SB3217 EngrossedLRB097 18462 PJG 63692 b

1    AN ACT concerning regulation.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Credit Union Act is amended by
5changing Sections 15 and 20 and adding Section 64.5 as follows:
 
6    (205 ILCS 305/15)  (from Ch. 17, par. 4416)
7    Sec. 15. Membership defined.
8    (1) The membership of a credit union shall be limited to
9and consist of the subscribers to the articles of incorporation
10and such other persons within the common bond, as defined in
11this Act and as set forth in the credit union's articles of
12incorporation, as have been duly admitted members, have paid
13the required entrance fee or membership fee, or both, if any,
14have subscribed for one or more shares, and have paid the
15initial installment thereon, and have complied with such other
16requirements as the articles of incorporation or bylaws
17specify. Two or more persons within the common bond who have
18jointly subscribed for one or more shares under a joint account
19and have complied with all membership requirements may each be
20admitted to membership. The surviving spouse of a credit union
21member may, within 6 months of the member's death, become a
22member of the credit union by paying the required entrance fee
23or membership fee or both, if any, by subscribing for one or

 

 

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1more shares and paying the initial installment thereon, and by
2complying with such other requirements as the articles of
3incorporation or bylaws specify.
4    (2) Any member may withdraw from a credit union at any time
5upon giving notice of withdrawal as required by the bylaws.
6    (3) Any member may be expelled by a 2/3 vote of the members
7present at any regular or special meeting called to consider
8the matter, but only after an opportunity has been given to the
9member to be heard.
10    (4) A member who has caused a loss to the credit union,
11failed to maintain one or more shares at the credit union, or
12violated board policy applicable to members may be expelled by
13a majority vote of a quorum of directors if the board has
14adopted a policy providing for expulsion under those
15circumstances. In maintaining and enforcing a policy based on
16loss, the board may consider, without limitation, a member's
17failure to pay amounts due under a loan, failure to provide
18collected funds to cover withdrawals or personal share drafts
19or credit union drafts where the member is a remitter, or
20failure to pay fees or charges due the credit union. If a
21policy is adopted by the board pursuant to this subsection (4),
22written notice of the policy and the effective date of the
23policy shall be mailed to each member of the credit union at
24the member's current address appearing on the records of the
25credit union. The policy shall be mailed to members not fewer
26than 30 days prior to the effective date of the policy. In

 

 

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1addition, new members shall be provided written notice of the
2policy prior to or upon applying for membership.
3    (5) All or any part of the amount paid on shares of a
4withdrawing member or expelled member with any declared
5dividends or interest on the date of withdrawal or expulsion
6must, after deducting all amounts due from the member to the
7credit union, be paid to him. The credit union may require not
8more than 60 days' written notice of intention to withdraw
9shares, but a notice of withdrawal does not entitle the member
10to any preferred or prior claim in the event of liquidation.
11Withdrawing or expelled members have no further rights in the
12credit union, but are not, by withdrawal or expulsion, released
13from any obligation they owe to the credit union.
14    (6) A member who has caused a loss to the credit union or
15has violated board policy applicable to members may be denied
16any or all credit union services in accordance with board
17policy, however, members who are denied services shall be
18allowed to maintain a share account and to vote on all issues
19put to a vote of the membership.
20    (7) If a member fails to maintain one fully paid share, the
21credit union, at its option, may permit the member to
22re-subscribe and pay for one or more shares within 30 days
23after the date the member failed to maintain one fully paid
24share, without affecting the member's status or rights as a
25member during that period. A member that fails to re-subscribe
26for at least one fully paid share within the 30-day period

 

 

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1shall be automatically expelled from the credit union and
2treated as an expelled member under subsection (5) of this
3Section 15.
4(Source: P.A. 97-133, eff. 1-1-12.)
 
5    (205 ILCS 305/20)  (from Ch. 17, par. 4421)
6    Sec. 20. Election or appointment of officials.
7    (1) The credit union shall be directed by a board of
8directors consisting of no less than 7 in number, to be elected
9at the annual meeting by and from the members. Directors shall
10hold office until the next annual meeting, unless their terms
11are staggered. Upon amendment of its bylaws, a credit union may
12divide the directors into 2 or 3 classes with each class as
13nearly equal in number as possible. The term of office of the
14directors of the first class shall expire at the first annual
15meeting after their election, that of the second class shall
16expire at the second annual meeting after their election, and
17that of the third class, if any, shall expire at the third
18annual meeting after their election. At each annual meeting
19after the classification, the number of directors equal to the
20number of directors whose terms expire at the time of the
21meeting shall be elected to hold office until the second
22succeeding annual meeting if there are 2 classes or until the
23third succeeding annual meeting if there are 3 classes. A
24director shall hold office for the term for which he or she is
25elected and until his or her successor is elected and

 

 

