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[ House Amendment 002 ] |
92_HB3008 LRB9203170JSpcA 1 AN ACT concerning credit unions. 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 1.1, 10, 12, 51, and 59 as follows: 6 (205 ILCS 305/1.1) (from Ch. 17, par. 4402) 7 Sec. 1.1. Definitions. As used in this Act: 8Credit Union - The term"Credit union" means a 9 cooperative, non-profit association, incorporated under this 10 Act, under the laws of the United States of America or under 11 the laws of another state, for the purposes of encouraging 12 thrift among its members, creating a source of credit at a 13 reasonable rate of interest, and providing an opportunity for 14 its members to use and control their own money in order to 15 improve their economic and social conditions. The membership 16 of a credit union shall consist of a group or groups each 17 having a common bond as set forth in this Act. 18Common Bond - The term"Common bond" refers to groups of 19 people who meet one of the following qualifications: 20 (1) Persons belonging to a specific association, 21 group or organization, such as a church, labor union, 22 club or society and members of their immediate families 23 which shall include any relative by blood or marriage or 24 foster and adopted children. 25 (2) Persons who reside in a reasonably compact and 26 well defined neighborhood or community, and members of 27 their immediate families which shall include any relative 28 by blood or marriage or foster and adopted children. 29 (3) Persons who have a common employer or who are 30 members of an organized labor union or an organized 31 occupational or professional group within a defined -2- LRB9203170JSpcA 1 geographical area, and members of their immediate 2 families which shall include any relative by blood or 3 marriage or foster and adopted children. 4Shares - The term"Shares" or "share accounts" means any 5 form of shares issued by a credit union and established by a 6 member in accordance with standards specified by a credit 7 union, including but not limited to common shares, share 8 draft accounts, classes of shares, share certificates, 9 special purpose share accounts, shares issued in trust, 10 custodial accounts, and individual retirement accounts or 11 other plans established pursuant to Section 401(d) or (f) or 12 Section 408(a) of the Internal Revenue Code, as now or 13 hereafter amended, or similar provisions of any tax laws of 14 the United States that may hereafter exist. 15Credit Union Organization - The term"Credit union 16 organization" means any organization established to serve the 17 needs of credit unions, the business of which relates to the 18 daily operations of credit unions. 19Department - The term"Department" means theIllinois20 Department of Financial Institutions. 21Director - The term"Director" means the Director ofthe22Illinois Department ofFinancial Institutions. 23NCUA - The term"NCUA" means the National Credit Union 24 Administration, an agency of the United States Government 25 charged with the supervision of credit unions chartered under 26 the laws of the United States of America. 27Central Credit Union - The term"Central credit union" 28 means a credit union incorporated primarily to receive shares 29 from and make loans to credit unions and Directors, Officers, 30 committee members and employees of credit unions. A central 31 credit union may also accept as members persons who were 32 members of credit unions which were liquidated and persons 33 from occupational groups not otherwise served by another 34 credit union. -3- LRB9203170JSpcA 1Corporate Credit Union - The term"Corporate credit 2 union" means a credit union which is a cooperative, 3 non-profit association, the membership of which is limited 4 primarily to other credit unions. 5Insolvent -"Insolvent" means the condition that results 6 when the total of all liabilities and shares exceeds net 7 assets of the credit union. 8Danger of insolvency - The term"Danger of insolvency" as 9 used in Section 61 means when a credit union falls below a 2% 10 capital to asset ratio. 11 "Political subdivision" includes, but is not limited to, 12 counties, townships, cities, villages, incorporated towns, 13 school districts, and any agency, corporation, or 14 instrumentality of a state or its political subdivisions. 15 (Source: P.A. 90-665, eff. 7-30-98.) 16 (205 ILCS 305/10) (from Ch. 17, par. 4411) 17 Sec. 10. Credit union records; member financial records. 