||||
18 | credit union may establish one or more donor-advised fund | ||||||
19 | accounts. The credit union shall maintain the account on its | ||||||
20 | books and records under a name it selects, which may identify | ||||||
21 | the account as a charitable or grant fund or other name that | ||||||
22 | reflects the charitable nature of the account. The account | ||||||
23 | shall be subject to the terms and restrictions set forth in | ||||||
24 | this subsection. | ||||||
25 | (a) Transfers from a donor-advised fund account shall | ||||||
26 | be limited to foundations exempt from taxation under |
| |||||||
| |||||||
1 | Section 501(c)(3) of the Internal Revenue Code. | ||||||
2 | (b) Distributions by a foundation receiving | ||||||
3 | donor-advised funds from the credit union shall be: | ||||||
4 | (i) based upon specific grant recommendations of | ||||||
5 | the credit union; and | ||||||
6 | (ii) limited to public charities exempt from | ||||||
7 | taxation under Section 501(c)(3) of the Internal | ||||||
8 | Revenue Code. | ||||||
9 | (c) Transfers by a credit union from its donor-advised | ||||||
10 | fund account to a foundation irrevocably conveys all | ||||||
11 | right, title, and interest in the funds to the foundation, | ||||||
12 | subject only to the continuing right of the credit union | ||||||
13 | to designate the entity or entities that will receive the | ||||||
14 | grant funds. Grants may not be used to satisfy any | ||||||
15 | obligation of the credit union and no goods or services | ||||||
16 | may be received by the credit union from the recipient | ||||||
17 | organization in consideration of the grant. | ||||||
18 | (Source: P.A. 102-774, eff. 5-13-22.)
| ||||||
19 | (205 ILCS 305/59) (from Ch. 17, par. 4460) | ||||||
20 | Sec. 59. Investment of funds. | ||||||
21 | (a) Funds not used in loans to members may be invested, | ||||||
22 | pursuant to subsection (7) of Section 30 of this Act, and | ||||||
23 | subject to Departmental rules and regulations: | ||||||
24 | (1) In securities, obligations or other instruments of | ||||||
25 | or issued by or fully guaranteed as to principal and |
| |||||||
| |||||||
1 | interest by the United States of America or any agency | ||||||
2 | thereof or in any trust or trusts established for | ||||||
3 | investing directly or collectively in the same; | ||||||
4 | (2) In obligations of any state of the United States, | ||||||
5 | the District of Columbia, the Commonwealth of Puerto Rico, | ||||||
6 | and the several territories organized by Congress, or any | ||||||
7 | political subdivision thereof; however, a credit union may | ||||||
8 | not invest more than 10% of its unimpaired capital and | ||||||
9 | surplus in the obligations of one issuer, exclusive of | ||||||
10 | general obligations of the issuer, and investments in | ||||||
11 | municipal securities must be limited to securities rated | ||||||
12 | in one of the 4 highest rating investment grades by a | ||||||
13 | nationally recognized statistical rating organization; | ||||||
14 | (3) In certificates of deposit or passbook type | ||||||
15 | accounts issued by a state or national bank, mutual | ||||||
16 | savings bank or savings and loan association; provided | ||||||
17 | that such institutions have their accounts insured by the | ||||||
18 | Federal Deposit Insurance Corporation or the Federal | ||||||
19 | Savings and Loan Insurance Corporation; but provided, | ||||||
20 | further, that a credit union's investment in an account in | ||||||
21 | any one institution may exceed the insured limit on | ||||||
22 | accounts; | ||||||
23 | (4) In shares, classes of shares or share certificates | ||||||
24 | of other credit unions, including, but not limited to, | ||||||
25 | corporate credit unions; provided that such credit unions | ||||||
26 | have their members' accounts insured by the NCUA or other |
| |||||||
| |||||||
1 | approved insurers, and that if the members' accounts are | ||||||
2 | so insured, a credit union's investment may exceed the | ||||||
3 | insured limit on accounts; | ||||||
4 | (5) In shares of a cooperative society organized under | ||||||
5 | the laws of this State or the laws of the United States in | ||||||
6 | the total amount not exceeding 10% of the unimpaired | ||||||
7 | capital and surplus of the credit union; provided that | ||||||
8 | such investment shall first be approved by the Department; | ||||||
9 | (6) In obligations of the State of Israel, or | ||||||
10 | obligations fully guaranteed by the State of Israel as to | ||||||
11 | payment of principal and interest; | ||||||
12 | (7) In shares, stocks or obligations of other | ||||||
