Illinois General Assembly - Full Text of HB5342
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Full Text of HB5342  98th General Assembly




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1    AN ACT concerning regulation.
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
4    Section 5. The Illinois Credit Union Act is amended by
5changing Sections 1.1, 9, 30, 34, 39, and 46 and by adding
6Section 57.1 as follows:
7    (205 ILCS 305/1.1)  (from Ch. 17, par. 4402)
8    Sec. 1.1. Definitions.
9    Credit Union - The term "credit union" means a cooperative,
10non-profit association, incorporated under this Act, under the
11laws of the United States of America or under the laws of
12another state, for the purposes of encouraging thrift among its
13members, creating a source of credit at a reasonable rate of
14interest, and providing an opportunity for its members to use
15and control their own money in order to improve their economic
16and social conditions. The membership of a credit union shall
17consist of a group or groups each having a common bond as set
18forth in this Act.
19    Common Bond - The term "common bond" refers to groups of
20people who meet one of the following qualifications:
21        (1) Persons belonging to a specific association, group
22    or organization, such as a church, labor union, club or
23    society and members of their immediate families which shall



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1    include any relative by blood or marriage or foster and
2    adopted children.
3        (2) Persons who reside in a reasonably compact and well
4    defined neighborhood or community, and members of their
5    immediate families which shall include any relative by
6    blood or marriage or foster and adopted children.
7        (3) Persons who have a common employer or who are
8    members of an organized labor union or an organized
9    occupational or professional group within a defined
10    geographical area, and members of their immediate families
11    which shall include any relative by blood or marriage or
12    foster and adopted children.
13    Shares - The term "shares" or "share accounts" means any
14form of shares issued by a credit union and established by a
15member in accordance with standards specified by a credit
16union, including but not limited to common shares, share draft
17accounts, classes of shares, share certificates, special
18purpose share accounts, shares issued in trust, custodial
19accounts, and individual retirement accounts or other plans
20established pursuant to Section 401(d) or (f) or Section 408(a)
21of the Internal Revenue Code, as now or hereafter amended, or
22similar provisions of any tax laws of the United States that
23may hereafter exist.
24    Credit Union Organization - The term "credit union
25organization" means any organization established to serve the
26needs of credit unions, the business of which relates to the



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1daily operations of credit unions.
2    Department - The term "Department" means the Illinois
3Department of Financial and Professional Regulation.
4    Secretary - The term "Secretary" means the Secretary of
5Financial and Professional Regulation or a person authorized by
6the Secretary or this Act to act in the Secretary's stead.
7    Division of Financial Institutions - The term "Division of
8Financial Institutions" means the Division of Financial
9Institutions of the Department of Financial and Professional
11    Director - The term "Director of Financial Institutions"
12means the Director of the Division of Financial Institutions of
13the Department of Financial and Professional Regulation.
14    Office - The term "office" means the Division of Financial
15Institutions of the Department of Financial and Professional
17    NCUA - The term "NCUA" means the National Credit Union
18Administration, an agency of the United States Government
19charged with the supervision of credit unions chartered under
20the laws of the United States of America.
21    Central Credit Union - The term "central credit union"
22means a credit union incorporated primarily to receive shares
23from and make loans to credit unions and directors, officers,
24committee members and employees of credit unions. A central
25credit union may also accept as members persons who were
26members of credit unions which were liquidated and persons from



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1occupational groups not otherwise served by another credit
3    Corporate Credit Union - The term "corporate credit union"
4means a credit union which is a cooperative, non-profit
5association, the membership of which is limited primarily to
6other credit unions.
7    Insolvent - "Insolvent" means the condition that results
8when the total of all liabilities and shares exceeds net assets
9of the credit union.
10    Danger of insolvency - For purposes of Section 61, a credit
11union is in "danger of insolvency" if its net worth to asset
12ratio falls below 2%. In calculating the danger of insolvency
13ratio, secondary capital shall be excluded. For purposes of
14Section 61, a credit union is also in "danger of insolvency" if
15the Department is unable to ascertain, upon examination, the
16true financial condition of the credit union.
17    Net Worth - "Net worth" means the retained earnings balance
18of the credit union, as determined under generally accepted
19accounting principles, and forms of secondary capital approved
20by the Secretary and the Director pursuant to rulemaking.
21    Charitable Donation Account – The term "charitable
22donation account" means an account owned by a credit union that
23is held in a segregated custodial account or special purpose
24entity and specifically identified as a charitable donation
25account whereby, no less frequently than every 5 years and upon
26termination of the account, at least 51% of the total return on



