Illinois 2023-2024 Regular Session

Illinois House Bill HB5372 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 HB5372 Introduced , by Rep. Jay Hoffman SYNOPSIS AS INTRODUCED: 30 ILCS 105/5.1015 new205 ILCS 305/2 from Ch. 17, par. 4403205 ILCS 305/8 from Ch. 17, par. 4409205 ILCS 305/9 from Ch. 17, par. 4410205 ILCS 305/12.5 new205 ILCS 305/13 from Ch. 17, par. 4414205 ILCS 305/39 from Ch. 17, par. 4440205 ILCS 305/59 from Ch. 17, par. 4460 Amends the Illinois Credit Union Act. Provides that a credit union regulated by the Department of Financial and Professional Regulation that is a covered financial institution under the Illinois Community Reinvestment Act shall pay an examination fee to the Department subject to the adopted by the Department. Provides that the aggregate of all credit union examination fees collected by the Department under the Illinois Community Reinvestment Act shall be paid and transferred promptly, accompanied by a detailed statement, into the State Treasury and shall be set apart in the Credit Union Community Reinvestment Act Fund. Provides the limits to the amounts of funds that a credit union may invest in the purchase of an investment interest in a pool of loans when the investment is greater than the net worth of the credit union. Provides that credit unions may invest funds in derivatives transactions to aid in the credit union's management of interest rate risk if certain specified conditions are satisfied. Makes changes to provisions concerning conflicts between bylaws adopted by the subscribers of a credit union and the Act. Makes changes to provisions concerning rules adopted by the Secretary of Financial and Professional Regulation and the Act. Makes other changes. Amends the State Finance Act. Creates the Credit Union Community Reinvestment Act Fund. Effective immediately. LRB103 39216 RTM 69366 b A BILL FOR 103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 HB5372 Introduced , by Rep. Jay Hoffman SYNOPSIS AS INTRODUCED: 30 ILCS 105/5.1015 new205 ILCS 305/2 from Ch. 17, par. 4403205 ILCS 305/8 from Ch. 17, par. 4409205 ILCS 305/9 from Ch. 17, par. 4410205 ILCS 305/12.5 new205 ILCS 305/13 from Ch. 17, par. 4414205 ILCS 305/39 from Ch. 17, par. 4440205 ILCS 305/59 from Ch. 17, par. 4460 30 ILCS 105/5.1015 new 205 ILCS 305/2 from Ch. 17, par. 4403 205 ILCS 305/8 from Ch. 17, par. 4409 205 ILCS 305/9 from Ch. 17, par. 4410 205 ILCS 305/12.5 new 205 ILCS 305/13 from Ch. 17, par. 4414 205 ILCS 305/39 from Ch. 17, par. 4440 205 ILCS 305/59 from Ch. 17, par. 4460 Amends the Illinois Credit Union Act. Provides that a credit union regulated by the Department of Financial and Professional Regulation that is a covered financial institution under the Illinois Community Reinvestment Act shall pay an examination fee to the Department subject to the adopted by the Department. Provides that the aggregate of all credit union examination fees collected by the Department under the Illinois Community Reinvestment Act shall be paid and transferred promptly, accompanied by a detailed statement, into the State Treasury and shall be set apart in the Credit Union Community Reinvestment Act Fund. Provides the limits to the amounts of funds that a credit union may invest in the purchase of an investment interest in a pool of loans when the investment is greater than the net worth of the credit union. Provides that credit unions may invest funds in derivatives transactions to aid in the credit union's management of interest rate risk if certain specified conditions are satisfied. Makes changes to provisions concerning conflicts between bylaws adopted by the subscribers of a credit union and the Act. Makes changes to provisions concerning rules adopted by the Secretary of Financial and Professional Regulation and the Act. Makes other changes. Amends the State Finance Act. Creates the Credit Union Community Reinvestment Act Fund. Effective immediately. LRB103 39216 RTM 69366 b LRB103 39216 RTM 69366 b A BILL FOR
2	2	103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 HB5372 Introduced , by Rep. Jay Hoffman SYNOPSIS AS INTRODUCED:
3	3	30 ILCS 105/5.1015 new205 ILCS 305/2 from Ch. 17, par. 4403205 ILCS 305/8 from Ch. 17, par. 4409205 ILCS 305/9 from Ch. 17, par. 4410205 ILCS 305/12.5 new205 ILCS 305/13 from Ch. 17, par. 4414205 ILCS 305/39 from Ch. 17, par. 4440205 ILCS 305/59 from Ch. 17, par. 4460 30 ILCS 105/5.1015 new 205 ILCS 305/2 from Ch. 17, par. 4403 205 ILCS 305/8 from Ch. 17, par. 4409 205 ILCS 305/9 from Ch. 17, par. 4410 205 ILCS 305/12.5 new 205 ILCS 305/13 from Ch. 17, par. 4414 205 ILCS 305/39 from Ch. 17, par. 4440 205 ILCS 305/59 from Ch. 17, par. 4460
4	4	30 ILCS 105/5.1015 new
5	5	205 ILCS 305/2 from Ch. 17, par. 4403
6	6	205 ILCS 305/8 from Ch. 17, par. 4409
7	7	205 ILCS 305/9 from Ch. 17, par. 4410
8	8	205 ILCS 305/12.5 new
9	9	205 ILCS 305/13 from Ch. 17, par. 4414
10	10	205 ILCS 305/39 from Ch. 17, par. 4440
11	11	205 ILCS 305/59 from Ch. 17, par. 4460
12	12	Amends the Illinois Credit Union Act. Provides that a credit union regulated by the Department of Financial and Professional Regulation that is a covered financial institution under the Illinois Community Reinvestment Act shall pay an examination fee to the Department subject to the adopted by the Department. Provides that the aggregate of all credit union examination fees collected by the Department under the Illinois Community Reinvestment Act shall be paid and transferred promptly, accompanied by a detailed statement, into the State Treasury and shall be set apart in the Credit Union Community Reinvestment Act Fund. Provides the limits to the amounts of funds that a credit union may invest in the purchase of an investment interest in a pool of loans when the investment is greater than the net worth of the credit union. Provides that credit unions may invest funds in derivatives transactions to aid in the credit union's management of interest rate risk if certain specified conditions are satisfied. Makes changes to provisions concerning conflicts between bylaws adopted by the subscribers of a credit union and the Act. Makes changes to provisions concerning rules adopted by the Secretary of Financial and Professional Regulation and the Act. Makes other changes. Amends the State Finance Act. Creates the Credit Union Community Reinvestment Act Fund. Effective immediately.
13	13	LRB103 39216 RTM 69366 b LRB103 39216 RTM 69366 b
14	14	LRB103 39216 RTM 69366 b
15	15	A BILL FOR
16	16	HB5372LRB103 39216 RTM 69366 b HB5372 LRB103 39216 RTM 69366 b
17	17	HB5372 LRB103 39216 RTM 69366 b
18	18	1 AN ACT concerning regulation.
19	19	2 Be it enacted by the People of the State of Illinois,
20	20	3 represented in the General Assembly:
21	21	4 Section 5. The State Finance Act is amended by adding
22	22	5 Section 5.1015 as follows:
23	23	6 (30 ILCS 105/5.1015 new)
24	24	7 Sec. 5.1015. The Credit Union Community Reinvestment Act
25	25	8 Fund.
26	26	9 Section 10. The Illinois Credit Union Act is amended by
27	27	10 changing Sections 2, 8, 9, 13, 39, and 59 and by adding Section
28	28	11 12.5 as follows:
29	29	12 (205 ILCS 305/2) (from Ch. 17, par. 4403)
30	30	13 Sec. 2. Organization procedure.
31	31	14 (1) Any 9 or more persons of legal age, the majority of
32	32	15 whom shall be residents of the State of Illinois, who have a
33	33	16 common bond referred to in Section 1.1 may organize a credit
34	34	17 union or a central credit union by complying with this
35	35	18 Section.
