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Public Act 101-0567


 

Public Act 0567 101ST GENERAL ASSEMBLY

  
  
  

 


 
Public Act 101-0567
 
SB1813 EnrolledLRB101 10992 HEP 56176 b

    AN ACT concerning regulation.
 
    Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
 
    Section 5. The Illinois Credit Union Act is amended by
changing Sections 15, 23, 57.1, 59, and 63 and by adding
Sections 10.2 and 44.1 as follows:
 
    (205 ILCS 305/10.2 new)
    Sec. 10.2. Electronic records.
    (a) As used in this Section, "electronic" and "electronic
record" have the meanings given to those terms in the
Electronic Commerce Security Act.
    (b) If a provision of this Act requires information to be
written or delivered in writing, or provides for certain
consequences if it is not, an electronic record or electronic
delivery satisfies that rule of law.
    (c) If a provision of this Act requires a policy, record,
notice or other document or information to be mailed or
otherwise furnished, posted, or disclosed by a credit union,
electronic delivery or distribution satisfies that rule of law.
Policies and notifications of general interest to or impact on
the membership may be posted on a credit union's website or
disclosed in membership newsletters or account statements, in
addition to, or in lieu of, any other methods of notification
or distribution specified in this Act.
 
    (205 ILCS 305/15)  (from Ch. 17, par. 4416)
    Sec. 15. Membership defined.
    (1) The membership of a credit union shall be limited to
and consist of the subscribers to the articles of incorporation
and such other persons within the common bond, as defined in
this Act and as set forth in the credit union's articles of
incorporation, as have been duly admitted members, have paid
the required entrance fee or membership fee, or both, if any,
have subscribed for one or more shares, and have paid the
initial installment thereon, and have complied with such other
requirements as the articles of incorporation or bylaws
specify. Two or more persons within the common bond who have
jointly subscribed for one or more shares under a joint account
and have complied with all membership requirements may each be
admitted to membership. The surviving spouse of a credit union
member may, within 6 months of the member's death, become a
member of the credit union by paying the required entrance fee
or membership fee or both, if any, by subscribing for one or
more shares and paying the initial installment thereon, and by
complying with such other requirements as the articles of
incorporation or bylaws specify.
    (2) Any member may withdraw from a credit union at any time
upon giving notice of withdrawal as required by the bylaws.
    (3) Any member may be expelled by a 2/3 vote of the members
present at any regular or special meeting called to consider
the matter, but only after an opportunity has been given to the
member to be heard.
    (4) A member who has caused a loss to the credit union,
failed to maintain one or more shares at the credit union, or
violated board policy applicable to members may be expelled by
a majority vote of a quorum of directors if the board has
adopted a policy providing for expulsion for any of the
following acts committed by the member: under those
circumstances.
        (i) causing a loss to the credit union;
        (ii) failing to maintain one or more shares at the
    credit union;
        (iii) committing fraud or any similar misdeed against
    the credit union;
        (iv) engaging in inappropriate behavior involving
    another person, such as physical or verbal abuse of another
    member or an employee of the credit union, while
    transacting business with the credit union; or
        (v) otherwise violating board policy applicable to
    members.
    In maintaining and enforcing a policy based on loss, the
board may consider, without limitation, a member's failure to
pay amounts due under a loan, failure to provide collected
funds to cover withdrawals or personal share drafts or credit
union drafts where the member is a remitter, or failure to pay
fees or charges due the credit union.
    The policy may delegate the expulsion authority to the
senior management officials of the credit union. If a member is
expelled by a senior management official of the credit union,
the member may, within 30 days after the expulsion, seek
reinstatement by appealing the action in writing to the board
of directors of the credit union. The board may affirm,
disaffirm, or modify the action, and the board's decision is
final. As used in this subsection (4), "senior management
official" includes the chief management officer of the credit
union (including the person holding the title of President or
Chief Executive Officer, or both, or Treasurer/Manager) and
other management officers of the credit union (including the
persons holding the title of Chief Operating Officer, Chief
Financial Officer, Chief Administrative Officer, Chief
Information Officer, Chief Security Officer, Executive Vice
President, Senior Vice President, or Vice President).
    If a policy is adopted by the board pursuant to this
subsection (4), written notice of the policy shall be
distributed not fewer than 30 days before the effective date of
the policy by: (i) mailing it and the effective date of the
policy shall be mailed to each member of the credit union at
the member's current address appearing on the records of the
credit union; (ii) electronically delivering it to all members
by posting it on the credit union's website; or (iii)
disclosing it to all members in membership newsletters or
account statements. The policy shall be mailed to members not
fewer than 30 days prior to the effective date of the policy.
In addition, new members shall be provided written notice of
the policy prior to or upon applying for membership by using
one of the distribution methods described in this subsection
(4).
    (5) All or any part of the amount paid on shares of a
withdrawing member or expelled member with any declared
dividends or interest on the date of withdrawal or expulsion
must, after deducting all amounts due from the member to the
credit union, be paid to him. The credit union may require not
more than 60 days' written notice of intention to withdraw
shares, but a notice of withdrawal does not entitle the member
to any preferred or prior claim in the event of liquidation.
Withdrawing or expelled members have no further rights in the
credit union, but are not, by withdrawal or expulsion, released
from any obligation they owe to the credit union.
    (6) A member who has caused a loss to the credit union or
has violated board policy applicable to members may be denied
any or all credit union services in accordance with board
policy, however, members who are denied services shall be
allowed to maintain a share account and to vote on all issues
put to a vote of the membership.
    (7) If a member fails to maintain one fully paid share, the
credit union, at its option, may permit the member to
re-subscribe and pay for one or more shares within 30 days
after the date the member failed to maintain one fully paid
share, without affecting the member's status or rights as a
member during that period. A member that fails to re-subscribe
for at least one fully paid share within the 30-day period
shall be automatically expelled from the credit union and
treated as an expelled member under subsection (5) of this
Section 15.
(Source: P.A. 97-133, eff. 1-1-12; 97-855, eff. 7-27-12.)
 