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1assets in the account is distributed to one or more charitable
2organizations or non-profit entities.
3(Source: P.A. 97-133, eff. 1-1-12.)
4    (205 ILCS 305/9)  (from Ch. 17, par. 4410)
5    Sec. 9. Reports and examinations.
6    (1) Credit unions shall report to the Department on forms
7supplied by the Department, in accordance with a schedule
8published by the Department. A recapitulation of the annual
9reports shall be compiled and published annually by the
10Department, for the use of the General Assembly, credit unions,
11various educational institutions and other interested parties.
12A credit union which fails to file any report when due shall
13pay to the Department a late filing fee for each day the report
14is overdue as prescribed by rule. The Secretary may extend the
15time for filing a report.
16    (2) The Secretary may require special examinations of and
17special financial reports from a credit union or a credit union
18organization in which a credit union loans, invests, or
19delegates substantially all managerial duties and
20responsibilities when he determines that such examinations and
21reports are necessary to enable the Department to determine the
22safety of a credit union's operation or its solvency. The cost
23to the Department of the aforesaid special examinations shall
24be borne by the credit union being examined as prescribed by



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1    (3) All credit unions incorporated under this Act shall be
2examined at least biennially by the Department or, at the
3discretion of the Secretary, by a public accountant registered
4by the Department of Financial and Professional Regulation. The
5costs of an examination shall be paid by the credit union. The
6scope of all examinations by a public accountant shall be at
7least equal to the examinations made by the Department. The
8examiners shall have full access to, and may compel the
9production of, all the books, papers, securities and accounts
10of any credit union. A special examination shall be made by the
11Department or by a public accountant approved by the Department
12upon written request of 5 or more members, who guarantee the
13expense of the same. Any credit union refusing to submit to an
14examination when ordered by the Department shall be reported to
15the Attorney General, who shall institute proceedings to have
16its charter revoked. If the Secretary determines that the
17examination of a credit union is to be conducted by a public
18accountant registered by the Department of Financial and
19Professional Regulation and the examination is done in
20conjunction with the credit union's external independent audit
21of financial statements, the requirements of this Section and
22subsection (3) of Section 34 shall be deemed met.
23    (3.5) Pursuant to Section 8, the Secretary shall adopt
24rules that ensure consistency and due process in the
25examination process. The Secretary may also establish
26guidelines that (i) define the scope of the examination process



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1and (ii) clarify examination items to be resolved. The rules,
2formal guidance, interpretative letters, or opinions furnished
3to credit unions by the Secretary may be relied upon by the
4credit unions.
5    (4) A copy of the completed report of examination and a
6review comment letter, if any, citing exceptions revealed
7during the examination, shall be submitted to the credit union
8by the Department. A detailed report stating the corrective
9actions taken by the board of directors on each exception set
10forth in the review comment letter shall be filed with the
11Department within 40 days after the date of the review comment
12letter, or as otherwise directed by the Department. Any credit
13union through its officers, directors, committee members or
14employees, which willfully provides fraudulent or misleading
15information regarding the corrective actions taken on
16exceptions appearing in a review comment letter may have its
17operations restricted to the collection of principal and
18interest on loans outstanding and the payment of normal
19expenses and salaries until all exceptions are corrected and
20accepted by the Department.
21(Source: P.A. 97-133, eff. 1-1-12.)
22    (205 ILCS 305/30)  (from Ch. 17, par. 4431)
23    Sec. 30. Duties of directors.
24    (a) It shall be the duty of the directors to:
25        (1) Review actions on applications for membership. A



