Public Act 101-0567
 
SB1813 EnrolledLRB101 10992 HEP 56176 b


  
    AN ACT concerning regulation.
  
 
    Be it enacted by the People of the State of Illinois,
 
represented in the General Assembly:
  



 
 
    Section 5. The Illinois Credit Union Act is amended  by 
changing Sections 15,  23, 57.1, 59, and 63 and by adding 
Sections 10.2 and 44.1 as follows:
 
    (205 ILCS 305/10.2 new)
    Sec. 10.2. Electronic records.
    (a)  As used in this Section, "electronic" and "electronic 
record" have the meanings given to those terms in the 
Electronic Commerce Security Act. 
    (b) If a provision of this Act requires information to be 
written or delivered in writing, or provides for certain 
consequences if it is not, an electronic record or electronic 
delivery satisfies that rule of law.
    (c) If a provision of this Act requires a policy, record, 
notice or other document or information to be mailed or 
otherwise furnished, posted, or disclosed by a credit union, 
electronic delivery or distribution satisfies that rule of law. 
Policies and notifications of general interest to or impact on 
the membership may be posted on a credit union's website or 
disclosed in membership newsletters or account statements, in 
addition to, or in lieu of, any other methods of notification 
or distribution specified in this Act.
 
    (205 ILCS 305/15)  (from Ch. 17, par. 4416)

    Sec. 15. Membership defined.


    (1) The membership of a credit union shall
be limited to 
and consist of the subscribers to the articles of incorporation

and such other persons within the common bond, as defined in 
this Act and
as set forth in the credit union's articles of 
incorporation, as have been
duly admitted members, have paid 
the required entrance fee or membership
fee, or both, if any, 
have subscribed for one or more shares, and have paid
the 
initial installment thereon, and have complied with such other 
requirements
as the articles of incorporation or bylaws 
specify.  Two or more persons
within the common bond who have 
jointly subscribed for one or more shares under
a joint account 
and have complied with all membership requirements may each be

admitted to membership.  The surviving spouse
of a credit union 
member may, within 6 months of the member's death, become
a 
member of the credit union by paying the required entrance fee 
or membership
fee or both, if any, by subscribing for one or 
more shares
and paying the initial installment thereon, and by 
complying with such other
requirements as the articles of 
incorporation or bylaws specify.


    (2) Any member may withdraw from a credit union at any time 
upon giving
notice of withdrawal as required by the bylaws.


    (3) Any member may be expelled
by a 2/3 vote of the members 
present at any regular or special
meeting
called to consider 
the matter, but only after an opportunity has been given
to the 
member to be heard.


    (4) A member who has caused a loss to the credit union,


failed
to maintain one or more shares at the credit union, or 
violated board policy
applicable to members may be expelled by

a majority vote of a quorum of directors if the board has 
adopted a policy
providing for expulsion for any of the 
following acts committed by the member: under those 
circumstances.  
        (i) causing a loss to the credit union;
        (ii) failing to maintain one or more shares at the 
    credit union;
        (iii) committing fraud or any similar misdeed against 
    the credit union;
        (iv) engaging in inappropriate behavior involving 
    another person, such as physical or verbal abuse of another 
    member or an employee of the credit union, while 
    transacting business with the credit union; or
        (v) otherwise violating board policy applicable to 
    members. 
    In maintaining and
enforcing a policy based on loss, the

board may consider, without limitation, a member's failure to 
pay amounts due
under a loan, failure to provide collected 
funds to cover withdrawals or
personal share drafts or credit 
union drafts where the member is a remitter, or
failure to pay 
fees or charges due the credit union.  
    The policy may delegate the expulsion authority to the 
senior management officials of the credit union. If a member is 
expelled by a senior management official of the credit union, 
the member may, within 30 days after the expulsion, seek 
reinstatement by appealing the action in writing to the board 
of directors of the credit union. The board may affirm, 
disaffirm, or modify the action, and the board's decision is 
final. As used in this subsection (4), "senior management 
official" includes the chief management officer of the credit 
union (including the person holding the title of President or 
Chief Executive Officer, or both, or Treasurer/Manager) and 
other management officers of the credit union (including the 
persons holding the title of Chief Operating Officer, Chief 
Financial Officer, Chief Administrative Officer, Chief 
Information Officer, Chief Security Officer, Executive Vice 
President, Senior Vice President, or Vice President).
    If a policy
is
adopted by the board pursuant to this 
subsection (4), written notice of the
policy shall be 
distributed not fewer than 30 days before the effective date of 
the policy by: (i) mailing it and the effective date of the 
policy
shall be mailed to each member of the credit union at 
the member's current
address appearing on the records of the 
credit union; (ii) electronically delivering it to all members 
by posting it on the credit union's website; or (iii) 
disclosing it to all members in membership newsletters or 
account statements.  The policy shall be
mailed to members not 
fewer than 30 days prior to the effective date of the
policy.  
In addition, new members shall be provided written notice of 
the
policy prior to or upon applying for membership by using 
one of the distribution methods described in this subsection 
(4).


