There Is a Newer Version of the Illinois Compiled Statutes
2005 Illinois Code - Chapter 205 Financial Regulation 205 ILCS 305/ Illinois Credit Union Act.
(205 ILCS 305/1) (from Ch. 17, par. 4401)
Sec. 1.
This Act may be cited as the
Illinois Credit Union Act.
(Source: P.A. 86‑1475.)
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(205 ILCS 305/1.1) (from Ch. 17, par. 4402)
Sec. 1.1.
Definitions.
Credit Union ‑ The term "credit union" means
a cooperative, non‑profit association, incorporated under this Act,
under the laws of the United States of America or under the laws
of another state, for the purposes of encouraging thrift among
its members, creating a source of credit at a reasonable rate of
interest, and providing an opportunity for its members to use
and control their own money in order to improve their economic and
social conditions. The membership of a credit union shall consist
of a group or groups each having a common
bond as set forth in this Act.
Common Bond ‑ The term "common bond" refers to groups of people
who meet one of the following qualifications:
(1) Persons belonging to a specific association, | ||
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(2) Persons who reside in a reasonably compact and | ||
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(3) Persons who have a common employer or who are | ||
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Shares ‑ The term "shares" or "share accounts" means any form of shares
issued by a credit union and established by a member in accordance with
standards specified by a credit union, including but not limited to common
shares, share draft accounts, classes of shares, share certificates,
special purpose share accounts, shares issued in trust, custodial accounts,
and individual retirement accounts or other plans established pursuant to
Section 401(d) or (f) or Section 408(a) of the Internal Revenue Code, as now
or hereafter amended, or similar provisions of any tax laws of the United
States that may hereafter exist.
Credit Union Organization ‑ The term "credit union organization" means
any organization established to serve the needs of credit unions, the business
of which relates to the daily operations of credit unions.
Department ‑ The term "Department" means the Illinois Department of Financial
Institutions.
Director ‑ The term "Director" means the Director of the Illinois Department
of Financial Institutions.
NCUA ‑ The term "NCUA" means the National Credit Union Administration, an
agency of the United States Government charged with the supervision of
credit unions chartered under the laws of the United States of America.
Central Credit Union ‑ The term "central credit union" means a credit union
incorporated primarily to receive shares from and make loans to credit unions
and Directors, Officers, committee members and employees of credit unions.
A central credit union may also accept as members persons who were members
of credit unions which were liquidated and persons from occupational groups
not otherwise served by another credit union.
Corporate Credit Union ‑ The term "corporate credit union" means a credit
union which is a cooperative, non‑profit association, the membership of
which is limited primarily to other credit unions.
Insolvent ‑ "Insolvent" means the condition that results when
the total of all liabilities and shares exceeds net assets of the credit union.
Danger of insolvency ‑ For purposes of Section 61, a credit union is in
"danger of insolvency" if its net worth to
asset ratio falls below 2%. In calculating the danger of insolvency ratio,
secondary
capital shall be excluded. For purposes of Section 61, a credit union is also
in "danger of
insolvency" if the Department is unable to
ascertain, upon examination, the true financial
condition of the credit union.
Net Worth ‑ "Net worth" means the retained earnings balance of the credit
union, as determined under generally accepted accounting principles, and forms
of secondary capital approved by the Director pursuant to rulemaking.
(Source: P.A. 92‑608, eff. 7‑1‑02.)
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(205 ILCS 305/2) (from Ch. 17, par. 4403)
Sec. 2.
Organization Procedure.
(1) Any 9 or more persons of legal age,
the majority of whom shall be residents of the State of Illinois, who have
a common bond referred to in Section 1.1 may organize a credit union or
a central credit union by complying with this Section.
(2) The subscribers shall execute in duplicate Articles of Incorporation
and agree to the terms thereof, which Articles shall state:
(a) The name, which shall include the words "credit union" and which shall
not be the same as that of any other existing credit union in this state,
and the location where the proposed credit union is to have its principal
place of business;
(b) The common bond of the members of the credit union;
(c) The par value of the shares of the credit union, which must be at least $5.00;
(d) The names, addresses and Social Security numbers of the subscribers to
the Articles of Incorporation, and the number and the value of shares subscribed
to by each;
(e) That the credit union may exercise such incidental powers as are necessary
or requisite to enable it to carry on effectively the purposes for which
it is incorporated, and those powers which are inherent in the credit union
as a legal entity;
(f) That the existence of the credit union shall be perpetual.
(3) The subscribers shall prepare and adopt bylaws for the general government
of the credit union, consistent with this Act, and execute same in duplicate.
(4) The subscribers shall forward the Articles of Incorporation, and the
bylaws to the Director in duplicate, along with the required Charter fee.
If they conform to the law, and such rules and regulations as the Director
may prescribe, if the Director determines that a common bond exists, and
that it is economically advisable to organize the credit union, he shall
within 60 days issue a Certificate of Approval attached to the Articles
and return a copy of the bylaws
and the Articles to the applicants or their representative, which shall
be preserved in the permanent files of the credit union. The subscribers
shall file the Certificate of Approval, with the Articles of Incorporation
attached, in the office of the recorder (or, if
there is no recorder, in the office of the County
Clerk) of the County in which the
credit union is to locate its principal place of business. The
recorder or the County Clerk, as the case may be, shall accept
and record the documents if they are accompanied by the proper fee. When the documents
are so recorded, the credit union is incorporated under this Act.
(5) The subscribers for a credit union charter shall not transact any
business until the Certificate of Approval has been received.
(Source: P.A. 83‑358.)
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(205 ILCS 305/3) (from Ch. 17, par. 4404)
Sec. 3.
Form of Articles and Bylaws.
The Director shall provide, at no
charge, a form of Articles of Incorporation and a form of bylaws which may
be used by credit union incorporators for their guidance.
(Source: P.A. 81‑329.)
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(205 ILCS 305/4) (from Ch. 17, par. 4405)
Sec. 4.
Amendments to Articles of Incorporation and Bylaws.
Amendments
to the Articles of Incorporation may be made by the members at any regular
or special meeting, if the proposed amendment is set forth in the call of
the meeting and is approved by at least two thirds of the members present
at a meeting at
which a quorum is present. Amendments to the bylaws may be made by the members
at any regular or special meeting, if the proposed amendment is set forth
in the call for the meeting and is approved by a majority of the members
present at a meeting at which a quorum is present. Amendments to the bylaws
may also be made by the Board of Directors at any regular or special meeting,
if the proposed amendment is set forth in the call of the meeting and approved
by at least two thirds of the Directors present at a meeting at which a
quorum is present. A report shall be made to the members at the next annual
meeting of any amendments to the bylaws adopted by the Board of Directors.
Any amendment to the Articles of Incorporation or bylaws of a credit union
shall be approved by the Director before the amendment is effective. The
Director shall approve or disapprove of any amendments within 60 days after
submission to him.
(Source: P.A. 81‑329.)
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(205 ILCS 305/5) (from Ch. 17, par. 4406)
Sec. 5.
Place of business.
(1) A credit union may change its principal
place of business within this State upon 45 days prior written notice
to the
Department, provided that a
credit union with a neighborhood or community common bond may not relocate its
principal place of business outside of its neighborhood or community.
(2) A credit union may share office space with one or more credit unions
and contract with any person, firm or corporation, including another credit
union, to provide facilities or personnel.
(Source: P.A. 81‑329; 91‑131, eff. 7‑16‑99.)
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(205 ILCS 305/6) (from Ch. 17, par. 4407)
Sec. 6.
Fiscal Year.
The fiscal year of each credit union organized under
this Act shall end on December 31 of each year.
(Source: P.A. 81‑329.)
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(205 ILCS 305/7) (from Ch. 17, par. 4408)
Sec. 7.
Reciprocity ‑ out of state credit unions.
(1) A credit union organized
and duly chartered as a credit union in another state shall be permitted
to conduct business as a credit union in this state if a credit union chartered
under the laws of this state is permitted to do business in such other state,
provided that:
(a) The credit union shall register with the | ||
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(b) The credit union may be required to pay a | ||
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(c) The credit union shall comply with rules | ||
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(2) It is intended that the legal existence of credit unions chartered
under this Act be recognized beyond the limits
of this State and that, subject to any reasonable registration requirements,
any credit union transacting business outside of this State be granted the
protection of full faith and credit under Section 1 of Article IV of the
Constitution of the United States.
(Source: P.A. 92‑608, eff. 7‑1‑02.)
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(205 ILCS 305/8) (from Ch. 17, par. 4409)
Sec. 8.
Director's powers and duties.
Credit unions are regulated by the
Department. The Director, in executing the powers and discharging the duties
vested by law in the Department has the following powers and duties:
(1) To exercise the rights, powers and duties set | ||
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(2) To prescribe rules and regulations for the | ||
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(3) To direct and supervise all the administrative | ||
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(4) To issue cease and desist orders when in the | ||
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(5) To suspend from office and to prohibit from | ||
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(6) Except for the fees established in this Act, to | ||
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(7) To destroy, in his discretion, any or all books | ||
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(8) To make investigations and to conduct research | ||
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(9) To authorize, foster or establish experimental, | ||
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(a) promote more effective operation of credit | ||
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(b) are in the best interests of credit unions, | ||
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(10) To cooperate in studies, training or other | ||
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(Source: P.A. 91‑357, eff. 7‑29‑99; 92‑608, eff. 7‑1‑02.)
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(205 ILCS 305/9) (from Ch. 17, par. 4410)
Sec. 9.
Reports and examinations.
(1) Credit unions shall report to
the Department on forms supplied by the Department, in accordance with a
schedule published by the Department. A recapitulation of the Annual Reports
shall be compiled and published annually by the Department, for the use
of the General Assembly, credit unions, various educational institutions
and other interested parties. A credit union which fails to file any report
when due shall pay to the Department a late filing fee for each
day the report is overdue as prescribed by rule. The Director may extend
the time for filing a
report.
(2) The Director may require special examinations of and special
financial reports from a credit union or a credit
union organization in which a credit union loans, invests, or delegates
substantially all
managerial duties and responsibilities when he determines that such
examinations
and reports are necessary to enable the Department
to determine the safety of a credit union's operation or its solvency.
The cost to the Department of the aforesaid special examinations shall be
borne by the credit union being examined as prescribed by rule.