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1    record of the membership committee's approval or denial of
2    membership or management's approval or denial of
3    membership if no membership committee has been appointed
4    shall be available to the board of directors for
5    inspection. A person denied membership by the membership
6    committee or credit union management may appeal the denial
7    to the board;
8        (2) Provide adequate fidelity bond coverage for
9    officers, employees, directors and committee members, and
10    for losses caused by persons outside of the credit union,
11    subject to rules and regulations promulgated by the
12    Secretary;
13        (3) Determine from time to time the interest rates, not
14    in excess of that allowed under this Act, which shall be
15    charged on loans to members and to authorize interest
16    refunds, if any, to members from income earned and received
17    in proportion to the interest paid by them on such classes
18    of loans and under such conditions as the board prescribes.
19    The directors may establish different interest rates to be
20    charged on different classes of loans;
21        (4) Within any limitations set forth in the credit
22    union's bylaws, fix the maximum amount which may be loaned
23    with and without security to a member;
24        (5) Declare dividends on various classes of shares in
25    the manner and form as provided in the bylaws;
26        (6) Limit the number of shares which may be owned by a



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1    member; such limitations to apply alike to all members;
2        (7) Have charge of the investment of funds, except that
3    the board of directors may designate an investment
4    committee or any qualified individual or entity to have
5    charge of making investments under policies established by
6    the board of directors;
7        (8) Authorize the employment of or contracting with
8    such persons or organizations as may be necessary to carry
9    on the operations of the credit union, provided that prior
10    approval is received from the Department before delegating
11    substantially all managerial duties and responsibilities
12    to a credit union organization, and fix the compensation,
13    if any, of the officers and provide for compensation for
14    other employees within policies established by the board of
15    directors;
16        (9) Authorize the conveyance of property;
17        (10) Borrow or lend money consistent with the
18    provisions of this Act;
19        (11) Designate a depository or depositories for the
20    funds of the credit union and supervise the investment of
21    funds;
22        (12) Suspend or remove, or both, any or all officers or
23    any or all members of the membership, credit, or other
24    committees whenever, in the judgment of the board of
25    directors, the best interests of the credit union will be
26    served thereby; provided that members of the supervisory



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1    committee may not be suspended or removed except for
2    failure to perform their duties; and provided that removal
3    of any officer shall be without prejudice to the contract
4    rights, if any, of the person so removed;
5        (13) Appoint any special committees deemed necessary;
6    and
7        (14) Perform such other duties as the members may
8    direct, and perform or authorize any action not
9    inconsistent with this Act and not specifically reserved by
10    the bylaws to the members.
11    (b) The board of directors may delegate to the chief
12management official, according to guidelines established by
13the board that may include the authority to further delegate
14one or more duties, all of the following duties:
15        (1) determining the interest rates on loans;
16        (2) determining the dividend rates on share accounts;
17    and
18        (3) hiring employees other than the chief management
19    official and fixing their compensation.
20    (c) Each director shall have a working familiarity with
21basic finance and accounting practices consistent with the size
22and complexity of the credit union operation they serve,
23including the ability to read and understand the credit union's
24balance sheet and income and expense statements and the ability
25to ask, when appropriate, substantive questions of management
26and auditors. For the purposes of this subsection (c),



