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95TH GENERAL ASSEMBLY
State of Illinois
2007 and 2008 HB1288
Introduced 2/20/2007, by Rep. Thomas Holbrook SYNOPSIS AS INTRODUCED: |
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205 ILCS 305/4.1 new |
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205 ILCS 305/8 |
from Ch. 17, par. 4409 |
205 ILCS 305/20 |
from Ch. 17, par. 4421 |
205 ILCS 305/22 |
from Ch. 17, par. 4423 |
205 ILCS 305/30 |
from Ch. 17, par. 4431 |
205 ILCS 305/46 |
from Ch. 17, par. 4447 |
205 ILCS 305/51 |
from Ch. 17, par. 4452 |
205 ILCS 305/70 |
from Ch. 17, par. 4471 |
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Amends the Illinois Credit Union Act. Provides that a credit union organized under the laws of Illinois may elect to adopt an assumed corporate name that is not impermissible under applicable law. Establishes the requirements for a credit union to operate under an assumed corporate name. Provides additional criteria that the Director of the Illinois Department of Financial Institutions may use to direct and supervise all the administrative and technical activities of the Illinois Department of Financial Institutions. Contains provisions concerning the rules of office for Directors. Allows a credit union to purchase certain instruments that evidence an indebtedness of its members or of members of another credit union (now, a credit union may only purchase certain instruments of its members). Prohibits those other than an authorized user, without permission, from using the name of or a name similar to the name of an existing credit union when marketing or soliciting business from members or prospective members and provides penalties against those who violate the provision. Effective immediately.
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A BILL FOR
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HB1288 |
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LRB095 08529 MJR 28710 b |
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| AN ACT concerning regulation.
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| Be it enacted by the People of the State of Illinois,
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| represented in the General Assembly:
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| Section 5. The Illinois Credit Union Act is amended by |
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| changing Sections 8, 20, 22, 30, 46, 51, and 70 and by adding |
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| Section 4.1 as follows: |
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| (205 ILCS 305/4.1 new) |
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| Sec. 4.1. Assumed corporate name. |
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| (a) A credit union organized under the laws of Illinois may |
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| elect to adopt an assumed name that is not impermissible under |
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| applicable law. |
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| (b) As used in this Act, "assumed name" means any name |
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| other than the true credit union name as stated in its charter, |
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| except that the following shall not constitute the use of an |
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| assumed name under this Act: |
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| (1) the identification by a credit union of the conduct |
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| of its affairs with a trademark or service mark of which it |
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| is the owner or licensed user; or |
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| (2) the use of the name of a division, not separately |
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| chartered under this Act and not containing the word |
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| "credit union" or an abbreviation of one of such words, |
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| provided the credit unions also clearly discloses its true |
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| name. |
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LRB095 08529 MJR 28710 b |
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| (c) Before conducting any affairs in this State under an |
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| assumed name or names, the credit union shall, for each assumed |
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| name, pursuant to resolution by its board of directors, execute |
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| and file with the Division of Financial Institutions, an |
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| application setting forth: |
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| (1) the true credit union name; |
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| (2) that the credit union intends to conduct affairs |
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| under an assumed name; and |
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| (3) the assumed name which it proposes to use. |
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| (d) The right to use an assumed name shall be effective for |
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| a period of 5 years from the date of approval by the Division |
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| of Financial Institutions. |
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| (e) A credit union shall renew the right to use its assumed |
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| name or names, if any, within the 60 days preceding the |
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| expiration of such right, for a period of 5 years, by making an |
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| election to do so and by paying the renewal fee as prescribed |
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| by rule. |
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| (f) Once an application for an assumed name has been |
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| approved by the Division of Financial Institutions, one copy |
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| thereof may be filed for record in the office of the Recorder |
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| of the county in which the principal office of the credit |
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| union.