(3) All credit unions incorporated under this Act shall be examined at
least biennially by the Department or, at the discretion of
the Director,
by a public accountant registered by the Department of Professional
Regulation. The costs of an examination shall be paid by the
credit union. The scope of all examinations by a public accountant shall
be at least equal to the examinations made by the Department. The examiners
shall have full access to, and may compel the production of, all the books,
papers, securities and accounts of any credit union. A special examination
shall be made by the Department or by a public accountant approved by the
Department upon written request of 5 or more members, who guarantee the
expense of the same. Any credit union refusing to submit to an examination
when ordered by the Department shall be reported to the Attorney General,
who shall institute proceedings to have its charter revoked. If the
Director determines that the examination of a credit
union is to be
conducted by a public accountant registered by the Department of
Professional Regulation and the examination is
done in conjunction
with the credit union's external independent audit of financial
statements, the requirements of this Section and subsection (3) of Section
34 shall be deemed met.
(4) A copy of the completed report of examination and a review comment
letter, if any, citing exceptions revealed during the examination, shall
be submitted to the credit union by the Department. A detailed report stating
the corrective actions taken by the Board of Directors on each exception
set forth in the review comment letter shall be filed with the Department
within 40 days after the date of the review comment letter, or as otherwise
directed by the Department. Any credit union through its officers, directors,
committee members or employees, which willfully provides fraudulent or
misleading information regarding the corrective actions taken on exceptions
appearing in a review comment letter may have its operations restricted to
the collection of principal and interest on loans outstanding and the
payment of normal expenses and salaries until all exceptions are corrected
and accepted by the Department.
(Source: P.A. 91‑755, eff. 1‑1‑01; 92‑608, eff. 7‑1‑02.)
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(205 ILCS 305/9.1)
Sec. 9.1.
Disclosures of reports of examinations and confidential
supervisory information; limitations.
(1) Any report of examination, visitation, or investigation
prepared by the Director under this Act or by the state
regulatory authority charged with enforcing the Electronic Fund
Transfer Act or the Corporate Fiduciary Act or by the state
regulatory authority of another state that examines an office of
an Illinois credit union in that state, any document or record
prepared or obtained in connection with or relating to any
examination, visitation, or investigation, and any record
prepared or obtained by the Director to the extent that the record
summarizes or contains information derived from any report,
document, or record described in this subsection shall be deemed
"confidential supervisory information". Confidential supervisory
information shall not include any information or record routinely
prepared by a credit union and maintained in the ordinary course
of business or any information or record that is required to be
made publicly available pursuant to State or federal law or rule.
(2) Confidential supervisory information is privileged from
discovery and shall only be disclosed under the circumstances and
for the purposes set forth in this Section.
(3) Relevant confidential supervisory information may be
disclosed under a statute that by its terms or by rules
promulgated thereunder requires the disclosure of confidential
supervisory information other than by subpoena, summons,
warrant, or court
order; to the appropriate
law enforcement
authorities when the Director or the credit union reasonably believes the
credit union,
which the Director has caused to be examined, has been a victim of a crime;
to other agencies or entities having a
legitimate regulatory interest; to the credit union's board,
officers, retained professionals, and insurers; to persons
seeking to merge with or purchase all or part of the assets of the credit
union; and where disclosure is otherwise required for the benefit of
the credit union. Disclosure of confidential supervisory
information to these persons does not constitute a waiver
of the legal privilege otherwise available with respect to the
information.
(4) A person to whom confidential supervisory information is
disclosed shall not further disseminate confidential supervisory
information.
(5) (a) Any person upon whom a demand for production of
confidential supervisory information is made, whether by | ||
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(b) Any request for discovery or disclosure of | ||
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(c) Any court order that compels disclosure of | ||
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(Source: P.A. 92‑608, eff. 7‑1‑02.)
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(205 ILCS 305/10)(from Ch. 17, par. 4411)
Sec. 10. Credit union records; member financial records.
(1) A credit union shall establish and maintain books, records, accounting
systems and procedures which accurately reflect its operations and which
enable the Department to readily ascertain the true financial condition
of the credit union and whether it is complying with this Act.
(2) A photostatic or photographic reproduction of any credit union records
shall be admissible as evidence of transactions with the credit union.
(3)(a) For the purpose of this Section, the term
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(b) This Section does not prohibit:
(1) The preparation, examination, handling or | ||
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(2) The examination of any financial records by or | ||
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(3) The publication of data furnished from financial | ||
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(4) The making of reports or returns required under | ||
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(5) Furnishing information concerning the dishonor | ||
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(6) The exchange in the regular course of business | ||
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(7) The furnishing of information to the appropriate | ||
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(8) The furnishing of information pursuant to the | ||
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(9) The furnishing of information pursuant to the | ||
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(10) The furnishing of information pursuant to the | ||
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(11) The furnishing of information pursuant to any | ||
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(12) The furnishing of information in accordance | ||
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(13) The furnishing of information to law | ||
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(14) The disclosure of financial records or | ||
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(A) servicing or processing a financial product | ||
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(B) maintaining or servicing a member's account | ||
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(C) a proposed or actual securitization or | ||
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Nothing in this item (14), however, authorizes the | ||
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(15) The disclosure of financial records or | ||
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(16)(a) The disclosure of financial records or | ||
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(b)(l) For purposes of this paragraph (16) of | ||
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(2) For purposes of this paragraph (16) of | ||
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(c) Except as otherwise provided by this Act, a credit | ||
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(1) the member has authorized disclosure to the | ||
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(2) the financial records are disclosed in response | ||
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(3) the credit union is attempting to collect an | ||
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(d) A credit union shall disclose financial records | ||
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(e)(1) Any officer or employee of a credit union who | ||
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(2) Any person who knowingly and wilfully induces or | ||
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(f) A credit union shall be reimbursed for costs which | ||
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(Source: P.A. 94‑495, eff. 8‑8‑05; 94‑851, eff. 6‑13‑06.)
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(205 ILCS 305/10.1)
Sec. 10.1.
Retention of records.
Unless a federal law requires otherwise, the Director may by rule
prescribe periods of time for which credit unions operating under
this Act must retain records and after the expiration of which
the credit union may destroy those records. No liability shall
accrue against the credit union, the Director, or this State for
the destruction of records according to rules of the Director
promulgated under the authority of this Section. In any cause or
proceeding in which any records may be called in question or be
demanded from any credit union, a showing of the expiration of the
period so prescribed shall be sufficient excuse for failure to
produce them.
(Source: P.A. 92‑608, eff. 7‑1‑02.)
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(205 ILCS 305/11) (from Ch. 17, par. 4412)
Sec. 11.
Board of Credit Union Advisors.
(1) There shall be a Board of
Credit Union Advisors who shall consult with, advise and make recommendations
to the Governor and to the Director on matters pertaining to credit unions.
The Board of Credit Union Advisors shall also advise the Governor and Director
upon appointments and employment of personnel in connection with the supervision
and regulation of credit unions.
(2) The Board of Credit Union Advisors shall consist of 7 persons with
credit union experience who shall be appointed by the Governor. Appointments
to the Board shall be for terms of 3 years each, except that initial appointments
shall be: 3 members for 3 years each; 3 members for 2 years each and 1 member
for 1 year.
(3) All members shall serve until their successors have been appointed
and qualified. In the event a vacancy occurs, the appointment to fill such
vacancy shall be made in the manner of original appointment, but only for
the unexpired term.
(4) The Chairman of the Board of Credit Union Advisors shall be elected
annually by a majority of the Board members at the first meeting of the Board each
year.
(5) The initial meeting of the Board shall be called by the Director and
thereafter regular meetings shall be held at such times and places as shall
be determined by the Governor, Chairman or Director, but at least once each
6 months. Special meetings may be called either by the Governor, the Director,
the Chairman, or by written notice sent by 2 or more members of the Board.
A majority of the members of the Board shall constitute a quorum.
(6) The Department shall reimburse the Board members for their actual
and necessary travel and subsistence expenses.
(Source: P.A. 81‑329.)
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(205 ILCS 305/12)(from Ch. 17, par. 4413) Sec. 12. Regulatory fees.
(1) A credit union regulated by the Department shall pay a regulatory
fee to the Department based upon its total assets as shown by its Year‑end
Call Report at the following rates:
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(2) The Director shall review the regulatory fee schedule in subsection
(1) and the projected earnings on those fees on an annual
basis
and adjust the fee schedule no more than 5% annually
if necessary to defray the estimated administrative and operational expenses of
the Department as defined in subsection (5). The Director shall provide credit
unions with written notice of any adjustment made in the regulatory fee
schedule.
(3) Not later than March 1 of each calendar year, a credit union shall
pay to the Department a regulatory fee
for that calendar year in accordance with the regulatory fee schedule in
subsection (1), on the basis of assets as
of the Year‑end Call Report of the preceding year. The regulatory fee shall
not be less than
$100 or more than $187,500, provided that the
regulatory fee cap of $187,500
shall be adjusted to incorporate the same percentage increase as the Director
makes in the regulatory fee schedule from time to time under subsection (2).
No regulatory
fee
shall be collected
from a credit union until it
has been in operation for one year.
(4) The aggregate of all fees collected by the Department under this
Act
shall be paid promptly after they are received,
accompanied by a detailed
statement thereof, into the State Treasury and shall be set apart in the
Credit Union Fund, a special fund hereby created in the State treasury.
The amount from time to time deposited in the Credit Union Fund and shall
be used to offset the ordinary administrative and operational expenses of
the Department under
this Act. All earnings received from investments of funds in the Credit
Union Fund shall be deposited into the Credit Union Fund and may be used for
the same purposes as fees deposited into that Fund.
Moneys in the Credit Union Fund may be transferred to the Professions Indirect Cost Fund, as authorized under Section 2105‑300 of the Department of Professional Regulation Law of the Civil Administrative Code of Illinois.
(5) The administrative and operational expenses for any calendar
year shall mean the ordinary
and contingent expenses for that year incidental to making the examinations
provided for by, and for administering, this Act, including all salaries
and other compensation paid for personal services rendered for the State by
officers or employees of the State to enforce this Act; all expenditures
for telephone and telegraph charges, postage and postal charges, office
supplies and services, furniture and equipment, office space and
maintenance thereof, travel expenses and other necessary expenses; all to
the extent that such expenditures are directly incidental to such
examination or administration.
(6) When the aggregate of all fees collected by the Department under
this Act
and all earnings thereon for any calendar year exceeds 150% of the
total
administrative and operational
expenses under this Act for that year, such excess shall be credited to
credit unions and applied against their regulatory fees for
the subsequent year. The amount credited to a credit union shall be in the
same proportion as the fee paid by such credit union for the
calendar year in which the excess is produced bears to the aggregate of the
fees collected by the Department
under this Act for the same year.
(7) Examination fees for the year 2000 statutory examinations paid
pursuant to the examination fee schedule in effect at that time shall be
credited toward the regulatory fee to be assessed the credit union in calendar
year 2001.
