State of Illinois
92nd General Assembly
Legislation

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92_HB3008eng

 
HB3008 Engrossed                              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 10, 12, 51, 59, and 70 as follows:

 6        (205 ILCS 305/10) (from Ch. 17, par. 4411)
 7        Sec. 10.  Credit union records; member financial records.
 8        (1)  A  credit  union shall establish and maintain books,
 9    records, accounting systems and procedures  which  accurately
10    reflect  its  operations  and  which enable the Department to
11    readily ascertain the true financial condition of the  credit
12    union and whether it is complying with this Act.
13        (2)  A  photostatic  or  photographic reproduction of any
14    credit union records  shall  be  admissible  as  evidence  of
15    transactions with the credit union.
16        (3) (a)  For  the  purpose  of  this  Section,  the  term
17        "financial  records" means any original, any copy, or any
18        summary of (1) a document  granting  signature  authority
19        over  an  account,  (2) a statement, ledger card or other
20        record on any account which shows each transaction in  or
21        with respect to that account, (3) a check, draft or money
22        order drawn on a financial institution or other entity or
23        issued  and payable by or through a financial institution
24        or  other  entity,  or  (4)  any  other  item  containing
25        information pertaining to any relationship established in
26        the ordinary course of business between  a  credit  union
27        and  its  member, including financial statements or other
28        financial information provided by the member.
29             (b)  This Section does not prohibit:
30                  (1)  The preparation, examination, handling  or
31             maintenance of any financial records by any officer,
 
HB3008 Engrossed            -2-               LRB9203170JSpcA
 1             employee  or  agent of a credit union having custody
 2             of such records, or the examination of such  records
 3             by  a  certified  public  accountant  engaged by the
 4             credit union to perform an independent audit;
 5                  (2)  The examination of any  financial  records
 6             by  or  the  furnishing  of  financial  records by a
 7             credit union to any officer, employee  or  agent  of
 8             the    Department,   the   National   Credit   Union
 9             Administration, Federal Reserve board or any insurer
10             of share accounts for use solely in the exercise  of
11             his duties as an officer, employee or agent;
12                  (3)  The  publication  of  data  furnished from
13             financial records relating to members where the data
14             cannot be identified to any particular  customer  of
15             account;
16                  (4)  The  making of reports or returns required
17             under Chapter 61 of the  Internal  Revenue  Code  of
18             1954;
19                  (5)  Furnishing   information   concerning  the
20             dishonor of any negotiable instrument  permitted  to
21             be disclosed under the Uniform Commercial Code;
22                  (6)  The  exchange  in  the  regular  course of
23             business of (i) credit information between a  credit
24             union   and   other   credit   unions  or  financial
25             institutions or commercial enterprises, directly  or
26             through   a   consumer   reporting  agency  or  (ii)
27             financial  records  or  information   derived   from
28             financial  records  between a credit union and other
29             credit   unions   or   financial   institutions   or
30             commercial enterprises for the purpose of conducting
31             due diligence pursuant to a merger or a purchase  or
32             sale of assets or liabilities of the credit union;
33                  (7)  The   furnishing  of  information  to  the
34             appropriate law enforcement  authorities  where  the
 
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 1             credit  union  reasonably  believes  it has been the
 2             victim of a crime;
 3                  (8)  The furnishing of information pursuant  to
 4             the Uniform Disposition of Unclaimed Property Act;
 5                  (9)  The  furnishing of information pursuant to
 6             the Illinois Income Tax Act and the Illinois  Estate
 7             and Generation-Skipping Transfer Tax Act;
 8                  (10)  The furnishing of information pursuant to
 9             the   federal  "Currency  and  Foreign  Transactions
10             Reporting  Act",  Title  31,  United  States   Code,
11             Section 1051 et sequentia; or
12                  (11)  The furnishing of information pursuant to
13             any   other   statute  which  by  its  terms  or  by
14             regulations  promulgated  thereunder  requires   the
15             disclosure   of  financial  records  other  than  by
16             subpoena, summons, warrant or court order.
17                  (12)  The   furnishing   of   information    in
18             accordance  with the federal Personal Responsibility
19             and Work Opportunity Reconciliation Act of 1996. Any
20             credit union governed by this Act shall  enter  into
21             an  agreement for data exchanges with a State agency
22             provided the State agency pays to the credit union a
23             reasonable  fee  not  to  exceed  its  actual   cost
24             incurred.   A  credit union providing information in
25             accordance with this item shall not be liable to any
26             account holder or other person for any disclosure of
27             information to a State agency,  for  encumbering  or
28             surrendering  any assets held by the credit union in
29             response to a lien or order to withhold and  deliver
30             issued  by  a  State agency, or for any other action
31             taken pursuant to this item, including individual or
32             mechanical errors,  provided  the  action  does  not
33             constitute gross negligence or willful misconduct. A
34             credit  union  shall  have  no  obligation  to hold,
 