36	36	19 (2) The subscribers shall execute in duplicate Articles of
37	37	20 Incorporation and agree to the terms thereof, which Articles
38	38	21 shall state:
39	39
40	40
41	41
42	42	103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 HB5372 Introduced , by Rep. Jay Hoffman SYNOPSIS AS INTRODUCED:
43	43	30 ILCS 105/5.1015 new205 ILCS 305/2 from Ch. 17, par. 4403205 ILCS 305/8 from Ch. 17, par. 4409205 ILCS 305/9 from Ch. 17, par. 4410205 ILCS 305/12.5 new205 ILCS 305/13 from Ch. 17, par. 4414205 ILCS 305/39 from Ch. 17, par. 4440205 ILCS 305/59 from Ch. 17, par. 4460 30 ILCS 105/5.1015 new 205 ILCS 305/2 from Ch. 17, par. 4403 205 ILCS 305/8 from Ch. 17, par. 4409 205 ILCS 305/9 from Ch. 17, par. 4410 205 ILCS 305/12.5 new 205 ILCS 305/13 from Ch. 17, par. 4414 205 ILCS 305/39 from Ch. 17, par. 4440 205 ILCS 305/59 from Ch. 17, par. 4460
44	44	30 ILCS 105/5.1015 new
45	45	205 ILCS 305/2 from Ch. 17, par. 4403
46	46	205 ILCS 305/8 from Ch. 17, par. 4409
47	47	205 ILCS 305/9 from Ch. 17, par. 4410
48	48	205 ILCS 305/12.5 new
49	49	205 ILCS 305/13 from Ch. 17, par. 4414
50	50	205 ILCS 305/39 from Ch. 17, par. 4440
51	51	205 ILCS 305/59 from Ch. 17, par. 4460
52	52	Amends the Illinois Credit Union Act. Provides that a credit union regulated by the Department of Financial and Professional Regulation that is a covered financial institution under the Illinois Community Reinvestment Act shall pay an examination fee to the Department subject to the adopted by the Department. Provides that the aggregate of all credit union examination fees collected by the Department under the Illinois Community Reinvestment Act shall be paid and transferred promptly, accompanied by a detailed statement, into the State Treasury and shall be set apart in the Credit Union Community Reinvestment Act Fund. Provides the limits to the amounts of funds that a credit union may invest in the purchase of an investment interest in a pool of loans when the investment is greater than the net worth of the credit union. Provides that credit unions may invest funds in derivatives transactions to aid in the credit union's management of interest rate risk if certain specified conditions are satisfied. Makes changes to provisions concerning conflicts between bylaws adopted by the subscribers of a credit union and the Act. Makes changes to provisions concerning rules adopted by the Secretary of Financial and Professional Regulation and the Act. Makes other changes. Amends the State Finance Act. Creates the Credit Union Community Reinvestment Act Fund. Effective immediately.
53	53	LRB103 39216 RTM 69366 b LRB103 39216 RTM 69366 b
54	54	LRB103 39216 RTM 69366 b
55	55	A BILL FOR
56	56
57	57
58	58
59	59
60	60
61	61	30 ILCS 105/5.1015 new
62	62	205 ILCS 305/2 from Ch. 17, par. 4403
63	63	205 ILCS 305/8 from Ch. 17, par. 4409
64	64	205 ILCS 305/9 from Ch. 17, par. 4410
65	65	205 ILCS 305/12.5 new
66	66	205 ILCS 305/13 from Ch. 17, par. 4414
67	67	205 ILCS 305/39 from Ch. 17, par. 4440
68	68	205 ILCS 305/59 from Ch. 17, par. 4460
69	69
70	70
71	71
72	72	LRB103 39216 RTM 69366 b
73	73
74	74
75	75
76	76
77	77
78	78
79	79
80	80
81	81
82	82	HB5372 LRB103 39216 RTM 69366 b
83	83
84	84
85	85	HB5372- 2 -LRB103 39216 RTM 69366 b HB5372 - 2 - LRB103 39216 RTM 69366 b
86	86	HB5372 - 2 - LRB103 39216 RTM 69366 b
87	87	1 (a) The name, which shall include the words "credit
88	88	2 union" and which shall not be the same as that of any other
89	89	3 existing credit union in this state, and the location
90	90	4 where the proposed credit union is to have its principal
91	91	5 place of business;
92	92	6 (b) The common bond of the members of the credit
93	93	7 union;
94	94	8 (c) The par value of the shares of the credit union,
95	95	9 which must be at least $1;
96	96	10 (d) The names, addresses and Social Security numbers
97	97	11 of the subscribers to the Articles of Incorporation, and
98	98	12 the number and the value of shares subscribed to by each;
99	99	13 (e) That the credit union may exercise such incidental
100	100	14 powers as are necessary or requisite to enable it to carry
101	101	15 on effectively the purposes for which it is incorporated,
102	102	16 and those powers which are inherent in the credit union as
103	103	17 a legal entity;
104	104	18 (f) That the existence of the credit union shall be
105	105	19 perpetual.
106	106	20 (3) The subscribers shall prepare and adopt bylaws for the
107	107	21 general governance government of the credit union, consistent
108	108	22 with this Act, and execute same in duplicate. If there is a
109	109	23 conflict, inconsistency, or variation between the terms of
110	110	24 this Act and the provisions in the bylaws adopted by the credit
111	111	25 union, the terms of this Act shall control. A conflict,
112	112	26 inconsistency, or variation may not be deemed to exist if the
113	113
114	114
115	115
116	116
117	117
118	118	HB5372 - 2 - LRB103 39216 RTM 69366 b
119	119
120	120
121	121	HB5372- 3 -LRB103 39216 RTM 69366 b HB5372 - 3 - LRB103 39216 RTM 69366 b
122	122	HB5372 - 3 - LRB103 39216 RTM 69366 b
123	123	1 Act specifically requires that a particular matter shall be
124	124	2 adopted in the bylaws.
125	125	3 (4) The subscribers shall forward the articles of
126	126	4 incorporation and the bylaws to the Secretary in duplicate,
127	127	5 along with the required charter fee. If they conform to the
128	128	6 law, and such rules and regulations as the Secretary and the
129	129	7 Director may prescribe, if the Secretary determines that a
130	130	8 common bond exists, and that it is economically advisable to
131	131	9 organize the credit union, he or she shall within 60 days issue
132	132	10 a certificate of approval attached to the articles of
133	133	11 incorporation and return a copy of the bylaws and the articles
134	134	12 of incorporation to the applicants or their representative,
135	135	13 which shall be preserved in the permanent files of the credit
136	136	14 union. The subscribers shall file the certificate of approval,
137	137	15 with the articles of incorporation attached, in the office of
138	138	16 the recorder (or, if there is no recorder, in the office of the
139	139	17 county clerk) of the county in which the credit union is to
140	140	18 locate its principal place of business. The recorder or the
141	141	19 county clerk, as the case may be, shall accept and record the
142	142	20 documents if they are accompanied by the proper fee. When the
143	143	21 documents are so recorded, the credit union is incorporated
144	144	22 under this Act.
145	145	23 (5) The subscribers for a credit union charter shall not
146	146	24 transact any business until the certificate of approval has
147	147	25 been received.
148	148	26 (Source: P.A. 100-361, eff. 8-25-17.)
149	149
150	150
151	151
152	152
153	153
154	154	HB5372 - 3 - LRB103 39216 RTM 69366 b
155	155
156	156
157	157	HB5372- 4 -LRB103 39216 RTM 69366 b HB5372 - 4 - LRB103 39216 RTM 69366 b
158	158	HB5372 - 4 - LRB103 39216 RTM 69366 b
159	159	1 (205 ILCS 305/8) (from Ch. 17, par. 4409)
160	160	2 Sec. 8. Secretary's powers and duties. Credit unions are
161	161	3 regulated by the Department. The Secretary in executing the
162	162	4 powers and discharging the duties vested by law in the
163	163	5 Department has the following powers and duties:
164	164	6 (1) To exercise the rights, powers, and duties set
165	165	7 forth in this Act or any related Act. The Director shall
166	166	8 oversee the functions of the Division and report to the
167	167	9 Secretary, with respect to the Director's exercise of any
168	168	10 of the rights, powers, and duties vested by law in the
169	169	11 Secretary under this Act. All references in this Act to
170	170	12 the Secretary shall be deemed to include the Director, as
171	171	13 a person authorized by the Secretary or this Act to assume
172	172	14 responsibility for the oversight of the functions of the
173	173	15 Department relating to the regulatory supervision of
174	174	16 credit unions under this Act.
175	175	17 (2) To adopt prescribe rules and regulations for the
176	176	18 administration of this Act. The provisions of the Illinois
177	177	19 Administrative Procedure Act are hereby expressly adopted
178	178	20 and incorporated herein as though a part of this Act, and
179	179	21 shall apply to all administrative rules and procedures of
180	180	22 the Department under this Act. Rules adopted by the
181	181	23 Secretary shall be within the statutory authority upon
182	182	24 which they are based. If there is a conflict,
183	183	25 inconsistency, or variation between the terms of this Act
184	184
185	185
186	186
187	187
188	188
189	189	HB5372 - 4 - LRB103 39216 RTM 69366 b
190	190
191	191
192	192	HB5372- 5 -LRB103 39216 RTM 69366 b HB5372 - 5 - LRB103 39216 RTM 69366 b
193	193	HB5372 - 5 - LRB103 39216 RTM 69366 b
194	194	1 and the provisions in a rule adopted by the Secretary, the
195	195	2 terms of this Act shall control. A conflict,
196	196	3 inconsistency, or variation may not be deemed to exist if
197	197	4 the Act specifically delegates authority to the Secretary
198	198	5 to adopt by rule standards or limitations on a particular
199	199	6 matter, provided the rule is within the statutory
200	200	7 authority upon which it is based.
