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Public Act 100-0361 | ||||
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AN ACT concerning regulation.
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Be it enacted by the People of the State of Illinois,
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represented in the General Assembly:
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Section 5. The Illinois Credit Union Act is amended by | ||||
changing Sections 2, 11, 19, 20, 34.1, 48, 53, 57, 59, and 64.7 | ||||
as follows:
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(205 ILCS 305/2) (from Ch. 17, par. 4403)
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Sec. 2. Organization Procedure. | ||||
(1) Any 9 or more persons of legal age,
the majority of | ||||
whom shall be residents of the State of Illinois, who have
a | ||||
common bond referred to in Section 1.1 may organize a credit | ||||
union or
a central credit union by complying with this Section.
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(2) The subscribers shall execute in duplicate Articles of | ||||
Incorporation
and agree to the terms thereof, which Articles | ||||
shall state:
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(a) The name, which shall include the words "credit | ||||
union" and which shall
not be the same as that of any other | ||||
existing credit union in this state,
and the location where | ||||
the proposed credit union is to have its principal
place of | ||||
business;
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(b) The common bond of the members of the credit union;
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(c) The par value of the shares of the credit union, | ||||
which must be at least $1 $5.00 ;
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(d) The names, addresses and Social Security numbers of | ||
the subscribers to
the Articles of Incorporation, and the | ||
number and the value of shares subscribed
to by each;
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(e) That the credit union may exercise such incidental | ||
powers as are necessary
or requisite to enable it to carry | ||
on effectively the purposes for which
it is incorporated, | ||
and those powers which are inherent in the credit union
as | ||
a legal entity;
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(f) That the existence of the credit union shall be | ||
perpetual.
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(3) The subscribers shall prepare and adopt bylaws for the | ||
general government
of the credit union, consistent with this | ||
Act, and execute same in duplicate.
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(4) The subscribers shall forward the articles of | ||
incorporation and the
bylaws to the Secretary in duplicate, | ||
along with the required charter fee.
If they conform to the | ||
law, and such rules and regulations as the Secretary and the | ||
Director
may prescribe, if the Secretary determines that a | ||
common bond exists, and
that it is economically advisable to | ||
organize the credit union, he or she shall
within 60 days issue | ||
a certificate of approval attached to the articles of | ||
incorporation
and return a copy of the bylaws
and the articles | ||
of incorporation to the applicants or their representative, | ||
which shall
be preserved in the permanent files of the credit | ||
union. The subscribers
shall file the certificate of approval, | ||
with the articles of incorporation
attached, in the office of |
the recorder (or, if
there is no recorder, in the office of the | ||
county
clerk) of the county in which the
credit union is to | ||
locate its principal place of business. The
recorder or the | ||
county
clerk, as the case may be, shall accept
and record the | ||
documents if they are accompanied by the proper fee. When the | ||
documents
are so recorded, the credit union is incorporated | ||
under this Act.
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(5) The subscribers for a credit union charter shall not | ||
transact any
business until the certificate of approval has | ||
been received.
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(Source: P.A. 97-133, eff. 1-1-12.)
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(205 ILCS 305/11) (from Ch. 17, par. 4412)
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Sec. 11. Board of credit union advisors. | ||
(1) There shall be a board of credit union advisors
who | ||
shall consult with, advise, and make recommendations
to the | ||
Governor and to the Secretary on matters pertaining to credit | ||
unions.
The board of credit union advisors may also advise the | ||
Governor and Secretary
upon appointments and employment of | ||
personnel in connection with the supervision
and regulation of | ||
credit unions.
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(2) The board of credit union advisors shall consist of 7 | ||
persons with
credit union experience who shall be appointed by | ||
the Governor. Appointments
to the board shall be for terms of 3 | ||
years each, except that initial appointments
shall be: 3 | ||
members for 3 years each; 3 members for 2 years each and 1 |
member
for 1 year.
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(3) All members shall serve until their successors have | ||
been appointed
and qualified. In the event a vacancy occurs, | ||
the appointment to fill such
vacancy shall be made in the | ||
manner of original appointment, but only for
the unexpired | ||
term.