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1substantive questions include queries concerning financial
2services and products offered to the membership; how those
3activities generate revenue for the credit union; the credit,
4liquidity, interest rate, compliance, strategic, transaction,
5and reputation risks associated with those activities; and the
6internal control structures maintained by the credit union that
7limit and manage those risks.
8    A director who was elected or appointed on or after January
91, 2015 and who comes to the position without the requisite
10financial skills shall have until 6 months after the date of
11election or appointment to acquire the enumerated skills.
12    An incumbent director who was elected or appointed before
13January 1, 2015 and does not possess the requisite financial
14skills shall have until July 1, 2015 to acquire the enumerated
16    An incumbent director or a director who is elected or
17appointed on or after January 1, 2015 who already understands
18his or her credit union's financial statements shall not be
19required to do anything further to satisfy the financial skills
20requirement set forth in subsection (c).
21    It is the intent of the Department that all credit union
22directors possess a basic understanding of their credit union's
23financial condition. It is not the intent of the Department to
24subject credit union directors to examiner scrutiny of their
25financial skills. Rather, the Department shall evaluate
26whether the credit union has in place a policy to make



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1available to their directors appropriate training to enhance
2their financial knowledge of the credit union. Directors may
3receive the training through internal credit union training,
4external training offered by the credit union's retained
5auditors, trade associations, vendors, regulatory agencies, or
6any other sources or on-the-job experience, or a combination of
7those activities. The training may be received through any
8medium, including, but not limited to, conferences, workshops,
9audit closing meetings, seminars, teleconferences, webinars,
10and other internet based delivery channels.
11(Source: P.A. 97-133, eff. 1-1-12.)
12    (205 ILCS 305/34)  (from Ch. 17, par. 4435)
13    Sec. 34. Duties of supervisory committee.
14    (1) The supervisory committee shall make or cause to be
15made an annual internal audit of the books and affairs of the
16credit union to determine that the credit union's accounting
17records and reports are prepared promptly and accurately
18reflect operations and results, that internal controls are
19established and effectively maintained to safeguard the assets
20of the credit union, and that the policies, procedures and
21practices established by the board of directors and management
22of the credit union are being properly administered. The
23supervisory committee shall submit a report of that audit to
24the board of directors and a summary of that report to the
25members at the next annual meeting of the credit union. It



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1shall make or cause to be made such supplementary audits as it
2deems necessary or as are required by the Secretary or by the
3board of directors, and submit reports of these supplementary
4audits to the Secretary or board of directors as applicable. If
5the supervisory committee has not engaged a public accountant
6registered by the Department of Financial and Professional
7Regulation to make the internal audit, the supervisory
8committee or other officials of the credit union shall not
9indicate or in any manner imply that such audit has been
10performed by a public accountant or that the audit represents
11the independent opinion of a public accountant. The supervisory
12committee must retain its tapes and working papers of each
13internal audit for inspection by the Department. The report of
14this audit must be made on a form approved by the Secretary. A
15copy of the report must be promptly mailed to the Secretary.
16    (2) The supervisory committee shall make or cause to be
17made at least once each year a reasonable percentage
18verification of members' share and loan accounts, consistent
19with rules promulgated by the Secretary.
20    (3) The supervisory committee of a credit union with assets
21of $5,000,000 or more shall engage a public accountant
22registered by the Department of Financial and Professional
23Regulation to perform an annual external independent audit of
24the credit union's financial statements in accordance with
25generally accepted auditing standards. The supervisory
26committee of a credit union with assets of $3,000,000 or more,



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1but less than $5,000,000, shall engage a public accountant
2registered by the Department of Financial and Professional
3Regulation to perform an external independent audit of the
4credit union's financial statements in accordance with
5generally accepted auditing standards at least once every 3
6years. A copy of an external independent audit shall be
7completed and mailed to the Secretary no later than 90 days
8after December 31 of each year; provided that a credit union or
9group of credit unions may obtain an extension of the due date
10upon application to and receipt of written approval from the
11Secretary. If the annual internal audit of such a credit union
12is conducted by a public accountant registered by the
13Department of Financial and Professional Regulation and the
14annual internal audit is done in conjunction with the credit
15union's annual external audit, the requirements of subsection
16(1) of this Section shall be deemed met.
17    (4) In determining the appropriate balance in the allowance
18for loan losses account, a credit union may determine its
19historical loss rate using a defined period of time of less
20than 5 years, provided that:
21        (A) the methodology used to determine the defined
22    period of time is formally documented in the credit union's
23    policies and procedures and is appropriate to the credit
24    union's size, business strategy, and loan portfolio
25    characteristics and the economic environment of the areas
26    and employers served by the credit union;