18 (1) A credit union shall establish and maintain books, 19 records, accounting systems and procedures which accurately 20 reflect its operations and which enable the Department to 21 readily ascertain the true financial condition of the credit 22 union and whether it is complying with this Act. 23 (2) A photostatic or photographic reproduction of any 24 credit union records shall be admissible as evidence of 25 transactions with the credit union. 26 (3) (a) For the purpose of this Section, the term 27 "financial records" means any original, any copy, or any 28 summary of (1) a document granting signature authority 29 over an account, (2) a statement, ledger card or other 30 record on any account which shows each transaction in or 31 with respect to that account, (3) a check, draft or money 32 order drawn on a financial institution or other entity or 33 issued and payable by or through a financial institution -4- LRB9203170JSpcA 1 or other entity, or (4) any other item containing 2 information pertaining to any relationship established in 3 the ordinary course of business between a credit union 4 and its member. 5 (b) This Section does not prohibit: 6 (1) The preparation, examination, handling or 7 maintenance of any financial records by any officer, 8 employee or agent of a credit union having custody 9 of such records, or the examination of such records 10 by a certified public accountant engaged by the 11 credit union to perform an independent audit; 12 (2) The examination of any financial records 13 by or the furnishing of financial records by a 14 credit union to any officer, employee or agent of 15 the Department, the National Credit Union 16 Administration, Federal Reserve board or any insurer 17 of share accounts for use solely in the exercise of 18 his duties as an officer, employee or agent; 19 (3) The publication of data furnished from 20 financial records relating to members where the data 21 cannot be identified to any particular customer of 22 account; 23 (4) The making of reports or returns required 24 under Chapter 61 of the Internal Revenue Code of 25 1954; 26 (5) Furnishing information concerning the 27 dishonor of any negotiable instrument permitted to 28 be disclosed under the Uniform Commercial Code; 29 (6) The exchange in the regular course of 30 business of credit information between a credit 31 union and other credit unions or financial 32 institutions or commercial enterprises, directly or 33 through a consumer reporting agency; 34 (7) The furnishing of information to the -5- LRB9203170JSpcA 1 appropriate law enforcement authorities where the 2 credit union reasonably believes it has been the 3 victim of a crime; 4 (8) The furnishing of information pursuant to 5 the Uniform Disposition of Unclaimed Property Act; 6 (9) The furnishing of information pursuant to 7 the Illinois Income Tax Act and the Illinois Estate 8 and Generation-Skipping Transfer Tax Act; 9 (10) The furnishing of information pursuant to 10 the federal "Currency and Foreign Transactions 11 Reporting Act", Title 31, United States Code, 12 Section 1051 et sequentia; or 13 (11) The furnishing of information pursuant to 14 any other statute which by its terms or by 15 regulations promulgated thereunder requires the 16 disclosure of financial records other than by 17 subpoena, summons, warrant or court order. 18 (12) The furnishing of information in 19 accordance with the federal Personal Responsibility 20 and Work Opportunity Reconciliation Act of 1996. Any 21 credit union governed by this Act shall enter into 22 an agreement for data exchanges with a State agency 23 provided the State agency pays to the credit union a 24 reasonable fee not to exceed its actual cost 25 incurred. A credit union providing information in 26 accordance with this item shall not be liable to any 27 account holder or other person for any disclosure of 28 information to a State agency, for encumbering or 29 surrendering any assets held by the credit union in 30 response to a lien or order to withhold and deliver 31 issued by a State agency, or for any other action 32 taken pursuant to this item, including individual or 33 mechanical errors, provided the action does not 34 constitute gross negligence or willful misconduct. A -6- LRB9203170JSpcA 1 credit union shall have no obligation to hold, 2 encumber, or surrender assets until it has been 3 served with a subpoena, summons, warrant, court or 4 administrative order, lien, or levy. 5 (13) The furnishing of information to law 6 enforcement authorities, the Illinois Department on 7 Aging and its regional administrative and provider 8 agencies, the Department of Human Services Office of 9 Inspector General, or