13 | financial institutions in the total amount not exceeding | ||||||
14 | 5% of the unimpaired capital and surplus of the credit | ||||||
15 | union; | ||||||
16 | (8) In federal funds and bankers' acceptances; | ||||||
17 | (9) In shares or stocks of Credit Union Service | ||||||
18 | Organizations in the total amount not exceeding the | ||||||
19 | greater of 6% of the unimpaired capital and surplus of the | ||||||
20 | credit union or the amount authorized for federal credit | ||||||
21 | unions; | ||||||
22 | (10) In corporate bonds identified as investment grade | ||||||
23 | by at least one nationally recognized statistical rating | ||||||
24 | organization, provided that: | ||||||
25 | (i) the board of directors has established a | ||||||
26 | written policy that addresses corporate bond |
| |||||||
| |||||||
1 | investment procedures and how the credit union will | ||||||
2 | manage credit risk, interest rate risk, liquidity | ||||||
3 | risk, and concentration risk; and | ||||||
4 | (ii) the credit union has documented in its | ||||||
5 | records that a credit analysis of a particular | ||||||
6 | investment and the issuing entity was conducted by the | ||||||
7 | credit union, a third party on behalf of the credit | ||||||
8 | union qualified by education or experience to assess | ||||||
9 | the risk characteristics of corporate bonds, or a | ||||||
10 | nationally recognized statistical rating agency before | ||||||
11 | purchasing the investment and the analysis is updated | ||||||
12 | at least annually for as long as it holds the | ||||||
13 | investment; | ||||||
14 | (11) To aid in the credit union's management of its | ||||||
15 | assets, liabilities, and liquidity in the purchase of an | ||||||
16 | investment interest in a pool of loans, in whole or in part | ||||||
17 | and without regard to the membership of the borrowers, | ||||||
18 | from other depository institutions and financial type | ||||||
19 | institutions, including mortgage banks, finance companies, | ||||||
20 | insurance companies, and other loan sellers, subject to | ||||||
21 | such safety and soundness standards, limitations, and | ||||||
22 | qualifications as the Department may establish by rule or | ||||||
23 | guidance from time to time; | ||||||
24 | (12) To aid in the credit union's management of its | ||||||
25 | assets, liabilities, and liquidity by receiving funds from | ||||||
26 | another financial institution as evidenced by certificates |
| |||||||
| |||||||
1 | of deposit, share certificates, or other classes of shares | ||||||
2 | issued by the credit union to the financial institution; | ||||||
3 | (13) In the purchase and assumption of assets held by | ||||||
4 | other financial institutions, with approval of the | ||||||
5 | Secretary and subject to any safety and soundness | ||||||
6 | standards, limitations, and qualifications as the | ||||||
7 | Department may establish by rule or guidance from time to | ||||||
8 | time; | ||||||
9 | (14) In the shares, stocks, or obligations of | ||||||
10 | community development financial institutions as defined in | ||||||
11 | regulations issued by the U.S. Department of the Treasury | ||||||
12 | and minority depository institutions as defined by the | ||||||
13 | National Credit Union Administration; however the | ||||||
14 | aggregate amount of all such investments shall not at any | ||||||
15 | time exceed 5% of the paid-in and unimpaired capital and | ||||||
16 | surplus of the credit union; and | ||||||
17 | (15)(A) In shares, stocks, or member units of | ||||||
18 | financial technology companies in the total amount not | ||||||
19 | exceeding 2.5% of the net worth of the credit union, so | ||||||
20 | long as: | ||||||
21 | (i) the credit union would remain well capitalized | ||||||
22 | as defined by 12 CFR 702.102 if the credit union | ||||||
23 | reduced its net worth by the full investment amount at | ||||||
24 | the time the investment is made or at any point during | ||||||
25 | the time the investment is held by the credit union; | ||||||
26 | (ii) the credit union and the financial technology |
| |||||||
| |||||||
1 | company are operated in a manner that demonstrates to | ||||||
2 | the public the separate corporate existence of the | ||||||
3 | credit union and financial technology company; and | ||||||
4 | (iii) the credit union has received a composite | ||||||
5 | rating of 1 or 2 under the CAMELS supervisory rating | ||||||
6 | system. | ||||||
7 | (B) The investment limit in subparagraph (A) of this | ||||||
8 | paragraph (15) is increased to 5% of the net worth of the | ||||||
9 | credit union if it has received a management rating of 1 | ||||||