HB3008 Engrossed            -4-               LRB9203170JSpcA
 1             encumber, or surrender  assets  until  it  has  been
 2             served  with  a subpoena, summons, warrant, court or
 3             administrative order, lien, or levy.
 4                  (13)  The  furnishing  of  information  to  law
 5             enforcement authorities, the Illinois Department  on
 6             Aging  and  its regional administrative and provider
 7             agencies, the Department of Human Services Office of
 8             Inspector  General,  or  public  guardians,  if  the
 9             credit union  suspects  that  a  member  who  is  an
10             elderly  or  disabled  person has been or may become
11             the  victim  of  financial  exploitation.  For   the
12             purposes  of  this item (13), the term: (i) "elderly
13             person" means a person who is 60 or  more  years  of
14             age,  (ii)  "disabled person" means a person who has
15             or reasonably appears to the credit union to have  a
16             physical  or  mental  disability that impairs his or
17             her ability to seek or  obtain  protection  from  or
18             prevent financial exploitation, and (iii) "financial
19             exploitation"  means  tortious or illegal use of the
20             assets  or  resources  of  an  elderly  or  disabled
21             person,   and    includes,    without    limitation,
22             misappropriation of the elderly or disabled person's
23             assets  or  resources  by undue influence, breach of
24             fiduciary   relationship,    intimidation,    fraud,
25             deception,  extortion,  or  the  use  of  assets  or
26             resources  in  any  manner contrary to law. A credit
27             union or person furnishing information  pursuant  to
28             this  item (13) shall be entitled to the same rights
29             and protections as a person  furnishing  information
30             under  the  Elder  Abuse  and  Neglect  Act  and the
31             Illinois Domestic Violence Act of 1986.
32                  (14)  The disclosure of  financial  records  or
33             information  as  necessary to effect, administer, or
34             enforce a transaction requested or authorized by the
 
HB3008 Engrossed            -5-               LRB9203170JSpcA
 1             member, or in connection with:
 2                       (A)  servicing or processing  a  financial
 3                  product  or  service requested or authorized by
 4                  the member;
 5                       (B)  maintaining or servicing  a  member's
 6                  account with the credit union; or
 7                       (C)  a  proposed  or actual securitization
 8                  or secondary market sale  (including  sales  of
 9                  servicing rights) related to a transaction of a
10                  member.
11             Nothing  in  this item (14), however, authorizes the
12        sale of the financial records or information of a  member
13        without the consent of the member.
14        (c)  Except  as  otherwise provided by this Act, a credit
15    union may not disclose to any person, except to the member or
16    his duly authorized agent, any financial records relating  to
17    that member of the credit union unless:
18             (1)  the  member  has  authorized  disclosure to the
19        person;
20             (2)  the financial records are disclosed in response
21        to a lawful subpoena, summons,  warrant  or  court  order
22        that  meets  the requirements of subparagraph (d) of this
23        Section; or
24             (3)  the credit union is attempting  to  collect  an
25        obligation  owed to the credit union and the credit union
26        complies  with  the  provisions  of  Section  2I  of  the
27        Consumer Fraud and Deceptive Business Practices Act.
28        (d)  A credit  union  shall  disclose  financial  records
29    under  subparagraph  (c)(2)  of  this  Section  pursuant to a
30    lawful subpoena, summons, warrant or court order  only  after
31    the  credit  union  mails  a  copy  of the subpoena, summons,
32    warrant  or  court  order  to  the  person  establishing  the
33    relationship with the credit union, if living, and  otherwise
34    his  personal  representative,  if  known,  at his last known
 