public guardians, if the 10 credit union suspects that a member who is an 11 elderly or disabled person has been or may become 12 the victim of financial exploitation. For the 13 purposes of this item (13), the term: (i) "elderly 14 person" means a person who is 60 or more years of 15 age, (ii) "disabled person" means a person who has 16 or reasonably appears to the credit union to have a 17 physical or mental disability that impairs his or 18 her ability to seek or obtain protection from or 19 prevent financial exploitation, and (iii) "financial 20 exploitation" means tortious or illegal use of the 21 assets or resources of an elderly or disabled 22 person, and includes, without limitation, 23 misappropriation of the elderly or disabled person's 24 assets or resources by undue influence, breach of 25 fiduciary relationship, intimidation, fraud, 26 deception, extortion, or the use of assets or 27 resources in any manner contrary to law. A credit 28 union or person furnishing information pursuant to 29 this item (13) shall be entitled to the same rights 30 and protections as a person furnishing information 31 under the Elder Abuse and Neglect Act and the 32 Illinois Domestic Violence Act of 1986. 33 (c) A credit union may not disclose to any person, 34 except to the member or his duly authorized agent, any -7- LRB9203170JSpcA 1 financial records relating to that member of the credit union 2 unless: 3 (1) the member has authorized disclosure to the 4 person; 5 (2) the financial records are disclosed in response 6 to a lawful subpoena, summons, warrant or court order 7 that meets the requirements of subparagraph (d) of this 8 Section; or 9 (3) the credit union is attempting to collect an 10 obligation owed to the credit union and the credit union 11 complies with the provisions of Section 2I of the 12 Consumer Fraud and Deceptive Business Practices Act. 13 (d) A credit union shall disclose financial records 14 under subparagraph (c)(2) of this Section pursuant to a 15 lawful subpoena, summons, warrant or court order only after 16 the credit union mails a copy of the subpoena, summons, 17 warrant or court order to the person establishing the 18 relationship with the credit union, if living, and otherwise 19 his personal representative, if known, at his last known 20 address by first class mail, postage prepaid unless the 21 credit union is specifically prohibited from notifying the 22 person by order of court or by applicable State or federal 23 law. In the case of a grand jury subpoena, a credit union 24 shall not mail a copy of a subpoena to any person pursuant to 25 this subsection if the subpoena was issued by a grand jury 26 under the Statewide Grand Jury Act or notifying the person 27 would constitute a violation of the federal Right to 28 Financial Privacy Act of 1978. 29 (e) (1) Any officer or employee of a credit union who 30 knowingly and wilfully furnishes financial records in 31 violation of this Section is guilty of a business offense 32 and upon conviction thereof shall be fined not more than 33 $1,000. 34 (2) Any person who knowingly and wilfully induces -8- LRB9203170JSpcA 1 or attempts to induce any officer or employee of a credit 2 union to disclose financial records in violation of this 3 Section is guilty of a business offense and upon 4 conviction thereof shall be fined not more than $1,000. 5 (f) A credit union shall be reimbursed for costs which 6 are reasonably necessary and which have been directly 7 incurred in searching for, reproducing or transporting books, 8 papers, records or other data of a member required or 9 requested to be produced pursuant to a lawful subpoena, 10 summons, warrant or court order. The Director may determine 11 the rates and conditions under which payment shall be made. 12 Delivery of requested documents may be delayed until final 13 reimbursement of all costs is received. 14 (Source: P.A. 90-18, eff. 7-1-97; 91-929, eff. 12-15-00.) 15 (205 ILCS 305/12) (from Ch. 17, par. 4413) 16 Sec. 12. Regulatory feesfor examination and17administration. 