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| (205 ILCS 305/8) (from Ch. 17, par. 4409)
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| Sec. 8. Director's powers and duties. Credit unions are |
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| regulated by the
Department. The Director, in executing the |
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| powers and discharging the duties
vested by law in the |
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| Department has the following powers and duties:
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| (1) To exercise the rights, powers and duties set forth |
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| in this Act or
any related Act.
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| (2) To prescribe rules and regulations for the |
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| administration of this
Act. The provisions of the Illinois |
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| Administrative Procedure Act are hereby
expressly adopted |
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| and incorporated herein
as though a part of this Act, and |
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| shall apply to all administrative rules
and procedures of |
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| the Department under this Act.
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| (3) To direct and supervise all the administrative and |
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| technical
activities
of the Department including the |
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| employment of a Credit Union Supervisor
who shall have |
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| knowledge in the theory and practice of, or experience in, |
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| the
operations or supervision of financial institutions, |
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| preferably credit unions,
and such other persons as are |
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| necessary to carry out his functions including examiners |
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| meeting certification standards of the National |
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| Association of State Credit Union Supervisors (NASCUS) or |
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| similar certification standards .
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| (4) To issue cease and desist orders when in the |
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| opinion of the Director,
a credit union is engaged or has |
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| engaged, or the Director has reasonable
cause to believe |
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| the credit union is about to engage, in an unsafe or |
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| unsound
practice, or is violating or has violated or the |
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| Director has reasonable
cause to believe is about to |
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| violate a law, rule or regulation or any condition
imposed |
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| in writing by the Department.
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| (5) To suspend from office and to prohibit from further |
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| participation
in any manner in the conduct of the affairs |
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| of his credit union any director,
officer or committee |
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| member who has committed any violation of a law, rule,
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| regulation or of a cease and desist order or who has |
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| engaged or participated
in any unsafe or unsound practice |
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| in connection with the credit union or
who has committed or |
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| engaged in any act, omission, or practice which
constitutes |
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| a breach of his fiduciary duty as such director, officer or
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| committee member, when the Director has determined that |
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| such action or actions
have resulted or will result in |
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| substantial financial loss or other damage that
seriously |
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| prejudices the interests of the members.
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| (6) Except for the fees established in this Act, to |
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| prescribe, by rule
and regulation, fees and penalties for |
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| preparing, approving, and filing
reports and other |
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| documents; furnishing
transcripts; holding hearings; |
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| investigating applications
for permission to
organize, |
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| merge, or convert; failure to maintain accurate books and |
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| records
to enable the Department to conduct an examination; |
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| and taking supervisory
actions.
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| (7) To destroy, in his discretion, any or all books and |
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| records of any
credit union in his possession or under his |
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| control after the expiration
of three years from the date |
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| of cancellation of the charter of such credit
unions.
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| (8) To make investigations and to conduct research and |
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| studies and to
publish some of the problems of persons in |
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| obtaining credit at reasonable
rates of interest and of the |
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| methods and benefits of cooperative saving
and lending for |
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| such persons.
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| (9) To authorize, foster or establish experimental, |
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| developmental,
demonstration or pilot projects by public |
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| or private organizations including
credit unions which:
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| (a) promote more effective operation of credit |
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| unions so as to provide
members an opportunity to use |
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| and control their own money to improve their
economic |
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| and social conditions; or
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| (b) are in the best interests of credit unions, |
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| their members and the
people of the State of Illinois.
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| (10) To cooperate in studies, training or other |
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| administrative activities
with, but not limited to, the |
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| NCUA, other state credit union regulatory
agencies and |
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| industry trade associations in order to promote more |
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| effective
and efficient supervision of Illinois chartered |
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| credit unions.
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| (Source: P.A. 91-357, eff. 7-29-99; 92-608, eff. 7-1-02.)
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| (205 ILCS 305/20) (from Ch. 17, par. 4421)
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| Sec. 20. Election or appointment of officials.