    (5) All or any part of the amount paid on shares
of a 
withdrawing member
or expelled member with any declared 
dividends or interest on the date of
withdrawal or expulsion 
must, after deducting all amounts due from the member
to the 
credit union, be paid to him.  The credit union may require not 
more
than 60 days' written notice of intention to withdraw 
shares, but a notice
of withdrawal does not entitle the member 
to any preferred or prior claim
in the event of liquidation.  
Withdrawing or expelled members have no further
rights in the 
credit union, but are not, by withdrawal or expulsion, released

from any obligation they owe to the credit union.


    (6) A member who has caused a loss to the credit union or 
has violated board
 policy applicable to members may be denied 
any
or all credit union services in accordance with board 
policy, however, members
who are denied services shall be 
allowed to maintain a share account and to
vote on all issues

put to a vote of the membership.

    (7) If a member fails to maintain one fully paid share, the 
credit union, at its option, may permit the member to 
re-subscribe and pay for one or more shares within 30 days 
after the date the member failed to maintain one fully paid 
share, without affecting the member's status or rights as a 
member during that period.  A member that fails to re-subscribe 
for at least one fully paid share within the 30-day period 
shall be automatically expelled from the credit union and 
treated as an expelled member under subsection (5) of this 
Section 15. 

(Source: P.A. 97-133, eff. 1-1-12; 97-855, eff. 7-27-12.)

 



    (205 ILCS 305/23)  (from Ch. 17, par. 4424)



    Sec. 23. Compensation of officials. 

    (1) Directors and committee members No director or 
committee member may
receive reasonable compensation for their 
his service as such, the amount of which shall be set by the 
board of directors. The Department shall, by rule, establish 
maximum rates of reasonable compensation that are generally 
applicable to credit unions considering factors the Department 
may establish from time to time, including, but not limited to, 
total assets, nonprofit cooperative structure, and the best 
interests of members.
"Compensation" as used in this subsection 
(1) refers to remuneration expense
to the credit union for 
services provided by a director or committee member in
his or 
her capacity as director or committee member.  The remuneration 
expense shall be disclosed on an annual basis to the membership 
in the financial statement that is part of the annual 
membership meeting materials. The disclosure shall contain: 
(i) the amount paid to each director and (ii) the amount paid 
to the directors as a group. "Compensation" as used in
this 
subsection (1) does not include 
    (2) The credit union may incur the expense of providing

reasonable life, health,
accident, and similar insurance 
protection benefits for directors and a director or committee 
members member.

    (3) (2) Directors, committee members and
employees, while 
on official business of the credit union, may be reimbursed
for 
reasonable and necessary expenses. Alternatively, the credit 
union may make direct payment to a third party for such 
business expenses. Reasonable and necessary expenses may 
include the payment of travel costs for the foregoing officials 
and one guest per official. All payment of costs shall be made 
in accordance with written policies and procedures established 
by the board of directors.


    (4) (3) The board of directors may establish
compensation 
for officers of the credit union.

(Source: P.A. 97-133, eff. 1-1-12.)

 
    (205 ILCS 305/44.1 new)
    Sec. 44.1. Unclaimed property; dormancy or escheat fee. A 
credit union may deduct a dormancy charge or an escheat fee 
from property required to be paid or delivered to the 
administrator under the Revised Uniform Unclaimed Property 
Act, provided the amount of the deduction is consistent with 
the standards set forth in subsection (b) of Section 15-602 of 
that Act. In making the deduction, a credit union may allocate, 
classify, and record all or a portion of the deduction, as 
applicable, as the minimum share amount required to preserve 
the member's status as a member of the credit union.
 
    (205 ILCS 305/57.1)
    Sec. 57.1. Services to other credit unions. A credit union 
may act as a representative of and enter into an agreement with 
credit unions or other organizations for the purposes 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 or other organizations 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, implementation and

administrative support 
    services related to the use of debit cards, payroll debit


    cards, and other prepaid debit cards and

credit cards, coin 
    and currency services, performing internal audits, and 
    automated teller machine deposit services.