18 (1) A credit union regulated by the Department shall pay 19 a regulatory fee to the Department based upon its total 20 assets as shown by its Year-end Call Report at the following 21 rates: 22 TOTAL ASSETS REGULATORY FEE 23 $25,000 or less .............. $100 24 Over $25,000 and not over 25 $100,000 ..................... $100 plus $4 per $1,000 of 26 assets in excess of $25,000 27 Over $100,000 and not over 28 $200,000 ..................... $400 plus $3 per $1,000 of 29 assets in excess of $100,000 30 Over $200,000 and not over 31 $500,000 ..................... $700 plus $2 per $1,000 of 32 assets in excess of $200,000 33 Over $500,000 and not over -9- LRB9203170JSpcA 1 $1,000,000 ................... $1,300 plus $1.40 per $1,000 2 of assets in excess of 3 $500,000 4 Over $1,000,000 and not 5 over $5,000,000............... $2,000 plus $0.50 per 6 $1,000 of assets in 7 excess of $1,000,000 8 Over $5,000,000 and not 9 over $30,000,000 ............. $4,000 plus $0.35 10 per $1,000 assets 11 in excess of $5,000,000 12 Over $30,000,000 and not 13 over $100,000,000 ............ $12,750 plus $0.30 14 per $1,000 of assets in 15 excess of $30,000,000 16 Over $100,000,000 and not 17 over $500,000,000 ............ $33,750 plus $0.15 per 18 $1,000 of assets in excess 19 of $100,000,000 20 Over $500,000,000 ............ $93,750 plus $0.05 per 21 $1,000 of assets in excess 22 of $500,000,000 23 (2) The Director shall review the regulatory fee 24 schedule in subsection (1) and the projected earnings on 25 those fees on an annual basis and adjust the fee schedule no 26 more than 5% annually if necessary to defray the estimated 27 administrative and operational expenses of the Department as 28 defined in subsection (5). The Director shall provide credit 29 unions with written notice of any adjustment made in the 30 regulatory fee schedule. 31 (3) Not later than March 1 of each calendar year, a 32 credit union shall pay to the Department, for the preceding33calendar year,a regulatory fee for that calendar year in 34 accordance with the regulatory fee schedule in subsection -10- LRB9203170JSpcA 1 (1), on the basis of assets as of the Year-end Call Report of 2 the preceding year. The regulatory fee shall not be less 3 than $100 or more than $125,000, provided that the regulatory 4 fee cap of $125,000 shall be adjusted to incorporate the same 5 percentage increase as the Director makes in the regulatory 6 fee schedule from time to time under subsection (2). No 7 regulatory fee shall be collected from a credit union until 8 it has been in operation for one year. 9 (4) The aggregate of all fees collected by the 10 Department under this Act shall be paid promptly after they 11 are receivedreceipt of the same, accompanied by a detailed 12 statement thereof, into the State Treasury and shall be set 13 apart in the Credit Union Fund, a special fund hereby created 14 in the State treasury. The amount from time to time 15 deposited in the Credit Union Fund and shall be used to 16 offset the ordinary administrative and operational expenses 17 of the Department under this Act. Investment income earned 18 on the money in the Fund shall be deposited into and become 19 part of the Fund. 20 (5) The administrative and operational expenses for any 21 calendar year shall mean the ordinary and contingent expenses 22 for that year incidental to making the examinations provided 23 for by, and for administering, this Act, including all 24 salaries and other compensation paid for personal services 25 rendered for the State by officers or employees of the State 26 to enforce this Act; all expenditures for telephone and 27 telegraph charges, postage and postal charges, office 28 supplies and services, furniture and equipment, office space 29 and maintenance thereof, travel expenses and other necessary 30 expenses; all to the extent that such expenditures are 31 directly incidental to such examination or administration. 32 (6) When the aggregate of all fees collected by the 33 Department under this Act and all earnings thereon for any 34 calendar year exceeds 150% of the total administrative and -11- LRB9203170JSpcA 1 operational expenses under this Act for that year, such 2 excess shall be credited to credit unions and applied against 3 their regulatory fees for the subsequent year. The amount 4 credited to a credit union shall be in the same proportion as 5 the fee paid by such credit union for the calendar year in 6 which the excess is produced bears to the aggregate of the 7 fees collected by the Department under this Act for the same 8 year. 9 (7) Examination fees for the year 2000 statutory 10 examinations paid pursuant to the examination fee schedule in 11 effect at that time shall be credited toward the regulatory 12 fee to be assessed the credit union in calendar year 2001. 13 (8) Nothing in this Act shall prohibit the General 14 Assembly from appropriating funds to the Department from the 15 General Revenue Fund for the purpose of administering this 16 Act. 17 (Source: P.A. 91-755, eff. 1-1-01.) 