Public Act 103-0289
 
HB2043 EnrolledLRB103 05826 BMS 50846 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 16, 20, 29, and 48 as follows:
 



    (205 ILCS 305/16)  (from Ch. 17, par. 4417)



    Sec. 16. Societies and associations. Societies,

associations, clubs, partnerships, corporations, and limited

liability companies in which one or more the majority of the 
members, partners, or
shareholders
are individuals who are

eligible for credit union membership may be admitted to 
membership in a credit
union in the same
manner and under the 
same conditions as individuals, subject to such rules
as the 
Secretary and the Director may promulgate hereunder. Any 
members, partners, or shareholders who are ineligible for 
membership in the credit union shall not become eligible by 
virtue of the eligibility of the entity in which they hold an 
ownership interest. 

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

 



    (205 ILCS 305/20)  (from Ch. 17, par. 4421)



    Sec. 20. Election or appointment of officials. 

    (1) The credit union shall
be directed by a board of 
directors consisting of no less than 7 in number,
to be elected 
at the annual meeting by and from the members.  Directors shall

hold office until the next annual meeting, unless their
terms 
are staggered.  Upon amendment of its bylaws, a credit union 
may divide
the directors into 2 or 3 classes with each class as 
nearly equal in number as
possible.  The term of office of the 
directors of the first class shall expire
at the first annual 
meeting after their election, that of the second class
shall

expire at the second annual meeting after their election, and 
that of the third
class, if any, shall expire at the third 
annual meeting after their election.
At each annual meeting 
after the classification, the number of directors equal
to the 
number of directors whose terms expire at the time of the 
meeting shall
be elected to hold office until the second 
succeeding annual meeting if there
are 2 classes or until the 
third succeeding annual meeting if there are 3
classes.  A 
director shall hold office for the term for which he
or she is 
elected and until his or her
successor
is elected and 
qualified.  
    (1.5) Except as provided in subsection (1.10), in all 
elections for directors, every member
has the right to vote, 
in person, by proxy, or by   electronic record if approved by the 
board of directors, the number of shares owned
by him, or in 
the case of a member other than a natural person, the member's

one vote, for as many persons as there are directors to be 
elected, or to
cumulate such shares, and give one candidate as 
many votes as the number
of directors multiplied by the number 
of his shares equals, or to distribute
them on
the same 
principle among as many candidates as he may desire and the 
directors
shall not be elected in any other manner.  Shares 
held in a joint account
owned by more than one member may be 
voted by any one of the members, however,
the number of 
cumulative votes cast may not exceed a total equal to the 
number
of shares multiplied by the number of directors to be 
elected.  A majority of
the shares entitled
to vote shall be 
represented either in person or by proxy for the election
of 
directors.  Each director shall wholly take and subscribe to an 
oath
that he will diligently and honestly perform his duties 
in administering
the affairs of the credit union, that while 
he may delegate to another the
performance of those 
administrative duties he is not thereby relieved from
his 
responsibility for their performance, that he will not 
knowingly violate
or permit to be violated any law applicable 
to the credit union,
and that he is the owner of at least one 
share of the credit union.

    (1.10) Upon amendment of a credit union's bylaws, in all 
elections for directors, every member who is  a natural person 
shall have the right to cast one vote, regardless of the number 
of his or her shares, in person, by proxy, or by electronic 
record if approved by the board of directors, for as many 
persons as there are directors to be elected.

    (1.15) If the board of directors has adopted a policy 
addressing age eligibility standards on voting, holding 
office, or petitioning the board, then  a credit union may 
require (i) that members be at least 18 years of age by the 
date of the meeting in order to vote at meetings of the 
members, sign nominating petitions, or sign petitions 
requesting special meetings, and (ii) that members be at least 
18 years of age by the date of election or appointment in order 
to hold elective or appointive office. 
    (2) The board of directors shall appoint from among the 
members of the
credit union, a supervisory committee of not 
less than 3 members at the
organization meeting and within 30 
days following each annual meeting of
the members for such 
terms as the bylaws provide.  Members of the supervisory 
committee may, but need not be, on the board of directors, but 
shall not
be officers of the credit union, members of the 
credit committee,
or the
credit manager if no credit committee 
has been appointed.

    (3) The board of directors may appoint, from among the

members of the
credit union, a credit committee consisting of 
an odd number, not less than
3 for such terms as the bylaws 
provide. Members of the credit committee
may, but need not be, 
directors or officers of the credit union, but shall
not be 
members of the supervisory committee.

