There Is a Newer Version of the Illinois Compiled Statutes
2010 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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(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, except that beginning on the effective date of this amendatory Act of the 95th General Assembly, all references in this Act to the Director of the Department of Financial Institutions are deemed, in appropriate contexts, to be references to the Secretary of Financial and Professional Regulation. 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. Secretary ‑ The term "Secretary" means the Secretary of the Department of Financial and Professional Regulation, or a person authorized by the Secretary or this Act to act in the Secretary's stead. (Source: P.A. 95‑1047, eff. 4‑6‑09.) |
(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.) |
(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.) |
(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.) |
(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.) |
(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.) |
(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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(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. 95‑98, eff. 8‑13‑07.) |
(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.) |
(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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(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; 95‑661, eff. 1‑1‑08.) |
(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.) |
(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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(2) The Secretary 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 Credit Union Section of the Department as defined in subsection (5). However, the fee schedule shall not be increased if the amount remaining in the Credit Union Fund at the end of any fiscal year is greater than 25% of the total actual and operational expenses incurred by the State in administering and enforcing the Illinois Credit Union Act and other laws, rules, and regulations as may apply to the administration and enforcement of the foregoing laws, rules, and regulations as amended from time to time for the preceding fiscal year. The regulatory fee for the next fiscal year shall be calculated by the Secretary based on the credit union's total assets as of December 31 of the preceding calendar year. The Secretary shall provide credit unions with written notice of any adjustment made in the regulatory fee schedule. (3) Beginning with the calendar quarter commencing on January 1, 2009, a credit union shall pay to the Department a regulatory fee in quarterly installments equal to one‑fourth of the regulatory fee due 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 calendar year. The total annual regulatory fee shall not be less than $100 or more than $141,875, provided that the regulatory fee cap of $141,875 shall be adjusted to incorporate the same percentage increase as the Secretary 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. The regulatory fee shall be billed to credit unions on a quarterly basis commencing with the quarter ending March 31, 2009, and it shall be payable by credit unions on the due date for the Call Report for the subject quarter. (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 Credit Union Section 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 deposited 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. Notwithstanding provisions in the State Finance Act, as now or hereafter amended, or any other law to the contrary, the sum of $4,404,515 shall be transferred from the Credit Union Fund to the Financial Institutions Settlement of 2008 Fund as of the effective date of this amendatory Act of the 95th General Assembly, or as soon thereafter as practical. Notwithstanding provisions in the State Finance Act, as now or hereafter amended, or any other law to the contrary, the Governor may, during any fiscal year through January 10, 2011, from time to time direct the State Treasurer and Comptroller to transfer a specified sum not exceeding 10% of the revenues to be deposited into the Credit Union Fund during that fiscal year from that Fund to the General Revenue Fund in order to help defray the State's operating costs for the fiscal year. Notwithstanding provisions in the State Finance Act, as now or hereafter amended, or any other law to the contrary, the total sum transferred from the Credit Union Fund to the General Revenue Fund pursuant to this provision shall not exceed during any fiscal year 10% of the revenues to be deposited into the Credit Union Fund during that fiscal year. The State Treasurer and Comptroller shall transfer the amounts designated under this Section as soon as may be practicable after receiving the direction to transfer from the Governor. (5) The administrative and operational expenses for any fiscal 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 balance in the Credit Union Fund at the end of a fiscal year exceeds 25% of the total administrative and operational expenses incurred by the State in administering and enforcing the Illinois Credit Union Act and other laws, rules, and regulations as may apply to the administration and enforcement of the foregoing laws, rules, and regulations as amended from time to time for that fiscal year, such excess shall be credited to credit unions and applied against their regulatory fees for the subsequent fiscal year. The amount credited to each credit union shall be in the same proportion as the regulatory fee paid by such credit union for the fiscal year in which the excess is produced bears to the aggregate amount of all fees collected by the Department under this Act for the same fiscal year. (7) (Blank). (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. (9) For purposes of this Section, "fiscal year" means a period beginning on July 1 of any calendar year and ending on June 30 of the next calendar year. (Source: P.A. 94‑91, eff. 7‑1‑05; 95‑1047, eff. 4‑6‑09.) |
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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.) |
(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.) |
(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.) |
(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.) |
(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.) |
(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.) |
(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.) |
(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.) |
(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.) |
(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.) |
(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.) |
(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.) |
(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.) |
(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.) |
(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.) |
(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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(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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(b) The Board of Directors may delegate to the chief | ||
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(1) determining the interest rates on loans; (2) determining the dividend rates on share accounts; | ||
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(3) hiring employees other than the chief management | ||
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(Source: P.A. 95‑98, eff. 8‑13‑07.) |
(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.) |
(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.) |
(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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(B) supporting documentation is maintained for the | ||
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(C) the external auditor conducting the credit | ||
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(5) A majority of the members of the Supervisory Committee shall constitute a quorum. (Source: P.A. 96‑141, eff. 8‑7‑09; 96‑963, eff. 7‑2‑10.) |
(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.) |
(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.) |
(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.) |
(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.) |
(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.) |
(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.) |
(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.) |
(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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(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.) |
(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.) |
(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.) |
(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.) |
(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.) |
(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.) |
(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.) |
(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.) |
(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.) |
(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.) |
(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.) |
(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.) |
(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.) |
(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.) |
(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.) |
(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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(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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(b) As used in this Section, "political subdivision" includes, but is not limited to, counties, townships, cities, villages, incorporated towns, school districts, educational service regions, special road districts, public water supply districts, fire protection districts, drainage districts, levee districts, sewer districts, housing authorities, park districts, and any agency, corporation, or instrumentality of a state or its political subdivisions, whether now or hereafter created and whether herein specifically mentioned or not. (c) A credit union investing to fund an employee benefit plan obligation is not subject to the investment limitations of this Act and this Section and may purchase an investment that would otherwise be impermissible if the investment is directly related to the credit union's obligation under the employee benefit plan and the credit union holds the investment only for so long as it has an actual or potential obligation under the employee benefit plan. (Source: P.A. 95‑124, eff. 8‑13‑07.) |
(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.) |
(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.) |
(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.) |
(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.) |
(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.) |
(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.) |
(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.) |
(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.) |
(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.) |
(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.) |
(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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(d) The Director of the Division of Financial Institutions may adopt rules to administer the provisions of this Section. (Source: P.A. 94‑150, eff. 7‑8‑05; 95‑98, eff. 8‑13‑07.) |
(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.) |
(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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