    (205 ILCS 305/23)  (from Ch. 17, par. 4424)
    Sec. 23. Compensation of officials.
    (1) Directors and committee members No director or
committee member may receive reasonable compensation for their
his service as such, the amount of which shall be set by the
board of directors. The Department shall, by rule, establish
maximum rates of reasonable compensation that are generally
applicable to credit unions considering factors the Department
may establish from time to time, including, but not limited to,
total assets, nonprofit cooperative structure, and the best
interests of members. "Compensation" as used in this subsection
(1) refers to remuneration expense to the credit union for
services provided by a director or committee member in his or
her capacity as director or committee member. The remuneration
expense shall be disclosed on an annual basis to the membership
in the financial statement that is part of the annual
membership meeting materials. The disclosure shall contain:
(i) the amount paid to each director and (ii) the amount paid
to the directors as a group. "Compensation" as used in this
subsection (1) does not include
    (2) The credit union may incur the expense of providing
reasonable life, health, accident, and similar insurance
protection benefits for directors and a director or committee
members member.
    (3) (2) Directors, committee members and employees, while
on official business of the credit union, may be reimbursed for
reasonable and necessary expenses. Alternatively, the credit
union may make direct payment to a third party for such
business expenses. Reasonable and necessary expenses may
include the payment of travel costs for the foregoing officials
and one guest per official. All payment of costs shall be made
in accordance with written policies and procedures established
by the board of directors.
    (4) (3) The board of directors may establish compensation
for officers of the credit union.
(Source: P.A. 97-133, eff. 1-1-12.)
 
    (205 ILCS 305/44.1 new)
    Sec. 44.1. Unclaimed property; dormancy or escheat fee. A
credit union may deduct a dormancy charge or an escheat fee
from property required to be paid or delivered to the
administrator under the Revised Uniform Unclaimed Property
Act, provided the amount of the deduction is consistent with
the standards set forth in subsection (b) of Section 15-602 of
that Act. In making the deduction, a credit union may allocate,
classify, and record all or a portion of the deduction, as
applicable, as the minimum share amount required to preserve
the member's status as a member of the credit union.
 
