HB0188 102ND GENERAL ASSEMBLY

LRB102 04283 BMS 14301 b

102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
HB0188

Introduced 1/22/2021, by Rep. La Shawn K. Ford

SYNOPSIS AS INTRODUCED:

205 ILCS 305/9

from Ch. 17, par. 4410

Amends the Illinois Credit Union Act. Provides that the Director of the Division of Financial Institutions of the Department of Financial and Professional Regulation may accept an examination of a credit union made by the credit union's share insurer as an alternative to the biennial examination of a credit union conducted by the Department of Financial and Professional Regulation or a public accountant registered by the Department.

A BILL FOR

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 Section 9 as follows:

(205 ILCS 305/9) (from Ch. 17, par. 4410)

Sec. 9. Reports and examinations.

(1) Credit unions shall report to the Department on forms supplied by the Department, in accordance with a schedule published by the Department. A recapitulation of the annual reports shall be compiled and published annually by the Department, for the use of the General Assembly, credit unions, various educational institutions and other interested parties. A credit union which fails to file any report when due shall pay to the Department a late filing fee for each day the report is overdue as prescribed by rule. The Secretary may extend the time for filing a report.

(2) The Secretary may require special examinations of and special financial reports from a credit union or a credit union organization in which a credit union loans, invests, or delegates substantially all managerial duties and responsibilities when he determines that such examinations and reports are necessary to enable the Department to determine the safety of a credit union's operation or its solvency. The cost to the Department of the aforesaid special examinations shall be borne by the credit union being examined as prescribed by rule.

(3) All credit unions incorporated under this Act shall be examined at least biennially by the Department or, at the discretion of the Secretary, by a public accountant registered by the Department of Financial and Professional Regulation; however, as an alternative to that examination, the Director may accept an examination made by the credit union's share insurer. The costs of an examination shall be paid by the credit union. The scope of all examinations by a public accountant shall be at least equal to the examinations made by the Department. The examiners shall have full access to, and may compel the production of, all the books, papers, securities and accounts of any credit union. A special examination shall be made by the Department or by a public accountant approved by the Department upon written request of 5 or more members, who guarantee the expense of the same. Any credit union refusing to submit to an examination when ordered by the Department shall be reported to the Attorney General, who shall institute proceedings to have its charter revoked. If the Secretary determines that the examination of a credit union is to be conducted by a public accountant registered by the Department of Financial and Professional Regulation and the examination is done in conjunction with the credit union's external independent audit of financial statements, the requirements of this Section and subsection (3) of Section 34 shall be deemed met.

(3.5) Pursuant to Section 8, the Secretary shall adopt rules that ensure consistency and due process in the examination process. The Secretary may also establish guidelines that (i) define the scope of the examination process and (ii) clarify examination items to be resolved. The rules, formal guidance, interpretive interpretative letters, or opinions furnished to credit unions by the Secretary may be relied upon by the credit unions.

(4) A copy of the completed report of examination and a review comment letter, if any, citing exceptions revealed during the examination, shall be submitted to the credit union by the Department. A detailed report stating the corrective actions taken by the board of directors on each exception set forth in the review comment letter shall be filed with the Department within 40 days after the date of the review comment letter, or as otherwise directed by the Department. Any credit union through its officers, directors, committee members or employees, which willfully provides fraudulent or misleading information regarding the corrective actions taken on exceptions appearing in a review comment letter may have its operations restricted to the collection of principal and interest on loans outstanding and the payment of normal expenses and salaries until all exceptions are corrected and accepted by the Department.

(Source: P.A. 97-133, eff. 1-1-12; 98-784, eff. 7-24-14; revised 8-23-19.)