10 | under the CAMELS supervisory rating system at the time a | ||||||
11 | specific investment is made and at all times during the | ||||||
12 | term of the investment. A credit union that satisfies the | ||||||
13 | criteria in subparagraph (A) of this paragraph (15) and | ||||||
14 | this subparagraph may request approval from the Secretary | ||||||
15 | for an exception to the 5% limit up to a limit of 10% of | ||||||
16 | the net worth of the credit union, subject to such safety | ||||||
17 | and soundness standards, limitations, and qualifications | ||||||
18 | as the Department may establish by rule or guidance from | ||||||
19 | time to time. The request shall be in writing and | ||||||
20 | substantiate the need for the higher limit, describe the | ||||||
21 | credit union's record of investment activity, and include | ||||||
22 | financial statements reflecting a sound fiscal history. | ||||||
23 | (C) Before investing in a financial technology | ||||||
24 | company, the credit union shall obtain a written legal | ||||||
25 | opinion as to whether the financial technology company is | ||||||
26 | established in a manner that will limit potential exposure |
| |||||||
| |||||||
1 | of the credit union to no more than the loss of funds | ||||||
2 | invested in the financial technology company and the legal | ||||||
3 | opinion shall: | ||||||
4 | (i) address factors that have led courts to | ||||||
5 | "pierce the corporate veil", such as inadequate | ||||||
6 | capitalization, lack of separate corporate identity, | ||||||
7 | common boards of directors and employees, control of | ||||||
8 | one entity over another, and lack of separate books | ||||||
9 | and records; and | ||||||
10 | (ii) be provided by independent legal counsel of | ||||||
11 | the credit union. | ||||||
12 | (D) Before investing in the financial technology | ||||||
13 | company, the credit union shall enter into a written | ||||||
14 | investment agreement with the financial technology company | ||||||
15 | and the agreement shall contain the following clauses: | ||||||
16 | (i) the financial technology company will: (I) | ||||||
17 | provide the Department with access to the books and | ||||||
18 | records of the financial technology company relating | ||||||
19 | to the investment made by the credit union, with the | ||||||
20 | costs of examining those records borne by the credit | ||||||
21 | union in accordance with the per diem rate established | ||||||
22 | by the Department by rule; (II) follow generally | ||||||
23 | accepted accounting principles; and (III) provide the | ||||||
24 | credit union with its financial statements on at least | ||||||
25 | a quarterly basis and certified public accountant | ||||||
26 | audited financial statements on an annual basis; and |
| |||||||
| |||||||
1 | (ii) the financial technology company and credit | ||||||
2 | union agree to terminate their contractual | ||||||
3 | relationship: (I) upon 90 days' written notice to the | ||||||
4 | parties by the Secretary that the safety and soundness | ||||||
5 | of the credit union is threatened pursuant to the | ||||||
6 | Department's cease and desist and suspension authority | ||||||
7 | in Sections 8 and 61; (II) upon 30 days' written notice | ||||||
8 | to the parties if the credit union's net worth ratio | ||||||
9 | falls below the level that classifies it as well | ||||||
10 | capitalized as defined by 12 CFR 702.102; and (III) | ||||||
11 | immediately upon the parties' receipt of written | ||||||
12 | notice from the Secretary when the Secretary | ||||||
13 | reasonably concludes, based upon specific facts set | ||||||
14 | forth in the notice to the parties, that the credit | ||||||
15 | union will suffer immediate, substantial, and | ||||||
16 | irreparable injury or loss if it remains a party to the | ||||||
17 | investment agreement. | ||||||
18 | (E) The termination of the investment agreement | ||||||
19 | between the financial technology company and credit union | ||||||
20 | shall in no way operate to relieve the financial | ||||||
21 | technology company from repaying the investment or other | ||||||
22 | obligation due and owing the credit union at the time of | ||||||
23 | termination. | ||||||
24 | (F) Any financial technology company in which a credit | ||||||
25 | union invests pursuant to this paragraph (15) that | ||||||
26 | directly or indirectly originates, purchases, facilitates, |
| |||||||
| |||||||
1 | brokers, or services loans to consumers in Illinois shall | ||||||
2 | not charge an interest rate that exceeds the applicable | ||||||
3 | maximum rate established by the Board of the National | ||||||