    (205 ILCS 305/57.1)
    Sec. 57.1. Services to other credit unions. A credit union
may act as a representative of and enter into an agreement with
credit unions or other organizations for the purposes of:
        (1) sharing, utilizing, renting, leasing, purchasing,
    selling, and joint ownership of fixed assets or engaging in
    activities and services that relate to the daily operations
    of credit unions; and
        (2) providing correspondent services to other credit
    unions or other organizations that the service provider
    credit union is authorized to perform for its own members
    or as part of its operations, including, but not limited
    to, loan processing, loan servicing, member check cashing
    services, disbursing share withdrawals and loan proceeds,
    cashing and selling money orders, ACH and wire transfer
    services, implementation and administrative support
    services related to the use of debit cards, payroll debit
    cards, and other prepaid debit cards and credit cards, coin
    and currency services, performing internal audits, and
    automated teller machine deposit services.
(Source: P.A. 99-78, eff. 7-20-15; 99-149, eff. 1-1-16;
100-201, eff. 8-18-17.)
 
    (205 ILCS 305/59)  (from Ch. 17, par. 4460)
    Sec. 59. 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 regulations:
        (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.
    (d) If a credit union acquires loans from another financial
institution or financial-type institution pursuant to this
Section, the credit union shall be authorized to provide loan
servicing and collection services in connection with those
loans.
(Source: P.A. 100-361, eff. 8-25-17; 100-778, eff. 8-10-18.)
 
    (205 ILCS 305/63)  (from Ch. 17, par. 4464)
    Sec. 63. Merger and consolidation.
    (1) Any two or more credit unions, regardless of whether or
not they have the same common bond, may merge or consolidate
into a single credit union. A merger or consolidation may be
with a credit union organized under the laws of this State or
of another state or of the United States and is subject to the
approval of the Secretary. It must be made on such terms as
have been agreed upon by a vote of a majority of the board of
directors of each credit union, and approved by an affirmative
vote of a majority of the members of the merging credit union
being absorbed present at a meeting, either in person or by
proxy, duly called for that purpose, except as hereinafter
specified. Notice of the meeting stating the purpose must be
sent by the Secretary of each merging credit union being
absorbed to each member by mail at least 45 but no more than 90
7 days before the date of the meeting.
    (2) One of the merging credit unions may continue after the
merger or consolidation either as a surviving credit union
retaining its identity or as a new credit union as has been
agreed upon under the terms of the merger. At least 9 members
of the new proposed credit union must apply to the Department
for permission to organize the new credit union. The same
procedure shall be followed as provided for the organization of
a new credit union.
    (3) After approval by the members of the credit union which
is to be absorbed by the merger or consolidation, the chairman
or president and the secretary of each credit union shall
execute a certificate of merger or consolidation, which shall
set forth all of the following:
        (a) The time and place of the meeting of each board of
    directors at which the plan was agreed upon;
        (b) The vote in favor of the adoption of the plan;
        (c) A copy of each resolution or other action by which
    the plan was agreed upon;
        (d) The time and place of the meeting of the members of
    the absorbed credit union at which the plan agreed upon was
    approved; and,
        (e) The vote by which the plan was approved by the
    members of the absorbed credit union.
    (4) Such certificate and a copy of the plan of merger or
consolidation agreed upon shall be mailed to the Secretary for
review. If the provisions of this Act have been complied with,
the certificate shall be approved by him, and returned to the
credit unions which are parties to the merger or consolidation
within 30 days. When so approved by the Secretary the
certificate shall constitute the Department's certificate of
approval of the merger or consolidation.
    (5) Upon issuance of the certificate of approval, each
merging credit union which was absorbed shall cease operation.
Each party to the merger shall file the certificate of approval
with the Recorder or County Clerk of the county in which the
credit union has or had its principal office.
    (6) Each credit union absorbed by the merger or
consolidation shall return to the Secretary the original
statement of incorporation, certificate of approval of
incorporation, and the bylaws of the credit union. The
surviving credit union shall continue its operation under its
existing certificate of approval, articles of incorporation,
and the bylaws or if a new credit union has been formed, under
the new certificate of approval, articles of incorporation, and
bylaws.
    (7) All rights of membership in and any obligation or
liability of any member to any credit union which is party to a
consolidation or merger are continued in the surviving or new
credit union without reservation or diminution.
    (8) A pending action or other judicial proceeding to which
any of the consolidating or merging credit unions is a party
does not abate by reason of the consolidation or merger.
(Source: P.A. 97-133, eff. 1-1-12.)
 
    Section 99. Effective date. This Act takes effect upon
becoming law.

Effective Date: 8/23/2019