201	201	8 (3) To direct and supervise all the administrative and
202	202	9 technical activities of the Department including the
203	203	10 employment of a Credit Union Supervisor who shall have
204	204	11 knowledge in the theory and practice of, or experience in,
205	205	12 the operations or supervision of financial institutions,
206	206	13 preferably credit unions, and such other persons as are
207	207	14 necessary to carry out his functions. The Secretary shall
208	208	15 ensure that all examiners appointed or assigned to examine
209	209	16 the affairs of State-chartered credit unions possess the
210	210	17 necessary training and continuing education to effectively
211	211	18 execute their jobs.
212	212	19 (4) To issue cease and desist orders when in the
213	213	20 opinion of the Secretary, a credit union is engaged or has
214	214	21 engaged, or the Secretary has reasonable cause to believe
215	215	22 the credit union is about to engage, in an unsafe or
216	216	23 unsound practice, or is violating or has violated or the
217	217	24 Secretary has reasonable cause to believe is about to
218	218	25 violate a law, rule, or regulation or any condition
219	219	26 imposed in writing by the Department.
220	220
221	221
222	222
223	223
224	224
225	225	HB5372 - 5 - LRB103 39216 RTM 69366 b
226	226
227	227
228	228	HB5372- 6 -LRB103 39216 RTM 69366 b HB5372 - 6 - LRB103 39216 RTM 69366 b
229	229	HB5372 - 6 - LRB103 39216 RTM 69366 b
230	230	1 (5) To suspend from office and to prohibit from
231	231	2 further participation in any manner in the conduct of the
232	232	3 affairs of any credit union any director, officer, or
233	233	4 committee member who has committed any violation of a law,
234	234	5 rule, or regulation or of a cease and desist order or who
235	235	6 has engaged or participated in any unsafe or unsound
236	236	7 practice in connection with the credit union or who has
237	237	8 committed or engaged in any act, omission, or practice
238	238	9 which constitutes a breach of his fiduciary duty as such
239	239	10 director, officer, or committee member, when the Secretary
240	240	11 has determined that such action or actions have resulted
241	241	12 or will result in substantial financial loss or other
242	242	13 damage that seriously prejudices the interests of the
243	243	14 members.
244	244	15 (6) To assess a civil penalty against a credit union
245	245	16 provided that:
246	246	17 (A) the Secretary reasonably determines, based on
247	247	18 objective facts and an accurate assessment of
248	248	19 applicable legal standards, that the credit union has:
249	249	20 (i) committed a violation of this Act, any
250	250	21 rule adopted in accordance with this Act, or any
251	251	22 order of the Secretary issued pursuant to his or
252	252	23 her authority under this Act; or
253	253	24 (ii) engaged or participated in any unsafe or
254	254	25 unsound practice;
255	255	26 (B) before a civil penalty is assessed under this
256	256
257	257
258	258
259	259
260	260
261	261	HB5372 - 6 - LRB103 39216 RTM 69366 b
262	262
263	263
264	264	HB5372- 7 -LRB103 39216 RTM 69366 b HB5372 - 7 - LRB103 39216 RTM 69366 b
265	265	HB5372 - 7 - LRB103 39216 RTM 69366 b
266	266	1 item (6), the Secretary must make the further
267	267	2 reasonable determination, based on objective facts and
268	268	3 an accurate assessment of applicable legal standards,
269	269	4 that the credit union's action constituting a
270	270	5 violation under subparagraph (i) of paragraph (A) of
271	271	6 this item (6) or an unsafe and unsound practice under
272	272	7 subparagraph (ii) of paragraph (A) of this item (6):
273	273	8 (i) directly resulted in a substantial and
274	274	9 material financial loss or created a reasonable
275	275	10 probability that a substantial and material
276	276	11 financial loss will directly result; or
277	277	12 (ii) constituted willful misconduct or a
278	278	13 material breach of fiduciary duty of any director,
279	279	14 officer, or committee member of the credit union;
280	280	15 Material financial loss, as referenced in this
281	281	16 paragraph (B), shall be assessed in light of
282	282	17 surrounding circumstances and the relative size and
283	283	18 nature of the financial loss or probable financial
284	284	19 loss. Certain benchmarks shall be used in determining
285	285	20 whether financial loss is material, such as a
286	286	21 percentage of total assets or total gross income for
287	287	22 the immediately preceding 12-month period. Absent
288	288	23 compelling and extraordinary circumstances, no civil
289	289	24 penalty shall be assessed, unless the financial loss
290	290	25 or probable financial loss is equal to or greater than
291	291	26 either 1% of the credit union's total assets for the
292	292
293	293
294	294
295	295
296	296
297	297	HB5372 - 7 - LRB103 39216 RTM 69366 b
298	298
299	299
300	300	HB5372- 8 -LRB103 39216 RTM 69366 b HB5372 - 8 - LRB103 39216 RTM 69366 b
301	301	HB5372 - 8 - LRB103 39216 RTM 69366 b
302	302	1 immediately preceding 12-month period, or 1% of the
303	303	2 credit union's total gross income for the immediately
304	304	3 preceding 12-month period, whichever is less;
305	305	4 (C) before a civil penalty is assessed under this
306	306	5 item (6), the credit union must be expressly advised
307	307	6 in writing of the:
308	308	7 (i) specific violation that could subject it
309	309	8 to a penalty under this item (6); and
310	310	9 (ii) specific remedial action to be taken
311	311	10 within a specific and reasonable time frame to
312	312	11 avoid imposition of the penalty;
313	313	12 (D) civil penalties assessed under this item (6)
314	314	13 shall be remedial, not punitive, and reasonably
315	315	14 tailored to ensure future compliance by the credit
316	316	15 union with the provisions of this Act and any rules
317	317	16 adopted pursuant to this Act;
318	318	17 (E) a credit union's failure to take timely
319	319	18 remedial action with respect to the specific violation
320	320	19 may result in the issuance of an order assessing a
321	321	20 civil penalty up to the following maximum amount,
322	322	21 based upon the total assets of the credit union:
323	323	22 (i) Credit unions with assets of less than $10
324	324	23 million................................................$1,000
325	325	24 (ii) Credit unions with assets of at least $10
326	326	25 million and less than $50 million......................$2,500
327	327	26 (iii) Credit unions with assets of at least
328	328
329	329
330	330
331	331
332	332
333	333	HB5372 - 8 - LRB103 39216 RTM 69366 b
334	334
335	335
336	336	HB5372- 9 -LRB103 39216 RTM 69366 b HB5372 - 9 - LRB103 39216 RTM 69366 b
337	337	HB5372 - 9 - LRB103 39216 RTM 69366 b
338	338	1 $50 million and less than $100 million.................$5,000
339	339	2 (iv) Credit unions with assets of at least
340	340	3 $100 million and less than $500 million...............$10,000
341	341	4 (v) Credit unions with assets of at least $500
342	342	5 million and less than $1 billion......................$25,000
343	343	6 (vi) Credit unions with assets of $1 billion
344	344	7 and greater.....................................$50,000; and
345	345	8 (F) an order assessing a civil penalty under this
346	346	9 item (6) shall take effect upon service of the order,
347	347	10 unless the credit union makes a written request for a
348	348	11 hearing under 38 Ill. Adm. Code 190.20 of the
349	349	12 Department's rules for credit unions within 90 days
350	350	13 after issuance of the order; in that event, the order
351	351	14 shall be stayed until a final administrative order is
352	352	15 entered.
353	353	16 This item (6) shall not apply to violations separately
354	354	17 addressed in rules as authorized under item (7) of this
355	355	18 Section.
356	356	19 (7) Except for the fees established in this Act, to
357	357	20 prescribe, by rule and regulation, fees and penalties for
358	358	21 preparing, approving, and filing reports and other
359	359	22 documents; furnishing transcripts; holding hearings;
360	360	23 investigating applications for permission to organize,
361	361	24 merge, or convert; failure to maintain accurate books and
362	362	25 records to enable the Department to conduct an
363	363	26 examination; and taking supervisory actions.
364	364
365	365
366	366
367	367
368	368
369	369	HB5372 - 9 - LRB103 39216 RTM 69366 b
370	370
371	371
372	372	HB5372- 10 -LRB103 39216 RTM 69366 b HB5372 - 10 - LRB103 39216 RTM 69366 b
373	373	HB5372 - 10 - LRB103 39216 RTM 69366 b
374	374	1 (8) To destroy, in his discretion, any or all books
375	375	2 and records of any credit union in his possession or under
376	376	3 his control after the expiration of three years from the
377	377	4 date of cancellation of the charter of such credit unions.