(8) Nothing in this Act shall prohibit the General Assembly from
appropriating funds to the Department from the General Revenue Fund for the
purpose of administering this Act.
(Source: P.A. 93‑32, eff. 7‑1‑03; 93‑652, eff. 1‑8‑04; 94‑91, eff. 7‑1‑05.)
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(205 ILCS 305/13)(from Ch. 17, par. 4414)
Sec. 13. General powers. A credit union may:
(1) Make contracts; sue and be sued; and adopt and
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(2) Acquire, lease (either as lessee or lessor), | ||
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(3) At the discretion of the Board of Directors, | ||
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(4) Receive savings from its members in the form of | ||
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(5) Lend its funds to its members and otherwise as | ||
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(6) Borrow from any source in accordance with policy | ||
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(7) Discount and sell any obligations owed to the | ||
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(8) Honor requests for withdrawals or transfers of | ||
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(9) Sell all or substantially all of its assets or | ||
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(10) Invest surplus funds as provided in this Act;
(11) Make deposits in banks, savings banks, savings | ||
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(12) Assess charges and fees to members in | ||
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(13) Hold membership in and pay dues to associations | ||
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(14) Declare dividends and pay interest refunds to | ||
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(15) Collect, receive and disburse monies in | ||
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(16) Act as fiscal agent for and receive deposits | ||
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(17) Receive savings from nonmembers in the form of | ||
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(18) Establish, maintain, and operate terminals as | ||
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(19) Subject to Article XLIV of the Illinois | ||
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(20) Make reasonable contributions to civic, | ||
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(Source: P.A. 94‑150, eff. 7‑8‑05.)
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(205 ILCS 305/13a)
Sec. 13a.
Non‑English language transactions.
A credit union may conduct
transactions in a language other than English through an employee or agent
acting as interpreter or through an interpreter provided by the customer.
(Source: P.A. 92‑578, eff. 6‑26‑02.)
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(205 ILCS 305/14) (from Ch. 17, par. 4415)
Sec. 14.
Incidental Powers.
A credit union may exercise such incidental
powers as are granted corporations organized under the laws of this State
including, to the extent such powers are not inconsistent with powers and
prohibitions contained in this Act, such powers as are necessary or convenient
to enable credit unions to promote and carry on their purposes. The provisions
of this Section shall be interpreted liberally and not restrictively.
(Source: P.A. 81‑329.)
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(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 under those circumstances. 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. If a policy
is
adopted by the board pursuant to this subsection (4), written notice of the
policy 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. 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.
(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.
(Source: P.A. 93‑640, eff. 12‑31‑03.)
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(205 ILCS 305/16) (from Ch. 17, par. 4417)
Sec. 16.
Societies, associations.
Societies,
associations, clubs, partnerships, corporations, and limited
liability companies in which the majority of the members, partners, or
shareholders
are individuals who are
eligible for credit union membership may be admitted to membership in a credit
union in the same
manner and under the same conditions as individuals, subject to such rules
as the Director may promulgate hereunder.
(Source: P.A. 92‑608, eff. 7‑1‑02.)
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(205 ILCS 305/16.1) Sec. 16.1. Service to the economically disadvantaged.
(a) Persons who reside in investment areas as defined in the Community Development Banking and Financial Institutions Act of 1994 (12 U.S.C. 4702) and identified by the U.S. Department of the Treasury may be admitted to membership in a credit union that serves the area by maintaining a facility in the area. For purposes of this Section, a "facility" means a credit union owned branch, a shared branch, an office operated on a regularly scheduled weekly basis, or a credit union owned electronic facility that meets, at a minimum, the requirements of accepting shares for members' accounts, accepting loan applications and disbursing loans, but does not include an ATM. (b) Credit unions desiring to serve the economically disadvantaged in accordance with this Section shall do so pursuant to a written business plan that shall document the fact that the area meets the criteria of this Section, identify the credit and depository needs of the area, identify the services to be delivered, and describe the manner in which the services will be delivered. The credit union shall regularly review the business plan to determine whether the area is being adequately served and shall provide to the Director periodic service status reports that describe how the needs of the area are being met.
(Source: P.A. 93‑916, eff. 8‑12‑04.)
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(205 ILCS 305/17) (from Ch. 17, par. 4418)
Sec. 17.
Members who leave field.
Nothing in this Act shall be construed
to impair the charter of an existing credit union, prevent the merger of
credit unions as otherwise provided for in this
Act or prevent a credit union from retaining as a member a person who subsequent
to becoming a member, leaves the credit union's common bond or undergoes
a change in marital status.
(Source: P.A. 81‑329.)
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(205 ILCS 305/18) (from Ch. 17, par. 4419)
Sec. 18.
Liability of members.
The members of the credit union shall
not be personally or individually liable for the payment of its debts.
A reduction in shares as provided for in Section 45 of this Act shall not
be considered as imposing such individual or personal liability upon the
members of the credit union.
(Source: P.A. 81‑329.)
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(205 ILCS 305/19) (from Ch. 17, par. 4420)
Sec. 19.
Meeting of members.
(1) The annual meeting shall be held each
year during the months of January, February or March or such other month
as may be approved by the Department. The meeting shall be held at the
time, place and in the manner set forth in the bylaws. Any special
meetings of the members of the credit union shall be held at the time, place
and in the manner set forth in the bylaws. Unless otherwise set forth in
this Act, quorum requirements for meetings of members shall be established
by a credit union in its bylaws. Notice of all meetings must be given by
the Secretary of the credit union at least 7 days before the date of such
meeting, either by handing a written or printed notice to each
member of the credit union, by mailing the notice to the member at his address
as listed on the books and records of the credit union, or by posting a
notice of the meeting in three conspicuous places, including the office
of the credit union.
(2) On all questions and at all elections, except election of directors,
each member has one vote regardless of the number of his shares. There
shall be no voting by proxy except on the election of directors, proposals
for merger or voluntary dissolution. All voting on the election of directors
shall be by ballot, but when there is no contest, written ballots need not
be cast. The record date to be used for the purpose of determining which
members are entitled to notice of or to vote at any meeting of members,
may be fixed in advance by the directors on a date not more than 90 days
nor less than 10 days prior to the date of the meeting. If no record date
is fixed by the directors, the first day on which notice of the meeting
is given, mailed or posted is the record date.
(3) Regardless of the number of shares owned by a society, association,
club, partnership, other credit union or corporation, having membership
in the credit union, it shall be entitled to only
one vote and it may be represented and have its vote cast by its
designated agent acting on its
behalf pursuant
to a resolution
adopted by the organization's board of directors or similar governing
authority;
provided that the credit union shall obtain a certified copy of such resolution
before such vote may be cast.
(Source: P.A. 89‑603, eff. 8‑2‑96.)
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(205 ILCS 305/20) (from Ch. 17, par. 4421)
Sec. 20.
Election or appointment of officials.
(1) The credit union shall
be directed by a Board of Directors consisting of no less than 7 in number,
to be elected at the annual meeting by and from the members. Directors shall
hold office until the next annual meeting, unless their
terms are staggered. Upon amendment of its bylaws, a credit union may divide
the Directors into 2 or 3 classes with each class as nearly equal in number as
possible. The term of office of the directors of the first class shall expire
at the first annual meeting after their election, that of the second class
shall
expire at the second annual meeting after their election, and that of the third
class, if any, shall expire at the third annual meeting after their election.
At each annual meeting after the classification, the number of directors equal
to the number of directors whose terms expire at the time of the meeting shall
be elected to hold office until the second succeeding annual meeting if there
are 2 classes or until the third succeeding annual meeting if there are 3
classes. A Director shall hold office for the term for which he
or she is elected and until his or her
successor
is elected and qualified. In all elections for Directors, every member
has the right to vote, in person or by proxy, the number of shares owned
by him, or in the case of a member other than a natural person, the member's
one vote, for as many persons as there are Directors to be elected, or to
cumulate such shares, and give one candidate as many votes as the number
of Directors multiplied by the number of his shares equals, or to distribute
them on
the same principle among as many candidates as he may desire and the Directors
shall not be elected in any other manner. Shares held in a joint account
owned by more than one member may be voted by any one of the members, however,
the number of cumulative votes cast may not exceed a total equal to the number
of shares multiplied by the number of directors to be elected. A majority of
the shares entitled
to vote shall be represented either in person or by proxy for the election
of Directors. Each Director shall wholly take and subscribe to an oath
that he will diligently and honestly perform his duties in administering
the affairs of the credit union, that while he may delegate to another the
performance of those administrative duties he is not thereby relieved from
his responsibility for their performance, that he will not knowingly violate
or willingly permit to be violated any law applicable to the credit union,
and that he is the owner of at least one share of the credit union.
(2) The Board of Directors shall appoint from among the members of the
credit union, a Supervisory Committee of not less than 3 members at the
organization meeting and within 30 days following each annual meeting of
the members for such terms as the bylaws provide. Members of the Supervisory
Committee may, but need not be, on the Board of Directors, but shall not
be officers of the credit union, members of the Credit Committee,
or the
credit manager if no Credit Committee has been appointed.
(3) The Board of Directors may appoint, from among the
members of the
credit union, a Credit Committee consisting of an odd number, not less than
3 for such terms as the bylaws provide. Members of the Credit Committee
may, but need not be, Directors or officers of the credit union, but shall
not be members of the Supervisory Committee.
(4) The Board of Directors may appoint from among the members
of the
credit union a Membership Committee of one or more persons. If appointed,
the Committee shall act
upon all applications for membership and submit a report of its actions
to the Board of Directors at the next regular meeting for
review.
If no Membership Committee is appointed, credit union management shall act
upon all applications for membership and submit a report of its actions to the
Board of Directors at the next regular meeting for review.
(Source: P.A. 91‑929, eff. 12‑15‑00; 92‑608, eff. 7‑1‑02.)
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(205 ILCS 305/21) (from Ch. 17, par. 4422)
Sec. 21.
Record of board and committee members.
Within 30 days after
election or appointment, the names and addresses of the members of the Board
of Directors, committees and all officers of the credit union shall be filed
with the Department on forms provided by the Department.
(Source: P.A. 86‑1216.)
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(205 ILCS 305/22) (from Ch. 17, par. 4423)
Sec. 22.
Vacancies.
The Board of Directors shall, by appointment from
among the credit union members, fill any vacancies occurring on the Board
for the remainder of the Director's unexpired term or until a successor
is elected and qualified. The Board shall, by appointment from among the
credit union members, fill vacancies in the Membership Committee, Credit
Committee, or credit manager if no Credit Committee has been appointed, and
Supervisory
Committees.