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| (1) The credit union shall
be directed by a Board of |
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| Directors consisting of no less than 7 in number,
to be elected |
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| at the annual meeting by and from the members. Directors shall
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| hold office until the next annual meeting, unless their
terms |
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| are staggered. Upon amendment of its bylaws, a credit union may |
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| divide
the Directors into 2 or 3 classes with each class as |
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| nearly equal in number as
possible. The term of office of the |
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| directors of the first class shall expire
at the first annual |
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| meeting after their election, that of the second class
shall
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| expire at the second annual meeting after their election, and |
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| that of the third
class, if any, shall expire at the third |
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| annual meeting after their election.
At each annual meeting |
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| after the classification, the number of directors equal
to the |
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| number of directors whose terms expire at the time of the |
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| meeting shall
be elected to hold office until the second |
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| succeeding annual meeting if there
are 2 classes or until the |
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| third succeeding annual meeting if there are 3
classes. A |
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| Director shall hold office for the term for which he
or she is |
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| elected and until his or her
successor
is elected and |
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| qualified. |
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| (1.5) Except as provided in subsection (1.10), in
In all |
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| elections for Directors, every member
has the right to vote, in |
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| person or by proxy, the number of shares owned
by him, or in |
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| the case of a member other than a natural person, the member's
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| one vote, for as many persons as there are Directors to be |
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| elected, or to
cumulate such shares, and give one candidate as |
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| many votes as the number
of Directors multiplied by the number |
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LRB095 08529 MJR 28710 b |
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| of his shares equals, or to distribute
them on
the same |
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| principle among as many candidates as he may desire and the |
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| Directors
shall not be elected in any other manner. Shares held |
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| in a joint account
owned by more than one member may be voted |
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| by any one of the members, however,
the number of cumulative |
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| votes cast may not exceed a total equal to the number
of shares |
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| multiplied by the number of directors to be elected. A majority |
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| of
the shares entitled
to vote shall be represented either in |
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| person or by proxy for the election
of Directors. Each Director |
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| shall wholly take and subscribe to an oath
that he will |
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| diligently and honestly perform his duties in administering
the |
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| affairs of the credit union, that while he may delegate to |
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| another the
performance of those administrative duties he is |
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| not thereby relieved from
his responsibility for their |
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| performance, that he will not knowingly violate
or willingly |
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| permit to be violated any law applicable to the credit union,
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| and that he is the owner of at least one share of the credit |
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| union.
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| (1.10) Upon amendment of a credit union's bylaws approved |
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| by the members, in all elections for Directors, every member |
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| who is a natural person shall have the right to cast one vote, |
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| regardless of the number of his or her shares, in person or by |
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| proxy, for as many persons as there are Directors to be |
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| elected.
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| (2) The Board of Directors shall appoint from among the |
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| members of the
credit union, a Supervisory Committee of not |
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| less than 3 members at the
organization meeting and within 30 |
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| days following each annual meeting of
the members for such |
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| terms as the bylaws provide. Members of the Supervisory
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| Committee may, but need not be, on the Board of Directors, but |
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| shall not
be officers of the credit union, members of the |
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| Credit Committee,
or the
credit manager if no Credit Committee |
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| has been appointed.
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| (3) The Board of Directors may appoint, from among the
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| members of the
credit union, a Credit Committee consisting of |
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| an odd number, not less than
3 for such terms as the bylaws |
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| provide. Members of the Credit Committee
may, but need not be, |
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| Directors or officers of the credit union, but shall
not be |
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| members of the Supervisory Committee.
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| (4) The Board of Directors may appoint from among the |
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| members
of the
credit union a Membership Committee of one or |
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| more persons. If appointed,
the Committee shall act
upon all |
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| applications for membership and submit a report of its actions
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| to the Board of Directors at the next regular meeting for
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| review.
If no Membership Committee is appointed, credit union |
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| management shall act
upon all applications for membership and |
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| submit a report of its actions to the
Board of Directors at the |
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| next regular meeting for review.