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(4) The chairman of the board of credit union advisors | ||
shall be elected
annually by a majority of the board members at | ||
the first meeting of the board each
year.
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(5) The initial meeting of the board shall be called by the | ||
Secretary and
thereafter regular meetings shall be held at such | ||
times and places as shall
be determined by the Governor, | ||
chairman, or Secretary, but at least once each
calendar year 6 | ||
months . Special meetings may be called either by the Governor, | ||
the Secretary, the Director,
the chairman, or by written notice | ||
sent by 2 or more members of the board.
A majority of the | ||
members of the board shall constitute a quorum.
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(6) The Department shall reimburse the board members for | ||
their actual
and necessary travel and subsistence expenses.
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(Source: P.A. 97-133, eff. 1-1-12.)
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(205 ILCS 305/19) (from Ch. 17, par. 4420)
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Sec. 19. Meeting of members.
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(1) The annual meeting shall be held each
year during the | ||
months of January, February or March or such other month
as may | ||
be approved by the Department. The meeting shall be held at the
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time, place and in the manner set forth in the bylaws. Any | ||
special
meetings of the members of the credit union shall be | ||
held at the time, place
and in the manner set forth in the | ||
bylaws. Unless otherwise set forth in
this Act, quorum | ||
requirements for meetings of members shall be established
by a | ||
credit union in its bylaws. Notice of all meetings must be | ||
given by
the secretary of the credit union at least 7 days | ||
before the date of such
meeting, either by handing a written or | ||
printed notice to each
member of the credit union, by mailing | ||
the notice to the member at his address
as listed on the books | ||
and records of the credit union, or by posting a
notice of the | ||
meeting in three conspicuous places, including the office
of | ||
the credit union.
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(2) On all questions and at all elections, except election | ||
of directors,
each member has one vote regardless of the number | ||
of his shares. There
shall be no voting by proxy except on the | ||
election of directors, proposals
for merger or voluntary | ||
dissolution. Members may vote on questions and in elections by | ||
secure electronic record if approved by the board of directors. | ||
All voting on the election of directors
shall be by ballot, but | ||
when there is no contest, written or electronic ballots need | ||
not
be cast. The record date to be used for the purpose of | ||
determining which
members are entitled to notice of or to vote | ||
at any meeting of members,
may be fixed in advance by the | ||
directors on a date not more than 90 days
nor less than 10 days | ||
prior to the date of the meeting. If no record date
is fixed by |
the directors, the first day on which notice of the meeting
is | ||
given, mailed or posted is the record date.
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(3) Regardless of the number of shares owned by a society, | ||
association,
club, partnership, other credit union or | ||
corporation, having membership
in the credit union, it shall be | ||
entitled to only
one vote and it may be represented and have | ||
its vote cast by its
designated agent acting on its
behalf | ||
pursuant
to a resolution
adopted by the organization's board of | ||
directors or similar governing
authority;
provided that the | ||
credit union shall obtain a certified copy of such resolution
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before such vote may be cast. | ||
(4) A member may revoke a proxy by delivery to the credit | ||
union of a written statement to that effect, by execution of a | ||
subsequently dated proxy, by execution of a secure electronic | ||
record, or by attendance at a meeting and voting in person.
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(5) As used in this Section, "electronic" and "electronic | ||
record" have the meanings ascribed to those terms in the | ||
Electronic Commerce Security Act. As used in this Section, | ||
"secured electronic record" means an electronic record that | ||
meets the criteria set forth in Section 10-105 of the | ||
Electronic Commerce Security Act. | ||
(Source: P.A. 96-963, eff. 7-2-10; 97-133, eff. 1-1-12.)
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(205 ILCS 305/20) (from Ch. 17, par. 4421)
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Sec. 20. Election or appointment of officials.
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(1) The credit union shall
be directed by a board of |
directors consisting of no less than 7 in number,
to be elected | ||
at the annual meeting by and from the members. Directors shall
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hold office until the next annual meeting, unless their
terms | ||
are staggered. Upon amendment of its bylaws, a credit union may | ||
divide
the directors into 2 or 3 classes with each class as | ||
nearly equal in number as
possible. The term of office of the | ||
directors of the first class shall expire
at the first annual | ||
meeting after their election, that of the second class
shall
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expire at the second annual meeting after their election, and | ||
that of the third
class, if any, shall expire at the third | ||
annual meeting after their election.