(Source: P.A. 99-78, eff. 7-20-15; 99-149, eff. 1-1-16; 
100-201, eff. 8-18-17.)
 
    (205 ILCS 305/59)  (from Ch. 17, par. 4460)

    Sec. 59. Investment of funds. 

    (a) Funds not used in loans to members may be
invested, 
pursuant to subsection (7) of Section 30 of this Act, and

subject to Departmental rules and
regulations:


        (1) In securities, obligations or other instruments of 
    or issued by or
fully guaranteed as to principal and 
    interest by the United States of America
or any agency 
    thereof or in any trust or trusts established for investing

    directly or collectively in the same;


        (2) In obligations of any state of the United States, 
    the District of
Columbia, the Commonwealth of Puerto Rico, 
    and the several
territories organized
by Congress, or any 
    political subdivision thereof; however, a credit union
may

    not invest more than 10% of its unimpaired capital and 
    surplus in the
obligations of one issuer, exclusive of 
    general obligations of the issuer, and
investments in 
    municipal securities must be limited to securities rated in 
    one
of the 4
highest rating categories by a nationally 
    recognized statistical rating
organization;


        (3) In certificates of deposit or passbook type 
    accounts issued by a state
or national bank, mutual savings 
    bank or savings and loan association; provided
that such 
    institutions have their accounts insured by the Federal 
    Deposit
Insurance Corporation or the Federal Savings and 
    Loan Insurance Corporation;
but provided, further, that a 
    credit union's investment in an account in
any one 
    institution may exceed the insured limit on accounts;


        (4) In shares, classes of shares or share certificates 
    of other credit
unions, including, but not limited to 
    corporate credit unions; provided
that such credit unions 
    have their members' accounts insured by the NCUA
or other 
    approved insurers, and that if the members' accounts are so 
    insured,
a credit union's investment may exceed the insured 
    limit on accounts;


        (5) In shares of a cooperative society organized under 
    the laws of this
State or the laws of the United States in 
    the total amount not exceeding
10% of the unimpaired 
    capital and surplus of the credit union; provided
that such 
    investment shall first be approved by the Department;


        (6) In obligations of the State of Israel, or 
    obligations fully guaranteed
by the State of Israel as to 
    payment of principal and interest;


        (7) In shares, stocks or obligations of other financial 
    institutions in
the total amount not exceeding 5% of the 
    unimpaired capital and surplus
of the credit union;


        (8) In federal funds and bankers' acceptances;


        (9) In shares or stocks of Credit Union Service 
    Organizations in the
total amount not exceeding the greater 
    of 3% of the unimpaired
capital and surplus of the
credit 
    union or the amount authorized for federal credit unions;


        (10) In corporate bonds identified as investment grade 
    by at least one nationally recognized statistical rating 
    organization, provided that: 
            (i) the board of directors has established a 
        written policy that addresses corporate bond 
        investment procedures and how the credit union will 
        manage credit risk, interest rate risk, liquidity 
        risk, and concentration risk; and
            (ii) the credit union has documented in its records 
        that a credit analysis of a particular investment and 
        the issuing entity was conducted by the credit union, a 
        third party on behalf of the credit union qualified by 
        education or experience to assess the risk 
        characteristics of corporate bonds, or a nationally 
        recognized statistical rating agency before purchasing 
        the investment and the analysis is updated at least 
        annually for as long as it holds the investment; 
        (11) To aid in the credit union's management of its 
    assets, liabilities, and liquidity in the purchase of an 
    investment interest in a pool of loans, in whole or in part 
    and without regard to the membership of the borrowers, from 
    other depository institutions and financial type 
    institutions, including mortgage banks, finance companies, 
    insurance companies, and other loan sellers, subject to 
    such safety and soundness standards, limitations, and 
    qualifications as the Department may establish by rule or 
    guidance from time to time; 
        (12)   To aid in the credit union's management of its 
    assets, liabilities, and liquidity by receiving funds from 
    another financial institution as evidenced by certificates 
    of deposit, share certificates, or other classes of shares 
    issued by the credit union to the financial institution; 
    and
        (13)   In the purchase and assumption of assets held by 
    other financial institutions, with approval of the 
    Secretary and subject to any safety and soundness 
    standards, limitations, and qualifications as the 
    Department may establish by rule or guidance from time to 
    time. 
    (b) As used in this Section: 
    "Political subdivision" includes, but is not
limited to, 
counties,
townships, cities, villages, incorporated towns, 
school districts, educational
service regions, special road 
districts, public water supply districts, fire
protection 
districts, drainage districts, levee districts, sewer 
districts,
housing authorities, park districts, and any

agency, corporation, or instrumentality of a state or its 
political
subdivisions, whether now or hereafter created and 
whether herein specifically
mentioned or not.