378	378	5 (9) To make investigations and to conduct research and
379	379	6 studies and to publish some of the problems of persons in
380	380	7 obtaining credit at reasonable rates of interest and of
381	381	8 the methods and benefits of cooperative saving and lending
382	382	9 for such persons.
383	383	10 (10) To authorize, foster, or establish experimental,
384	384	11 developmental, demonstration, or pilot projects by public
385	385	12 or private organizations including credit unions which:
386	386	13 (a) promote more effective operation of credit
387	387	14 unions so as to provide members an opportunity to use
388	388	15 and control their own money to improve their economic
389	389	16 and social conditions; or
390	390	17 (b) are in the best interests of credit unions,
391	391	18 their members and the people of the State of Illinois.
392	392	19 (11) To cooperate in studies, training, or other
393	393	20 administrative activities with, but not limited to, the
394	394	21 NCUA, other state credit union regulatory agencies and
395	395	22 industry trade associations in order to promote more
396	396	23 effective and efficient supervision of Illinois chartered
397	397	24 credit unions.
398	398	25 (12) Notwithstanding the provisions of this Section,
399	399	26 the Secretary shall not:
400	400
401	401
402	402
403	403
404	404
405	405	HB5372 - 10 - LRB103 39216 RTM 69366 b
406	406
407	407
408	408	HB5372- 11 -LRB103 39216 RTM 69366 b HB5372 - 11 - LRB103 39216 RTM 69366 b
409	409	HB5372 - 11 - LRB103 39216 RTM 69366 b
410	410	1 (1) issue an order against a credit union
411	411	2 organized under this Act for unsafe or unsound banking
412	412	3 practices solely because the entity provides or has
413	413	4 provided financial services to a cannabis-related
414	414	5 legitimate business;
415	415	6 (2) prohibit, penalize, or otherwise discourage a
416	416	7 credit union from providing financial services to a
417	417	8 cannabis-related legitimate business solely because
418	418	9 the entity provides or has provided financial services
419	419	10 to a cannabis-related legitimate business;
420	420	11 (3) recommend, incentivize, or encourage a credit
421	421	12 union not to offer financial services to an account
422	422	13 holder or to downgrade or cancel the financial
423	423	14 services offered to an account holder solely because:
424	424	15 (A) the account holder is a manufacturer or
425	425	16 producer, or is the owner, operator, or employee
426	426	17 of a cannabis-related legitimate business;
427	427	18 (B) the account holder later becomes an owner
428	428	19 or operator of a cannabis-related legitimate
429	429	20 business; or
430	430	21 (C) the credit union was not aware that the
431	431	22 account holder is the owner or operator of a
432	432	23 cannabis-related legitimate business; and
433	433	24 (4) take any adverse or corrective supervisory
434	434	25 action on a loan made to an owner or operator of:
435	435	26 (A) a cannabis-related legitimate business
436	436
437	437
438	438
439	439
440	440
441	441	HB5372 - 11 - LRB103 39216 RTM 69366 b
442	442
443	443
444	444	HB5372- 12 -LRB103 39216 RTM 69366 b HB5372 - 12 - LRB103 39216 RTM 69366 b
445	445	HB5372 - 12 - LRB103 39216 RTM 69366 b
446	446	1 solely because the owner or operator owns or
447	447	2 operates a cannabis-related legitimate business;
448	448	3 or
449	449	4 (B) real estate or equipment that is leased to
450	450	5 a cannabis-related legitimate business solely
451	451	6 because the owner or operator of the real estate
452	452	7 or equipment leased the equipment or real estate
453	453	8 to a cannabis-related legitimate business.
454	454	9 (Source: P.A. 102-858, eff. 5-13-22; 103-154, eff. 6-30-23.)
455	455	10 (205 ILCS 305/9) (from Ch. 17, par. 4410)
456	456	11 Sec. 9. Reports and examinations.
457	457	12 (1) Credit unions shall report to the Department on forms
458	458	13 supplied by the Department, in accordance with a schedule
459	459	14 published by the Department. A recapitulation of the annual
460	460	15 reports shall be compiled and published annually by the
461	461	16 Department, for the use of the General Assembly, credit
462	462	17 unions, various educational institutions and other interested
463	463	18 parties. A credit union which fails to file any report when due
464	464	19 shall pay to the Department a late filing fee for each day the
465	465	20 report is overdue as prescribed by rule. The Secretary may
466	466	21 extend the time for filing a report. Invoices for a 5300 Call
467	467	22 Report and other reports and documents shall be paid by a
468	468	23 credit union no later than 20 days after the credit union
469	469	24 receives an invoice from the Department. If an invoice is not
470	470	25 paid in a timely manner, the Department shall continue to
471	471
472	472
473	473
474	474
475	475
476	476	HB5372 - 12 - LRB103 39216 RTM 69366 b
477	477
478	478
479	479	HB5372- 13 -LRB103 39216 RTM 69366 b HB5372 - 13 - LRB103 39216 RTM 69366 b
480	480	HB5372 - 13 - LRB103 39216 RTM 69366 b
481	481	1 issue invoices to the credit union on a monthly basis
482	482	2 reflecting applicable late filing fees until the invoice is
483	483	3 paid.
484	484	4 (2) The Secretary may require special examinations of and
485	485	5 special financial reports from a credit union or a credit
486	486	6 union organization in which a credit union loans, invests, or
487	487	7 delegates substantially all managerial duties and
488	488	8 responsibilities when he determines that such examinations and
489	489	9 reports are necessary to enable the Department to determine
490	490	10 the safety of a credit union's operation or its solvency. The
491	491	11 cost to the Department of the aforesaid special examinations
492	492	12 shall be borne by the credit union being examined as
493	493	13 prescribed by rule.
494	494	14 (3) All credit unions incorporated under this Act shall be
495	495	15 examined at least biennially by the Department or, at the
496	496	16 discretion of the Secretary, by a public accountant registered
497	497	17 by the Department of Financial and Professional Regulation.
498	498	18 The costs of an examination shall be paid by the credit union.
499	499	19 The scope of all examinations by a public accountant shall be
500	500	20 at least equal to the examinations made by the Department. The
501	501	21 examiners shall have full access to, and may compel the
502	502	22 production of, all the books, papers, securities and accounts
503	503	23 of any credit union. A special examination shall be made by the
504	504	24 Department or by a public accountant approved by the
505	505	25 Department upon written request of 5 or more members, who
506	506	26 guarantee the expense of the same. Any credit union refusing
507	507
508	508
509	509
510	510
511	511
512	512	HB5372 - 13 - LRB103 39216 RTM 69366 b
513	513
514	514
515	515	HB5372- 14 -LRB103 39216 RTM 69366 b HB5372 - 14 - LRB103 39216 RTM 69366 b
516	516	HB5372 - 14 - LRB103 39216 RTM 69366 b
517	517	1 to submit to an examination when ordered by the Department
518	518	2 shall be reported to the Attorney General, who shall institute
519	519	3 proceedings to have its charter revoked. If the Secretary
520	520	4 determines that the examination of a credit union is to be
521	521	5 conducted by a public accountant registered by the Department
522	522	6 of Financial and Professional Regulation and the examination
523	523	7 is done in conjunction with the credit union's external
524	524	8 independent audit of financial statements, the requirements of
525	525	9 this Section and subsection (3) of Section 34 shall be deemed
526	526	10 met.
527	527	11 (3.5) Pursuant to Section 8, the Secretary shall adopt
528	528	12 rules that ensure consistency and due process in the
529	529	13 examination process. The Secretary may also establish
530	530	14 guidelines that (i) define the scope of the examination
531	531	15 process and (ii) clarify examination items to be resolved. The
532	532	16 rules, formal guidance, interpretive letters, or opinions
533	533	17 furnished to credit unions by the Secretary may be relied upon
534	534	18 by the credit unions.
535	535	19 (4) A copy of the completed report of examination and a
536	536	20 review comment letter, if any, citing exceptions revealed
537	537	21 during the examination, shall be submitted to the credit union
538	538	22 by the Department. A detailed report stating the corrective
539	539	23 actions taken by the board of directors on each exception set
540	540	24 forth in the review comment letter shall be filed with the
541	541	25 Department within 40 days after the date of the review comment
542	542	26 letter, or as otherwise directed by the Department. Any credit
543	543
544	544
545	545
546	546
547	547
548	548	HB5372 - 14 - LRB103 39216 RTM 69366 b
549	549
550	550
551	551	HB5372- 15 -LRB103 39216 RTM 69366 b HB5372 - 15 - LRB103 39216 RTM 69366 b
552	552	HB5372 - 15 - LRB103 39216 RTM 69366 b
553	553	1 union through its officers, directors, committee members or
554	554	2 employees, which willfully provides fraudulent or misleading
555	555	3 information regarding the corrective actions taken on
556	556	4 exceptions appearing in a review comment letter may have its
557	557	5 operations restricted to the collection of principal and
558	558	6 interest on loans outstanding and the payment of normal
559	559	7 expenses and salaries until all exceptions are corrected and
560	560	8 accepted by the Department.