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 21 Director may promulgate, a credit union may participate in 22 loans to credit union members jointly with other credit 23 unions, credit union organizations, corporations, or 24 financial institutions. An originating credit union may 25 originate participation loans to its own members. A 26 participating credit union that is not the originating lender 27 may participate in loans made to its own members or to 28 members of another participating credit union. "Originating 29 lender" means the participating credit union with which the 30 member contracts. A master participation agreement must be 31 properly executed, and the agreement must include provisions 32 for identifying, either through documents incorporated by 33 reference or directly in the agreement, the participation -12- LRB9203170JSpcA 1 loan or loans prior to their sale. 2 (2) Any credit union with assets of $500,000 or more may 3 loan to its members under the State Scholarships Law or other 4 scholarship programs which are subject to a federal or state 5 law providing 100% repayment guarantee. 6 (3) A credit union may purchase from any source the 7 conditional sales contracts, notes and similar instruments 8 which evidence an indebtedness of its members. A credit 9 union may sell to any source the loans of its members. 10 (4) With approval of the Board of Directors, a credit 11 union may make loans, either on its own or jointly with other 12 credit unions, corporations or financial institutions, to 13 credit union organizations; provided, that the aggregate 14 amount of all such loans outstanding shall not at any time 15 exceed 1% of the paid-in and unimpaired capital and surplus 16 of the credit union. 17 (Source: P.A. 81-329.) 18 (205 ILCS 305/59) (from Ch. 17, par. 4460) 19 Sec. 59. Investment of Funds. Funds not used in loans to 20 members may be invested, pursuant to subsection (7) of 21 Section 30 of this Act, and subject to Departmental rules and 22 regulations: 23 (1) In securities, obligations or other instruments of 24 or issued by or fully guaranteed as to principal and interest 25 by the United States of America or any agency thereof or in 26 any trust or trusts established for investing directly or 27 collectively in the same; 28 (2) In obligations of any state of the United States, 29 the District of Columbia, the Commonwealth of Puerto Rico, 30 and the several territories organized by Congress, or any 31 political subdivision thereof; however, a credit union may 32 not invest more than 10% of its unimpaired capital and 33 surplus in the obligations of one issuer, exclusive of -13- LRB9203170JSpcA 1 general obligations of the issuer, and investments in 2 municipal securities must be limited to securities rated in 3 one of the 4 highest rating categories by a nationally 4 recognized statistical rating organization; 5 (3) In certificates of deposit or passbook type accounts 6 issued by a state or national bank, mutual savings bank or 7 savings and loan association; provided that such institutions 8 have their accounts insured by the Federal Deposit Insurance 9 Corporation or the Federal Savings and Loan Insurance 10 Corporation; but provided, further, that a credit union's 11 investment in an account in any one institution may exceed 12 the insured limit on accounts; 13 (4) In shares, classes of shares or share certificates 14 of other credit unions, including, but not limited to 15 corporate credit unions; provided that such credit unions 16 have their members' accounts insured by the NCUA or other 17 approved insurers, and that if the members' accounts are so 18 insured, a credit union's investment may exceed the insured 19 limit on accounts; 20 (5) In shares of a cooperative society organized under 21 the laws of this State or the laws of the United States in 22 the total amount not exceeding 10% of the unimpaired capital 23 and surplus of the credit union; provided that such 24 investment shall first be approved by the Department; 25 (6) In obligations of the State of Israel, or 26 obligations fully guaranteed by the State of Israel as to 27 payment of principal and interest; 28 (7) In shares, stocks or obligations of other financial 29 institutions in the total amount not exceeding 5% of the 30 unimpaired capital and surplus of the credit union; 31 (8) In federal funds and bankers' acceptances; 32 (9) In shares or stocks of Credit Union Service 33 Organizations in the total amount not exceeding 1% of the 34 unimpaired capital and surplus of the credit union. -14- LRB9203170JSpcA 1 (Source: P.A. 86-432.) 2 Section 99. Effective date. This Act takes effect upon 3 becoming law.