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| (Source: P.A. 91-929, eff. 12-15-00; 92-608, eff. 7-1-02.)
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| (205 ILCS 305/22) (from Ch. 17, par. 4423)
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| Sec. 22. Vacancies. |
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LRB095 08529 MJR 28710 b |
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| (a) The Board of Directors shall, by appointment from
among |
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| the credit union members, fill any vacancies occurring on the |
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| Board
for the remainder of the Director's unexpired term or |
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| until a successor
is elected and qualified following completion |
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| of the term filled by the Board . The Board shall, by |
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| appointment from among the
credit union members, fill vacancies |
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| in the Membership Committee, Credit
Committee, or credit |
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| manager if no Credit Committee has been appointed, and
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| Supervisory
Committees. |
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| (b) An office may be declared vacant by the Board when a |
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| Director or a Committee member dies, resigns from the Board or |
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| Committee, is removed from the Board or Committee, is no longer |
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| a member of the credit union, is the owner of less than one |
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| share of the credit union, or fails to attend three consecutive |
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| regular meetings of the Board without good cause.
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| (Source: P.A. 91-929, eff. 12-15-00.)
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| (205 ILCS 305/30) (from Ch. 17, par. 4431)
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| Sec. 30. Duties of directors. |
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| (a) It shall be the duty of the directors to:
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| (1) Review actions on applications
for membership. A |
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| record of the Membership Committee's approval or
denial of |
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| membership or management's approval or denial of |
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| membership if no
Membership Committee has been appointed |
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| shall be available to the Board of
Directors for |
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| inspection. A person denied membership by the Membership
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| Committee or credit union management may appeal the denial |
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| to the Board;
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| (2) Provide adequate fidelity bond coverage for |
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| officers,
employees, directors and committee members, and |
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| for losses caused by
persons outside of the credit union, |
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| subject to rules and regulations
promulgated by the |
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| Director;
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| (3) Determine from time to time the interest rates, not |
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| in excess of that
allowed under this Act, which shall be |
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| charged on loans to members and to
authorize interest |
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| refunds, if any, to members from income earned and received
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| in proportion to the interest paid by them on such classes |
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| of loans and
under such conditions as the Board prescribes. |
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| The Directors may establish
different interest rates to be |
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| charged on different classes of loans;
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| (4) Within any limitations set forth in the credit |
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| union's bylaws, fix
the maximum amount which may be loaned |
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| with and without security to a member;
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| (5) Declare dividends on various classes of shares in |
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| the manner and form
as provided in the bylaws;
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| (6) Limit the number of shares which may be owned by a |
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| member;
such limitations to apply alike to all members;
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| (7) Have charge of the investment of funds, except that |
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| the Board of
Directors may designate an Investment |
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| Committee or any qualified individual
or entity to have |
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| charge of making investments under policies established
by |
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LRB095 08529 MJR 28710 b |
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| the Board of Directors;
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| (8) Authorize the employment of or contracting with |
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| such persons or
organizations as may be necessary to carry |
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| on the
operations of the credit union, provided that prior |
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| approval is received from
the
Department before delegating |
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| substantially all managerial duties and
responsibilities |
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| to a credit union organization, and fix
the compensation, |
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| if any, of the officers and provide for compensation for
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| other employees within
policies established by the Board of |
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| Directors;
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| (9) Authorize the conveyance of property;
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| (10) Borrow or lend money consistent with the |
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| provisions of this Act;
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| (11) Designate a depository or depositories for the |
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| funds of the credit
union and supervise the investment of |
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| funds;
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| (12) Suspend or remove, or both, any or all officers or |
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| any
or all members of the Membership, Credit, or other |
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| committees
whenever, in the judgment of the Board of |
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| Directors, the best interests of the credit union will be |
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| served thereby; provided that members of the Supervisory |
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| Committee may not be suspended or removed except for |
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| failure to perform their duties; and provided that removal |
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| of any officer shall be without prejudice to the contract |
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| rights, if any, of the person so removed;
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| (13) Appoint any special committees deemed necessary; |
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| and
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| (14) Perform such other duties as the members may |
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| direct, and perform
or authorize any action not |
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| inconsistent with this Act and not specifically
reserved by |
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| the bylaws to the members. |
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| (b) The Board of Directors may delegate to the chief |
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| management official, according to guidelines established by |
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| the Board that may include the authority to further delegate |
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| one or more duties, all of the following duties: |
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| (1) determining the interest rates on loans; |
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| (2) determining the dividend rates on share accounts;
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| and |
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| (3) hiring employees other than the chief management |
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| official and fixing their compensation.