At each annual meeting | ||
after the classification, the number of directors equal
to the | ||
number of directors whose terms expire at the time of the | ||
meeting shall
be elected to hold office until the second | ||
succeeding annual meeting if there
are 2 classes or until the | ||
third succeeding annual meeting if there are 3
classes. A | ||
director shall hold office for the term for which he
or she is | ||
elected and until his or her
successor
is elected and | ||
qualified. | ||
(1.5) Except as provided in subsection (1.10), in all | ||
elections for directors, every member
has the right to vote, in | ||
person , or by proxy , or by secure electronic record if approved | ||
by the board of directors , the number of shares owned
by him, | ||
or in the case of a member other than a natural person, the | ||
member's
one vote, for as many persons as there are directors | ||
to be elected, or to
cumulate such shares, and give one |
candidate as many votes as the number
of directors multiplied | ||
by the number of his shares equals, or to distribute
them on
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the same principle among as many candidates as he may desire | ||
and the directors
shall not be elected in any other manner. | ||
Shares held in a joint account
owned by more than one member | ||
may be voted by any one of the members, however,
the number of | ||
cumulative votes cast may not exceed a total equal to the | ||
number
of shares multiplied by the number of directors to be | ||
elected. A majority of
the shares entitled
to vote shall be | ||
represented either in person or by proxy for the election
of | ||
directors. Each director shall wholly take and subscribe to an | ||
oath
that he will diligently and honestly perform his duties in | ||
administering
the affairs of the credit union, that while he | ||
may delegate to another the
performance of those administrative | ||
duties he is not thereby relieved from
his responsibility for | ||
their performance, that he will not knowingly violate
or permit | ||
to be violated any law applicable to the credit union,
and that | ||
he is the owner of at least one share of the credit union.
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(1.10) Upon amendment of a credit union's bylaws approved | ||
by the members, in all elections for directors, every member | ||
who is a natural person shall have the right to cast one vote, | ||
regardless of the number of his or her shares, in person , or by | ||
proxy , or by secure electronic record if approved by the board | ||
of directors , for as many persons as there are directors to be | ||
elected.
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(1.15) If the board of directors has adopted a policy |
addressing age eligibility standards on voting, holding | ||
office, or petitioning the board, then a credit union may | ||
require (i) that members be at least 18 years of age by the | ||
date of the meeting in order to vote at meetings of the | ||
members, sign nominating petitions, or sign petitions | ||
requesting special meetings, and (ii) that members be at least | ||
18 years of age by the date of election or appointment in order | ||
to hold elective or appointive office. | ||
(2) The board of directors shall appoint from among the | ||
members of the
credit union, a supervisory committee of not | ||
less than 3 members at the
organization meeting and within 30 | ||
days following each annual meeting of
the members for such | ||
terms as the bylaws provide. Members of the supervisory | ||
committee may, but need not be, on the board of directors, but | ||
shall not
be officers of the credit union, members of the | ||
credit committee,
or the
credit manager if no credit committee | ||
has been appointed.
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(3) The board of directors may appoint, from among the
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members of the
credit union, a credit committee consisting of | ||
an odd number, not less than
3 for such terms as the bylaws | ||
provide. Members of the credit committee
may, but need not be, | ||
directors or officers of the credit union, but shall
not be | ||
members of the supervisory committee.
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(4) The board of directors may appoint from among the | ||
members
of the
credit union a membership committee of one or | ||
more persons. If appointed,
the committee shall act
upon all |
applications for membership and submit a report of its actions
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to the board of directors at the next regular meeting for
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review.
If no membership committee is appointed, credit union | ||
management shall act
upon all applications for membership and | ||
submit a report of its actions to the board of directors
at the | ||
next regular meeting for review.
