Public Act 094-0150
 		





SB0173 Enrolled
LRB094 06716 MKM 36815 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 13, 42, 47, and 70 as follows:
 



    (205 ILCS 305/13)  (from Ch. 17, par. 4414)



    Sec. 13. General powers. A credit union may:


        (1) Make contracts; sue and be sued; and adopt and use 
    a common seal
and alter the same;


        (2) Acquire, lease (either as lessee or lessor), hold, 
    pledge, mortgage,
sell and dispose of real property, either 
    in whole or in part, or any interest
therein, as may be 
    necessary or incidental to its present or future
operations 
    and needs, subject to such limitations as may be imposed

    thereon in rules and regulations promulgated by the 
    Director; acquire, lease
(either as lessee or lessor), 
    hold, pledge, mortgage, sell and dispose of
personal 
    property, either in whole or in part, or any interest 
    therein,
as may be necessary or incidental to its present 
    or future operations
and needs;


        (3) At the discretion of the Board of Directors, 
    require the payment of
an entrance fee or annual membership 
    fee, or both, of any person admitted to
membership;


        (4) Receive savings from its members in the form of 
    shares of various
classes, or special purpose share 
    accounts; act as custodian of its members'
accounts; issue 
    shares in trust as provided in this Act;


        (5) Lend its funds to its members and otherwise as 
    hereinafter provided;


        (6) Borrow from any source in accordance with policy 
    established by the
Board of Directors to a maximum of 50% 
    of capital, surplus and reserves;


        (7) Discount and sell any obligations owed to the 
    credit union;


        (8) Honor requests for withdrawals or transfers of all 
    or any part of
member share accounts, and any classes 
    thereof, in any manner approved by
the credit union Board 
    of Directors;


        (9) Sell all or substantially all of its assets or 
    purchase all or
substantially all of the assets of another 
    credit union, subject to the
prior approval of the 
    Director;


        (10) Invest surplus funds as provided in this Act;


        (11) Make deposits in banks, savings banks, savings and 
    loan associations,
trust companies; and invest in shares, 
    classes of shares or share certificates
of other credit 
    unions;


        (12) Assess charges and fees to members in accordance 
    with board
resolution;


        (13) Hold membership in and pay dues to associations 
    and organizations;
to invest in shares, stocks or 
    obligations of any credit union organization;


        (14) Declare dividends and pay interest refunds to 
    borrowers as provided
in this Act;


        (15) Collect, receive and disburse monies in 
    connection with providing
negotiable checks, money orders 
    and other money-type instruments, and for
such other 
    purposes as may provide benefit or convenience to its 
    members,
and charge a reasonable fee for such services;


        (16) Act as fiscal agent for and receive deposits from 
    the federal
government, this state or any agency or 
    political subdivision thereof;


        (17) Receive savings from nonmembers in the form of 
    shares or share
accounts in the case of credit unions 
    serving predominantly low-income
members.  The term "low 
    income
members" shall mean those members who make less than 
    80% of the average for
all wage earners as established by 
    the Bureau of Labor Statistics or those
members whose 
    annual household income falls at or below 80% of the
median 
    household income for the nation as established by the 
    Census Bureau. The
term "predominantly" is defined as a 
    simple majority;


        (18) To Establish, maintain, and operate terminals as 
    authorized by
the Electronic Fund Transfer Act; and


        (19) Subject to Article XLIV of the Illinois Insurance 
    Code, to act
as the agent for any fire, life, or other 
    insurance company authorized by the
State of Illinois, by 
    soliciting and selling insurance and collecting premiums

    on policies issued by such company; and may receive for 
    services so rendered
such fees or commissions as may be 
    agreed upon between the said credit union
and the insurance 
    company for which it may act as agent; provided, however,

    that no such credit union shall in any case assume or 
    guarantee the payment of
any premium on insurance policies 
    issued through its agency by its principal;
and provided 
    further, that the credit union shall not guarantee the 
    truth of
any statement made by an assured in filing his 
    application for insurance; and .

        (20) Make reasonable contributions to civic, 
    charitable, or service organizations not organized for 
    profit; religious corporations; and fundraisers benefiting 
    persons in the credit union's service area.

(Source: P.A. 92-608, eff. 7-1-02; revised 1-20-03.)

 



    (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 for or
in 
respect to a member of a 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. 91-131, eff. 7-16-99; 92-608, eff. 7-1-02.)

 



    (205 ILCS 305/47)  (from Ch. 17, par. 4448)



    Sec. 47. Loan Applications. Every application for a loan 
shall be made
in the manner prescribed by
writing upon a form, 
which the Credit Committee, credit manager, or loan
officer 
prescribes. The application shall state the purpose for which 
the
loan is desired, and the security, if any, offered. Each 
loan shall be evidenced
by a written document or by a record 
electronically stored or generated by any electronic or 
computer-generated process that accurately reproduces or 
records the agreement, transaction, act, occurrence, or event. 
The signature of any party to the loan includes any symbol 
executed or adopted, or any security procedure employed or 
adopted, using electronic means or otherwise, by or on behalf 
of a person with intent to authenticate a record.

(Source: P.A. 81-329.)

 



    (205 ILCS 305/70)  (from Ch. 17, par. 4471)



    Sec. 70. Use of name, sentence. 
    (a) No individual
person, firm, association,
or body 
politic and corporate, including, without limitation, any 
corporation, limited liability company, general partnership, 
limited partnership, or joint venture that is not an authorized 
user
partnership,
or corporation, except corporations 
organized under this Act, the credit
union acts of other 
states, or under the Federal Credit Union Act,
associations
of 
such corporations, or subsidiaries of such associations, may 
use any
name or title which contains the words
"credit union" 
or any abbreviation thereof, and such use is a Class A

Misdemeanor. For purposes of this Section, "authorized user" 
means a corporation organized under this Act, the credit union 
act of another state, or the Federal Credit Union Act, any 
association of such a corporation, and subsidiaries and 
affiliates of such an association.


    (b) If the Director of the Division of Financial 
Institutions of the Department of Financial and Professional 
Regulation finds that an individual or entity that is not an 
authorized user has transacted or intends to transact business 
in this State in a manner that has a substantial likelihood of 
misleading the public by: (i) implying that the business is a 
credit union or (ii) using or intending to use the words 
"credit union", or any abbreviation thereof, in connection with 
its business, then the Director of the Division of Financial 
Institutions may direct the individual or entity to cease and 
desist from transacting its business or using the words "credit 
union", or any abbreviation thereof. If the individual or 
entity persists in transacting its business or using the words 
"credit union", or any abbreviation thereof, then the Director 
of the Division of Financial Institutions may impose a civil 
penalty of up to $10,000 for each violation. Each day that the 
individual or entity continues transacting business or using 
the words "credit union", or any abbreviation thereof, in 
connection with its business shall constitute a separate 
violation of these provisions.

(Source: P.A. 92-293, eff. 8-9-01.)

 

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