Full Text of HB5755 99th General Assembly
HB5755enr 99TH GENERAL ASSEMBLY |
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| 1 | | AN ACT concerning regulation.
| 2 | | Be it enacted by the People of the State of Illinois,
| 3 | | represented in the General Assembly:
| 4 | | Section 5. The Illinois Credit Union Act is amended by | 5 | | changing Sections 4, 22, 33, 46, and 52 and by adding Section | 6 | | 64.7 as follows:
| 7 | | (205 ILCS 305/4) (from Ch. 17, par. 4405)
| 8 | | Sec. 4. Amendments to articles of incorporation and bylaws. | 9 | | Amendments
to the articles of incorporation or may be made by | 10 | | the members at any regular
or special meeting, if the proposed | 11 | | amendment is set forth in the call of
the meeting and is | 12 | | approved by at least two thirds of the members present
at a | 13 | | meeting at
which a quorum is present. Amendments to the bylaws | 14 | | may be made by the members
at any regular or special meeting, | 15 | | if the proposed amendment is set forth
in the call for the | 16 | | meeting and is approved by a majority of the members
present at | 17 | | a meeting at which a quorum is present. Amendments to the | 18 | | articles of incorporation or bylaws
may also be made by the | 19 | | board of directors at any regular or special meeting,
if the | 20 | | proposed amendment is set forth in the call of the meeting and | 21 | | approved
by at least two thirds of the directors present at a | 22 | | meeting at which a
quorum is present. A report shall be made to | 23 | | the members at the next annual
meeting of any amendments to the |
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| 1 | | articles of incorporation or bylaws adopted by the board of | 2 | | directors.
Any amendment to the articles of incorporation or | 3 | | bylaws of a credit union
shall be approved by the Secretary | 4 | | before the amendment is effective. The Secretary
shall approve | 5 | | or disapprove of any amendments within 60 days after
submission | 6 | | to him or her.
| 7 | | (Source: P.A. 97-133, eff. 1-1-12.)
| 8 | | (205 ILCS 305/22) (from Ch. 17, par. 4423)
| 9 | | Sec. 22. Vacancies. | 10 | | (a) The board of directors shall, by appointment from
among | 11 | | the credit union members, fill any vacancies occurring on the | 12 | | board
for the remainder of the director's unexpired term or | 13 | | until a successor
is elected and qualified following completion | 14 | | of the term filled by the board. In the event the vacancy | 15 | | reduces the number of directors serving on the board to less | 16 | | than the statutory minimum set forth in subsection (1) of | 17 | | Section 20, then the board shall fill the vacancy no later than | 18 | | the next annual meeting of members or 90 days after the vacancy | 19 | | occurred, whichever occurs first. Upon written application to | 20 | | the Secretary, the board may request additional time in which | 21 | | to fill the vacancy. The application may be approved by the | 22 | | Secretary in his or her discretion. The board shall, by | 23 | | appointment from among the
credit union members, fill vacancies | 24 | | in the membership committee, credit
committee, or credit | 25 | | manager if no credit
committee has been appointed, and
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| 1 | | supervisory
committees. | 2 | | (b) An office may be declared vacant by the board when a | 3 | | director or a committee member dies, resigns from the board or | 4 | | committee, is removed from the board or committee, is no longer | 5 | | a member of the credit union, is the owner of less than one | 6 | | share of the credit union, or fails to attend three consecutive | 7 | | regular meetings of the board without good cause.
| 8 | | (Source: P.A. 97-133, eff. 1-1-12.)
| 9 | | (205 ILCS 305/33) (from Ch. 17, par. 4434)
| 10 | | Sec. 33. Credit manager.
| 11 | | (1) The credit committee , board of directors, or chief | 12 | | management official may or, if no credit committee has been | 13 | | appointed, the board of directors or chief management official | 14 | | shall appoint a credit
manager who shall be empowered to | 15 | | approve or disapprove loans and lines
of credit under | 16 | | conditions prescribed by the board of directors. The credit | 17 | | committee or credit manager may appoint one or more loan | 18 | | officers with the
power to approve loans and lines of credit, | 19 | | subject to such limitations
or conditions as may be prescribed | 20 | | by the board of directors. The credit
manager and any loan | 21 | | officers appointed by the credit committee or the credit
| 22 | | manager shall keep written records of all transactions and | 23 | | shall report,
in writing, to the credit committee if a credit | 24 | | committee has been appointed,
otherwise
to the directors at | 25 | | each board meeting.
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| 1 | | (2) Applications for loans or lines of credit not approved | 2 | | by a loan officer
shall be reviewed and acted upon by the | 3 | | credit committee or credit manager.
| 4 | | (3) The loan officers must keep written records of all | 5 | | loans or lines
of credit granted or refused and any other | 6 | | transactions and submit a report
to the credit committee or | 7 | | credit manager at least once each month.
| 8 | | (Source: P.A. 97-133, eff. 1-1-12.)
| 9 | | (205 ILCS 305/46) (from Ch. 17, par. 4447)
| 10 | | Sec. 46. Loans and interest rate.
| 11 | | (1) A credit union may make loans
to its members for such | 12 | | purpose and upon such security and terms, including
rates of | 13 | | interest, as the credit committee, credit manager, or loan | 14 | | officer
approves.