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(5) As used in this Section, "electronic" and "electronic | ||
record" have the meanings ascribed to those terms in the | ||
Electronic Commerce Security Act. As used in this Section, | ||
"secured electronic record" means an electronic record that | ||
meets the criteria set forth in Section 10-105 of the | ||
Electronic Commerce Security Act. | ||
(Source: P.A. 97-133, eff. 1-1-12; 97-855, eff. 7-27-12.)
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(205 ILCS 305/34.1)
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Sec. 34.1. Compliance review.
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(a) As used in this Section:
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"Affiliate" means an organization established to serve the | ||
needs of credit
unions, the business of which relates to the | ||
daily operations of credit unions.
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"Compliance review committee" means:
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(1) one or more persons appointed by the management, | ||
board of directors , or supervisory
committee of a credit | ||
union for the purposes set forth in subsection (b); or
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(2) any other person to the extent the person acts in | ||
an investigatory
capacity at the direction of a compliance |
review committee.
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"Compliance review documents" means documents prepared in | ||
connection with a
review or evaluation conducted by or for a | ||
compliance review committee.
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"Person " means an individual, a group of individuals, a | ||
board committee, a
partnership, a firm, an association, a | ||
corporation, or any other entity.
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(b) This Section applies to compliance review committees | ||
whose functions are
to evaluate and seek to improve any of the | ||
following:
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(1) loan policies or underwriting standards;
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(2) asset quality;
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(3) financial reporting to federal or State | ||
governmental or regulatory
agencies; or
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(4) compliance with federal or State statutory or | ||
regulatory requirements.
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(c) Except as provided in subsection (d), compliance review | ||
documents and
the deliberations of the compliance
review | ||
committee are privileged and confidential and are | ||
nondiscoverable
and nonadmissible.
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(1) Compliance review documents are privileged and | ||
confidential and are
not subject to discovery or admissible | ||
in evidence in any civil action.
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(2) Individuals serving on compliance review | ||
committees or acting under
the direction of a compliance | ||
review committee shall not be required to testify
in any |
civil action about the contents of any compliance review | ||
document or
conclusions of any compliance review committee | ||
or about the actions taken by a
compliance review | ||
committee.
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(3) An affiliate of a credit union, a credit union | ||
regulatory agency, and
the insurer of credit union share | ||
accounts shall have access to compliance
review documents, | ||
provided that (i) the documents shall remain confidential | ||
and
are not subject to discovery from such entity and (ii) | ||
delivery of compliance
review documents to an affiliate or | ||
pursuant to the requirements of a credit
union regulatory | ||
agency or an insurer of credit union share accounts shall | ||
not
constitute a waiver of the privilege granted in this | ||
Section.
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(d) This Section does not apply to: (1) compliance review | ||
committees on
which individuals serving on or at the direction | ||
of the compliance review
committee have management | ||
responsibility for the operations, records,
employees,
or | ||
activities being examined or evaluated by the compliance review | ||
committee
and (2) any civil or administrative action initiated | ||
by a credit union
regulatory agency or an insurer of credit | ||
union share accounts.
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(e) This Section shall not be construed to limit the | ||
discovery or
admissibility in any civil action of any documents | ||
other than compliance review
documents or to require the | ||
appointment of a compliance review committee.
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(Source: P.A. 90-665, eff. 7-30-98; revised 9-14-16.)
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(205 ILCS 305/48) (from Ch. 17, par. 4449)
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Sec. 48. Loan limit. Within any limitations set forth in a | ||
policy adopted by the bylaws of
the credit union, the board of | ||
directors , a credit union may place a limit upon the aggregate
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amount to be loaned to or cosigned for by any one member | ||
provided that . Such loan limits
shall be subject to rules and | ||
regulations promulgated by the Secretary. Unless
the credit | ||
union's bylaws provide otherwise, no loan shall be made to any
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member in an aggregate amount in excess of $200, or 10% of the | ||
credit union's
unimpaired capital
and surplus , whichever is | ||
greater . Such loan limits shall be subject to rules adopted by | ||
the Secretary.
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(Source: P.A. 97-133, eff. 1-1-12.)