561	561	9 (5) The Secretary may accept an examination from the
562	562	10 National Credit Union Administration or a private insurer of
563	563	11 share deposits approved by the Secretary instead of an
564	564	12 examination conducted by the Department or by a public
565	565	13 accountant registered by the Department pursuant to subsection
566	566	14 (3). Acceptance of an examination from the National Credit
567	567	15 Union Administration or an approved private insurer of share
568	568	16 deposits shall only be permitted on an alternating basis with
569	569	17 examinations that the Department or a registered public
570	570	18 accountant conducts.
571	571	19 (Source: P.A. 102-558, eff. 8-20-21; 102-858, eff. 5-13-22.)
572	572	20 (205 ILCS 305/12.5 new)
573	573	21 Sec. 12.5. Community Reinvestment Act examination fees.
574	574	22 (a) As used in this Section:
575	575	23 "Fiscal year" means a period beginning on July 1 of any
576	576	24 calendar year and ending on June 30 of the next calendar year.
577	577	25 "Examination fee" means the examination fee described in
578	578
579	579
580	580
581	581
582	582
583	583	HB5372 - 15 - LRB103 39216 RTM 69366 b
584	584
585	585
586	586	HB5372- 16 -LRB103 39216 RTM 69366 b HB5372 - 16 - LRB103 39216 RTM 69366 b
587	587	HB5372 - 16 - LRB103 39216 RTM 69366 b
588	588	1 Section 35-15 of the Illinois Community Reinvestment Act.
589	589	2 (b) For the fiscal year beginning July 1, 2025, a credit
590	590	3 union regulated by the Department that is a covered financial
591	591	4 institution under the Illinois Community Reinvestment Act
592	592	5 shall pay an examination fee to the Department at the
593	593	6 frequency and rate set forth in rules adopted by the
594	594	7 Department implementing the Illinois Community Reinvestment
595	595	8 Act, unless exempted from the payment of the examination fee
596	596	9 by those rules. The examination fee shall be separate from and
597	597	10 in addition to the regulatory fees paid by credit unions
598	598	11 regulated by the Department as prescribed in Section 12 and
599	599	12 shall be exclusively used to defray the administrative and
600	600	13 operational expenses of the Credit Union Section of the
601	601	14 Department incidental to conducting the examinations required
602	602	15 by the Illinois Community Reinvestment Act and implementing
603	603	16 rules of the Department.
604	604	17 (c) The aggregate of all credit union examination fees
605	605	18 collected by the Department under the Illinois Community
606	606	19 Reinvestment Act shall be paid and transferred promptly,
607	607	20 accompanied by a detailed statement, into the State Treasury
608	608	21 and shall be set apart in the Credit Union Community
609	609	22 Reinvestment Act Fund. All earnings received from investment
610	610	23 of the funds in the Credit Union Community Reinvestment Act
611	611	24 Fund shall be deposited in the Fund and shall be used for the
612	612	25 same purposes as examination fees deposited into the Fund.
613	613	26 Moneys deposited into the Credit Union Community Reinvestment
614	614
615	615
616	616
617	617
618	618
619	619	HB5372 - 16 - LRB103 39216 RTM 69366 b
620	620
621	621
622	622	HB5372- 17 -LRB103 39216 RTM 69366 b HB5372 - 17 - LRB103 39216 RTM 69366 b
623	623	HB5372 - 17 - LRB103 39216 RTM 69366 b
624	624	1 Act Fund may be transferred to the Professions Indirect Cost
625	625	2 Fund, as authorized under Section 2105-300 of the Department
626	626	3 of Professional Regulation Law of the Civil Administrative
627	627	4 Code of Illinois.
628	628	5 (d) The administrative and operational expenses of the
629	629	6 Credit Union Section of the Department in conducting
630	630	7 examinations shall have the same meaning and scope as the
631	631	8 administrative and operational expenses of the Credit Union
632	632	9 Section of the Department in conducting regulatory
633	633	10 examinations, as defined in subsection (5) of Section 12.
634	634	11 (e) When the balance in the Credit Union Community
635	635	12 Reinvestment Act Fund at the end of a fiscal year exceeds 25%
636	636	13 of the total administrative and operational expenses incurred
637	637	14 by the Department in administering and enforcing the Illinois
638	638	15 Community Reinvestment Act and rules of the Department in the
639	639	16 administration and enforcement of the Illinois Community
640	640	17 Reinvestment Act by conducting examinations of credit unions,
641	641	18 such excess shall be credited to credit unions and applied
642	642	19 against the credit unions' examination fees for the subsequent
643	643	20 fiscal year. The amount credited to each credit union shall be
644	644	21 in the same proportion as the examination fee paid by such
645	645	22 credit union for the fiscal year in which the excess is
646	646	23 produced bears to the aggregate amount of all examination fees
647	647	24 collected by the Department from credit unions under the
648	648	25 Illinois Community Reinvestment Act for the same fiscal year.
649	649
650	650
651	651
652	652
653	653
654	654	HB5372 - 17 - LRB103 39216 RTM 69366 b
655	655
656	656
657	657	HB5372- 18 -LRB103 39216 RTM 69366 b HB5372 - 18 - LRB103 39216 RTM 69366 b
658	658	HB5372 - 18 - LRB103 39216 RTM 69366 b
659	659	1 (205 ILCS 305/13) (from Ch. 17, par. 4414)
660	660	2 Sec. 13. General powers. A credit union may:
661	661	3 (1) Make contracts; sue and be sued; and adopt and use
662	662	4 a common seal and alter the same;
663	663	5 (2) Acquire, lease (either as lessee or lessor), hold,
664	664	6 pledge, mortgage, sell and dispose of real property,
665	665	7 either in whole or in part, or any interest therein, as may
666	666	8 be necessary or incidental to its present or future
667	667	9 operations and needs, subject to such limitations as may
668	668	10 be imposed thereon in rules and regulations promulgated by
669	669	11 the Secretary; acquire, lease (either as lessee or
670	670	12 lessor), hold, pledge, mortgage, sell and dispose of
671	671	13 personal property, either in whole or in part, or any
672	672	14 interest therein, as may be necessary or incidental to its
673	673	15 present or future operations and needs;
674	674	16 (3) At the discretion of the board of directors,
675	675	17 require the payment of an entrance fee or annual
676	676	18 membership fee, or both, of any person admitted to
677	677	19 membership;
678	678	20 (4) Receive savings from its members in the form of
679	679	21 shares of various classes, or special purpose share
680	680	22 accounts; act as custodian of its members' accounts; issue
681	681	23 shares in trust as provided in this Act;
682	682	24 (5) Lend its funds to its members and otherwise as
683	683	25 hereinafter provided;
684	684	26 (6) Borrow from any source in accordance with policy
685	685
686	686
687	687
688	688
689	689
690	690	HB5372 - 18 - LRB103 39216 RTM 69366 b
691	691
692	692
693	693	HB5372- 19 -LRB103 39216 RTM 69366 b HB5372 - 19 - LRB103 39216 RTM 69366 b
694	694	HB5372 - 19 - LRB103 39216 RTM 69366 b
695	695	1 established by the board of directors to a maximum of 50%
696	696	2 of capital, surplus and reserves;
697	697	3 (7) Discount and sell any obligations owed to the
698	698	4 credit union;
699	699	5 (8) Honor requests for withdrawals or transfers of all
700	700	6 or any part of member share accounts, and any classes
701	701	7 thereof, in any manner approved by the credit union board
702	702	8 of directors;
703	703	9 (9) Sell all or a part of its assets or purchase all or
704	704	10 a part of the assets of another credit union and assume the
705	705	11 liabilities of the selling credit union, subject to the
706	706	12 prior approval of the Director, which approval shall not
707	707	13 be required in the case of loan transactions otherwise
708	708	14 authorized under applicable law;
709	709	15 (10) Invest surplus funds as provided in this Act;
710	710	16 (11) Make deposits in banks, savings banks, savings
711	711	17 and loan associations, trust companies; and invest in
712	712	18 shares, classes of shares or share certificates of other
713	713	19 credit unions;
714	714	20 (12) Assess charges and fees to members in accordance
715	715	21 with board resolution;
716	716	22 (13) Hold membership in and pay dues to associations
717	717	23 and organizations; to invest in shares, stocks or
718	718	24 obligations of any credit union organization;
719	719	25 (14) Declare dividends and pay interest refunds to
720	720	26 borrowers as provided in this Act;
721	721
722	722
723	723
724	724
725	725
726	726	HB5372 - 19 - LRB103 39216 RTM 69366 b
727	727
728	728
729	729	HB5372- 20 -LRB103 39216 RTM 69366 b HB5372 - 20 - LRB103 39216 RTM 69366 b
730	730	HB5372 - 20 - LRB103 39216 RTM 69366 b
731	731	1 (15) Collect, receive and disburse monies in