(Source: P.A. 91‑929, eff. 12‑15‑00.)
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(205 ILCS 305/23) (from Ch. 17, par. 4424)
Sec. 23. Compensation of officials.
(1) No director or committee member may
receive compensation for his service as such.
"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. "Compensation" as used in
this subsection (1) does not include the expense of providing
reasonable life, health,
accident, and similar insurance protection benefits for a director or
committee member.
(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.
(3) The Board of Directors may establish
compensation for officers of the credit union.
(Source: P.A. 92‑608, eff. 7‑1‑02; 93‑916, eff. 8‑12‑04.)
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(205 ILCS 305/24) (from Ch. 17, par. 4425)
Sec. 24.
Conflicts of Interest.
No Director, committee member, officer,
agent or employee of the credit union shall in any manner, directly or indirectly,
participate in the deliberation upon or the determination of any question
affecting his pecuniary interest or the pecuniary interest of any corporation,
partnership, or association (other than the credit union, other credit unions
or credit union organizations) in which he is directly or indirectly interested,
unless such interest is disclosed to the Board of Directors prior to such
deliberation or determination, in which event such person shall be entitled
to participate and, if otherwise entitled to, shall have the power to vote
on such matter.
(Source: P.A. 81‑329.)
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(205 ILCS 305/25) (from Ch. 17, par. 4426)
Sec. 25.
Indemnification.
A credit union may indemnify any and all of its
Directors, committee members, officers or employees or former Directors,
committee members, officers or employees against expenses actually and necessarily
incurred by them in connection with the defense or settlement of any action,
suit or proceeding in which they, or any of them, are made a party or parties
by reason of being or having been a Director, committee member, officer
or employee of the credit union, except in relation to matters as to which
any such Director, committee member, officer or employee shall be adjudged
in such action, suit or proceeding to be liable for willful misconduct in
the performance of duty and to such matters as shall be settled by agreement
predicated on the existence of such liability.
(Source: P.A. 81‑329.)
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(205 ILCS 305/26) (from Ch. 17, par. 4427)
Sec. 26. Executive Officers. (1) At their first meeting, the Board of
Directors shall elect from among their own number a Chairman of the Board
and one or more Vice Chairmen, a Secretary and a Treasurer. The Directors
shall appoint a chief management official who shall have such title as the Directors shall determine. The Directors
may also appoint one or more Vice Presidents.
The chief management official and Vice President may, but need not, be Directors. Any two
or more offices may be held by the same person, except the Chairman of the Board may
not also hold the office of Vice Chairman or Secretary. (2) The officers shall serve for a term of one year, or until their successors
are chosen and have been duly qualified.
(3) The duties of the officers shall be prescribed in the bylaws. Compensation
of officers shall be such as may be established by the Directors from time to time.
(Source: P.A. 93‑916, eff. 8‑12‑04.)
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(205 ILCS 305/27) (from Ch. 17, par. 4428)
Sec. 27.
Authority of directors.
(1) The Board of Directors shall be charged
with and have control over the general management of the operations, funds
and records of the credit union.
(2) In discharging the duties of their respective positions, the board
of directors, committees of the board, and individual directors shall be
entitled to rely on advice, information, opinions, reports or statements,
including financial statements and financial data, prepared or presented by:
(i) one or more officers or employees of the credit union whom the director
believes to be reliable and competent in the matter presented; (ii) one or more
counsel, accountants, or other consultants as to matters that the Director
believes to be within that person's professional or expert competence; or (iii)
a committee of the board upon which the Director does not serve, as to matters
within that committee's designated authority; provided that the Director's
reliance under this subsection (2)
is placed in good faith, after reasonable inquiry if the need for such inquiry
is apparent under the circumstances and without knowledge that would cause such
reliance to be unreasonable.
(Source: P.A. 92‑608, eff. 7‑1‑02.)
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(205 ILCS 305/28) (from Ch. 17, par. 4429)
Sec. 28.
Executive Committee.
From the persons elected to the Board, the
Board may appoint an Executive Committee of not less than 3 Directors who
may be authorized to act for the Board in all respects, subject to such
conditions and limitations as are prescribed by the Board. The Executive
Committee shall report to the Board at each Board meeting on any meeting
held and actions taken by the Executive Committee between Board meetings.
(Source: P.A. 81‑329.)
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(205 ILCS 305/29) (from Ch. 17, par. 4430)
Sec. 29.
Meetings of directors.
(1) The board of directors and the executive
committee shall meet as often as necessary, but one body must meet at least
monthly and the other at least quarterly, as prescribed in the bylaws.
Unless a greater number is required by the bylaws, a majority of the whole
board of directors shall constitute a quorum. The act of a majority of
the directors present at a meeting at which a quorum is present shall be
the act of the board of directors unless the act of a greater number is
required by this Act, the credit union's articles of incorporation or the
bylaws.
(2) Unless specifically prohibited by the articles of incorporation or
bylaws, directors and committee members may participate in and act at any
meeting of the board or committee through the use of a conference telephone or
other communications equipment by means of which all persons participating in
the meeting can communicate with each other. Participation in the meeting
shall constitute attendance and presence in person at the meeting of the person
or persons so participating.
(3) Unless specifically prohibited by the articles of incorporation or
bylaws, any action required by this Act to be taken at a meeting of the board
of directors or a committee and any other action that may be taken at a
meeting of the board of directors or a committee may be taken without a
meeting if a consent in writing setting forth the action taken is
signed by all the directors entitled to vote with respect to the subject matter
thereof, or by all
members of the committee, as the case may be. The consent shall be evidenced
by one or more written approvals, each of which sets forth the action taken and
bears the signatures of one or more directors or committee members. All the
approvals evidencing the consent shall be delivered to the secretary to be
filed in the corporate records of the credit union. The action taken shall be
effective when all the directors or committee members have approved the consent
unless the consent specifies a different effective date. A consent
signed by all the directors or all the members of a committee shall have the
same effect as a unanimous vote, and may be stated as such in any document
filed with the director under this Act.
(Source: P.A. 89‑603, eff. 8‑2‑96.)
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(205 ILCS 305/30) (from Ch. 17, par. 4431)
Sec. 30. Duties of directors. It shall be the duty of the directors to:
(1) Review actions on applications for membership. | ||
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(2) Provide adequate fidelity bond coverage for | ||
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(3) Determine from time to time the interest rates, | ||
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(4) Within any limitations set forth in the credit | ||
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(5) Declare dividends on various classes of shares | ||
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(6) Limit the number of shares which may be owned by | ||
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(7) Have charge of the investment of funds, except | ||
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(8) Authorize the employment of or contracting with | ||
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(9) Authorize the conveyance of property;
(10) Borrow or lend money consistent with the | ||
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(11) Designate a depository or depositories for the | ||
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(12) Suspend or remove, or both, any or all officers | ||
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(13) Appoint any special committees deemed | ||
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(14) Perform such other duties as the members may | ||
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(Source: P.A. 92‑608, eff. 7‑1‑02; 93‑916, eff. 8‑12‑04.)
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(205 ILCS 305/31) (from Ch. 17, par. 4432)
Sec. 31.
Supervision of loans.
The Credit Committee shall have
the general supervision of all loans and lines of credit to members.
If no Credit Committee has been appointed, the credit manager shall have the
general supervision of all loans and lines of credit to members.
(Source: P.A. 91‑929, eff. 12‑15‑00.)
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(205 ILCS 305/32) (from Ch. 17, par. 4433)
Sec. 32.
Meetings of Credit Committee.
If a Credit Committee has been
appointed by the board, the provisions of this Section shall apply. The
Credit Committee shall meet
as often as the operations of the credit union require and not less frequently
than once a month to consider applications for loans and lines of credit.
Unless a greater percentage is required in the credit union's bylaws, a
majority of the
Credit Committee shall constitute a quorum. No loan shall be made unless
it is approved, in writing, by a majority of the Committee who are present
at a meeting at which a quorum is present and at which the application is
considered. The Credit Committee shall report to the Directors at each
Board meeting on all meetings held and actions taken since the last Board
meeting.
(Source: P.A. 91‑929, eff. 12‑15‑00.)
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(205 ILCS 305/33) (from Ch. 17, par. 4434)
Sec. 33.
Credit manager.
(1) The Credit Committee may or, if no Credit
Committee has been appointed, the Board of Directors shall appoint a credit
manager who shall be empowered to approve or disapprove loans and lines
of credit under conditions prescribed by the Board of Directors. The Credit
Committee or credit manager may appoint one or more loan officers with the
power to approve loans and lines of credit, subject to such limitations
or conditions as may be prescribed by the Board of Directors. The credit
manager and any loan officers appointed by the Credit Committee or the credit
manager shall keep written records of all transactions and shall report,
in writing, to the Credit Committee if a Credit Committee has been appointed,
otherwise
to the Directors at each Board meeting.
(2) Applications for loans or lines of credit not approved by a loan officer
shall be reviewed and acted upon by the Credit Committee or credit manager.
(3) The loan officers must keep written records of all loans or lines
of credit granted or refused and any other transactions and submit a report
to the Credit Committee or credit manager at least once each month.
(Source: P.A. 91‑929, eff. 12‑15‑00.)
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(205 ILCS 305/34) (from Ch. 17, par. 4435)
Sec. 34.
Duties of Supervisory Committee.
(1) The Supervisory Committee
shall make or cause to be made an annual internal audit of the books and
affairs of the credit union to determine that the credit union's accounting
records and reports are prepared promptly and accurately reflect operations
and results, that internal controls are established and effectively
maintained to safeguard the assets of the credit union, and that the
policies, procedures and practices established by the Board of Directors
and management of the credit union are being properly administered. The
Supervisory Committee shall submit a report of that audit to the Board
of Directors and a summary of that report to the members at the next annual
meeting of the credit union. It shall make or cause to be made such
supplementary audits as it deems necessary or as are required by the
Director or by the Board of Directors, and submit reports of these
supplementary audits to the Director or Board of Directors as applicable.
If the Supervisory Committee has not engaged a public accountant registered
by the Department of Professional Regulation to make the internal audit,
the Supervisory Committee or other officials of the credit union shall not
indicate or in any manner imply that such audit has been performed by a
public accountant or that the audit represents the independent opinion of a
public accountant. The Committee must retain its tapes and working papers
of each internal audit for inspection by the Department. The report of this
audit must be made on a form approved by the Director. A copy of the report
must be promptly mailed to the Director.
(2) The Supervisory Committee shall make or cause to be made at least
once each year a reasonable percentage verification of members' share and
loan accounts, consistent with rules promulgated by the Director.