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| (Source: P.A. 92-608, eff. 7-1-02; 93-916, eff. 8-12-04.)
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| (205 ILCS 305/46) (from Ch. 17, par. 4447)
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| Sec. 46. Loans and interest rate.
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| (1) A credit union may make loans
to its members for such |
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| purpose and upon such security and terms, including
rates of |
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| interest, as the Credit Committee, credit manager, or loan |
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| officer
approves.
Notwithstanding the provisions of any other |
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| law in connection with extensions
of credit, a credit union may |
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| elect to
contract for and receive interest and fees and other |
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| charges for extensions of
credit subject only to the provisions |
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| of this Act and rules promulgated under
this Act, except that |
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| extensions of credit secured by residential real estate
shall |
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| be subject to the laws applicable thereto.
The rates of |
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| interest to be charged on loans to members shall be
set by the |
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| Board of Directors of each individual credit union in |
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| accordance with Section 30 of this Act and such
rates may be |
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| less than, but may not exceed, the maximum rate set forth in
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| this Section. A borrower may repay his loan prior to maturity, |
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| in whole or
in part, without penalty. The credit contract may |
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| provide for the payment
by the member and receipt by the credit |
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| union of all costs and
disbursements, including reasonable |
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| attorney's fees and collection agency
charges, incurred by the |
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| credit union to collect or enforce the debt in the
event of a |
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| delinquency by the member, or in the event of a breach of any
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| obligation of the member under the credit contract. A |
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| contingency or
hourly arrangement established under an |
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| agreement entered into by a credit
union with an attorney or |
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| collection agency to collect a loan of a member
in default |
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| shall be presumed prima facie reasonable.
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| (2) Credit unions may make loans based upon the security of |
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| any
interest or equity in real estate, subject to rules and |
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| regulations
promulgated by the Director. In any contract or |
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| loan which
is secured by a mortgage, deed of
trust, or |
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| conveyance in the nature of a mortgage, on residential real
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| estate, the interest which is computed, calculated, charged, or |
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| collected
pursuant to such contract or loan, or pursuant to any |
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| regulation or rule
promulgated pursuant to this Act, may not be |
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| computed, calculated, charged
or collected for any period of |
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| time occurring after the date on which the
total indebtedness, |
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| with the exception of late payment penalties, is paid
in full.
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| For purposes of this subsection (2) of this Section 46, a |
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| prepayment
shall mean the payment of the total indebtedness, |
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| with the exception of
late payment penalties if incurred or |
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| charged, on any date before the date
specified in the contract |
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| or loan agreement on which the total indebtedness
shall be paid |
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| in full, or before the date on which all payments, if timely
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| made, shall have been made. In the event of a prepayment of the
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| indebtedness which is made on a date
after the date on which |
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| interest on the indebtedness was last computed,
calculated, |
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| charged, or collected but before the next date on which |
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| interest
on the indebtedness was to be calculated, computed, |
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| charged, or collected,
the lender may calculate, charge and |
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| collect interest on the indebtedness
for the period which |
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| elapsed between the date on which the prepayment is
made and |
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| the date on which interest on the indebtedness was last |
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| computed,
calculated, charged or collected at a rate equal to |
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| 1/360 of the annual
rate for each day which so elapsed, which |
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| rate shall be applied to the
indebtedness outstanding as of the |
22 |
| date of prepayment. The lender shall
refund to the borrower any |
23 |
| interest charged or collected which exceeds that
which the |
24 |
| lender may charge or collect pursuant to the preceding |
25 |
| sentence.