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(205 ILCS 305/53) (from Ch. 17, par. 4454)
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Sec. 53. Loans to credit unions. A credit union may make | ||
loans to other
credit unions if so provided and within the | ||
limits set forth in a policy adopted by the board of directors | ||
its bylaws .
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(Source: P.A. 97-133, eff. 1-1-12.)
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(205 ILCS 305/57) (from Ch. 17, par. 4458)
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Sec. 57. Group purchasing and marketing . | ||
(a) A credit union may, consistent with rules
and |
regulations promulgated by the Secretary, enter into | ||
cooperative marketing
arrangements to facilitate its members' | ||
voluntary purchase of such goods
and services as are in the | ||
interest of improving economic and social conditions
of the | ||
members.
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(b) A credit union may create and use descriptive and brand | ||
references to promote and market its identity, services, and | ||
products to its members. | ||
(Source: P.A. 97-133, eff. 1-1-12.)
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(205 ILCS 305/59) (from Ch. 17, par. 4460)
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Sec. 59. Investment of funds.
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(a) Funds not used in loans to members may be
invested, | ||
pursuant to subsection (7) of Section 30 of this Act, and
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subject to Departmental rules and
regulations:
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(1) In securities, obligations or other instruments of | ||
or issued by or
fully guaranteed as to principal and | ||
interest by the United States of America
or any agency | ||
thereof or in any trust or trusts established for investing
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directly or collectively in the same;
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(2) In obligations of any state of the United States, | ||
the District of
Columbia, the Commonwealth of Puerto Rico, | ||
and the several
territories organized
by Congress, or any | ||
political subdivision thereof; however, a credit union
may
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not invest more than 10% of its unimpaired capital and | ||
surplus in the
obligations of one issuer, exclusive of |
general obligations of the issuer, and
investments in | ||
municipal securities must be limited to securities rated in | ||
one
of the 4
highest rating categories by a nationally | ||
recognized statistical rating
organization;
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(3) In certificates of deposit or passbook type | ||
accounts issued by a state
or national bank, mutual savings | ||
bank or savings and loan association; provided
that such | ||
institutions have their accounts insured by the Federal | ||
Deposit
Insurance Corporation or the Federal Savings and | ||
Loan Insurance Corporation;
but provided, further, that a | ||
credit union's investment in an account in
any one | ||
institution may exceed the insured limit on accounts;
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(4) In shares, classes of shares or share certificates | ||
of other credit
unions, including, but not limited to | ||
corporate credit unions; provided
that such credit unions | ||
have their members' accounts insured by the NCUA
or other | ||
approved insurers, and that if the members' accounts are so | ||
insured,
a credit union's investment may exceed the insured | ||
limit on accounts;
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(5) In shares of a cooperative society organized under | ||
the laws of this
State or the laws of the United States in | ||
the total amount not exceeding
10% of the unimpaired | ||
capital and surplus of the credit union; provided
that such | ||
investment shall first be approved by the Department;
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(6) In obligations of the State of Israel, or | ||
obligations fully guaranteed
by the State of Israel as to |
payment of principal and interest;
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(7) In shares, stocks or obligations of other financial | ||
institutions in
the total amount not exceeding 5% of the | ||
unimpaired capital and surplus
of the credit union;
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(8) In federal funds and bankers' acceptances;
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(9) In shares or stocks of Credit Union Service | ||
Organizations in the
total amount not exceeding the greater | ||
of 3% of the unimpaired
capital and surplus of the
credit | ||
union or the amount authorized for federal credit unions ; .