(3) The Supervisory Committee of a credit union with assets of
$5,000,000 or more shall engage a public accountant registered by the
Department of Professional Regulation to perform an annual external
independent audit of the credit union's financial statements in accordance
with generally accepted auditing standards. The Supervisory Committee of a
credit union with assets of $3,000,000 or more, but less than $5,000,000,
shall engage a public accountant registered by the Department of
Professional Regulation to perform an external independent audit of the
credit union's financial statements in accordance with generally accepted
auditing standards at least once every 3 years. A copy of an external
independent audit shall be mailed to the Director upon completion. If the
annual internal audit of such a credit union is conducted by a public
accountant registered by the Department of Professional Regulation and the
annual internal audit is done in conjunction with the credit union's annual
external audit, the requirements of subsection (1) of this Section shall
be deemed met.
(4) A majority of the members of the Supervisory Committee
shall constitute a quorum.
(Source: P.A. 86‑238.)
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(205 ILCS 305/34.1)
Sec. 34.1.
Compliance review.
(a) As used in this Section:
"Affiliate" means an organization established to serve the needs of credit
unions, the business of which relates to the daily operations of credit unions.
"Compliance review committee" means:
(1) one or more persons appointed by the board of | ||
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(2) any other person to the extent the person acts | ||
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"Compliance review documents" means documents prepared in connection with a
review or evaluation conducted by or for a compliance review committee.
"Person means an individual, a group of individuals, a board committee, a
partnership, a firm, an association, a corporation, or any other entity.
(b) This Section applies to compliance review committees whose functions are
to evaluate and seek to improve any of the following:
(1) loan policies or underwriting standards;
(2) asset quality;
(3) financial reporting to federal or State | ||
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(4) compliance with federal or State statutory or | ||
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(c) Except as provided in subsection (d), compliance review documents and
the deliberations of the compliance
review committee are privileged and confidential and are nondiscoverable
and nonadmissible.
(1) Compliance review documents are privileged and | ||
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(2) Individuals serving on compliance review | ||
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(3) An affiliate of a credit union, a credit union | ||
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(d) This Section does not apply to: (1) compliance review committees on
which individuals serving on or at the direction of the compliance review
committee have management responsibility for the operations, records,
employees,
or activities being examined or evaluated by the compliance review committee
and (2) any civil or administrative action initiated by a credit union
regulatory agency or an insurer of credit union share accounts.
(e) This Section shall not be construed to limit the discovery or
admissibility in any civil action of any documents other than compliance review
documents or to require the appointment of a compliance review committee.
(Source: P.A. 90‑665, eff. 7‑30‑98.)
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(205 ILCS 305/35) (from Ch. 17, par. 4436)
Sec. 35.
Suspension and removal of officials.
(1) The Supervisory Committee,
by a unanimous vote of the whole committee, may suspend any member of the
Credit Committee or the credit manager if no Credit Committee has been
appointed. The Supervisory Committee shall report such action to
the Board of Directors for appropriate action.
(2) The Supervisory Committee, by a unanimous vote of the whole committee,
may suspend any officer or member of the Board of Directors until the next
members' meeting, which shall be held not less than 7 nor more than 21 days
after such suspension. At such meeting, the suspension shall be acted upon
by the members, who shall either confirm or reject it by majority vote.
(Source: P.A. 91‑929, eff. 12‑15‑00.)
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(205 ILCS 305/36) (from Ch. 17, par. 4437)
Sec. 36.
Calling of Special Meetings.
The Supervisory Committee, by a
majority vote, may, after written notice of its intended action is first
given to the Board of Directors, and the Department, call a special meeting
of the members to consider any violation of this Act, the credit union's
Articles of Incorporation or bylaws, or any practice of the credit union
deemed by the Supervisory Committee to be unsafe or unauthorized.
(Source: P.A. 81‑329.)
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(205 ILCS 305/37) (from Ch. 17, par. 4438)
Sec. 37.
Shares and Classes of Shares.
(1) The capital of a credit union
shall consist of the payments made by members for shares of the credit union.
(2) Shares may be subscribed to, paid for and transferred in such manner
as the bylaws prescribe.
(3) The Board of Directors may establish different classes of share accounts
classified in relation to different rights, restrictions and dividend rates.
(4) A certificate, passbook, periodic statement of account or other written
evidence of ownership shall be issued to denote ownership of shares in a credit union.
(Source: P.A. 81‑329.)
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(205 ILCS 305/38) (from Ch. 17, par. 4439)
Sec. 38.
Dividends.
The Board of Directors may declare a dividend to
be paid periodically from net earnings or undivided earnings and distributed
ratably among holders of share accounts of the same class as provided in
the bylaws. Dividends may not be declared or paid at a time when the credit
union is insolvent or its net assets are less than its stated capital or
when the payment thereof would render the credit union insolvent or reduce
its net assets below its stated capital.
(Source: P.A. 81‑329.)
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(205 ILCS 305/39) (from Ch. 17, par. 4440)
Sec. 39.
Special Purpose Share Accounts.
If provided for in and consistent
with the bylaws, Christmas clubs, vacation clubs and other special purpose
share accounts may be established and offered under conditions and restrictions
established by the Board of Directors.
(Source: P.A. 81‑329.)
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(205 ILCS 305/40) (from Ch. 17, par. 4441)
Sec. 40. Shares to Minors. Shares may be issued in the name of a minor
or in the name of a custodian under the Illinois Uniform Transfers to Minors
Act, as amended. If shares are issued in the name of a minor, redemption
of any part or all of the shares by payment to the minor or upon order of the
minor of the amount of
the shares and any declared dividends releases the credit union from all
obligations to the minor as to the shares redeemed. Further, if shares
are issued in the name of a minor, the minor shall be considered as being
of the age of majority and having contractual capacity.
(Source: P.A. 93‑640, eff. 12‑31‑03.)
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(205 ILCS 305/41) (from Ch. 17, par. 4442)
Sec. 41.
Joint Accounts.
Shares shall be issued in the name of the owner
and may be issued in the name of 2 or more persons in joint tenancy, or
in survivorship, in which case payment may be made, in whole or in part,
to any of the named persons whether the others are living or dead, if an
agreement permitting such payment was signed and dated by all persons when
the shares were issued or thereafter. Only one of the persons must have
the common bond of association, community or occupation specified in this
Act and only that person may vote in a meeting of the members, obtain loans,
hold office or be required to pay an entrance fee.
(Source: P.A. 81‑329.)
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(205 ILCS 305/42)(from Ch. 17, par. 4443)
Sec. 42. Shares in trust.
(1) Shares may be issued in trust to a member
as trustee or to an individual or corporate trustee. If a corporate trustee
is a bank or trust company, shares may be issued to the corporate trustee
only if such bank or trust company is organized under the laws of
the State of Illinois or is a nationally chartered bank located principally
in the State of Illinois. An individual trustee shall be a member of the
credit union unless the person establishing the trust in respect to which
such shares are issued or each beneficiary of the trust is a member of the
credit union and the name of each beneficiary is disclosed to the credit
union. Shares may also be issued in the name of an individual or corporate
representative under the Illinois Probate Act of 1975 for or
in respect to a member of a credit union. Shares may also be issued in
trust under the Illinois Funeral or Burial Funds Act, for or in respect
to a member of a credit union, to a trustee licensed under said Act.
Any credit union which issues shares in trust as provided in this Section
must be insured by the NCUA or another approved insurer. Payment of part or all of such shares to such trustee or member
shall, to the extent of such payment, discharge the liability of the credit
union to the member and the beneficiary and the credit union shall be under
no obligation to see to the application of such payment.
(2) If a credit union's shares are insured as provided for in this Act,
such credit union shall have power to act as trustee or custodian under
individual retirement accounts or plans, health savings accounts, and similar tax‑advantaged savings plans established pursuant to the Internal Revenue Code for its members or groups or
organizations
of its members provided the funds of such accounts or plans are invested
solely in (1) share accounts of, or (2) share accounts and obligations issued
by such credit union. All funds held in such fiduciary capacity shall be
maintained in accordance with applicable statutes and regulations promulgated
thereunder by any authority exercising jurisdiction over such trusts or
custodial accounts.
(3) Notwithstanding any language to the contrary in this Section 42, a
credit union may act as trustee or custodian of individual retirement plans
of its members established pursuant to the Employee Retirement Income
Security Act of 1974 or self‑employed retirement plans established pursuant
to the Self‑Employed Individuals Retirement Act of 1962, and any laws
amendatory or supplementary to such Acts, provided that:
(a) All contributions of funds are initially made to
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(b) Any subsequent transfer of funds to other assets | ||
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(c) The member is notified of the fact that share | ||
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(d) The credit union complies with all applicable | ||
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(Source: P.A. 94‑150, eff. 7‑8‑05.)
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(205 ILCS 305/43) (from Ch. 17, par. 4444)
Sec. 43.
Liens.
Without being required to take any action to perfect
the same, a credit union shall have a lien on the shares, accumulated dividends
or interest of a member in his individual, joint or trust account, for any
sum due the credit union from said member or for any loan cosigned or guaranteed
by him; provided, however, that a credit union shall not have a lien upon
the funds in an Individual Retirement Account or an account established
pursuant to Section 401(d) or (f) or Section 408(a) of the Internal Revenue
Code or similar provisions of any future internal revenue law of the United
States. A credit union may refuse to allow the withdrawal of a member's
shares while the member has any outstanding obligation to the credit union.
A member's shares may be offset against any sum due to the credit union.
The enforcing of such lien shall be governed by this Act and by the terms
of any written agreement between a credit union and its members and not
by the provisions of any other statute.
(Source: P.A. 81‑329.)
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(205 ILCS 305/43.1)
Sec. 43.1. Enforcement of child support. (a) Any credit
union governed by this Act shall encumber or surrender accounts or assets
held by the credit union on behalf of any responsible relative who is subject
to
a child support lien, upon notice of the lien or levy of the Illinois
Department of Public Aid or its successor agency pursuant to Section 10‑25.5
of the Illinois Public Aid Code, or upon notice of interstate lien from any
other state's agency responsible for implementing the child support enforcement
program set forth in Title IV, Part D of the Social Security Act.
(b) Within 90 days after receiving notice from the Department of Public Aid that the Department has adopted a child support enforcement debit authorization form as required under the Illinois Public Aid Code, each credit union governed by this Act shall take all appropriate steps to implement the use of the form in relation to accounts held by the credit union. Upon receiving from the Department of Public Aid a copy of a child support enforcement debit authorization form signed by an obligor, a credit union holding an account on behalf of the obligor shall debit the account and transfer the debited amounts to the State Disbursement Unit according to the instructions in the child support enforcement debit authorization form.
