(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,
| group or organization, such as a church, labor union, club or society and members of their immediate families which shall include any relative by blood or marriage or foster and adopted children. | |
(2) Persons who reside in a reasonably compact and |
| well defined neighborhood or community, and members of their immediate families which shall include any relative by blood or marriage or foster and adopted children. | |
(3) Persons who have a common employer or who are |
| members of an organized labor union or an organized occupational or professional group within a defined geographical area, and members of their immediate families which shall include any relative by blood or marriage or foster and adopted children. | |
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 305/7) (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 |
| Director prior to operating in this State, on a form specified by the Director. | |
(b) The credit union may be required to pay a |
| registration fee in accordance with rules promulgated by the Director. | |
(c) The credit union shall comply with rules |
| promulgated by the Director concerning the operation of out of state credit unions in this State. | |
(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.) |
(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
| forth in this Act or any related Act. | |
(2) To prescribe rules and regulations for the |
| administration of this Act. The provisions of the Illinois Administrative Procedure Act are hereby expressly adopted and incorporated herein as though a part of this Act, and shall apply to all administrative rules and procedures of the Department under this Act. | |
(3) To direct and supervise all the administrative |
| and technical activities of the Department including the employment of a Credit Union Supervisor who shall have knowledge in the theory and practice of, or experience in, the operations or supervision of financial institutions, preferably credit unions, and such other persons as are necessary to carry out his functions. The Director shall ensure that all examiners appointed or assigned to examine the affairs of State‑chartered credit unions possess the necessary training and continuing education to effectively execute their jobs. | |
(4) To issue cease and desist orders when in the |
| opinion of the Director, a credit union is engaged or has engaged, or the Director has reasonable cause to believe the credit union is about to engage, in an unsafe or unsound practice, or is violating or has violated or the Director has reasonable cause to believe is about to violate a law, rule or regulation or any condition imposed in writing by the Department. | |
(5) To suspend from office and to prohibit from |
| further participation in any manner in the conduct of the affairs of his credit union any director, officer or committee member who has committed any violation of a law, rule, regulation or of a cease and desist order or who has engaged or participated in any unsafe or unsound practice in connection with the credit union or who has committed or engaged in any act, omission, or practice which constitutes a breach of his fiduciary duty as such director, officer or committee member, when the Director has determined that such action or actions have resulted or will result in substantial financial loss or other damage that seriously prejudices the interests of the members. | |
(6) Except for the fees established in this Act, to |
| prescribe, by rule and regulation, fees and penalties for preparing, approving, and filing reports and other documents; furnishing transcripts; holding hearings; investigating applications for permission to organize, merge, or convert; failure to maintain accurate books and records to enable the Department to conduct an examination; and taking supervisory actions. | |
(7) To destroy, in his discretion, any or all books |
| and records of any credit union in his possession or under his control after the expiration of three years from the date of cancellation of the charter of such credit unions. | |
(8) To make investigations and to conduct research |
| and studies and to publish some of the problems of persons in obtaining credit at reasonable rates of interest and of the methods and benefits of cooperative saving and lending for such persons. | |
(9) To authorize, foster or establish experimental, |
| developmental, demonstration or pilot projects by public or private organizations including credit unions which: | |
(a) promote more effective operation of credit |
| unions so as to provide members an opportunity to use and control their own money to improve their economic and social conditions; or | |
(b) are in the best interests of credit unions, |
| their members and the people of the State of Illinois. | |
(10) To cooperate in studies, training or other |
| administrative activities with, but not limited to, the NCUA, other state credit union regulatory agencies and industry trade associations in order to promote more effective and efficient supervision of Illinois chartered credit unions. | |
(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 |