HB3008 Engrossed            -6-               LRB9203170JSpcA
 1    address by first  class  mail,  postage  prepaid  unless  the
 2    credit  union  is  specifically prohibited from notifying the
 3    person by order of court or by applicable  State  or  federal
 4    law.  In  the  case  of a grand jury subpoena, a credit union
 5    shall not mail a copy of a subpoena to any person pursuant to
 6    this subsection if the subpoena was issued by  a  grand  jury
 7    under  the  Statewide  Grand Jury Act or notifying the person
 8    would  constitute  a  violation  of  the  federal  Right   to
 9    Financial Privacy Act of 1978.
10        (e) (1)  Any  officer  or  employee of a credit union who
11        knowingly and wilfully  furnishes  financial  records  in
12        violation of this Section is guilty of a business offense
13        and  upon conviction thereof shall be fined not more than
14        $1,000.
15             (2)  Any person who knowingly and  wilfully  induces
16        or attempts to induce any officer or employee of a credit
17        union  to disclose financial records in violation of this
18        Section  is  guilty  of  a  business  offense  and   upon
19        conviction thereof shall be fined not more than $1,000.
20        (f)  A  credit  union shall be reimbursed for costs which
21    are  reasonably  necessary  and  which  have  been   directly
22    incurred in searching for, reproducing or transporting books,
23    papers,  records  or  other  data  of  a  member  required or
24    requested to be  produced  pursuant  to  a  lawful  subpoena,
25    summons, warrant or court order.  The Director may determine,
26    by  rule,  the rates and conditions under which payment shall
27    be made.  Delivery of  requested  documents  may  be  delayed
28    until final reimbursement of all costs is received.
29    (Source: P.A. 90-18, eff. 7-1-97; 91-929, eff. 12-15-00.)

30        (205 ILCS 305/12) (from Ch. 17, par. 4413)
31        Sec.    12.  Regulatory    fees   for   examination   and
32    administration.
33        (1)  A credit union regulated by the Department shall pay
 
HB3008 Engrossed            -7-               LRB9203170JSpcA
 1    a regulatory fee to  the  Department  based  upon  its  total
 2    assets  as shown by its Year-end Call Report at the following
 3    rates:
 4    TOTAL ASSETS                   REGULATORY FEE
 5    $25,000 or less .............. $100

 6    Over $25,000 and not over
 7    $100,000 ..................... $100 plus $4 per $1,000 of
 8                                   assets in excess of $25,000
 9    Over $100,000 and not over
10    $200,000 ..................... $400 plus $3 per $1,000 of
11                                   assets in excess of $100,000
12    Over $200,000 and not over
13    $500,000 ..................... $700 plus $2 per $1,000 of
14                                   assets in excess of $200,000
15    Over $500,000 and not over
16    $1,000,000 ................... $1,300 plus $1.40 per $1,000
17                                   of assets in excess of
18                                   $500,000
19    Over $1,000,000 and not
20    over $5,000,000............... $2,000 plus $0.50 per
21                                   $1,000 of assets in
22                                   excess of $1,000,000
23    Over $5,000,000 and not
24    over $30,000,000 ............. $4,000 plus $0.35
25                                   per $1,000 assets
26                                   in excess of $5,000,000
27    Over $30,000,000 and not
28    over $100,000,000 ............ $12,750 plus $0.30
29                                   per $1,000 of assets in
30                                   excess of $30,000,000
31    Over $100,000,000 and not
32    over $500,000,000 ............ $33,750 plus $0.15 per
33                                   $1,000 of assets in excess
34                                   of  $100,000,000
 
HB3008 Engrossed            -8-               LRB9203170JSpcA
 1    Over $500,000,000 ............ $93,750 plus $0.05 per
 2                                   $1,000 of assets in excess
 3                                   of $500,000,000
 4        (2)  The  Director  shall  review  the   regulatory   fee
 5    schedule  in  subsection  (1)  and  the projected earnings on
 6    those fees on an annual basis and adjust the fee schedule  no
 7    more  than  5%  annually if necessary to defray the estimated
 8    administrative and operational expenses of the Department  as
 9    defined in subsection (5).  The Director shall provide credit
10    unions  with  written  notice  of  any adjustment made in the
11    regulatory fee schedule.
12        (3)  Not later than March 1  of  each  calendar  year,  a
13    credit  union  shall pay to the Department, for the preceding
14    calendar year, a regulatory fee for  that  calendar  year  in
15    accordance  with  the  regulatory  fee schedule in subsection
16    (1), on the basis of assets as of the Year-end Call Report of
17    the preceding year.  The regulatory fee  shall  not  be  less
18    than $100 or more than $125,000, provided that the regulatory
19    fee cap of $125,000 shall be adjusted to incorporate the same
20    percentage  increase  as the Director makes in the regulatory
21    fee schedule from time to time  under  subsection  (2).    No
22    regulatory  fee  shall be collected from a credit union until
23    it has been in operation for one year.
24        (4)  The  aggregate  of  all  fees   collected   by   the
25    Department  under  this Act shall be paid promptly after they
26    are received receipt of the same, accompanied by  a  detailed
27    statement  thereof,  into the State Treasury and shall be set
28    apart in the Credit Union Fund, a special fund hereby created
29    in the  State  treasury.    The  amount  from  time  to  time
30    deposited  in  the  Credit  Union  Fund  and shall be used to
31    offset the ordinary administrative and  operational  expenses
32    of the Department under this Act.  All earnings received from
33    investments  of  funds  in  the  Credit  Union  Fund shall be
34    deposited into the Credit Union Fund and may be used for  the
 
