Rep. Joseph M. Lyons

Filed: 3/4/2011

 

 


 

 


 
09700HB3050ham001LRB097 10833 CEL 52143 a

1
AMENDMENT TO HOUSE BILL 3050

2    AMENDMENT NO. ______. Amend House Bill 3050 on page 1, line
35, after "9.1,", by inserting "10, 10.1,"; and
 
4on page 5, line 5, by replacing "Secretary Director" with
5"Secretary and the Director"; and
 
6on page 6, line 20, by replacing "Secretary Director" with
7"Secretary and the Director"; and
 
8on page 9, line 6, by replacing "Secretary" with "office"; and
 
9on page 9, line 11, by replacing "Secretary Director" with
10"Secretary and the Director"; and
 
11on page 9, line 23, by replacing "activities or operates" with
12"any activity"; and
 

 

 

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1on page 21, immediately below line 3, by inserting the
2following:
 
3    "(205 ILCS 305/10)  (from Ch. 17, par. 4411)
4    Sec. 10. Credit union records; member financial records.
5    (1) A credit union shall establish and maintain books,
6records, accounting systems and procedures which accurately
7reflect its operations and which enable the Department to
8readily ascertain the true financial condition of the credit
9union and whether it is complying with this Act.
10    (2) A photostatic or photographic reproduction of any
11credit union records shall be admissible as evidence of
12transactions with the credit union.
13    (3)(a) For the purpose of this Section, the term "financial
14records" means any original, any copy, or any summary of (1) a
15document granting signature authority over an account, (2) a
16statement, ledger card or other record on any account which
17shows each transaction in or with respect to that account, (3)
18a check, draft or money order drawn on a financial institution
19or other entity or issued and payable by or through a financial
20institution or other entity, or (4) any other item containing
21information pertaining to any relationship established in the
22ordinary course of business between a credit union and its
23member, including financial statements or other financial
24information provided by the member.
25    (b) This Section does not prohibit:

 

 

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1        (1) The preparation, examination, handling or
2    maintenance of any financial records by any officer,
3    employee or agent of a credit union having custody of such
4    records, or the examination of such records by a certified
5    public accountant engaged by the credit union to perform an
6    independent audit.
7        (2) The examination of any financial records by or the
8    furnishing of financial records by a credit union to any
9    officer, employee or agent of the Department, the National
10    Credit Union Administration, Federal Reserve board or any
11    insurer of share accounts for use solely in the exercise of
12    his duties as an officer, employee or agent.
13        (3) The publication of data furnished from financial
14    records relating to members where the data cannot be
15    identified to any particular customer of account.
16        (4) The making of reports or returns required under
17    Chapter 61 of the Internal Revenue Code of 1954.
18        (5) Furnishing information concerning the dishonor of
19    any negotiable instrument permitted to be disclosed under
20    the Uniform Commercial Code.
21        (6) The exchange in the regular course of business of
22    (i) credit information between a credit union and other
23    credit unions or financial institutions or commercial
24    enterprises, directly or through a consumer reporting
25    agency or (ii) financial records or information derived
26    from financial records between a credit union and other

 

 

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1    credit unions or financial institutions or commercial
2    enterprises for the purpose of conducting due diligence
3    pursuant to a merger or a purchase or sale of assets or
4    liabilities of the credit union.
5        (7) The furnishing of information to the appropriate
6    law enforcement authorities where the credit union
7    reasonably believes it has been the victim of a crime.
8        (8) The furnishing of information pursuant to the
9    Uniform Disposition of Unclaimed Property Act.
10        (9) The furnishing of information pursuant to the
11    Illinois Income Tax Act and the Illinois Estate and
12    Generation-Skipping Transfer Tax Act.
13        (10) The furnishing of information pursuant to the
14    federal "Currency and Foreign Transactions Reporting Act",
15    Title 31, United States Code, Section 1051 et sequentia.
16        (11) The furnishing of information pursuant to any
17    other statute which by its terms or by regulations
18    promulgated thereunder requires the disclosure of
19    financial records other than by subpoena, summons, warrant
20    or court order.
21        (12) The furnishing of information in accordance with
22    the federal Personal Responsibility and Work Opportunity
23    Reconciliation Act of 1996. Any credit union governed by
24    this Act shall enter into an agreement for data exchanges
25    with a State agency provided the State agency pays to the
26    credit union a reasonable fee not to exceed its actual cost

