Section 190.2  Definitions


For purposes of the Illinois Credit Union Act and this Part, the words and phrases defined in this Section shall have the meanings ascribed to them unless the context requires otherwise.


"Act" means the Illinois Credit Union Act [205 ILCS 305].


"Credit union" means a credit union chartered under the Illinois Credit Union Act, or, as the context permits, under the Federal Credit Union Act or the laws of any state.


"Department" means the Illinois Department of Financial and Professional Regulation.


"Director" means the Director of the Department of Financial and Professional Regulation-Division of Financial Institutions. As provided in Section 8(1) of the Act, the Director shall oversee the functions of the Division and report to the Secretary with respect to the Director's exercise of any of the rights, powers and duties vested by law in the Secretary under the Act or this Part.


"Division" means the Department of Financial and Professional Regulation-Division of Financial Institutions.


"GAAP" or "generally accepted accounting principles" means U.S. Generally Accepted Principles promulgated by the Financial Accounting Standards Board (see http://www.fasb.org).


"NCUA" means the National Credit Union Administration.


"Net worth" means retained earnings, as defined under GAAP, and secondary capital.  Net worth does not include the allowance for loan losses account.


"Retained earnings" includes undivided earnings, regular reserve, other reserves, and any other appropriations designated by management or regulatory authorities.


"Secondary capital" means a secondary capital account or other form of non-share account, including without limitation a debt instrument, subject to the following conditions:


The maturity or the account shall not be less than three years and the account shall not be redeemable prior to maturity or the expiration of a minimum withdrawal notice period of three years.


The account shall not be insured by the National Credit Union Share Insurance Fund or any governmental or private entity.


The account holder's claim against the credit union must be subordinate to all other claims, including shareholders, creditors and the National Credit Union Share Insurance Fund.


Funds in the account, including interest accrued and paid into the account, must be available to cover operating losses realized by the credit union that exceed its net available reserves and undivided earnings.  In lieu of being paid into the account, interest may be paid directly to the account holder or into a separate account from which the account holder may make withdrawals.  Losses shall be distributed pro-rata among all secondary capital accounts held by the credit union at the time losses are realized.


The account may not be  pledged or provided by the account holder as security on a loan or obligation with the credit union or any other party.


In the event of liquidation of the credit union, the accounts will, to the extent they are not needed to cover losses at the time of liquidation, be paid out to the account holder.


"Paid-in and unimpaired capital" or "unimpaired capital" means shares as defined in Section 1.1 of the Act.


"Person" or "persons" means individuals and bodies politic and corporate, including without limitation corporations, limited liability companies, general partnerships, limited partnerships and joint ventures; unless, from the context and facts, the intention is plain to apply only to individuals.  Persons who reside in or live in a geographical area include non-natural persons located within the geographical area.


"Secretary" means the Secretary of the Department of Financial and Professional Regulation or a person authorized by the Secretary, the Act or this Part to act in the Secretary's stead. As provided in Section 8(l) of the Act, all references in the Act or this Part to the Secretary shall be deemed to include the Director, as a person authorized by the Secretary or the Act to assume responsibility for the oversight of the functions of the Department relating to the regulatory supervision of credit unions under the Act and this Part.


"State" means a state of the United States, the District of Columbia, the Commonwealth of Puerto Rico and any of the several territories and possessions of the United States.  When capitalized, the term "State" generally means the State of Illinois.


"Surplus" means undivided earnings. 


"USPAP" means the Uniform Standards of Professional Appraisal Practice promulgated by the Appraisal Standards Board pursuant to Title XI of the Federal Financial Institutions Reform, Recovery and Enforcement Act of 1989 (12 USC 3331 et seq.) published biennially by the Appraisal Standards Board of The Appraisal Foundation, 1155 15th Street N.W., Suite 1111, Washington DC  20005 (effective January 1, 2016 through December 31, 2017; no later amendments or editions).


(Source:  Amended at 41 Ill. Reg. 4764, effective May 1, 2017)