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(205 ILCS 305/59)
(from Ch. 17, par. 4460)
Investment of funds.
(a) Funds not used in loans to members may be
invested, pursuant to subsection (7) of Section 30 of this Act, and
subject to Departmental rules and
(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 directly or collectively in the same;
(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 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;
(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;
(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;
(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;
(6) In obligations of the State of Israel, or
obligations fully guaranteed by the State of Israel as to payment of principal and interest;
(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;
(8) In federal funds and bankers' acceptances;
(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;
(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;
(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;
(12) To aid in the credit union's management of its
assets, liabilities, and liquidity by receiving funds from another financial institution as evidenced by certificates of deposit, share certificates, or other classes of shares issued by the credit union to the financial institution; and
(13) In the purchase and assumption of assets held
by other financial institutions, with approval of the Secretary and subject to any 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
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.
"Financial institution" includes any bank, savings bank, savings and loan association, or credit union established under the laws of the United States, this State, or any other state.
(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.
(Source: P.A. 100-361, eff. 8-25-17; 100-778, eff. 8-10-18.)