4 | Credit Union Administration pursuant to 12 CFR | ||||||
5 | 701.21(c)(7)(iii)-(iv). The maximum interest rate | ||||||
6 | described in this subparagraph that may be charged by a | ||||||
7 | financial technology company applies to all consumer loans | ||||||
8 | and consumer credit products ; and . | ||||||
9 | (16) In derivatives transactions, to aid in the credit | ||||||
10 | union's management of interest rate risk. Before entering | ||||||
11 | into a derivatives transaction, and at all times during | ||||||
12 | its management of a derivatives transactions program, a | ||||||
13 | credit union shall satisfy and comply with all the | ||||||
14 | requirements set forth in 12 CFR 703.101 et seq. All | ||||||
15 | definitional terms and operational standards shall have | ||||||
16 | the meanings given to them in 12 CFR 703.101 et seq., | ||||||
17 | except references to federal credit unions shall be | ||||||
18 | construed to mean Illinois-chartered credit unions, and | ||||||
19 | references to the National Credit Union Administration and | ||||||
20 | Regional Director shall be respectfully construed to mean | ||||||
21 | the Department and the Secretary. A credit union with | ||||||
22 | assets of at least $500 million and a CAMELS management | ||||||
23 | component rating of 1 or 2 need not obtain prior approval | ||||||
24 | from the Department before engaging in derivative | ||||||
25 | transactions | ||||||
but shall notify the Secretary in writing or | |||||||
26 | by electronic mail within 5 business days after entering |
| |||||||
| |||||||
1 | into its first derivatives transaction. | ||||||
2 | (b) As used in this Section: | ||||||
3 | "Political subdivision" includes, but is not limited to, | ||||||
4 | counties, townships, cities, villages, incorporated towns, | ||||||
5 | school districts, educational service regions, special road | ||||||
6 | districts, public water supply districts, fire protection | ||||||
7 | districts, drainage districts, levee districts, sewer | ||||||
8 | districts, housing authorities, park districts, and any | ||||||
9 | agency, corporation, or instrumentality of a state or its | ||||||
10 | political subdivisions, whether now or hereafter created and | ||||||
11 | whether herein specifically mentioned or not. | ||||||
12 | "Financial institution" includes any bank, savings bank, | ||||||
13 | savings and loan association, or credit union established | ||||||
14 | under the laws of the United States, this State, or any other | ||||||
15 | state. | ||||||
16 | "Financial technology company" includes any corporation, | ||||||
17 | partnership, limited liability company, or other entity | ||||||
18 | organized under the laws of Illinois, another state, or the | ||||||
19 | United States of America: | ||||||
20 | (1) that the principal business of which is the | ||||||
21 | provision of financial products or financial services, or | ||||||
22 | both, that: | ||||||
23 | (i) currently relate or may prospectively relate | ||||||
24 | to the daily operations of credit unions; | ||||||
25 | (ii) are of current or prospective benefit to the | ||||||
26 | members of credit unions; or |
| |||||||
| |||||||
1 | (iii) are of current or prospective benefit to | ||||||
2 | consumers eligible for membership in credit unions; | ||||||
3 | and | ||||||
4 | (2) that applies technological interventions, | ||||||
5 | including, without limitation, specialized software or | ||||||
6 | algorithm processes, products, or solutions, to improve | ||||||
7 | and automate the delivery and use of those financial | ||||||
8 | products or financial services. | ||||||
9 | (c) A credit union investing to fund an employee benefit | ||||||
10 | plan obligation is not subject to the investment limitations | ||||||
11 | of this Act and this Section and may purchase an investment | ||||||
12 | that would otherwise be impermissible if the investment is | ||||||
13 | directly related to the credit union's obligation under the | ||||||
14 | employee benefit plan and the credit union holds the | ||||||
15 | investment only for so long as it has an actual or potential | ||||||
16 | obligation under the employee benefit plan. | ||||||
17 | (d) If a credit union acquires loans from another | ||||||
18 | financial institution or financial-type institution pursuant | ||||||
19 | to this Section, the credit union shall be authorized to | ||||||
20 | provide loan servicing and collection services in connection | ||||||
21 | with those loans. | ||||||
22 | (Source: P.A. 102-496, eff. 8-20-21; 102-774, eff. 5-13-22; | ||||||
23 | 102-858, eff. 5-13-22; 103-154, eff. 6-30-23.)
|