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1        (B) supporting documentation is maintained for the
2    technique used to develop the credit union loss rates,
3    including the period of time used to accumulate historical
4    loss data and the factors considered in establishing the
5    time frames; and
6        (C) the external auditor conducting the credit union's
7    financial statement audit has analyzed the methodology
8    employed by the credit union and concludes that the
9    financial statements, including the allowance for loan
10    losses, are fairly stated in all material respects in
11    accordance with U.S. Generally Accepted Accounting
12    Principles, as promulgated by the Financial Accounting
13    Standards Board.
14    (5) A majority of the members of the supervisory committee
15shall constitute a quorum.
16    (6) On an annual basis commencing January 1, 2015, the
17members of the supervisory committee shall receive training
18related to their statutory duties. Supervisory committee
19members may receive the training through internal credit union
20training, external training offered by the credit union's
21retained auditors, trade associations, vendors, regulatory
22agencies, or any other sources or on-the-job experience, or a
23combination of those activities. The training may be received
24through any medium, including, but not limited to, conferences,
25workshops, audit closing meetings, seminars, teleconferences,
26webinars, and other Internet-based delivery channels.



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1(Source: P.A. 96-141, eff. 8-7-09; 96-963, eff. 7-2-10; 97-133,
2eff. 1-1-12.)
3    (205 ILCS 305/39)  (from Ch. 17, par. 4440)
4    Sec. 39. Special purpose share accounts; charitable
5donation accounts.
6    (1) If provided for in and consistent with the bylaws,
7Christmas clubs, vacation clubs and other special purpose share
8accounts may be established and offered under conditions and
9restrictions established by the board of directors.
10    (2) Pursuant to a policy adopted by the board of directors,
11which may be amended from time to time, a credit union may
12establish one or more charitable donation accounts. The
13investments and purchases to fund a charitable donation account
14are not subject to the investment limitations of this Act,
15provided the charitable donation account is structured in
16accordance with this Act. At their time of purchase, the book
17value of the investments in all charitable donation accounts,
18in the aggregate, shall not exceed 5% of the credit union's net
20        (a) If a credit union chooses to establish a charitable
21    donation account using a trust vehicle, the trustee must be
22    an entity regulated by the Office of the Comptroller of the
23    Currency, the U.S. Securities and Exchange Commission,
24    another federal regulatory agency, or a State financial
25    regulatory agency. A regulated trustee or other person who



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1    is authorized to make investment decisions for a charitable
2    donation account, other than the credit union itself, shall
3    either be registered with the U.S. Securities and Exchange
4    Commission as an investment advisor or regulated by the
5    Office of the Comptroller of the Currency.
6        (b) The parties to the charitable donation account must
7    document the terms and conditions controlling the account
8    in a written operating agreement, trust agreement, or
9    similar instrument. The terms of the agreement shall be
10    consistent with the requirements and conditions set forth
11    in this Section. The agreement, if applicable, and policies
12    must document the investment strategies of the charitable
13    donation account trustee or other manager in administering
14    the charitable donation account and provide for the
15    accounting of all aspects of the account, including its
16    distributions and liquidation, in accordance with
17    generally accepted accounting principles.
18        (c) A credit union's charitable donation account
19    agreement, if applicable, and policies shall provide that
20    the charitable organization or non-profit entity
21    recipients of any charitable donation account funds must be
22    identified in the policy and be exempt from taxation under
23    Section 501(c)(3) of the Internal Revenue Code.
24        (d) Upon termination of a charitable donation account,
25    the credit union may receive a distribution of the
26    remaining assets in cash, or a distribution in kind of the