The provisions of this amendatory Act of 1985 shall |
26 |
| apply only to contracts
or loans entered into on or after the |
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LRB095 08529 MJR 28710 b |
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| effective date of this amendatory
Act.
|
2 |
| (3) Notwithstanding any other provision of this Act, a |
3 |
| credit union
authorized under this Act to make loans secured by |
4 |
| an interest or equity in
real estate may engage in making |
5 |
| "reverse mortgage" loans to persons for
the purpose of making |
6 |
| home improvements or repairs, paying insurance
premiums or |
7 |
| paying real estate taxes on the homestead properties
of such |
8 |
| persons. If made, such loans shall be made on such terms and
|
9 |
| conditions as the credit union shall determine and as shall be |
10 |
| consistent
with the provisions of this Section and such rules |
11 |
| and regulations as the
Director shall promulgate hereunder. For |
12 |
| purposes of this Section, a
"reverse mortgage" loan shall be a |
13 |
| loan extended on the basis of existing
equity in homestead |
14 |
| property and secured by a mortgage on such property.
Such loans |
15 |
| shall be repaid upon the sale of the property or upon the death
|
16 |
| of the owner or, if the property is in joint tenancy, upon the |
17 |
| death of the
last surviving joint tenant who had such an |
18 |
| interest in the property at the
time the loan was initiated, |
19 |
| provided, however, that the credit union and
its member may by |
20 |
| mutual agreement, establish other repayment terms. A
credit |
21 |
| union, in making a "reverse mortgage" loan, may add deferred
|
22 |
| interest to principal or otherwise provide for the charging of |
23 |
| interest or
premiums on such deferred interest. "Homestead" |
24 |
| property, for purposes of
this Section, means the domicile and |
25 |
| contiguous real estate owned and
occupied by the mortgagor. The |
26 |
| Director shall promulgate rules and
regulations under this |
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LRB095 08529 MJR 28710 b |
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| Section; provided that such rules and regulations
need not be |
2 |
| promulgated jointly with any other administrative agency of |
3 |
| this State.
|
4 |
| (4) Notwithstanding any other provisions of this Act, a |
5 |
| credit union
authorized under this Act to make loans secured by |
6 |
| an interest or equity
in real property may engage in making |
7 |
| revolving credit loans secured by
mortgages or deeds of trust |
8 |
| on such real property or by security
assignments of beneficial |
9 |
| interests in land trusts.
|
10 |
| For purposes of this Section, "revolving credit" has the |
11 |
| meaning defined
in Section 4.1 of the Interest Act.
|
12 |
| Any mortgage or deed of trust given to secure a revolving |
13 |
| credit loan may,
and when so expressed therein shall, secure |
14 |
| not only the existing indebtedness
but also such future |
15 |
| advances, whether such advances are obligatory or to
be made at |
16 |
| the option of the lender, or otherwise, as are made within |
17 |
| twenty
years from the date thereof, to the same extent as if |
18 |
| such future advances
were made on the date of the execution of |
19 |
| such mortgage or deed of trust,
although there may be no |
20 |
| advance made at the time of execution of such mortgage
or other |
21 |
| instrument, and although there may be no indebtedness |
22 |
| outstanding
at the time any advance is made. The lien of such |
23 |
| mortgage or deed of trust,
as to third persons
without actual |
24 |
| notice thereof, shall be valid as to all such indebtedness
and |
25 |
| future advances form the time said mortgage or deed of trust is |
26 |
| filed
for record in the office of the Recorder of Deeds or the |
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LRB095 08529 MJR 28710 b |
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| Registrar of Titles
of the county where the real property |
2 |
| described therein is located. The
total amount of indebtedness |
3 |
| that may be so secured may increase or decrease
from time to |
4 |
| time, but the total unpaid balance so secured at any one time
|
5 |
| shall not exceed a maximum principal amount which must be |
6 |
| specified in such
mortgage or deed of trust, plus interest |
7 |
| thereon, and any disbursements
made for the payment of taxes, |
8 |
| special assessments, or insurance on said
real property, with |
9 |
| interest on such disbursements.