 

 

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1    incurred. A credit union providing information in
2    accordance with this item shall not be liable to any
3    account holder or other person for any disclosure of
4    information to a State agency, for encumbering or
5    surrendering any assets held by the credit union in
6    response to a lien or order to withhold and deliver issued
7    by a State agency, or for any other action taken pursuant
8    to this item, including individual or mechanical errors,
9    provided the action does not constitute gross negligence or
10    willful misconduct. A credit union shall have no obligation
11    to hold, encumber, or surrender assets until it has been
12    served with a subpoena, summons, warrant, court or
13    administrative order, lien, or levy.
14        (13) The furnishing of information to law enforcement
15    authorities, the Illinois Department on Aging and its
16    regional administrative and provider agencies, the
17    Department of Human Services Office of Inspector General,
18    or public guardians: (i) upon subpoena by the investigatory
19    entity or the guardian, or (ii) if there is suspicion by
20    the credit union that a member who is an elderly or
21    disabled person has been or may become the victim of
22    financial exploitation. For the purposes of this item (13),
23    the term: (i) "elderly person" means a person who is 60 or
24    more years of age, (ii) "disabled person" means a person
25    who has or reasonably appears to the credit union to have a
26    physical or mental disability that impairs his or her

 

 

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1    ability to seek or obtain protection from or prevent
2    financial exploitation, and (iii) "financial exploitation"
3    means tortious or illegal use of the assets or resources of
4    an elderly or disabled person, and includes, without
5    limitation, misappropriation of the elderly or disabled
6    person's assets or resources by undue influence, breach of
7    fiduciary relationship, intimidation, fraud, deception,
8    extortion, or the use of assets or resources in any manner
9    contrary to law. A credit union or person furnishing
10    information pursuant to this item (13) shall be entitled to
11    the same rights and protections as a person furnishing
12    information under the Elder Abuse and Neglect Act, the
13    Illinois Domestic Violence Act of 1986, and the Abuse of
14    Adults with Disabilities Intervention Act.
15        (14) The disclosure of financial records or
16    information as necessary to effect, administer, or enforce
17    a transaction requested or authorized by the member, or in
18    connection with:
19            (A) servicing or processing a financial product or
20        service requested or authorized by the member;
21            (B) maintaining or servicing a member's account
22        with the credit union; or
23            (C) a proposed or actual securitization or
24        secondary market sale (including sales of servicing
25        rights) related to a transaction of a member.
26        Nothing in this item (14), however, authorizes the sale

 

 

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1    of the financial records or information of a member without
2    the consent of the member.
3        (15) The disclosure of financial records or
4    information as necessary to protect against or prevent
5    actual or potential fraud, unauthorized transactions,
6    claims, or other liability.
7        (16)(a) The disclosure of financial records or
8    information related to a private label credit program
9    between a financial institution and a private label party
10    in connection with that private label credit program. Such
11    information is limited to outstanding balance, available
12    credit, payment and performance and account history,
13    product references, purchase information, and information
14    related to the identity of the customer.
15        (b)(l) For purposes of this paragraph (16) of
16    subsection (b) of Section 10, a "private label credit
17    program" means a credit program involving a financial
18    institution and a private label party that is used by a
19    customer of the financial institution and the private label
20    party primarily for payment for goods or services sold,
21    manufactured, or distributed by a private label party.
22        (2) For purposes of this paragraph (16) of subsection
23    (b) of Section 10, a "private label party" means, with
24    respect to a private label credit program, any of the
25    following: a retailer, a merchant, a manufacturer, a trade
26    group, or any such person's affiliate, subsidiary, member,

 

 

