Sen. Antonio Muņoz

Filed: 2/18/2022

 

 


 

 


 
10200SB3145sam002LRB102 22843 BMS 36533 a

1
AMENDMENT TO SENATE BILL 3145

2    AMENDMENT NO. ______. Amend Senate Bill 3145 on page 1,
3line 5, by deleting "29,"; and
 
4on page 1, line 19, by replacing "Section" with "Section 15
5or"; and
 
6on page 2, line 1, after "union", by inserting "in accordance
7with the terms of the credit union's written business plan
8submitted to the Secretary under subsection (e)"; and
 
9on page 3, by replacing lines 1 through 9 with the following:
10"must submit the business plan to the Secretary. The Secretary
11may, in his or her sole discretion, approve the business plan,
12disapprove the business plan, or require the credit union to
13modify the business plan to seek approval of the target market
14as an occupational, community, or associational common bond or
15common bonds, pursuant to 38 Ill. Adm. Code 190.10. The credit

 

 

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1union must be advised in writing of the findings of the
2Secretary in support of the determination and the specific and
3reasonable time period in which to file a modified plan. If the
4Secretary approves the business plan the credit union shall be
5required to add the target market to its field of
6membership."; and
 
7by deleting line 8 on page 11 through line 3 on page 13; and
 
8on page 15, line 6, by replacing "or" with "or"; and
 
9on page 15, line 8, after "subsection (3),", by inserting "; or
10(iii) an external independent audit of the credit union's
11financial statements in accordance with subsection (5)"; and
 
12on page 17, line 4, after "Board", by inserting ", or the
13regulatory basis of accounting identified in subsection (5)";
14and
 
15on page 17, line 15, after "losses", by inserting "and
16complies with the Department's rule addressing loan loss
17accounting procedures in 38 Ill. Adm. Code 190.70"; and
 
18on page 28, by replacing lines 1 through 7 with the following:
19        "(15)(A) In shares, stocks, or member units of
20    financial technology companies in the total amount not

 

 

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1    exceeding 10% of the net worth of the credit union, so long
2    as:
3            (i) the credit union is well capitalized as
4        defined under applicable supervisory capital
5        classification criteria at the time a specific
6        investment is made and at all times during the term of
7        the investment; and
8            (ii) the credit union and the financial technology
9        company are operated in a manner that demonstrates to
10        the public the separate corporate existence of the
11        credit union and financial technology company.
12        (B) Before investing in a financial technology
13    company, the credit union shall obtain a written legal
14    opinion as to whether the financial technology company is
15    established in a manner that will limit potential exposure
16    of the credit union to no more than the loss of funds
17    invested in the financial technology company and the legal
18    opinion shall:
19            (i) address factors that have led courts to
20        "pierce the corporate veil", such as inadequate
21        capitalization, lack of separate corporate identity,
22        common boards of directors and employees, control of
23        one entity over another, and lack of separate books
24        and records; and
25            (ii) be provided by independent legal counsel of
26        the credit union.

 

 

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1        (C) Before investing in the financial technology
2    company, the credit union shall enter into a written
3    investment agreement with the financial technology company
4    and the agreement shall contain the following clauses:
5            (i) the financial technology company will: (I)
6        provide the Department with access to the books and
7        records of the financial technology company relating
8        to the investment made by the credit union, with the
9        costs of examining those records borne by the credit
10        union in accordance with the per diem rate established
11        by the Department by rule; (II) follow generally
12        accepted accounting principles; and (III) provide the
13        credit union with its financial statements on at least
14        a quarterly basis and certified public accountant
15        audited financial statements on an annual basis; and
16            (ii) the financial technology company and credit
17        union agree to terminate their contractual
18        relationship: (I) upon 90 days' written notice to the
19        parties by the Secretary that the safety and soundness
20        of the credit union is threatened pursuant to the
21        Department's cease and desist and suspension authority
22        in Sections 8 and 61; and (II) immediately upon the
23        parties' receipt of written notice from the Secretary
24        when the Secretary reasonably concludes, based upon
25        specific facts set forth in the notice to the parties,
26        that the credit union will suffer immediate,

 

 

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1        substantial, and irreparable injury or loss if it
2        remains a party to the investment agreement.
3        (D) The termination of the investment agreement
4    between the financial technology company and credit union
5    shall in no way operate to relieve the financial
6    technology company from repaying the investment or other
7    obligation due and owing the credit union at the time of
8    termination.
9        (E) Any financial technology company in which a credit
10    union invests pursuant to this paragraph (15) that
11    directly or indirectly originates, purchases, facilitates,
12    brokers, or services loans to consumers in Illinois shall
13    not charge an interest rate that exceeds the applicable
14    maximum rate established by the Board of the National
15    Credit Union Administration from time to time for payday
16    alternative loans pursuant to 12 CFR 701.21(c)(7)."; and
 
17on page 30, immediately below line 2, by inserting the
18following:
 
19    "Section 99. Effective date. This Act takes effect upon
20becoming law, except that Section 16.5 of the Illinois Credit
21Union Act takes effect January 1, 2023.".