|
10 |
| Any such mortgage or deed of trust shall be valid and have |
11 |
| priority over
all subsequent liens and encumbrances, including |
12 |
| statutory liens, except
taxes and assessments levied on said |
13 |
| real property.
|
14 |
| (5) Compliance with federal or Illinois preemptive laws or |
15 |
| regulations
governing loans made by a credit union chartered |
16 |
| under this Act shall
constitute compliance with this Act.
|
17 |
| (Source: P.A. 93-640, eff. 12-31-03.)
|
18 |
| (205 ILCS 305/51) (from Ch. 17, par. 4452)
|
19 |
| Sec. 51. Other Loan Programs.
|
20 |
| (1) Subject to such rules and regulations
as the Director |
21 |
| may promulgate, a credit union may participate in loans
to |
22 |
| credit union members jointly with other credit unions, |
23 |
| corporations, or
financial institutions. An originating credit |
24 |
| union may originate
loans only to its own members. A |
25 |
| participating credit union that is
not the originating lender |
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LRB095 08529 MJR 28710 b |
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| may participate in loans made to its own members or
to members |
2 |
| of another participating credit union.
"Originating lender" |
3 |
| means the participating credit union with which the member
|
4 |
| contracts. A master participation agreement must be properly |
5 |
| executed, and the
agreement must include provisions for |
6 |
| identifying, either through documents
incorporated by |
7 |
| reference or directly in the agreement, the participation loan
|
8 |
| or loans prior to their sale.
|
9 |
| (2) Any credit union with assets of $500,000 or more may |
10 |
| loan to its members
under the State Scholarships Law or other |
11 |
| scholarship programs which are
subject to a federal or state |
12 |
| law providing 100% repayment guarantee.
|
13 |
| (3) A credit union may purchase the conditional sales
|
14 |
| contracts, notes
and similar instruments which evidence an |
15 |
| indebtedness of its members or of members of another credit |
16 |
| union .
|
17 |
| (4) With approval of the Board of Directors, a credit union |
18 |
| may make loans,
either on its own or jointly with other credit |
19 |
| unions, corporations or
financial
institutions, to credit |
20 |
| union organizations; provided, that the aggregate
amount of all |
21 |
| such loans outstanding shall not at any time exceed the greater
|
22 |
| of 3% of the paid-in and unimpaired capital and surplus of the |
23 |
| credit
union or the amount authorized for federal credit |
24 |
| unions.
|
25 |
| (Source: P.A. 92-293, eff. 8-9-01; 93-640, eff. 12-31-03.)
|
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LRB095 08529 MJR 28710 b |
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|
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| (205 ILCS 305/70) (from Ch. 17, par. 4471)
|
2 |
| Sec. 70. Use of name, sentence. |
3 |
| (a) No individual, firm, association,
or body politic and |
4 |
| corporate, including, without limitation, any corporation, |
5 |
| limited liability company, general partnership, limited |
6 |
| partnership, or joint venture that is not an authorized user |
7 |
| may use any
name or title which contains the words
"credit |
8 |
| union" or any abbreviation thereof, and such use is a Class A
|
9 |
| Misdemeanor. For purposes of this Section, "authorized user" |
10 |
| means a corporation organized under this Act, the credit union |
11 |
| act of another state, or the Federal Credit Union Act, any |
12 |
| association of such a corporation, and subsidiaries and |
13 |
| affiliates of such an association.