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1    remaining assets, but only if those assets are permissible
2    investments for credit unions pursuant to this Act.
3(Source: P.A. 97-133, eff. 1-1-12.)
4    (205 ILCS 305/46)  (from Ch. 17, par. 4447)
5    Sec. 46. Loans and interest rate.
6    (1) A credit union may make loans to its members for such
7purpose and upon such security and terms, including rates of
8interest, as the credit committee, credit manager, or loan
9officer approves. Notwithstanding the provisions of any other
10law in connection with extensions of credit, a credit union may
11elect to contract for and receive interest and fees and other
12charges for extensions of credit subject only to the provisions
13of this Act and rules promulgated under this Act, except that
14extensions of credit secured by residential real estate shall
15be subject to the laws applicable thereto. The rates of
16interest to be charged on loans to members shall be set by the
17board of directors of each individual credit union in
18accordance with Section 30 of this Act and such rates may be
19less than, but may not exceed, the maximum rate set forth in
20this Section. A borrower may repay his loan prior to maturity,
21in whole or in part, without penalty. The credit contract may
22provide for the payment by the member and receipt by the credit
23union of all costs and disbursements, including reasonable
24attorney's fees and collection agency charges, incurred by the
25credit union to collect or enforce the debt in the event of a



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1delinquency by the member, or in the event of a breach of any
2obligation of the member under the credit contract. A
3contingency or hourly arrangement established under an
4agreement entered into by a credit union with an attorney or
5collection agency to collect a loan of a member in default
6shall be presumed prima facie reasonable.
7    (2) Credit unions may make loans based upon the security of
8any interest or equity in real estate, subject to rules and
9regulations promulgated by the Secretary. In any contract or
10loan which is secured by a mortgage, deed of trust, or
11conveyance in the nature of a mortgage, on residential real
12estate, the interest which is computed, calculated, charged, or
13collected pursuant to such contract or loan, or pursuant to any
14regulation or rule promulgated pursuant to this Act, may not be
15computed, calculated, charged or collected for any period of
16time occurring after the date on which the total indebtedness,
17with the exception of late payment penalties, is paid in full.
18    For purposes of this subsection (2) of this Section 46, a
19prepayment shall mean the payment of the total indebtedness,
20with the exception of late payment penalties if incurred or
21charged, on any date before the date specified in the contract
22or loan agreement on which the total indebtedness shall be paid
23in full, or before the date on which all payments, if timely
24made, shall have been made. In the event of a prepayment of the
25indebtedness which is made on a date after the date on which
26interest on the indebtedness was last computed, calculated,



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1charged, or collected but before the next date on which
2interest on the indebtedness was to be calculated, computed,
3charged, or collected, the lender may calculate, charge and
4collect interest on the indebtedness for the period which
5elapsed between the date on which the prepayment is made and
6the date on which interest on the indebtedness was last
7computed, calculated, charged or collected at a rate equal to
81/360 of the annual rate for each day which so elapsed, which
9rate shall be applied to the indebtedness outstanding as of the
10date of prepayment. The lender shall refund to the borrower any
11interest charged or collected which exceeds that which the
12lender may charge or collect pursuant to the preceding
13sentence. The provisions of this amendatory Act of 1985 shall
14apply only to contracts or loans entered into on or after the
15effective date of this amendatory Act.
16    (3) Notwithstanding any other provision of this Act, a
17credit union authorized under this Act to make loans secured by
18an interest or equity in real estate may engage in making
19"reverse mortgage" loans to persons for the purpose of making
20home improvements or repairs, paying insurance premiums or
21paying real estate taxes on the homestead properties of such
22persons. If made, such loans shall be made on such terms and
23conditions as the credit union shall determine and as shall be
24consistent with the provisions of this Section and such rules
25and regulations as the Secretary shall promulgate hereunder.
26For purposes of this Section, a "reverse mortgage" loan shall