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(10) In corporate bonds identified as investment grade | ||
by at least one nationally recognized statistical rating | ||
organization, provided that: | ||
(i) the board of directors has established a | ||
written policy that addresses corporate bond | ||
investment procedures and how the credit union will | ||
manage credit risk, interest rate risk, liquidity | ||
risk, and concentration risk; and | ||
(ii) the credit union has documented in its records | ||
that a credit analysis of a particular investment and | ||
the issuing entity was conducted by the credit union, a | ||
third party on behalf of the credit union qualified by | ||
education or experience to assess the risk | ||
characteristics of corporate bonds, or a nationally | ||
recognized statistical rating agency before purchasing | ||
the investment and the analysis is updated at least | ||
annually for as long as it holds the investment; and |
(11) To aid in the credit union's management of its | ||
assets, liabilities, and liquidity in the purchase of an | ||
investment interest in a pool of loans, in whole or in part | ||
and without regard to the membership of the borrowers, from | ||
other depository institutions and financial type | ||
institutions, including mortgage banks, finance companies, | ||
insurance companies, and other loan sellers, subject to | ||
such safety and soundness standards, limitations, and | ||
qualifications as the Department may establish by rule or | ||
guidance from time to time. | ||
(b) As used in this Section, "political subdivision" | ||
includes, but is not
limited to, counties,
townships, cities, | ||
villages, incorporated towns, school districts, educational
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service regions, special road districts, public water supply | ||
districts, fire
protection districts, drainage districts, | ||
levee districts, sewer districts,
housing authorities, park | ||
districts, and any
agency, corporation, or instrumentality of a | ||
state or its political
subdivisions, whether now or hereafter | ||
created and whether herein specifically
mentioned or not.
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(c) A credit union investing to fund an employee benefit | ||
plan obligation is not subject to the investment limitations of | ||
this Act and this Section and may purchase an investment that | ||
would otherwise be impermissible if the investment is directly | ||
related to the credit union's obligation under the employee | ||
benefit plan and the credit union holds the investment only for | ||
so long as it has an actual or potential obligation under the |
employee benefit plan.
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(Source: P.A. 97-133, eff. 1-1-12.)
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(205 ILCS 305/64.7) | ||
Sec. 64.7. Network credit unions. | ||
(a) Two or more credit unions merging pursuant to Section | ||
63 of this Act may elect to request a network credit union | ||
designation for the surviving credit union from the Secretary. | ||
The request shall be set forth in the plan of merger and | ||
certificate of merger executed by the credit unions and | ||
submitted to the Secretary pursuant to subsection (4) of | ||
Section 63. The Secretary's approval of a certificate of merger | ||
containing a network credit union designation request shall | ||
constitute approval of the use of the network designation as a | ||
brand or other identifier of the surviving credit union. If the | ||
surviving credit union desires to include the network | ||
designation in its legal name, make any other change to its | ||
legal name, or both, it shall proceed with an amendment to the | ||
articles of incorporation and bylaws of the surviving credit | ||
union pursuant to Section 4 of this Act. | ||
(b) A network credit union is a cooperative business | ||
structure comprised of 2 or more merging credit unions with a | ||
collective goal of efficiently serving their combined | ||
membership and gaining economies of scale through common | ||
vision, strategy and initiative. The merging credit unions | ||
shall be identified as divisional credit unions, branches, or |
units of the network credit union or by other descriptive | ||
references that ensure the members understand they are dealing | ||
with one credit union rather than multiple credit unions. | ||
Descriptive and brand references may also be created and used | ||
to promote the identity, services, and products of the network | ||
credit union to its members. | ||
(c) Each divisional credit union may shall have an its own | ||
advisory board of directors and a chief management official to | ||
assist in maintaining and leveraging its respective local | ||
identity for the benefit of the surviving credit union. The | ||
divisional credit union advisory boards shall be appointed by | ||
the network credit union board of directors. Each divisional | ||
credit union's advisory board of directors may shall appoint a | ||
its divisional credit union chief management official and may | ||
also appoint one of its directors to serve on the network | ||
credit union's nominating committee. A divisional credit union | ||
may determine to identify its advisory board as a committee and | ||
its divisional chief management official with a title it deems | ||
reasonable and appropriate. | ||
(d) (c) The network credit union is the surviving legal | ||
entity in the merger and supervision, examination, audit, | ||
reporting, governance, and management shall be conducted or | ||
performed at the network credit union level. All share | ||
insurance, safety and soundness, and statutory and regulatory | ||
requirements and limitations shall be evaluated at the network | ||
credit union level.
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(Source: P.A. 99-614, eff. 7-22-16.)
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Section 99. Effective date. This Act takes effect upon | ||||||||||||||||||||||||||||||||||||||||||
becoming law.
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