|
14 |
| (b) If the Director of the Division of Financial |
15 |
| Institutions of the Department of Financial and Professional |
16 |
| Regulation finds that an individual or entity that is not an |
17 |
| authorized user has transacted or intends to transact business |
18 |
| in this State in a manner that has a substantial likelihood of |
19 |
| misleading the public by: (i) implying that the business is a |
20 |
| credit union or (ii) using or intending to use the words |
21 |
| "credit union", or any abbreviation thereof, in connection with |
22 |
| its business, then the Director of the Division of Financial |
23 |
| Institutions may direct the individual or entity to cease and |
24 |
| desist from transacting its business or using the words "credit |
25 |
| union", or any abbreviation thereof. If the individual or |
26 |
| entity persists in transacting its business or using the words |
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HB1288 |
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LRB095 08529 MJR 28710 b |
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| "credit union", or any abbreviation thereof, then the Director |
2 |
| of the Division of Financial Institutions may impose a civil |
3 |
| penalty of up to $10,000 for each violation. Each day that the |
4 |
| individual or entity continues transacting business or using |
5 |
| the words "credit union", or any abbreviation thereof, in |
6 |
| connection with its business shall constitute a separate |
7 |
| violation of these provisions.
|
8 |
| (c) Except as otherwise expressly permitted by law or with |
9 |
| the written consent of the credit union, no person or group of |
10 |
| persons other than an authorized user may use the name of or a |
11 |
| name similar to the name of an existing credit union when |
12 |
| marketing or soliciting business from members or prospective |
13 |
| members if the name or similar name is used in a manner that |
14 |
| would cause a reasonable person to believe that the marketing |
15 |
| material or solicitation originated from or is endorsed by the |
16 |
| existing credit union or that the existing credit union is in |
17 |
| any other way responsible for the marketing material or |
18 |
| solicitation. The following remedies shall apply: |
19 |
| (1) Any person who violates subsection (c) of this |
20 |
| Section commits a business offense and shall be fined in an |
21 |
| amount not to exceed $5,000. |
22 |
| (2) In addition to any other available remedies, any |
23 |
| existing credit union may report an alleged violation of |
24 |
| any provision of this Section to the Supervisor of the |
25 |
| Credit Union Section of the Division of Financial |
26 |
| Institutions. If the Supervisor finds that any person or |
|
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HB1288 |
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LRB095 08529 MJR 28710 b |
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1 |
| group of persons is in violation of any provision of this |
2 |
| Section, then the Supervisor may direct that person or |
3 |
| group of persons to cease and desist from that violation. |
4 |
| If the Supervisor issues a cease and desist order against |
5 |
| any person or group of persons for violation of subsection |
6 |
| (c), then the order must require that person or group of |
7 |
| persons to cease and desist from using the offending |
8 |
| marketing material or solicitation in Illinois. |
9 |
| (3) If a person or group of persons against whom the |
10 |
| Supervisor issued the cease and desist order persists in |
11 |
| the violation, then the Supervisor may impose a civil |
12 |
| penalty of up to $10,000 for each violation. Each day that |
13 |
| a person or group of persons is in violation of this |
14 |
| Section constitutes a separate violation of this Section |
15 |
| and each instance in which marketing material or a |
16 |
| solicitation is sent in violation of this subsection (c) |
17 |
| constitutes a separate violation of this Section. |
18 |
| (d) The Supervisor of the Credit Union Section of the |
19 |
| Division of Financial Institutions may adopt rules to |
20 |
| administer the provisions of this Section.
|
21 |
| (Source: P.A. 94-150, eff. 7-8-05.)
|
22 |
| Section 99. Effective date. This Act takes effect upon |
23 |
| becoming law.
|