732	732	2 connection with providing negotiable checks, money orders
733	733	3 and other money-type instruments, and for such other
734	734	4 purposes as may provide benefit or convenience to its
735	735	5 members, and charge a reasonable fee for such services;
736	736	6 (16) Act as fiscal agent for and receive deposits from
737	737	7 the federal government, this State, or any other state,
738	738	8 state or any agency or political subdivision thereof,
739	739	9 including, but not limited to, political subdivisions as
740	740	10 defined in subsection (b) of Section 59;
741	741	11 (17) Receive savings from nonmembers in the form of
742	742	12 shares or share accounts in the case of credit unions
743	743	13 serving predominantly low-income members. The term "low
744	744	14 income members" shall mean those members who make less
745	745	15 than 80% of the average for all wage earners as
746	746	16 established by the Bureau of Labor Statistics or those
747	747	17 members whose annual household income falls at or below
748	748	18 80% of the median household income for the nation as
749	749	19 established by the Census Bureau. The term "predominantly"
750	750	20 is defined as a simple majority;
751	751	21 (18) Establish, maintain, and operate terminals as
752	752	22 authorized by the Electronic Fund Transfer Act;
753	753	23 (19) Subject to Article XLIV of the Illinois Insurance
754	754	24 Code, act as the agent for any fire, life, or other
755	755	25 insurance company authorized by the State of Illinois, by
756	756	26 soliciting and selling insurance and collecting premiums
757	757
758	758
759	759
760	760
761	761
762	762	HB5372 - 20 - LRB103 39216 RTM 69366 b
763	763
764	764
765	765	HB5372- 21 -LRB103 39216 RTM 69366 b HB5372 - 21 - LRB103 39216 RTM 69366 b
766	766	HB5372 - 21 - LRB103 39216 RTM 69366 b
767	767	1 on policies issued by such company; and may receive for
768	768	2 services so rendered such fees or commissions as may be
769	769	3 agreed upon between the said credit union and the
770	770	4 insurance company for which it may act as agent; provided,
771	771	5 however, that no such credit union shall in any case
772	772	6 assume or guarantee the payment of any premium on
773	773	7 insurance policies issued through its agency by its
774	774	8 principal; and provided further, that the credit union
775	775	9 shall not guarantee the truth of any statement made by an
776	776	10 assured in filing his application for insurance; and
777	777	11 (20) Make reasonable contributions to civic,
778	778	12 charitable, or service organizations not organized for
779	779	13 profit; religious corporations; and fundraisers benefiting
780	780	14 persons in the credit union's service area.
781	781	15 (Source: P.A. 97-133, eff. 1-1-12.)
782	782	16 (205 ILCS 305/39) (from Ch. 17, par. 4440)
783	783	17 Sec. 39. Special purpose share accounts; charitable
784	784	18 donation accounts.
785	785	19 (1) If provided for in and consistent with the bylaws,
786	786	20 Christmas clubs, vacation clubs and other special purpose
787	787	21 share accounts may be established and offered under conditions
788	788	22 and restrictions established by the board of directors.
789	789	23 (2) Pursuant to a policy adopted by the board of
790	790	24 directors, which may be amended from time to time, a credit
791	791	25 union may establish one or more charitable donation accounts.
792	792
793	793
794	794
795	795
796	796
797	797	HB5372 - 21 - LRB103 39216 RTM 69366 b
798	798
799	799
800	800	HB5372- 22 -LRB103 39216 RTM 69366 b HB5372 - 22 - LRB103 39216 RTM 69366 b
801	801	HB5372 - 22 - LRB103 39216 RTM 69366 b
802	802	1 The investments and purchases to fund a charitable donation
803	803	2 account are not subject to the investment limitations of this
804	804	3 Act, provided the charitable donation account is structured in
805	805	4 accordance with this Act. At their time of purchase, the book
806	806	5 value of the investments in all charitable donation accounts,
807	807	6 in the aggregate, shall not exceed 5% of the credit union's net
808	808	7 worth.
809	809	8 (a) If a credit union chooses to establish a
810	810	9 charitable donation account using a trust vehicle, the
811	811	10 trustee must be an entity regulated by the Office of the
812	812	11 Comptroller of the Currency, the U.S. Securities and
813	813	12 Exchange Commission, another federal regulatory agency, or
814	814	13 a State financial regulatory agency. A regulated trustee
815	815	14 or other person who is authorized to make investment
816	816	15 decisions for a charitable donation account, other than
817	817	16 the credit union itself, shall either be registered with
818	818	17 the U.S. Securities and Exchange Commission as an
819	819	18 investment advisor or regulated by the Office of the
820	820	19 Comptroller of the Currency.
821	821	20 (b) The parties to the charitable donation account
822	822	21 must document the terms and conditions controlling the
823	823	22 account in a written operating agreement, trust agreement,
824	824	23 or similar instrument. The terms of the agreement shall be
825	825	24 consistent with the requirements and conditions set forth
826	826	25 in this Section. The agreement, if applicable, and
827	827	26 policies must document the investment strategies of the
828	828
829	829
830	830
831	831
832	832
833	833	HB5372 - 22 - LRB103 39216 RTM 69366 b
834	834
835	835
836	836	HB5372- 23 -LRB103 39216 RTM 69366 b HB5372 - 23 - LRB103 39216 RTM 69366 b
837	837	HB5372 - 23 - LRB103 39216 RTM 69366 b
838	838	1 charitable donation account trustee or other manager in
839	839	2 administering the charitable donation account and provide
840	840	3 for the accounting of all aspects of the account,
841	841	4 including its distributions and liquidation, in accordance
842	842	5 with generally accepted accounting principles.
843	843	6 (c) A credit union's charitable donation account
844	844	7 agreement, if applicable, and policies shall provide that
845	845	8 the charitable organization or non-profit entity
846	846	9 recipients of any charitable donation account funds must
847	847	10 be identified in the policy and be exempt from taxation
848	848	11 under Section 501(c)(3) or Section 501(c)(19) of the
849	849	12 Internal Revenue Code.
850	850	13 (d) Upon termination of a charitable donation account,
851	851	14 the credit union may receive a distribution of the
852	852	15 remaining assets in cash, or a distribution in kind of the
853	853	16 remaining assets, but only if those assets are permissible
854	854	17 investments for credit unions pursuant to this Act.
855	855	18 (3) Pursuant to subsection (20) of Section 13 authorizing
856	856	19 a credit union to make reasonable contributions to civic,
857	857	20 charitable, service, or religious corporations and to avoid
858	858	21 the cost, administrative expenses, and reporting requirements
859	859	22 associated with establishing its own private foundation, a
860	860	23 credit union may establish one or more donor-advised fund
861	861	24 accounts. The credit union shall maintain the account on its
862	862	25 books and records under a name it selects, which may identify
863	863	26 the account as a charitable or grant fund or other name that
864	864
865	865
866	866
867	867
868	868
869	869	HB5372 - 23 - LRB103 39216 RTM 69366 b
870	870
871	871
872	872	HB5372- 24 -LRB103 39216 RTM 69366 b HB5372 - 24 - LRB103 39216 RTM 69366 b
873	873	HB5372 - 24 - LRB103 39216 RTM 69366 b
874	874	1 reflects the charitable nature of the account. The account
875	875	2 shall be subject to the terms and restrictions set forth in
876	876	3 this subsection.
877	877	4 (a) Transfers from a donor-advised fund account shall
878	878	5 be limited to foundations exempt from taxation under
879	879	6 Section 501(c)(3) of the Internal Revenue Code.
880	880	7 (b) Distributions by a foundation receiving
881	881	8 donor-advised funds from the credit union shall be:
882	882	9 (i) based upon specific grant recommendations of
883	883	10 the credit union; and
884	884	11 (ii) limited to public charities exempt from
885	885	12 taxation under Section 501(c)(3) of the Internal
886	886	13 Revenue Code.
887	887	14 (c) Transfers by a credit union from its donor-advised
888	888	15 fund account to a foundation irrevocably conveys all
889	889	16 right, title, and interest in the funds to the foundation,
890	890	17 subject only to the continuing right of the credit union
891	891	18 to designate the entity or entities that will receive the
892	892	19 grant funds. Grants may not be used to satisfy any
893	893	20 obligation of the credit union and no goods or services
894	894	21 may be received by the credit union from the recipient
895	895	22 organization in consideration of the grant.