(Source: P.A. 93‑736, eff. 7‑14‑04.)
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(205 ILCS 305/44) (from Ch. 17, par. 4445)
Sec. 44.
Share Accounts; Garnishment.
A credit union may be subject
to garnishment proceedings concerning the share accounts of its members.
(Source: P.A. 87‑390.)
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(205 ILCS 305/45) (from Ch. 17, par. 4446)
Sec. 45.
Reduction in Shares.
Whenever the losses of any credit union,
resulting from a depreciation in value of its loans or investments or otherwise,
exceed its undivided earnings and reserve fund so that the estimated value
of its assets is less than the total amount due the holders of share accounts,
the credit union, may, by a majority vote of the entire membership, with
approval by the Department, order a reduction in the shares of each of its
shareholders to divide the loss proportionately among the holders of shares
in accordance with such terms and conditions as the Department may prescribe.
(Source: P.A. 81‑329.)
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(205 ILCS 305/46) (from Ch. 17, par. 4447)
Sec. 46. Loans and interest rate.
(1) A credit union may make loans
to its members for such purpose and upon such security and terms, including
rates of interest, as the Credit Committee, credit manager, or loan officer
approves.
Notwithstanding the provisions of any other law in connection with extensions
of credit, a credit union may elect to
contract for and receive interest and fees and other charges for extensions of
credit subject only to the provisions of this Act and rules promulgated under
this Act, except that extensions of credit secured by residential real estate
shall be subject to the laws applicable thereto.
The rates of interest to be charged on loans to members shall be
set by the Board of Directors of each individual credit union and such
rates may be less than, but may not exceed, the maximum rate set forth in
this Section. A borrower may repay his loan prior to maturity, in whole or
in part, without penalty. The credit contract may provide for the payment
by the member and receipt by the credit union of all costs and
disbursements, including reasonable attorney's fees and collection agency
charges, incurred by the credit union to collect or enforce the debt in the
event of a delinquency by the member, or in the event of a breach of any
obligation of the member under the credit contract. A contingency or
hourly arrangement established under an agreement entered into by a credit
union with an attorney or collection agency to collect a loan of a member
in default shall be presumed prima facie reasonable.
(2) Credit unions may make loans based upon the security of any
interest or equity in real estate, subject to rules and regulations
promulgated by the Director. In any contract or loan which
is secured by a mortgage, deed of
trust, or conveyance in the nature of a mortgage, on residential real
estate, the interest which is computed, calculated, charged, or collected
pursuant to such contract or loan, or pursuant to any regulation or rule
promulgated pursuant to this Act, may not be computed, calculated, charged
or collected for any period of time occurring after the date on which the
total indebtedness, with the exception of late payment penalties, is paid
in full.
For purposes of this subsection (2) of this Section 46, a prepayment
shall mean the payment of the total indebtedness, with the exception of
late payment penalties if incurred or charged, on any date before the date
specified in the contract or loan agreement on which the total indebtedness
shall be paid in full, or before the date on which all payments, if timely
made, shall have been made. In the event of a prepayment of the
indebtedness which is made on a date
after the date on which interest on the indebtedness was last computed,
calculated, charged, or collected but before the next date on which interest
on the indebtedness was to be calculated, computed, charged, or collected,
the lender may calculate, charge and collect interest on the indebtedness
for the period which elapsed between the date on which the prepayment is
made and the date on which interest on the indebtedness was last computed,
calculated, charged or collected at a rate equal to 1/360 of the annual
rate for each day which so elapsed, which rate shall be applied to the
indebtedness outstanding as of the date of prepayment. The lender shall
refund to the borrower any interest charged or collected which exceeds that
which the lender may charge or collect pursuant to the preceding sentence.
The provisions of this amendatory Act of 1985 shall apply only to contracts
or loans entered into on or after the effective date of this amendatory
Act.
(3) Notwithstanding any other provision of this Act, a credit union
authorized under this Act to make loans secured by an interest or equity in
real estate may engage in making "reverse mortgage" loans to persons for
the purpose of making home improvements or repairs, paying insurance
premiums or paying real estate taxes on the homestead properties
of such persons. If made, such loans shall be made on such terms and
conditions as the credit union shall determine and as shall be consistent
with the provisions of this Section and such rules and regulations as the
Director shall promulgate hereunder. For purposes of this Section, a
"reverse mortgage" loan shall be a loan extended on the basis of existing
equity in homestead property and secured by a mortgage on such property.
Such loans shall be repaid upon the sale of the property or upon the death
of the owner or, if the property is in joint tenancy, upon the death of the
last surviving joint tenant who had such an interest in the property at the
time the loan was initiated, provided, however, that the credit union and
its member may by mutual agreement, establish other repayment terms. A
credit union, in making a "reverse mortgage" loan, may add deferred
interest to principal or otherwise provide for the charging of interest or
premiums on such deferred interest. "Homestead" property, for purposes of
this Section, means the domicile and contiguous real estate owned and
occupied by the mortgagor. The Director shall promulgate rules and
regulations under this Section; provided that such rules and regulations
need not be promulgated jointly with any other administrative agency of this State.
(4) Notwithstanding any other provisions of this Act, a credit union
authorized under this Act to make loans secured by an interest or equity
in real property may engage in making revolving credit loans secured by
mortgages or deeds of trust on such real property or by security
assignments of beneficial interests in land trusts.
For purposes of this Section, "revolving credit" has the meaning defined
in Section 4.1 of the Interest Act.
Any mortgage or deed of trust given to secure a revolving credit loan may,
and when so expressed therein shall, secure not only the existing indebtedness
but also such future advances, whether such advances are obligatory or to
be made at the option of the lender, or otherwise, as are made within twenty
years from the date thereof, to the same extent as if such future advances
were made on the date of the execution of such mortgage or deed of trust,
although there may be no advance made at the time of execution of such mortgage
or other instrument, and although there may be no indebtedness outstanding
at the time any advance is made. The lien of such mortgage or deed of trust,
as to third persons
without actual notice thereof, shall be valid as to all such indebtedness
and future advances form the time said mortgage or deed of trust is filed
for record in the office of the Recorder of Deeds or the Registrar of Titles
of the county where the real property described therein is located. The
total amount of indebtedness that may be so secured may increase or decrease
from time to time, but the total unpaid balance so secured at any one time
shall not exceed a maximum principal amount which must be specified in such
mortgage or deed of trust, plus interest thereon, and any disbursements
made for the payment of taxes, special assessments, or insurance on said
real property, with interest on such disbursements.
Any such mortgage or deed of trust shall be valid and have priority over
all subsequent liens and encumbrances, including statutory liens, except
taxes and assessments levied on said real property.
(5) Compliance with federal or Illinois preemptive laws or regulations
governing loans made by a credit union chartered under this Act shall
constitute compliance with this Act.
(Source: P.A. 93‑640, eff. 12‑31‑03.)
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(205 ILCS 305/46.1) (from Ch. 17, par. 4447.1)
Sec. 46.1.
Non‑recourse reverse mortgage loans.
Any credit union
authorized under this Act to make loans secured by an interest or equity in
real estate may make non‑recourse reverse mortgage loans as provided in
Section 6.1 of the Illinois Banking Act.
(Source: P.A. 87‑488.)
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(205 ILCS 305/46.2)
Sec. 46.2.
Reverse mortgage; disclosure.
At the time a reverse mortgage
loan is made, the lender must provide to the mortgagor a separate document
that informs the mortgagor that by obtaining the reverse mortgage the
mortgagor's eligibility to obtain a tax deferral under the Senior Citizens Real
Estate Tax Deferral Act may be adversely affected. The mortgagor must sign
the disclosure document as part of the reverse mortgage transaction.
(Source: P.A. 92‑577, eff. 6‑26‑02.)
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(205 ILCS 305/47)(from Ch. 17, par. 4448)
Sec. 47. Loan Applications. Every application for a loan shall be made
in the manner prescribed by the Credit Committee, credit manager, or loan
officer. The application shall state the purpose for which the
loan is desired, and the security, if any, offered. Each loan shall be evidenced
by a written document or by a record electronically stored or generated by any electronic or computer‑generated process that accurately reproduces or records the agreement, transaction, act, occurrence, or event. The signature of any party to the loan includes any symbol executed or adopted, or any security procedure employed or adopted, using electronic means or otherwise, by or on behalf of a person with intent to authenticate a record.
(Source: P.A. 94‑150, eff. 7‑8‑05.)
(205 ILCS 305/48) (from Ch. 17, par. 4449)
Sec. 48.
Loan Limit.
Within any limitations set forth in the bylaws of
the credit union, the Board of Directors may place a limit upon the aggregate
amount to be loaned to or cosigned for by any one member. Such loan limits
shall be subject to rules and regulations promulgated by the Director. Unless
the credit union's bylaws provide otherwise, no loan shall be made to any
member in an aggregate amount in excess of $200, or 10% of the credit union's
unimpaired capital
and surplus, whichever is greater.
(Source: P.A. 81‑329.)
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(205 ILCS 305/49) (from Ch. 17, par. 4450)
Sec. 49.
Security.
In addition to generally accepted types of security,
the endorsement of a note by a surety, comaker or guarantor, or assignment
of shares or wages, in a manner consistent with the laws of this State,
shall be deemed security within the meaning of this Act. A credit union
shall give each surety, guarantor or comaker a copy of the instrument
evidencing the indebtedness. The adequacy of any security shall be
determined by the Credit Committee, credit manager or loan officer, subject
to this Act and the bylaws of the credit union. The surety, guarantor or
comaker may, but need not, be a member of the credit union making the loan.
(Source: P.A. 85‑1273.)
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(205 ILCS 305/50) (from Ch. 17, par. 4451)
Sec. 50.
Line of credit.
(1) A credit union may grant a self‑replenishing
line of credit to a member up to a stated maximum amount. The terms and
conditions upon which a line of credit is extended to any member may be
different from the terms and conditions established for another member.
Where a line of credit has been approved, no additional loan applications
are required as long as the total outstanding advances under the line of
credit do not exceed the maximum amount as stated in the line of credit
agreement.
(2) The term "line of credit" means a type of credit agreement including,
without limitation, a credit card agreement. Each line of credit advance
constitutes a loan, and provisions in this Act regarding loans are equally
applicable to lines of credit.
(Source: P.A. 90‑222, eff. 7‑25‑97.)
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(205 ILCS 305/51) (from Ch. 17, par. 4452)
Sec. 51. Other Loan Programs.