Notwithstanding the provisions of any other | 15 | | law in connection with extensions
of credit, a credit union may | 16 | | elect to
contract for and receive interest and fees and other | 17 | | charges for extensions of
credit subject only to the provisions | 18 | | of this Act and rules promulgated under
this Act, except that | 19 | | extensions of credit secured by residential real estate
shall | 20 | | be subject to the laws applicable thereto.
The rates of | 21 | | interest to be charged on loans to members shall be
set by the | 22 | | board of directors of each individual credit union in | 23 | | accordance with Section 30 of this Act and such
rates may be | 24 | | less than, but may not exceed, the maximum rate set forth in
| 25 | | this Section. A borrower may repay his loan prior to maturity, |
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| 1 | | in whole or
in part, without penalty. A prepayment penalty does | 2 | | not include a waived, bona fide third-party charge that the | 3 | | credit union imposes if the borrower prepays all of the | 4 | | transaction's principal sooner than 36 months after | 5 | | consummation of a closed-end credit transaction, a waived, bona | 6 | | fide third-party charge that the credit union imposes if the | 7 | | borrower terminates an open-end credit plan sooner than 36 | 8 | | months after account opening, or a yield maintenance fee | 9 | | imposed on a business loan transaction. The credit contract may | 10 | | provide for the payment
by the member and receipt by the credit | 11 | | union of all costs and
disbursements, including reasonable | 12 | | attorney's fees and collection agency
charges, incurred by the | 13 | | credit union to collect or enforce the debt in the
event of a | 14 | | delinquency by the member, or in the event of a breach of any
| 15 | | obligation of the member under the credit contract. A | 16 | | contingency or
hourly arrangement established under an | 17 | | agreement entered into by a credit
union with an attorney or | 18 | | collection agency to collect a loan of a member
in default | 19 | | shall be presumed prima facie reasonable.
| 20 | | (2) Credit unions may make loans based upon the security of | 21 | | any
interest or equity in real estate, subject to rules and | 22 | | regulations
promulgated by the Secretary. In any contract or | 23 | | loan which
is secured by a mortgage, deed of
trust, or | 24 | | conveyance in the nature of a mortgage, on residential real
| 25 | | estate, the interest which is computed, calculated, charged, or | 26 | | collected
pursuant to such contract or loan, or pursuant to any |
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| 1 | | regulation or rule
promulgated pursuant to this Act, may not be | 2 | | computed, calculated, charged
or collected for any period of | 3 | | time occurring after the date on which the
total indebtedness, | 4 | | with the exception of late payment penalties, is paid
in full.
| 5 | | For purposes of this subsection (2) of this Section 46, a | 6 | | prepayment
shall mean the payment of the total indebtedness, | 7 | | with the exception of
late payment penalties if incurred or | 8 | | charged, on any date before the date
specified in the contract | 9 | | or loan agreement on which the total indebtedness
shall be paid | 10 | | in full, or before the date on which all payments, if timely
| 11 | | made, shall have been made. In the event of a prepayment of the
| 12 | | indebtedness which is made on a date
after the date on which | 13 | | interest on the indebtedness was last computed,
calculated, | 14 | | charged, or collected but before the next date on which | 15 | | interest
on the indebtedness was to be calculated, computed, | 16 | | charged, or collected,
the lender may calculate, charge and | 17 | | collect interest on the indebtedness
for the period which | 18 | | elapsed between the date on which the prepayment is
made and | 19 | | the date on which interest on the indebtedness was last | 20 | | computed,
calculated, charged or collected at a rate equal to | 21 | | 1/360 of the annual
rate for each day which so elapsed, which | 22 | | rate shall be applied to the
indebtedness outstanding as of the | 23 | | date of prepayment. The lender shall
refund to the borrower any | 24 | | interest charged or collected which exceeds that
which the | 25 | | lender may charge or collect pursuant to the preceding | 26 | | sentence.