896	896	23 (Source: P.A. 102-774, eff. 5-13-22.)
897	897	24 (205 ILCS 305/59) (from Ch. 17, par. 4460)
898	898	25 Sec. 59. Investment of funds.
899	899
900	900
901	901
902	902
903	903
904	904	HB5372 - 24 - LRB103 39216 RTM 69366 b
905	905
906	906
907	907	HB5372- 25 -LRB103 39216 RTM 69366 b HB5372 - 25 - LRB103 39216 RTM 69366 b
908	908	HB5372 - 25 - LRB103 39216 RTM 69366 b
909	909	1 (a) Funds not used in loans to members may be invested,
910	910	2 pursuant to subsection (7) of Section 30 of this Act, and
911	911	3 subject to Departmental rules and regulations:
912	912	4 (1) In securities, obligations or other instruments of
913	913	5 or issued by or fully guaranteed as to principal and
914	914	6 interest by the United States of America or any agency
915	915	7 thereof or in any trust or trusts established for
916	916	8 investing directly or collectively in the same;
917	917	9 (2) In obligations of any state of the United States,
918	918	10 the District of Columbia, the Commonwealth of Puerto Rico,
919	919	11 and the several territories organized by Congress, or any
920	920	12 political subdivision thereof; however, a credit union may
921	921	13 not invest more than 10% of its unimpaired capital and
922	922	14 surplus in the obligations of one issuer, exclusive of
923	923	15 general obligations of the issuer, and investments in
924	924	16 municipal securities must be limited to securities rated
925	925	17 in one of the 4 highest rating investment grades by a
926	926	18 nationally recognized statistical rating organization;
927	927	19 (3) In certificates of deposit or passbook type
928	928	20 accounts issued by a state or national bank, mutual
929	929	21 savings bank or savings and loan association; provided
930	930	22 that such institutions have their accounts insured by the
931	931	23 Federal Deposit Insurance Corporation or the Federal
932	932	24 Savings and Loan Insurance Corporation; but provided,
933	933	25 further, that a credit union's investment in an account in
934	934	26 any one institution may exceed the insured limit on
935	935
936	936
937	937
938	938
939	939
940	940	HB5372 - 25 - LRB103 39216 RTM 69366 b
941	941
942	942
943	943	HB5372- 26 -LRB103 39216 RTM 69366 b HB5372 - 26 - LRB103 39216 RTM 69366 b
944	944	HB5372 - 26 - LRB103 39216 RTM 69366 b
945	945	1 accounts;
946	946	2 (4) In shares, classes of shares or share certificates
947	947	3 of other credit unions, including, but not limited to,
948	948	4 corporate credit unions; provided that such credit unions
949	949	5 have their members' accounts insured by the NCUA or other
950	950	6 approved insurers, and that if the members' accounts are
951	951	7 so insured, a credit union's investment may exceed the
952	952	8 insured limit on accounts;
953	953	9 (5) In shares of a cooperative society organized under
954	954	10 the laws of this State or the laws of the United States in
955	955	11 the total amount not exceeding 10% of the unimpaired
956	956	12 capital and surplus of the credit union; provided that
957	957	13 such investment shall first be approved by the Department;
958	958	14 (6) In obligations of the State of Israel, or
959	959	15 obligations fully guaranteed by the State of Israel as to
960	960	16 payment of principal and interest;
961	961	17 (7) In shares, stocks or obligations of other
962	962	18 financial institutions in the total amount not exceeding
963	963	19 5% of the unimpaired capital and surplus of the credit
964	964	20 union;
965	965	21 (8) In federal funds and bankers' acceptances;
966	966	22 (9) In shares or stocks of Credit Union Service
967	967	23 Organizations in the total amount not exceeding the
968	968	24 greater of 6% of the unimpaired capital and surplus of the
969	969	25 credit union or the amount authorized for federal credit
970	970	26 unions;
971	971
972	972
973	973
974	974
975	975
976	976	HB5372 - 26 - LRB103 39216 RTM 69366 b
977	977
978	978
979	979	HB5372- 27 -LRB103 39216 RTM 69366 b HB5372 - 27 - LRB103 39216 RTM 69366 b
980	980	HB5372 - 27 - LRB103 39216 RTM 69366 b
981	981	1 (10) In corporate bonds identified as investment grade
982	982	2 by at least one nationally recognized statistical rating
983	983	3 organization, provided that:
984	984	4 (i) the board of directors has established a
985	985	5 written policy that addresses corporate bond
986	986	6 investment procedures and how the credit union will
987	987	7 manage credit risk, interest rate risk, liquidity
988	988	8 risk, and concentration risk; and
989	989	9 (ii) the credit union has documented in its
990	990	10 records that a credit analysis of a particular
991	991	11 investment and the issuing entity was conducted by the
992	992	12 credit union, a third party on behalf of the credit
993	993	13 union qualified by education or experience to assess
994	994	14 the risk characteristics of corporate bonds, or a
995	995	15 nationally recognized statistical rating agency before
996	996	16 purchasing the investment and the analysis is updated
997	997	17 at least annually for as long as it holds the
998	998	18 investment;
999	999	19 (11) To aid in the credit union's management of its
1000	1000	20 assets, liabilities, and liquidity in the purchase of an
1001	1001	21 investment interest in a pool of loans, in whole or in part
1002	1002	22 and without regard to the membership of the borrowers,
1003	1003	23 from other depository institutions and financial type
1004	1004	24 institutions, including mortgage banks, finance companies,
1005	1005	25 insurance companies, and other loan sellers in the total
1006	1006	26 amount not exceeding 150% of the net worth of the credit
1007	1007
1008	1008
1009	1009
1010	1010
1011	1011
1012	1012	HB5372 - 27 - LRB103 39216 RTM 69366 b
1013	1013
1014	1014
1015	1015	HB5372- 28 -LRB103 39216 RTM 69366 b HB5372 - 28 - LRB103 39216 RTM 69366 b
1016	1016	HB5372 - 28 - LRB103 39216 RTM 69366 b
1017	1017	1 union, so long as the credit union has received a
1018	1018	2 composite rating of 1 or 2 under the CAMELS supervisory
1019	1019	3 rating system at the time of the purchase of the
1020	1020	4 investment interest. The limit is increased to 175% of the
1021	1021	5 net worth of the credit union if it has received a
1022	1022	6 management rating of 1 under the CAMELS supervisory rating
1023	1023	7 system at the time of the purchase of the investment
1024	1024	8 interest. A credit union that satisfies the criteria for
1025	1025	9 the 175% limit may request approval from the Secretary for
1026	1026	10 an exception to the 175% limit up to a limit of 200% of the
1027	1027	11 net worth of the credit union, subject to such safety and
1028	1028	12 soundness standards, limitations, and qualifications as
1029	1029	13 the Department may establish by rule or guidance from time
1030	1030	14 to time;
1031	1031	15 (12) To aid in the credit union's management of its
1032	1032	16 assets, liabilities, and liquidity by receiving funds from
1033	1033	17 another financial institution as evidenced by certificates
1034	1034	18 of deposit, share certificates, or other classes of shares
1035	1035	19 issued by the credit union to the financial institution;
1036	1036	20 (13) In the purchase and assumption of assets held by
1037	1037	21 other financial institutions, with approval of the
1038	1038	22 Secretary and subject to any safety and soundness
1039	1039	23 standards, limitations, and qualifications as the
1040	1040	24 Department may establish by rule or guidance from time to
1041	1041	25 time;
1042	1042	26 (14) In the shares, stocks, or obligations of
1043	1043
1044	1044
1045	1045
1046	1046
1047	1047
1048	1048	HB5372 - 28 - LRB103 39216 RTM 69366 b
1049	1049
1050	1050
1051	1051	HB5372- 29 -LRB103 39216 RTM 69366 b HB5372 - 29 - LRB103 39216 RTM 69366 b
1052	1052	HB5372 - 29 - LRB103 39216 RTM 69366 b
1053	1053	1 community development financial institutions as defined in
1054	1054	2 regulations issued by the U.S. Department of the Treasury
1055	1055	3 and minority depository institutions as defined by the
1056	1056	4 National Credit Union Administration; however the
1057	1057	5 aggregate amount of all such investments shall not at any
1058	1058	6 time exceed 5% of the paid-in and unimpaired capital and
1059	1059	7 surplus of the credit union; and
1060	1060	8 (15)(A) In shares, stocks, or member units of
1061	1061	9 financial technology companies in the total amount not
1062	1062	10 exceeding 2.5% of the net worth of the credit union, so
1063	1063	11 long as:
1064	1064	12 (i) the credit union would remain well capitalized
1065	1065	13 as defined by 12 CFR 702.102 if the credit union
1066	1066	14 reduced its net worth by the full investment amount at
1067	1067	15 the time the investment is made or at any point during
1068	1068	16 the time the investment is held by the credit union;
1069	1069	17 (ii) the credit union and the financial technology
1070	1070	18 company are operated in a manner that demonstrates to
1071	1071	19 the public the separate corporate existence of the
1072	1072	20 credit union and financial technology company; and
1073	1073	21 (iii) the credit union has received a composite
1074	1074	22 rating of 1 or 2 under the CAMELS supervisory rating
1075	1075	23 system.