| subpoena, order, or other judicial or administrative process, must withhold production of the confidential supervisory information and must notify the Director of the demand, at which time the Director is authorized to intervene for the purpose of enforcing the limitations of this Section or seeking the withdrawal or termination of the attempt to compel production of the confidential supervisory information. | |
(b) Any request for discovery or disclosure of |
| confidential supervisory information, whether by subpoena, order, or other judicial or administrative process, shall be made to the Director, and the Director shall determine within 15 days whether to disclose the information pursuant to procedures and standards that the Director shall establish by rule. If the Director determines that such information will not be disclosed, the Director's decision shall be subject to judicial review under the provisions of the Administrative Review Law, and venue shall be in either Sangamon County or Cook County. | |
(c) Any court order that compels disclosure of |
| confidential supervisory information may be immediately appealed by the Director, and the order shall be automatically stayed pending the outcome of the appeal. | |
(Source: P.A. 92‑608, eff. 7‑1‑02.) |
(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
| "financial records" means any original, any copy, or any summary of (1) a document granting signature authority over an account, (2) a statement, ledger card or other record on any account which shows each transaction in or with respect to that account, (3) a check, draft or money order drawn on a financial institution or other entity or issued and payable by or through a financial institution or other entity, or (4) any other item containing information pertaining to any relationship established in the ordinary course of business between a credit union and its member, including financial statements or other financial information provided by the member. | |
(b) This Section does not prohibit:
(1) The preparation, examination, handling or |
| maintenance of any financial records by any officer, employee or agent of a credit union having custody of such records, or the examination of such records by a certified public accountant engaged by the credit union to perform an independent audit. | |
(2) The examination of any financial records by or |
| the furnishing of financial records by a credit union to any officer, employee or agent of the Department, the National Credit Union Administration, Federal Reserve board or any insurer of share accounts for use solely in the exercise of his duties as an officer, employee or agent. | |
(3) The publication of data furnished from financial |
| records relating to members where the data cannot be identified to any particular customer of account. | |
(4) The making of reports or returns required under |
| Chapter 61 of the Internal Revenue Code of 1954. | |
(5) Furnishing information concerning the dishonor |
| of any negotiable instrument permitted to be disclosed under the Uniform Commercial Code. | |
(6) The exchange in the regular course of business |
| of (i) credit information between a credit union and other credit unions or financial institutions or commercial enterprises, directly or through a consumer reporting agency or (ii) financial records or information derived from financial records between a credit union and other credit unions or financial institutions or commercial enterprises for the purpose of conducting due diligence pursuant to a merger or a purchase or sale of assets or liabilities of the credit union. | |
(7) The furnishing of information to the appropriate |
| law enforcement authorities where the credit union reasonably believes it has been the victim of a crime. | |
(8) The furnishing of information pursuant to the |
| Uniform Disposition of Unclaimed Property Act. | |
(9) The furnishing of information pursuant to the |
| Illinois Income Tax Act and the Illinois Estate and Generation‑Skipping Transfer Tax Act. | |
(10) The furnishing of information pursuant to the |
| federal "Currency and Foreign Transactions Reporting Act", Title 31, United States Code, Section 1051 et sequentia. | |
(11) The furnishing of information pursuant to any |
| other statute which by its terms or by regulations promulgated thereunder requires the disclosure of financial records other than by subpoena, summons, warrant or court order. | |
(12) The furnishing of information in accordance |
| with the federal Personal Responsibility and Work Opportunity Reconciliation Act of 1996. Any credit union governed by this Act shall enter into an agreement for data exchanges with a State agency provided the State agency pays to the credit union a reasonable fee not to exceed its actual cost incurred. A credit union providing information in accordance with this item shall not be liable to any account holder or other person for any disclosure of information to a State agency, for encumbering or surrendering any assets held by the credit union in response to a lien or order to withhold and deliver issued by a State agency, or for any other action taken pursuant to this item, including individual or mechanical errors, provided the action does not constitute gross negligence or willful misconduct. A credit union shall have no obligation to hold, encumber, or surrender assets until it has been served with a subpoena, summons, warrant, court or administrative order, lien, or levy. | |
(13) The furnishing of information to law |
| |