    (4) The board of directors may appoint from among the 
members
of the
credit union a membership committee of one or 
more persons.  If appointed,
the committee shall act
upon all 
applications for membership and submit a report of its actions

to the board of directors at the next regular meeting for

review.
If no membership committee is appointed, credit union 
management shall act
upon all applications for membership and 
submit a report of its actions to the board of directors
 at the 
next regular meeting for review.

    (5) The board of directors may appoint, from among the 
members of the credit union, a nominating committee of 3 or 
more persons. Members of the nominating committee may, but 
need not, be directors or officers of the credit union, but may 
not be members of the supervisory committee. The appointment, 
if made, shall be made in a timely manner to permit the 
nominating committee to recruit, evaluate, and nominate 
eligible candidates for each position to be filled in the 
election of directors or, in the event of a vacancy in office, 
to be filled by appointment of the board of directors for the 
remainder of the unexpired term of the director creating the 
vacancy. Factors the nominating committee may consider in 
evaluating prospective candidates include whether a candidate 
possesses or is willing to acquire through training the 
requisite skills and qualifications to carry out the statutory 
duties of a director. The board of directors may delegate to 
the nominating committee the recruitment, evaluation, and 
nomination of eligible candidates to serve on committees and 
in executive officer positions. 
    (6) The board of directors may create one or more other 
committees in addition to the committees identified in this 
Section and appoint directors or such other persons as the 
board designates to serve on the committee or committees. Any 
such committee shall serve at the pleasure of the board of 
directors and it shall not act on behalf of the credit union or 
bind it to any action, but it may make recommendations to the 
board of directors.
    (7)(a) The board of directors may appoint an individual as 
a registered agent for the credit union. The name of the 
registered agent appointed by the board of directors shall be 
identified in the annual report filed by the credit union on 
the annual report form supplied by the Department. The 
business office of the registered agent shall be the same as 
the principal place of business of the credit union. Any 
process, notice, or demand required or permitted by law to be 
served upon the credit union may be served upon the registered 
agent appointed by the credit union.
        (b) A credit union that has appointed a registered 
    agent shall post on its website the name of its registered 
    agent, the address of its principal place of business, and 
    that the appointment was authorized by action of the board 
    of directors.
        (c) A credit union that has appointed a registered 
    agent may change its registered agent at any time by 
    posting on its website a statement setting forth the 
    following:
            (i) the address of its principal place of 
        business,
            (ii) the name of its existing registered agent,
            (iii) the name of its successor registered agent, 
        and
            (iv) that the change was authorized by action of 
        the board of directors.
        (d) A registered agent may resign at any time by 
    submitting written notice thereof to the credit union at 
    its principal place of business. The notice shall set 
    forth the following:
            (i) the name of the credit union for which the 
        registered agent is acting,
            (ii) the address of the principal place of 
        business of the credit union,
            (iii) the name of the registered agent,
            (iv) that the registered agent is resigning, and
            (v) the effective date of the resignation, which 
        shall not be less than 30 days after the date of filing 
        of the notice. 
    (8) (6) The use of electronic records for member voting 
pursuant to this Section shall employ a security procedure 
that meets the attribution criteria set forth in Section 9 of 
the Uniform Electronic Transactions Act. 
    (9) (7) As used in this Section, "electronic", "electronic 
record", and "security procedure" have the meanings ascribed 
to those terms in the Uniform Electronic Transactions Act. the
(Source: P.A. 102-38, eff. 6-25-21; 102-687, eff. 12-17-21; 
102-774, eff. 5-13-22; 102-858, eff. 5-13-22; revised 8-3-22.)

 



    (205 ILCS 305/29)  (from Ch. 17, par. 4430)



    Sec. 29. Meetings of directors. 

    (1) The board of directors and the executive
committee 
shall meet as often as necessary, but one body must meet at 
least
monthly and the other at least quarterly, as prescribed 
in the bylaws.
Unless a greater number is required by the 
bylaws, a majority of the whole
board of directors shall 
constitute a quorum.  The act of a majority of
the directors 
present at a meeting at which a quorum is present shall be
the 
act of the board of directors unless the act of a greater 
number is
required by this Act, the credit union's articles of 
incorporation or the
bylaws.
    (1.5) Notwithstanding anything to the contrary in 
subsection (1), the board of directors of a credit union with a 
composite rating of either 1 or 2 under the Uniform Financial 
Institutions Rating System known as the CAMELS supervisory 
rating system (or an equivalent rating under a comparable 
rating system) and a management rating under such composite 
rating of either 1 or 2 may meet not less than 6 times 
annually, with at least one meeting held during each fiscal 
quarter. This meeting frequency schedule shall be available to 
an eligible credit union irrespective of whether it has 
appointed an executive committee pursuant to Section 28. 