(1) Subject to such rules and regulations
as the Director may promulgate, a credit union may participate in loans
to credit union members jointly with other credit unions, corporations, or
financial institutions. An originating credit union may originate
loans only to its own members. A participating credit union that is
not the originating lender may participate in loans made to its own members or
to members of another participating credit union.
"Originating lender" means the participating credit union with which the member
contracts. A master participation agreement must be properly executed, and the
agreement must include provisions for identifying, either through documents
incorporated by reference or directly in the agreement, the participation loan
or loans prior to their sale.
(2) Any credit union with assets of $500,000 or more may loan to its members
under the State Scholarships Law or other scholarship programs which are
subject to a federal or state law providing 100% repayment guarantee.
(3) A credit union may purchase the conditional sales
contracts, notes
and similar instruments which evidence an indebtedness of its members.
(4) With approval of the Board of Directors, a credit union may make loans,
either on its own or jointly with other credit unions, corporations or
financial
institutions, to credit union organizations; provided, that the aggregate
amount of all such loans outstanding shall not at any time exceed the greater
of 3% of the paid‑in and unimpaired capital and surplus of the credit
union or the amount authorized for federal credit unions.
(Source: P.A. 92‑293, eff. 8‑9‑01; 93‑640, eff. 12‑31‑03.)
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(205 ILCS 305/52) (from Ch. 17, par. 4453)
Sec. 52.
Loans to directors, officers, Credit Committee, credit manager,
and Supervisory
Committee members. A credit union may make loans to its directors,
officers, Credit Committee members, credit manager, and Supervisory
Committee members, provided
that the loan complies with all lawful requirements under this Act with
respect to loans to other borrowers. No loan may be made to or cosigned
by any director, officer, Credit Committee member, credit manager if no
Credit Committee has been appointed, or Supervisory Committee
member which would cause the aggregate amount of all loans then outstanding
to or cosigned by all directors, officers, Credit Committee members, credit
manager if no Credit Committee has been appointed, or
Supervisory Committee members to exceed 20% of the unimpaired capital and
surplus of the credit union.
(Source: P.A. 91‑929, eff. 12‑15‑00.)
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(205 ILCS 305/53) (from Ch. 17, par. 4454)
Sec. 53.
Loans to Credit Unions.
A credit union may make loans to other
credit unions if so provided and within the limits set forth in its Bylaws.
(Source: P.A. 81‑329.)
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(205 ILCS 305/54) (from Ch. 17, par. 4455)
Sec. 54.
Loans to Associations.
A credit union may make loans to
any credit union association or corporation, of which the credit union is
a member or shareholder, except that the aggregate of all such loans shall
not exceed 5% of the assets of the credit union.
(Source: P.A. 81‑329.)
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(205 ILCS 305/55) (from Ch. 17, par. 4456)
Sec. 55.
Insurance for Members.
(1) A credit union may purchase or make
available insurance for its members.
(2) A credit union may enter into cooperative marketing arrangements to
facilitate its members' voluntary purchase of insurance including, but not
by way of limitation, life insurance, disability insurance, accident and
health insurance, property insurance, liability insurance and legal expense
insurance.
(Source: P.A. 90‑41, eff. 10‑1‑97.)
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(205 ILCS 305/56) (from Ch. 17, par. 4457)
Sec. 56.
Liability Insurance for Directors and Officers.
A credit union
may purchase and maintain insurance on behalf of any person who is or was
a Director, Officer, committee member, employee or agent of the credit union
as a director, officer, committee member, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against any liability
asserted against such person incurred by such person in any such capacity
or arising out of such person's status as such, whether or not the credit
union would have the power to indemnify such person against such liability.
(Source: P.A. 81‑329.)
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(205 ILCS 305/57) (from Ch. 17, par. 4458)
Sec. 57.
Group Purchasing.
A credit union may, consistent with rules
and regulations promulgated by the Director, enter into cooperative marketing
arrangements to facilitate its members' voluntary purchase of such goods
and services as are in the interest of improving economic and social conditions
of the members.
(Source: P.A. 81‑329.)
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(205 ILCS 305/58) (from Ch. 17, par. 4459)
Sec. 58.
Share insurance.
(1) Each credit union operating in this State shall insure its share
accounts with the NCUA, under 12 U.S.C. 1781 et seq. (Sec. 201 et
seq. of
the Federal Credit Union Act) or with such other insurers as may be jointly
approved by the Director of Financial Institutions and the Director of
Insurance. Each approved insurer shall be found to be financially sound and to
employ approved actuarial practices. The Director shall determine that a firm
commitment to insure share accounts has been issued before a charter may be
granted for a new credit union. Application for such insurance by credit
unions in existence on the effective date of this Section shall be made not
later than December 31, 1981 and such credit unions shall receive a commitment
to insure share accounts by December 31, 1984.
(2) A credit union which has been denied a commitment of insurance of
accounts shall either dissolve, merge with another credit union, or apply
in writing, within 30 days of denial, to the Director for additional time
to obtain an insurance commitment. The Director may grant up to 24 months
additional time upon satisfactory evidence that the credit union is making
a substantial effort to achieve the conditions precedent to issuance of the
commitment.
(3) The Director shall cooperate with the NCUA or other approved insurers
by furnishing copies of financial and examination reports and other information
bearing on the financial condition of any credit union.
(Source: P.A. 90‑655, eff. 7‑30‑98.)
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(205 ILCS 305/59) (from Ch. 17, par. 4460)
Sec. 59. Investment of Funds. 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 | ||
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(2) In obligations of any state of the United States, | ||
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(3) In certificates of deposit or passbook type | ||
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(4) In shares, classes of shares or share | ||
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(5) In shares of a cooperative society organized | ||
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(6) In obligations of the State of Israel, or | ||
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(7) In shares, stocks or obligations of other | ||
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(8) In federal funds and bankers' acceptances;
(9) In shares or stocks of Credit Union Service | ||
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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.
(Source: P.A. 92‑293, eff. 8‑9‑01; 93‑640, eff. 12‑31‑03.)
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(205 ILCS 305/60) (from Ch. 17, par. 4461)
Sec. 60.
Reserves.
(A) At the end of each accounting period the gross
income shall be determined. From this amount, there shall be set aside,
as a regular reserve against losses on loans and risk assets sums in accordance
with the following schedule:
(1) A credit union in operation for more than four years and having assets
of $500,000 or more shall set aside (A) 10 per centum of gross income until
the regular reserve shall equal 4 per centum of the total outstanding loans
and risk assets, then (B) 5 per centum of gross income until the regular
reserve shall equal 6 per centum of the total outstanding loans and risk assets.
(2) A credit union in operation less than four years or having assets
of less than $500,000 shall set aside (A) 10 per centum of gross income
until the regular reserve shall equal 7 1/2 per centum of the total outstanding
loans and risk assets, then (B) 5 per centum of gross income until the regular
reserve shall equal 10 per centum of the total outstanding loans and risk assets.
(3) Whenever the regular reserve falls below the stated per centum of
the total of outstanding loans and risk assets, it shall be replenished
by regular contributions in such amounts as may be needed to maintain the
stated reserve goals.
(B) The Director may decrease the reserve requirement set forth in
subsection (A) of this Section when in his opinion such a decrease is
necessary or desirable. The Director may also require special reserves to
protect the interest of members.
(C) For the purpose of establishing the reserves required by this Section
all assets except the following are risk assets:
(1) Cash on hand;
(2) Real estate;
(3) Depreciated value of buildings, furnishings and equipment;
(4) Loans to students insured under Title IV, part B of the Higher Education
Act of 1965 or the Higher Education Student Assistance Law;
(5) Loans insured under Title 1 of the National Housing Act by the Federal
Housing Administration;
(6) Funds invested as authorized under Section 59 of this Act; and
(7) Loans fully secured by a pledge of shares in the lending credit
union equal to and maintained to at least the amount of the loan outstanding.
(Source: P.A. 85‑249.)
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(205 ILCS 305/61) (from Ch. 17, par. 4462)
Sec. 61.
Suspension.
(1) If the Director determines that any credit
union is bankrupt, insolvent, impaired or that it has willfully violated
this Act, or is operating in an unsafe or unsound manner, he shall issue
an order temporarily suspending the credit union's operations for not more than
60 days. The Board of Directors shall be given notice by
registered or certified mail of such suspension, which notice shall include
the reasons for such suspension and a list of specific violations of the
Act. The Director shall also notify
the members of the Credit Union Board of Advisors of any suspension. The
Director may assess to the credit union a penalty, not to exceed the
regulatory fee as set forth in this Act, to
offset costs incurred in determining the condition of the credit union's
books and records.
(2) Upon receipt of such suspension notice, the credit union shall cease
all operations, except those authorized by the Director, or the Director may
appoint a Manager‑Trustee to operate the credit union during the suspension
period. The Board of Directors
shall, within 10 days of the receipt of the suspension notice,
file with the Director a
reply to the suspension notice by
submitting a corrective plan of action or a
request for formal hearing on said action pursuant to the Department's
rules and regulations.
(3) Upon receipt from the suspended credit union of evidence that the
conditions causing the order of suspension have been corrected, and after
determining that the proposed corrective plan of action submitted is
factual, the Director shall revoke
the suspension notice, permit the credit union to resume normal operations,
and notify the Board of Credit Union Advisors of such action.
(4) If the Director determines that the proposed corrective plan of action
will
not correct such conditions,
he may take possession and control of the credit union. The
Director may permit the credit union to operate under his direction and
control and may appoint a Manager‑Trustee to manage its affairs until such
time as the condition requiring such action has been remedied, or in the case
of insolvency or danger of insolvency where an emergency requiring expeditious
action exists, the Director may involuntarily merge the credit union without
the
vote of the suspended credit union's Board of Directors or members (hereafter
involuntary merger)
subject
to rules promulgated by the
Director. No
credit union shall be required to serve as a surviving credit union in any
involuntary merger. Upon the request of the Director, a credit union by a vote
of a majority of its Board of Directors may elect to serve as a surviving
credit union in an involuntary merger. If the Director
determines
that
the suspended
credit union should be liquidated, he may appoint a Liquidating
Agent and require of that person such bond and security as he considers proper.
(5) Upon receipt of a request for a formal hearing, the Director shall
conduct proceedings pursuant to rules and regulations of the Department. The credit union may request the appropriate court
to stay execution of such action. Involuntary liquidation or involuntary
merger may not be ordered
prior to the conclusion of suspension procedures outlined in this Section.
(6) If, within the suspension period, the credit union fails to answer
the suspension notice or fails to request a formal hearing, or both,
the Director may then (i) involuntarily merge the credit union if the credit
union is insolvent or in danger of insolvency and an emergency
requiring expeditious action exists or (ii) revoke
the credit union's charter, appoint a Liquidating Agent and liquidate the
credit union.