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1    agent, or service provider.
2    (c) Except as otherwise provided by this Act, a credit
3union may not disclose to any person, except to the member or
4his duly authorized agent, any financial records relating to
5that member of the credit union unless:
6        (1) the member has authorized disclosure to the person;
7        (2) the financial records are disclosed in response to
8    a lawful subpoena, summons, warrant, citation to discover
9    assets, or court order that meets the requirements of
10    subparagraph (d) of this Section; or
11        (3) the credit union is attempting to collect an
12    obligation owed to the credit union and the credit union
13    complies with the provisions of Section 2I of the Consumer
14    Fraud and Deceptive Business Practices Act.
15    (d) A credit union shall disclose financial records under
16subparagraph (c)(2) of this Section pursuant to a lawful
17subpoena, summons, warrant, citation to discover assets, or
18court order only after the credit union mails a copy of the
19subpoena, summons, warrant, citation to discover assets, or
20court order to the person establishing the relationship with
21the credit union, if living, and otherwise his personal
22representative, if known, at his last known address by first
23class mail, postage prepaid unless the credit union is
24specifically prohibited from notifying the person by order of
25court or by applicable State or federal law. In the case of a
26grand jury subpoena, a credit union shall not mail a copy of a

 

 

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1subpoena to any person pursuant to this subsection if the
2subpoena was issued by a grand jury under the Statewide Grand
3Jury Act or notifying the person would constitute a violation
4of the federal Right to Financial Privacy Act of 1978.
5    (e)(1) Any officer or employee of a credit union who
6knowingly and wilfully furnishes financial records in
7violation of this Section is guilty of a business offense and
8upon conviction thereof shall be fined not more than $1,000.
9    (2) Any person who knowingly and wilfully induces or
10attempts to induce any officer or employee of a credit union to
11disclose financial records in violation of this Section is
12guilty of a business offense and upon conviction thereof shall
13be fined not more than $1,000.
14    (f) A credit union shall be reimbursed for costs which are
15reasonably necessary and which have been directly incurred in
16searching for, reproducing or transporting books, papers,
17records or other data of a member required or requested to be
18produced pursuant to a lawful subpoena, summons, warrant,
19citation to discover assets, or court order. The Secretary and
20the Director may determine, by rule, the rates and conditions
21under which payment shall be made. Delivery of requested
22documents may be delayed until final reimbursement of all costs
23is received.
24(Source: P.A. 94-495, eff. 8-8-05; 94-851, eff. 6-13-06;
2595-661, eff. 1-1-08.)
 

 

 

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1    (205 ILCS 305/10.1)
2    Sec. 10.1. Retention of records. Unless a federal law
3requires otherwise, the Secretary and the Director may by rule
4prescribe periods of time for which credit unions operating
5under this Act must retain records and after the expiration of
6which the credit union may destroy those records. No liability
7shall accrue against the credit union, the Secretary Director,
8or this State for the destruction of records according to rules
9of the Secretary Director promulgated under the authority of
10this Section. In any cause or proceeding in which any records
11may be called in question or be demanded from any credit union,
12a showing of the expiration of the period so prescribed shall
13be sufficient excuse for failure to produce them.
14(Source: P.A. 92-608, eff. 7-1-02.)"; and
 
15on page 22, line 10, by replacing "Secretary Director" with
16"Secretary, the Director"; and
 
17on page 35, line 12, by replacing "Secretary Director" with
18"Secretary and the Director"; and
 
19on page 42, line 15, by replacing "Director" with "Secretary";
20and
 
21on page 77, line 22, after "his", by inserting "or her"; and
 

 

 

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1on page 94, by replacing lines 8 through 18 with the following:
2        "(3) If a person or group of persons against whom the
3    Secretary Director issued the cease and desist order
4    persists in the violation, then the Secretary Director may
5    impose a civil penalty of up to $10,000 for each violation.
6    Each day that a person or group of persons is in violation
7    of this Section constitutes a separate violation of this
8    Section and each instance in which marketing material or a
9    solicitation is sent in violation of this subsection (c)
10    constitutes a separate violation of this Section.
11    (d) The Secretary and the Director of the Division of
12Financial Institutions may adopt rules to administer the
13provisions of this Section.".