    (2) Unless specifically prohibited by the articles of 
incorporation or
bylaws, directors and committee members may 
participate in and act at any
meeting of the board or committee 
through the use of a conference telephone or
other 
communications equipment by means of which all persons 
participating in
the meeting can communicate with each other.  
Participation in the meeting
shall constitute attendance and 
presence in person at the meeting of the person
or persons so 
participating.

    (3) Unless specifically prohibited by the articles of 
incorporation or
bylaws, any action required by this Act to be 
taken at a meeting of the board
of directors or a committee and 
any other action that may be taken at a
meeting of the board of 
directors or a committee may be taken without a
meeting if a 
consent in writing setting forth the action taken is
signed by 
all the directors entitled to vote with respect to the subject 
matter
thereof, or by all
members of the committee, as the case 
may be.  The consent shall be evidenced
by one or more written 
approvals, each of which sets forth the action taken and
bears 
the signatures of one or more directors or committee members.  
All the
approvals evidencing the consent shall be delivered to 
the secretary to be
filed in the corporate records of the 
credit union.  The action taken shall be
effective when all the 
directors or committee members have approved the consent

unless the consent specifies a different effective date.  A 
consent
signed by all the directors or all the members of a 
committee shall have the
same effect as a unanimous vote, and 
may be stated as such in any document
filed with the director 
under this Act.
    (4)(a) As used in this subsection:
        "Affiliate" means an organization established to serve 
    the needs of credit unions, the business of which relates 
    to the daily operations of credit unions.
        "Compliance review documents" means reports, meeting 
    minutes, and other documents prepared in connection with a 
    review or evaluation conducted by or for the board of 
    directors.
        (b) This subsection applies to the board of directors 
    in relation to its functions to evaluate and seek to 
    improve any of the  following:
            (i) loan policies or underwriting standards;
            (ii) asset quality;
            (iii) financial reporting to federal or State 
        governmental or regulatory agencies; or
            (iv) compliance with federal or State statutory or 
        regulatory requirements, including, without 
        limitation, the manner in which it performs its duties 
        under Section 30.
        (c) Meetings, minutes of meetings, and reports of the 
    board of directors shall be subject to the confidentiality 
    and redaction standards set forth in this subsection.
        (d) Except as provided in paragraph (e), compliance 
    review documents and the deliberations of the board of 
    directors are confidential. An affiliate of a credit 
    union, a credit union
regulatory agency, and the insurer 
    of credit union share accounts shall have access to 
    compliance review documents; however, (i) the documents 
    remain confidential and (ii) delivery of compliance review 
    documents to an affiliate or pursuant to the requirements 
    of a credit union regulatory agency or an insurer of 
    credit union share accounts do not constitute a waiver of 
    the confidentiality granted in this Section.
        (e) This Section does not apply to any civil or 
    administrative action initiated by a credit union 
    regulatory agency or an insurer of credit union share 
    accounts.
        (f) This Section shall not be construed to limit the 
    discovery or admissibility in any civil action of any 
    documents, including compliance review documents.
        (g) Any report required under this Act to be furnished 
    to the board of directors by the membership committee, 
    credit committee, or any other committee may be submitted 
    in a summary format that redacts personally identifiable 
    information as defined under applicable State and federal 
    law. 

        (h) Compliance review documents may be disclosed by 
    the Secretary or a credit union to any person or entity to 
    whom confidential supervisory information may be disclosed 
    pursuant to subsection (3) of Section 9.1. 
(Source: P.A. 89-603, eff. 8-2-96.)

 



    (205 ILCS 305/48)  (from Ch. 17, par. 4449)



    Sec. 48. Loan limit. Within any limitations set forth in a 
policy adopted by the board of directors, a credit union may 
place a limit upon the aggregate
amount to be loaned to or 
cosigned for by any one member provided that no loan shall be 
made to any
member in an aggregate amount in excess of 10% of 
the credit union's
unimpaired capital
and surplus. Such loan 
limits shall not be subject to reduction by rules adopted by 
the Secretary. 

(Source: P.A. 100-361, eff. 8-25-17.)

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