(Source: P.A. 92‑608, eff. 7‑1‑02.)
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(205 ILCS 305/62) (from Ch. 17, par. 4463)
Sec. 62.
Liquidation.
(1) A credit union may elect to dissolve voluntarily
and liquidate its affairs in the manner prescribed in this Section.
(2) The Board of Directors shall adopt a resolution recommending the credit
union be dissolved voluntarily, and directing that the question of liquidating
be submitted to the members.
(3) Within 10 days after the Board of Directors decides to submit the
question of liquidation to the members, the Chairman or President shall
notify the Director thereof, in writing, setting forth the reasons for the
proposed action. Within 10 days after the members act on the question of
liquidation, the Chairman or President shall notify the Director, in writing,
as to whether or not the members approved the proposed liquidation. The
Director then must determine whether this Section has been complied with
and if his decision is favorable, he shall prepare a certificate to the
effect that this Section has been complied with, a copy of which will be
retained by the Department and the other copy forwarded to the credit union.
The certificate must be filed with the recorder or if there is
no recorder, in the office of the County Clerk of the County or Counties in
which the credit union is operating, whereupon the credit union must cease
operations except for the purpose of its liquidation.
(4) As soon as the Board of Directors passes a resolution to submit the
question of liquidation to the members, payment on shares, withdrawal of
shares, making any transfer of shares to loans and interest, making investments
of any kind and granting loans shall be suspended pending action by members.
On approval by the members of such proposal, all such operations shall be
permanently discontinued. The necessary expenses of operating shall, however,
continue to be paid on authorization of the Board of Directors or the
Liquidating Agent during the period of liquidation.
(5) For a credit union to enter voluntary liquidation, it must be approved
by affirmative vote of the members owning a majority of the shares entitled
to vote, in person or by proxy, at a regular or special meeting of the members.
Notice, in writing, shall be given to each member, by first class mail,
at least 10 days prior to such meeting. If liquidation is approved, the
Board of Directors shall appoint a Liquidating Agent for the purpose of
conserving and collecting the assets, closing the affairs of the credit
union and distributing the assets as required by this Act.
(6) A liquidating credit union shall continue in existence for the purpose
of discharging its debts, collecting and distributing its assets, and doing
all acts required in order to terminate its operations and may sue and be
sued for the purpose of enforcing such debts and obligations until its affairs
are fully adjusted.
(7) Subject to such rules and regulations as the Director may promulgate,
the Liquidating Agent shall use the assets of the credit union to pay; first,
expenses incidental to liquidating including any surety bond that may be
required; then, liabilities of the credit union; then special classes of
shares. The remaining assets shall then be distributed to the members
proportionately to the dollar value of the shares held by each member in
relation to the total dollar value of all shares outstanding as of the date the
dissolution was voted.
(8) As soon as the Liquidating Agent determines that all assets as to
which there is a reasonable expectancy of sale or transfer have been liquidated
and distributed as set forth in this Section, he shall execute a Certificate
of Dissolution on a form prescribed by the Department and file the same,
together with all pertinent books and records of the liquidating credit
union with the Department, whereupon such credit union shall be dissolved.
The Liquidating Agent must, within 3 years after issuance of a certificate
by the Director referred to in Subsection (3) of this Section, discharge
the debts of the credit union, collect and distribute its assets and do
all other acts required to wind up its business.
(9) If the Director determines that the Liquidating Agent has failed to
make reasonable progress in the liquidating of the credit union's affairs
and distribution of its assets or has violated this Act, the Director may
take possession and control of the credit union and remove the Liquidating
Agent and appoint a Liquidating Agent to complete the liquidation under
his direction and control. The Director shall fill any vacancy caused by
the resignation, death, illness, removal, desertion or incapacity to function
of the Liquidating Agent.
(10) Any funds representing unclaimed dividends and shares in liquidation
and remaining in the hands of the Board of Directors or the Liquidating
Agent at the end of the liquidation must be deposited by them, together with
all books and papers of the credit union, with the State Treasurer in
compliance with the Uniform Disposition of Unclaimed Property Act, approved
August 17, 1961, as amended.
(Source: P.A. 91‑16, eff. 7‑1‑99.)
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(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
Director. 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 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 Director 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 Director 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 Director 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. 83‑1362.)
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(205 ILCS 305/64) (from Ch. 17, par. 4465)
Sec. 64.
Conversion of Charter.
A credit union chartered under the laws
of this State may be converted to a credit union chartered under the laws
of any other state or under the laws of the United States. A credit union
chartered under the laws of the United States or of any other state may
convert to a credit union chartered under the laws of this State. To effect
such a conversion, a credit union must comply with all the requirements
of the jurisdiction under which it is currently chartered and such rules
and regulations as may be promulgated by the Director and file proof of
such compliance with the Department.
(Source: P.A. 81‑329.)
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(205 ILCS 305/65) (from Ch. 17, par. 4466)
Sec. 65.
Conformity With Federal Credit Union Act.
After the effective
date of this Act, any credit union incorporated under the laws of this State
shall have all of the rights, privileges and benefits which may be exercised
by a federal credit union; provided, however, that the exercise of such
rights, privileges and benefits may not violate any provision of this Act.
In order to give effect to this provision, the Director shall, where necessary,
promulgate rules and regulations in substantial
conformity with those promulgated by the NCUA under the Federal Credit Union Act.
(Source: P.A. 81‑329.)
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(205 ILCS 305/66) (from Ch. 17, par. 4467)
Sec. 66.
Illegal Loans.
(1) Any Officer, Director or member of a committee
of a credit union who knowingly permits a loan to be made or participates
in a loan to a nonmember of the credit union, is guilty of a Class A Misdemeanor
and is primarily liable to the credit union for the amount illegally loaned,
and the illegality of the loan is not a defense in any action by the credit
union to recover the balance owing on the loan.
Any Officer, Director, member of a committee or employee of a credit union
who solicits or accepts any payment of property or gift as consideration
for influencing the approval or granting of a loan is guilty of a Class
A Misdemeanor and is primarily liable to the credit union for the amount
loaned. The loan is illegal and may be immediately collected in full by
the credit union. The illegality of the loan is no defense in any action
by the credit union to recover the balance owing on the loan.
(Source: P.A. 81‑329.)
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(205 ILCS 305/67) (from Ch. 17, par. 4468)
Sec. 67.
Use of Public Property.
Any credit union, the membership of
which consists primarily of employees of this State or of any county, city,
village, incorporated town or school district, or of any department, agency
or instrumentality of the State and their families, may, upon application
to the appropriate officer or agency, be allotted such space as is available
in any public building, for the purpose of providing an office and meeting
place for the credit union without charge for rent or services.
(Source: P.A. 81‑329.)
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(205 ILCS 305/68) (from Ch. 17, par. 4469)
Sec. 68.
Interest, Fines, Not Usurious‑Shares and Loans Not to be Taxed.
Reasonable fines may be levied as provided in the Bylaws of each credit
union and may be deducted from the share balance or added to the loan balance
of a member upon whom a fine is levied. Interest or fines that may accrue
to a credit union are not usurious and they may be collected under the law
of this State. The shares and loans provided for in this Act are not subject
to taxation.
(Source: P.A. 81‑329.)
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(205 ILCS 305/69) (from Ch. 17, par. 4470)
Sec. 69.
Effect of Invalidity of Part of this Act.
If a court of competent
jurisdiction shall adjudge to be invalid or unconstitutional any clause,
sentence, paragraph, section or part of this Act, such judgment
shall not affect, impair, invalidate or nullify the remainder of this Act,
but the effect thereof shall be confined to the clause, sentence, paragraph,
Section or part of this Act so adjudged to be invalid or unconstitutional.
(Source: P.A. 84‑545.)
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(205 ILCS 305/69.1) (from Ch. 17, par. 4470.1)
Sec. 69.1.
Review Under Administrative Review Law.
The provisions of
the Administrative Review Law, and all amendments and modifications thereof
and the rules adopted pursuant thereto, shall apply to and govern all
proceedings for the judicial review of final administrative decisions of
the Director provided for under this Act. The term "administrative
decision" is defined as in Section 3‑101 of the Code of Civil Procedure.
(Source: P.A. 85‑1273.)
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(205 ILCS 305/70)(from Ch. 17, par. 4471)
Sec. 70. Use of name, sentence. (a) No individual, firm, association,
or body politic and corporate, including, without limitation, any corporation, limited liability company, general partnership, limited partnership, or joint venture that is not an authorized user may use any
name or title which contains the words
"credit union" or any abbreviation thereof, and such use is a Class A
Misdemeanor. For purposes of this Section, "authorized user" means a corporation organized under this Act, the credit union act of another state, or the Federal Credit Union Act, any association of such a corporation, and subsidiaries and affiliates of such an association.
(b) If the Director of the Division of Financial Institutions of the Department of Financial and Professional Regulation finds that an individual or entity that is not an authorized user has transacted or intends to transact business in this State in a manner that has a substantial likelihood of misleading the public by: (i) implying that the business is a credit union or (ii) using or intending to use the words "credit union", or any abbreviation thereof, in connection with its business, then the Director of the Division of Financial Institutions may direct the individual or entity to cease and desist from transacting its business or using the words "credit union", or any abbreviation thereof. If the individual or entity persists in transacting its business or using the words "credit union", or any abbreviation thereof, then the Director of the Division of Financial Institutions may impose a civil penalty of up to $10,000 for each violation. Each day that the individual or entity continues transacting business or using the words "credit union", or any abbreviation thereof, in connection with its business shall constitute a separate violation of these provisions.
(Source: P.A. 94‑150, eff. 7‑8‑05.)
(205 ILCS 305/71) (from Ch. 17, par. 4472)
Sec. 71.
False Statements.
Any person who knowingly makes any false statement
or report upon any application, advance, discount, purchase, purchase agreement,
repurchase agreement, commitment or loan or any change or extension
of the same to a credit union chartered by this State shall be fined not
more than $5000 or imprisoned for not more than 5 years, or both.
(Source: P.A. 81‑329.)
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(205 ILCS 305/72) (from Ch. 17, par. 4473)
Sec. 72.
Repeal.
"An Act to revise the law in relation to credit unions
and to repeal a certain act therein named", approved June 16, 1953, as amended,
is repealed. The repeal of this Act or any parts of any act in relation
to credit unions does not affect any right accrued or established or any
liability or penalty incurred prior to the repeal thereof.
(Source: P.A. 81‑329.)
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