    "Financial institution" includes any bank, savings bank, 
savings and loan association, or credit union established under 
the laws of the United States, this State, or any other state. 
    (c) A credit union investing to fund an employee benefit 
plan obligation is not subject to the investment limitations of 
this Act and this Section and may purchase an investment that 
would otherwise be impermissible if the investment is directly 
related to the credit union's obligation under the employee 
benefit plan and the credit union holds the investment only for 
so long as it has an actual or potential obligation under the 
employee benefit plan.

    (d) If a credit union acquires loans from another financial 
institution or financial-type institution pursuant to this 
Section, the credit union shall be authorized to provide loan 
servicing and collection services in connection with those 
loans. 
(Source: P.A. 100-361, eff. 8-25-17; 100-778, eff. 8-10-18.)

 



    (205 ILCS 305/63)  (from Ch. 17, par. 4464)



    Sec. 63. Merger and consolidation. 
    (1) Any two or more credit unions,
regardless of whether or 
not they have the same common bond, may merge or
consolidate 
into a single credit union.  A merger or consolidation may be

with a credit union organized under the laws of this State or 
of another
state or of the United States and is subject to the 
approval of the Secretary. It must be made on such terms as 
have been agreed upon by a vote
of a majority of the board of 
directors of each credit union, and approved
by an affirmative 
vote of a majority of the members of the merging credit
union 
being absorbed present at a meeting, either in person or by 
proxy,
duly called for that purpose, except as hereinafter 
specified.  Notice
of the meeting stating the purpose must be 
sent by the
Secretary of each merging credit union being 
absorbed to each member by
mail at least 45 but no more than 90 
7 days before the date of the meeting.

    (2) One of the merging credit unions may continue after the 
merger or
consolidation either as a surviving credit union 
retaining its identity
or as a new credit
union as has been 
agreed upon under the terms of the merger.  At least
9 members 
of the new proposed credit union must apply to the Department

for permission to organize the new credit union.  The same 
procedure shall
be followed as provided for the organization of 
a new credit union.

    (3) After approval by the members of the credit union which 
is to be absorbed
by the merger or consolidation, the chairman 
or president and the secretary
of each credit union shall 
execute a certificate of merger or consolidation,
which shall 
set forth all of the following:

        (a) The time and place of the meeting of each board of 
    directors at which
the plan was agreed upon;

        (b) The vote in favor of the adoption of the plan;

        (c) A copy of each resolution or other action by which 
    the plan was agreed upon;

        (d) The time and place of the meeting of the members of 
    the absorbed credit
union at which the plan agreed upon was 
    approved; and,

        (e) The vote by which the plan was approved by the 
    members of the absorbed
credit union.

    (4) Such certificate and a copy of the plan of merger or 
consolidation
agreed upon shall be mailed to the Secretary for 
review.  If the provisions
of this Act have been complied with, 
the certificate shall be approved by
him, and returned to the 
credit unions which are parties to the merger or
consolidation 
within 30 days.  When so approved by the Secretary the 
certificate
shall constitute the Department's certificate of 
approval of the merger
or consolidation.

    (5) Upon issuance of the certificate of approval, each 
merging credit
union which was absorbed shall cease operation. 
Each party to the merger shall file
the certificate of approval 
with the Recorder or County Clerk of
the county in which the 
credit union has or had its principal office.

    (6) Each credit union absorbed by the merger or 
consolidation shall return
to the Secretary the original 
statement of incorporation, certificate of
approval of 
incorporation, and the bylaws of the credit union.  The 
surviving
credit union shall continue its operation under its 
existing certificate of
approval, articles of incorporation, 
and the bylaws or if a new credit
union has been formed, under 
the new certificate of
approval, articles of incorporation, and 
bylaws.

    (7) All rights of membership in and any obligation or 
liability of any
member to any credit union which is party to a 
consolidation or merger are
continued in the surviving or new 
credit union without reservation or diminution.

    (8) A pending action or other judicial proceeding to which 
any of the
consolidating or merging credit unions is a party 
does not abate by reason
of the consolidation or merger.

(Source: P.A. 97-133, eff. 1-1-12.)

 
 
    Section 99. Effective date. This Act takes effect upon 
becoming law.