HB3008 Engrossed            -9-               LRB9203170JSpcA
 1    same purposes as fees deposited into that Fund.
 2        (5)  The  administrative and operational expenses for any
 3    calendar year shall mean the ordinary and contingent expenses
 4    for that year incidental to making the examinations  provided
 5    for  by,  and  for  administering,  this  Act,  including all
 6    salaries and other compensation paid  for  personal  services
 7    rendered  for the State by officers or employees of the State
 8    to enforce this  Act;  all  expenditures  for  telephone  and
 9    telegraph   charges,   postage  and  postal  charges,  office
10    supplies and services, furniture and equipment, office  space
11    and  maintenance thereof, travel expenses and other necessary
12    expenses; all  to  the  extent  that  such  expenditures  are
13    directly incidental to such examination or administration.
14        (6)  When  the  aggregate  of  all  fees collected by the
15    Department under this Act and all earnings  thereon  for  any
16    calendar  year  exceeds  150% of the total administrative and
17    operational expenses under  this  Act  for  that  year,  such
18    excess shall be credited to credit unions and applied against
19    their  regulatory  fees  for the subsequent year.  The amount
20    credited to a credit union shall be in the same proportion as
21    the fee paid by such credit union for the  calendar  year  in
22    which  the  excess  is produced bears to the aggregate of the
23    fees collected by the Department under this Act for the  same
24    year.
25        (7)  Examination   fees   for  the  year  2000  statutory
26    examinations paid pursuant to the examination fee schedule in
27    effect at that time shall be credited toward  the  regulatory
28    fee to be assessed the credit union in calendar year 2001.
29        (8)  Nothing  in  this  Act  shall  prohibit  the General
30    Assembly from appropriating funds to the Department from  the
31    General  Revenue  Fund  for the purpose of administering this
32    Act.
33    (Source: P.A. 91-755, eff. 1-1-01.)
 
HB3008 Engrossed            -10-              LRB9203170JSpcA
 1        (205 ILCS 305/51) (from Ch. 17, par. 4452)
 2        Sec. 51.  Other Loan Programs.
 3        (1)  Subject  to  such  rules  and  regulations  as   the
 4    Director  may  promulgate,  a credit union may participate in
 5    loans to credit  union  members  jointly  with  other  credit
 6    unions,   corporations,   or   financial   institutions.   An
 7    originating credit union may originate loans only to its  own
 8    members.   A  participating  credit  union  that  is  not the
 9    originating lender may participate in loans made to  its  own
10    members  or to members of another participating credit union.
11    "Originating lender" means  the  participating  credit  union
12    with  which  the  member  contracts.   A master participation
13    agreement must be properly executed, and the  agreement  must
14    include  provisions for identifying, either through documents
15    incorporated by reference or directly in the  agreement,  the
16    participation loan or loans prior to their sale.
17        (2)  Any credit union with assets of $500,000 or more may
18    loan to its members under the State Scholarships Law or other
19    scholarship  programs which are subject to a federal or state
20    law providing 100% repayment guarantee.
21        (3)  A credit union may purchase  the  conditional  sales
22    contracts,  notes  and  similar instruments which evidence an
23    indebtedness of its members.
24        (4)  With approval of the Board of  Directors,  a  credit
25    union may make loans, either on its own or jointly with other
26    credit  unions,  corporations  or  financial institutions, to
27    credit union  organizations;  provided,  that  the  aggregate
28    amount  of  all  such loans outstanding shall not at any time
29    exceed 1% of the paid-in and unimpaired capital  and  surplus
30    of the credit union.
31    (Source: P.A. 81-329.)

