Illinois General Assembly - Illinois Compiled Statutes

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205 ILCS 305/42

(205 ILCS 305/42) (from Ch. 17, par. 4443)

Sec. 42. Shares in trust.

(1) Shares may be issued in trust to a member
as trustee or to an individual or corporate trustee.  If a corporate trustee
is a bank or trust company, shares may be issued to the corporate trustee
only if such bank or trust company is organized under the laws of
the State of Illinois or is a nationally chartered bank located principally
in the State of Illinois.  An individual trustee shall be a member of the
credit union unless the person establishing the trust in respect to which
such shares are issued or each beneficiary of the trust is a member of the
credit union and the name of each beneficiary is disclosed to the credit
union.  Shares may also be issued in the name of an individual or corporate
representative under the Illinois Probate Act of 1975 (i) for or
in respect to a member of a credit union; or (ii) for or in respect of a nonmember of a credit union, if the representative is an individual who is a member of the credit union.  Shares may also be issued in
trust under the Illinois Funeral or Burial Funds Act, for or in respect
to a member of a credit union, to a trustee licensed under said Act.
Any credit union which issues shares in trust as provided in this Section
must be insured by the NCUA or another approved insurer.   Payment of part or all of such shares to such trustee or member
shall, to the extent of such payment, discharge the liability of the credit
union to the member and the beneficiary and the credit union shall be under
no obligation to see to the application of such payment.

(2) If a credit union's shares are insured as provided for in this Act,
such credit union shall have power to act as trustee or custodian under
individual retirement accounts or plans, health savings accounts, and similar tax-advantaged savings plans established pursuant to the Internal Revenue Code for its members or groups or
organizations
of its members provided the funds of such accounts or plans are invested
solely in (1) share accounts of, or (2) share accounts and obligations issued
by such credit union.  All funds held in such fiduciary capacity shall be
maintained in accordance with applicable statutes and regulations promulgated
thereunder by any authority exercising jurisdiction over such trusts or
custodial accounts.

(3) Notwithstanding any language to the contrary in this Section 42, a
credit union may act as trustee or custodian of individual retirement plans
of its members established pursuant to the Employee Retirement Income
Security Act of 1974 or self-employed retirement plans established pursuant
to the Self-Employed Individuals Retirement Act of 1962, and any laws
amendatory or supplementary to such Acts, provided that:

(a) All contributions of funds are initially made to

a share account in the credit union;

(b) Any subsequent transfer of funds to other assets

is solely at the direction of the member and the credit union performs only custodial duties, exercises no investment discretion and provides no investment advice with respect to plan assets;

(c) The member is notified of the fact that share

insurance coverage is limited to funds held in share accounts; and

(d) The credit union complies with all applicable

provisions of this Act and applicable laws and regulations as may be promulgated by any authority exercising jurisdiction over such trust or custodial accounts.

(Source: P.A. 102-774, eff. 5-13-22.)