The provisions of this amendatory Act of 1985 shall |
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| 1 | | apply only to contracts
or loans entered into on or after the | 2 | | effective date of this amendatory
Act.
| 3 | | (3) (Blank).
| 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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| 1 | | 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 | | (4-5) For purposes of this Section, "real estate" and "real | 15 | | property" include a manufactured home as defined in subdivision | 16 | | (53) of Section 9-102 of the Uniform Commercial Code which is | 17 | | real property as defined in Section 5-35 of the Conveyance and | 18 | | Encumbrance of Manufactured Homes as Real Property and | 19 | | Severance Act. | 20 | | (5) Compliance with federal or Illinois preemptive laws or | 21 | | regulations
governing loans made by a credit union chartered | 22 | | under this Act shall
constitute compliance with this Act.
| 23 | | (6) Credit unions may make residential real estate mortgage | 24 | | loans on terms and conditions established by the United States | 25 | | Department of Agriculture through its Rural Development | 26 | | Housing and Community Facilities Program. The portion of any |
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| 1 | | loan in excess of the appraised value of the real estate shall | 2 | | be allocable only to the guarantee fee required under the | 3 | | program. | 4 | | (7) For a renewal, refinancing, or restructuring of an | 5 | | existing loan at the credit union that is secured by an | 6 | | interest or equity in real estate, a new appraisal of the | 7 | | collateral shall not be required when (i) no new moneys are | 8 | | advanced other than funds necessary to cover reasonable closing | 9 | | costs, or (ii) there has been no obvious or material change in | 10 | | market conditions or physical aspects of the real estate that | 11 | | threatens the adequacy of the credit union's real estate | 12 | | collateral protection after the transaction, even with the | 13 | | advancement of new moneys. The Department reserves the right to | 14 | | require an appraisal under this subsection (7) whenever the | 15 | | Department believes it is necessary to address safety and | 16 | | soundness concerns. | 17 | | (Source: P.A. 98-749, eff. 7-16-14; 98-784, eff. 7-24-14; | 18 | | 99-78, eff. 7-20-15; 99-149, eff. 1-1-16; 99-331, eff. 1-1-16; | 19 | | revised 10-16-15.)
| 20 | | (205 ILCS 305/52) (from Ch. 17, par. 4453)
| 21 | | Sec. 52. Loans to directors, officers, credit committee, | 22 | | credit manager,
and supervisory
committee members. A credit | 23 | | union may make loans to its directors,
officers, credit | 24 | | committee members, credit manager, and supervisory
committee | 25 | | members, provided
that the loan complies with all lawful |
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| 1 | | requirements under this Act with
respect to loans to other | 2 | | borrowers. No loan may be made to or cosigned
by any director, | 3 | | officer, credit committee member, credit manager if no credit | 4 | | committee
has been appointed, or supervisory
committee
member | 5 | | which would cause the aggregate amount of all loans then | 6 | | outstanding
to or cosigned by all directors, officers, credit | 7 | | committee members, credit
manager if no credit committee has | 8 | | been appointed, or supervisory
committee
members to exceed 20% | 9 | | of the unimpaired capital and
surplus of the credit union.
| 10 | | (Source: P.A. 97-133, eff. 1-1-12.)
| 11 | | (205 ILCS 305/64.7 new) | 12 | | Sec. 64.7. Network credit unions. | 13 | | (a) Two or more credit unions merging pursuant to Section | 14 | | 63 of this Act may elect to request a network credit union | 15 | | designation for the surviving credit union from the Secretary. | 16 | | The request shall be set forth in the plan of merger and | 17 | | certificate of merger executed by the credit unions and | 18 | | submitted to the Secretary pursuant to subsection (4) of | 19 | | Section 63. The Secretary's approval of a certificate of merger | 20 | | containing a network credit union designation request shall | 21 | | constitute approval of the use of the network designation as a | 22 | | brand or other identifier of the surviving credit union. If the | 23 | | surviving credit union desires to include the network | 24 | | designation in its legal name, make any other change to its | 25 | | legal name, or both, it shall proceed with an amendment to the |
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| 1 | | articles of incorporation and bylaws of the surviving credit | 2 | | union pursuant to Section 4 of this Act. | 3 | | (b) A network credit union is a cooperative business | 4 | | structure comprised of 2 or more merging credit unions with a | 5 | | collective goal of efficiently serving their combined | 6 | | membership and gaining economies of scale through common | 7 | | vision, strategy and initiative. The merging credit unions | 8 | | shall be identified as divisional credit unions, branches, or | 9 | | units of the network credit union or by other descriptive | 10 | | references that ensure the members understand they are dealing | 11 | | with one credit union rather than multiple credit unions. Each | 12 | | divisional credit union shall have its own advisory board of | 13 | | directors and chief management official to assist in | 14 | | maintaining and leveraging its respective local identity for | 15 | | the benefit of the surviving credit union. The divisional | 16 | | credit union advisory boards shall be appointed by the network | 17 | | credit union board of directors. Each divisional credit union's | 18 | | board of directors shall appoint its divisional credit union | 19 | | chief management official and may also appoint one of its | 20 | | directors to serve on the network credit union's nominating | 21 | | committee. | 22 | | (c) The network credit union is the surviving legal entity | 23 | | in the merger and supervision, examination, audit, reporting, | 24 | | governance, and management shall be conducted or performed at | 25 | | the network credit union level. All share insurance, safety and | 26 | | soundness, and statutory and regulatory requirements and |
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| 1 | | limitations shall be evaluated at the network credit union | 2 | | level.
| 3 | | Section 99. Effective date. This Act takes effect upon | 4 | | becoming law.
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