32        (205 ILCS 305/59) (from Ch. 17, par. 4460)
33        Sec. 59.  Investment of Funds. Funds not used in loans to
 
HB3008 Engrossed            -11-              LRB9203170JSpcA
 1    members  may  be  invested,  pursuant  to  subsection  (7) of
 2    Section 30 of this Act, and subject to Departmental rules and
 3    regulations:
 4        (1)  In securities, obligations or other  instruments  of
 5    or issued by or fully guaranteed as to principal and interest
 6    by  the  United States of America or any agency thereof or in
 7    any trust or trusts established  for  investing  directly  or
 8    collectively in the same;
 9        (2)  In  obligations  of  any state of the United States,
10    the District of Columbia, the Commonwealth  of  Puerto  Rico,
11    and  the  several  territories  organized by Congress, or any
12    political subdivision thereof; however, a  credit  union  may
13    not  invest  more  than  10%  of  its  unimpaired capital and
14    surplus in  the  obligations  of  one  issuer,  exclusive  of
15    general   obligations  of  the  issuer,  and  investments  in
16    municipal securities must be limited to securities  rated  in
17    one  of  the  4  highest  rating  categories  by a nationally
18    recognized statistical rating organization;
19        (3)  In certificates of deposit or passbook type accounts
20    issued by a state or national bank, mutual  savings  bank  or
21    savings and loan association; provided that such institutions
22    have  their accounts insured by the Federal Deposit Insurance
23    Corporation  or  the  Federal  Savings  and  Loan   Insurance
24    Corporation;  but  provided,  further,  that a credit union's
25    investment in an account in any one  institution  may  exceed
26    the insured limit on accounts;
27        (4)  In  shares,  classes of shares or share certificates
28    of  other  credit  unions,  including,  but  not  limited  to
29    corporate credit unions; provided  that  such  credit  unions
30    have  their  members'  accounts  insured by the NCUA or other
31    approved insurers, and that if the members' accounts  are  so
32    insured,  a  credit union's investment may exceed the insured
33    limit on accounts;
34        (5)  In shares of a cooperative society  organized  under
 
HB3008 Engrossed            -12-              LRB9203170JSpcA
 1    the  laws  of  this State or the laws of the United States in
 2    the total amount not exceeding 10% of the unimpaired  capital
 3    and   surplus   of  the  credit  union;  provided  that  such
 4    investment shall first be approved by the Department;
 5        (6)  In  obligations  of  the   State   of   Israel,   or
 6    obligations  fully  guaranteed  by  the State of Israel as to
 7    payment of principal and interest;
 8        (7)  In shares, stocks or obligations of other  financial
 9    institutions  in  the  total  amount  not exceeding 5% of the
10    unimpaired capital and surplus of the credit union;
11        (8)  In federal funds and bankers' acceptances;
12        (9)  In  shares  or  stocks  of  Credit   Union   Service
13    Organizations  in  the  total  amount not exceeding 1% of the
14    unimpaired capital and surplus of the credit union.
15        As  used  in  this   Section,   "political   subdivision"
16    includes, but is not limited to, counties, townships, cities,
17    villages,  incorporated  towns, school districts, educational
18    service regions, special road districts, public water  supply
19    districts,  fire  protection  districts,  drainage districts,
20    levee districts, sewer districts, housing  authorities,  park
21    districts, and any agency, corporation, or instrumentality of
22    a  state  or  its  political  subdivisions,  whether  now  or
23    hereafter  created  and whether herein specifically mentioned
24    or not.
25    (Source: P.A. 86-432.)

26        (205 ILCS 305/70) (from Ch. 17, par. 4471)
27        Sec.  70.  Use  of  name,  sentence.   No  person,  firm,
28    association, partnership, or corporation, except corporations
29    organized under this Act, the  credit  union  acts  of  other
30    states,   or   under   the   Federal  Credit  Union  Act,  or
31    associations of such corporations, or  subsidiaries  of  such
32    associations,  may  use  any name or title which contains the
33    words "credit union" or any abbreviation  thereof,  and  such
 
HB3008 Engrossed            -13-              LRB9203170JSpcA
 1    use is a Class A Misdemeanor.
 2    (Source: P.A. 81-329.)

 3        Section  99.  Effective date.  This Act takes effect upon
 4    becoming law.

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