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1be a loan extended on the basis of existing equity in homestead
2property and secured by a mortgage on such property. Such loans
3shall be repaid upon the sale of the property or upon the death
4of the owner or, if the property is in joint tenancy, upon the
5death of the last surviving joint tenant who had such an
6interest in the property at the time the loan was initiated,
7provided, however, that the credit union and its member may by
8mutual agreement, establish other repayment terms. A credit
9union, in making a "reverse mortgage" loan, may add deferred
10interest to principal or otherwise provide for the charging of
11interest or premiums on such deferred interest. "Homestead"
12property, for purposes of this Section, means the domicile and
13contiguous real estate owned and occupied by the mortgagor.
14    (4) Notwithstanding any other provisions of this Act, a
15credit union authorized under this Act to make loans secured by
16an interest or equity in real property may engage in making
17revolving credit loans secured by mortgages or deeds of trust
18on such real property or by security assignments of beneficial
19interests in land trusts.
20    For purposes of this Section, "revolving credit" has the
21meaning defined in Section 4.1 of the Interest Act.
22    Any mortgage or deed of trust given to secure a revolving
23credit loan may, and when so expressed therein shall, secure
24not only the existing indebtedness but also such future
25advances, whether such advances are obligatory or to be made at
26the option of the lender, or otherwise, as are made within



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1twenty years from the date thereof, to the same extent as if
2such future advances were made on the date of the execution of
3such mortgage or deed of trust, although there may be no
4advance made at the time of execution of such mortgage or other
5instrument, and although there may be no indebtedness
6outstanding at the time any advance is made. The lien of such
7mortgage or deed of trust, as to third persons without actual
8notice thereof, shall be valid as to all such indebtedness and
9future advances form the time said mortgage or deed of trust is
10filed for record in the office of the recorder of deeds or the
11registrar of titles of the county where the real property
12described therein is located. The total amount of indebtedness
13that may be so secured may increase or decrease from time to
14time, but the total unpaid balance so secured at any one time
15shall not exceed a maximum principal amount which must be
16specified in such mortgage or deed of trust, plus interest
17thereon, and any disbursements made for the payment of taxes,
18special assessments, or insurance on said real property, with
19interest on such disbursements.
20    Any such mortgage or deed of trust shall be valid and have
21priority over all subsequent liens and encumbrances, including
22statutory liens, except taxes and assessments levied on said
23real property.
24    (5) Compliance with federal or Illinois preemptive laws or
25regulations governing loans made by a credit union chartered
26under this Act shall constitute compliance with this Act.



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1    (6) Credit unions may make residential real estate mortgage
2loans on terms and conditions established by the United States
3Department of Agriculture through its Rural Development
4Housing and Community Facilities Program. The portion of any
5loan in excess of the appraised value of the real estate shall
6be allocable only to the guarantee fee required under the
8    (7) For a renewal, refinancing, or restructuring of an
9existing loan that is secured by an interest or equity in real
10estate, a new appraisal of the collateral shall not be required
11when the transaction involves an existing extension of credit
12at the credit union, no new moneys are advanced other than
13funds necessary to cover reasonable closing costs, and there
14has been no obvious or material change in market conditions or
15physical aspects of the real estate that threatens the adequacy
16of the credit union's real estate collateral protection after
17the transaction.
18(Source: P.A. 96-141, eff. 8-7-09; 97-133, eff. 1-1-12.)
19    (205 ILCS 305/57.1 new)
20    Sec. 57.1. Services to other credit unions.
21    (a) A credit union may act as a representative of and enter
22into an agreement with credit unions or other organizations for
23the purpose of:
24        (1) sharing, utilizing, renting, leasing, purchasing,
25    selling, and joint ownership of fixed assets or engaging in



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1    activities and services that relate to the daily operations
2    of credit unions; and
3        (2) providing correspondent services to other credit
4    unions that the service provider credit union is authorized
5    to perform for its own members or as part of its
6    operations, including, but not limited to, loan
7    processing, loan servicing, member check cashing services,
8    disbursing share withdrawals and loan proceeds, cashing
9    and selling money orders, ACH and wire transfer services,
10    coin and currency services, performing internal audits,
11    and automated teller machine deposit services.
12    Section 99. Effective date. This Act takes effect upon
13becoming law.