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1qualified.
2    (1.5) Except as provided in subsection (1.10), in all
3elections for directors, every member has the right to vote, in
4person or by proxy, the number of shares owned by him, or in
5the case of a member other than a natural person, the member's
6one vote, for as many persons as there are directors to be
7elected, or to cumulate such shares, and give one candidate as
8many votes as the number of directors multiplied by the number
9of his shares equals, or to distribute them on the same
10principle among as many candidates as he may desire and the
11directors shall not be elected in any other manner. Shares held
12in a joint account owned by more than one member may be voted
13by any one of the members, however, the number of cumulative
14votes cast may not exceed a total equal to the number of shares
15multiplied by the number of directors to be elected. A majority
16of the shares entitled to vote shall be represented either in
17person or by proxy for the election of directors. Each director
18shall wholly take and subscribe to an oath that he will
19diligently and honestly perform his duties in administering the
20affairs of the credit union, that while he may delegate to
21another the performance of those administrative duties he is
22not thereby relieved from his responsibility for their
23performance, that he will not knowingly violate or permit to be
24violated any law applicable to the credit union, and that he is
25the owner of at least one share of the credit union.
26    (1.10) Upon amendment of a credit union's bylaws approved

 

 

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1by the members, in all elections for directors, every member
2who is a natural person shall have the right to cast one vote,
3regardless of the number of his or her shares, in person or by
4proxy, for as many persons as there are directors to be
5elected.
6    (1.15) If the board of directors has adopted a policy
7addressing age eligibility standards on voting, holding
8office, or petitioning the board, then a credit union may
9require (i) that members be at least 18 years of age by the
10date of the meeting in order to vote at meetings of the
11members, sign nominating petitions, or sign petitions
12requesting special meetings, and (ii) that members be at least
1318 years of age by the date of election or appointment in order
14to hold elective or appointive office.
15    (2) The board of directors shall appoint from among the
16members of the credit union, a supervisory committee of not
17less than 3 members at the organization meeting and within 30
18days following each annual meeting of the members for such
19terms as the bylaws provide. Members of the supervisory
20committee may, but need not be, on the board of directors, but
21shall not be officers of the credit union, members of the
22credit committee, or the credit manager if no credit committee
23has been appointed.
24    (3) The board of directors may appoint, from among the
25members of the credit union, a credit committee consisting of
26an odd number, not less than 3 for such terms as the bylaws

 

 

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1provide. Members of the credit committee may, but need not be,
2directors or officers of the credit union, but shall not be
3members of the supervisory committee.
4    (4) The board of directors may appoint from among the
5members of the credit union a membership committee of one or
6more persons. If appointed, the committee shall act upon all
7applications for membership and submit a report of its actions
8to the board of directors at the next regular meeting for
9review. If no membership committee is appointed, credit union
10management shall act upon all applications for membership and
11submit a report of its actions to the board of directors at the
12next regular meeting for review.
13(Source: P.A. 97-133, eff. 1-1-12.)
 
14    (205 ILCS 305/64.5 new)
15    Sec. 64.5. Continuation of corporate entity.
16    (a) For purposes of this Section, a "resulting credit
17union" means an Illinois-chartered credit union that is the
18surviving credit union in a merger of 2 or more credit unions,
19a new credit union resulting from a consolidation of 2 or more
20credit unions, or a credit union that has effected a conversion
21from a credit union chartered under the laws of any other state
22or under the laws of the United States.
23    (b) A resulting credit union shall be considered the same
24business and corporate entity as each merging or consolidating
25credit union or as the converting credit union, with all the

 

 

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1property, rights, powers, duties, and obligations of each
2merging or consolidating credit union or of the converting
3credit union, except as affected by the charter and bylaws of
4the resulting credit union. A resulting credit union shall be
5liable for all liabilities of the merging or consolidating
6credit union or converting credit union. All the rights,
7franchises, and interests of the merging or consolidating
8credit union or converting credit union in and to every species
9of property, real, personal, and mixed, and choses in action
10thereunto belonging, shall be deemed to be automatically
11transferred to and vested in the resulting credit union as a
12successor-in-interest without any deed or other transfer, and
13the resulting credit union, without any order or other action
14on the part of any court or otherwise, shall hold and enjoy the
15same and all rights of property, franchises, and interests,
16including appointments, designations, and nominations, and all
17other rights and interests as trustee, executor,
18administrator, registrar or transfer agent of stocks and bonds,
19guardian, assignee, receiver, and in every other fiduciary
20capacity, in the same manner and to the same extent as was held
21and enjoyed by the merging or consolidating credit union or the
22converting credit union. Any reference to a merging,
23consolidating, or converting credit union in any writing,
24whether executed or taking effect before or after the merger,
25consolidation, or conversion, shall be deemed a reference to
26the resulting credit union if not inconsistent with the other

 

 

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1provisions of the writing.
 
2    Section 99. Effective date. This Act takes effect upon
3becoming law.