1076	1076	24 (B) The investment limit in subparagraph (A) of this
1077	1077	25 paragraph (15) is increased to 5% of the net worth of the
1078	1078	26 credit union if it has received a management rating of 1
1079	1079
1080	1080
1081	1081
1082	1082
1083	1083
1084	1084	HB5372 - 29 - LRB103 39216 RTM 69366 b
1085	1085
1086	1086
1087	1087	HB5372- 30 -LRB103 39216 RTM 69366 b HB5372 - 30 - LRB103 39216 RTM 69366 b
1088	1088	HB5372 - 30 - LRB103 39216 RTM 69366 b
1089	1089	1 under the CAMELS supervisory rating system at the time a
1090	1090	2 specific investment is made and at all times during the
1091	1091	3 term of the investment. A credit union that satisfies the
1092	1092	4 criteria in subparagraph (A) of this paragraph (15) and
1093	1093	5 this subparagraph may request approval from the Secretary
1094	1094	6 for an exception to the 5% limit up to a limit of 10% of
1095	1095	7 the net worth of the credit union, subject to such safety
1096	1096	8 and soundness standards, limitations, and qualifications
1097	1097	9 as the Department may establish by rule or guidance from
1098	1098	10 time to time. The request shall be in writing and
1099	1099	11 substantiate the need for the higher limit, describe the
1100	1100	12 credit union's record of investment activity, and include
1101	1101	13 financial statements reflecting a sound fiscal history.
1102	1102	14 (C) Before investing in a financial technology
1103	1103	15 company, the credit union shall obtain a written legal
1104	1104	16 opinion as to whether the financial technology company is
1105	1105	17 established in a manner that will limit potential exposure
1106	1106	18 of the credit union to no more than the loss of funds
1107	1107	19 invested in the financial technology company and the legal
1108	1108	20 opinion shall:
1109	1109	21 (i) address factors that have led courts to
1110	1110	22 "pierce the corporate veil", such as inadequate
1111	1111	23 capitalization, lack of separate corporate identity,
1112	1112	24 common boards of directors and employees, control of
1113	1113	25 one entity over another, and lack of separate books
1114	1114	26 and records; and
1115	1115
1116	1116
1117	1117
1118	1118
1119	1119
1120	1120	HB5372 - 30 - LRB103 39216 RTM 69366 b
1121	1121
1122	1122
1123	1123	HB5372- 31 -LRB103 39216 RTM 69366 b HB5372 - 31 - LRB103 39216 RTM 69366 b
1124	1124	HB5372 - 31 - LRB103 39216 RTM 69366 b
1125	1125	1 (ii) be provided by independent legal counsel of
1126	1126	2 the credit union.
1127	1127	3 (D) Before investing in the financial technology
1128	1128	4 company, the credit union shall enter into a written
1129	1129	5 investment agreement with the financial technology company
1130	1130	6 and the agreement shall contain the following clauses:
1131	1131	7 (i) the financial technology company will: (I)
1132	1132	8 provide the Department with access to the books and
1133	1133	9 records of the financial technology company relating
1134	1134	10 to the investment made by the credit union, with the
1135	1135	11 costs of examining those records borne by the credit
1136	1136	12 union in accordance with the per diem rate established
1137	1137	13 by the Department by rule; (II) follow generally
1138	1138	14 accepted accounting principles; and (III) provide the
1139	1139	15 credit union with its financial statements on at least
1140	1140	16 a quarterly basis and certified public accountant
1141	1141	17 audited financial statements on an annual basis; and
1142	1142	18 (ii) the financial technology company and credit
1143	1143	19 union agree to terminate their contractual
1144	1144	20 relationship: (I) upon 90 days' written notice to the
1145	1145	21 parties by the Secretary that the safety and soundness
1146	1146	22 of the credit union is threatened pursuant to the
1147	1147	23 Department's cease and desist and suspension authority
1148	1148	24 in Sections 8 and 61; (II) upon 30 days' written notice
1149	1149	25 to the parties if the credit union's net worth ratio
1150	1150	26 falls below the level that classifies it as well
1151	1151
1152	1152
1153	1153
1154	1154
1155	1155
1156	1156	HB5372 - 31 - LRB103 39216 RTM 69366 b
1157	1157
1158	1158
1159	1159	HB5372- 32 -LRB103 39216 RTM 69366 b HB5372 - 32 - LRB103 39216 RTM 69366 b
1160	1160	HB5372 - 32 - LRB103 39216 RTM 69366 b
1161	1161	1 capitalized as defined by 12 CFR 702.102; and (III)
1162	1162	2 immediately upon the parties' receipt of written
1163	1163	3 notice from the Secretary when the Secretary
1164	1164	4 reasonably concludes, based upon specific facts set
1165	1165	5 forth in the notice to the parties, that the credit
1166	1166	6 union will suffer immediate, substantial, and
1167	1167	7 irreparable injury or loss if it remains a party to the
1168	1168	8 investment agreement.
1169	1169	9 (E) The termination of the investment agreement
1170	1170	10 between the financial technology company and credit union
1171	1171	11 shall in no way operate to relieve the financial
1172	1172	12 technology company from repaying the investment or other
1173	1173	13 obligation due and owing the credit union at the time of
1174	1174	14 termination.
1175	1175	15 (F) Any financial technology company in which a credit
1176	1176	16 union invests pursuant to this paragraph (15) that
1177	1177	17 directly or indirectly originates, purchases, facilitates,
1178	1178	18 brokers, or services loans to consumers in Illinois shall
1179	1179	19 not charge an interest rate that exceeds the applicable
1180	1180	20 maximum rate established by the Board of the National
1181	1181	21 Credit Union Administration pursuant to 12 CFR
1182	1182	22 701.21(c)(7)(iii)-(iv). The maximum interest rate
1183	1183	23 described in this subparagraph that may be charged by a
1184	1184	24 financial technology company applies to all consumer loans
1185	1185	25 and consumer credit products; and .
1186	1186	26 (16) In derivatives transactions, to aid in the credit
1187	1187
1188	1188
1189	1189
1190	1190
1191	1191
1192	1192	HB5372 - 32 - LRB103 39216 RTM 69366 b
1193	1193
1194	1194
1195	1195	HB5372- 33 -LRB103 39216 RTM 69366 b HB5372 - 33 - LRB103 39216 RTM 69366 b
1196	1196	HB5372 - 33 - LRB103 39216 RTM 69366 b
1197	1197	1 union's management of interest rate risk. Before entering
1198	1198	2 into a derivatives transaction, and at all times during
1199	1199	3 its management of a derivatives transactions program, a
1200	1200	4 credit union shall satisfy and comply with all the
1201	1201	5 requirements set forth in 12 CFR 703.101 et seq. All
1202	1202	6 definitional terms and operational standards shall have
1203	1203	7 the meanings given to them in 12 CFR 703.101 et seq.,
1204	1204	8 except references to federal credit unions shall be
1205	1205	9 construed to mean Illinois-chartered credit unions, and
1206	1206	10 references to the National Credit Union Administration and
1207	1207	11 Regional Director shall be respectfully construed to mean
1208	1208	12 the Department and the Secretary. A credit union with
1209	1209	13 assets of at least $500 million and a CAMELS management
1210	1210	14 component rating of 1 or 2 need not obtain prior approval
1211	1211	15 from the Department before engaging in derivative
1212	1212	16 transactions
1213	1213	but shall notify the Secretary in writing or
1214	1214	17 by electronic mail within 5 business days after entering
1215	1215	18 into its first derivatives transaction.
1216	1216	19 (b) As used in this Section:
1217	1217	20 "Political subdivision" includes, but is not limited to,
1218	1218	21 counties, townships, cities, villages, incorporated towns,
1219	1219	22 school districts, educational service regions, special road
1220	1220	23 districts, public water supply districts, fire protection
1221	1221	24 districts, drainage districts, levee districts, sewer
1222	1222	25 districts, housing authorities, park districts, and any
1223	1223	26 agency, corporation, or instrumentality of a state or its
1224	1224
1225	1225
1226	1226
1227	1227
1228	1228
1229	1229	HB5372 - 33 - LRB103 39216 RTM 69366 b
1230	1230
1231	1231
1232	1232	HB5372- 34 -LRB103 39216 RTM 69366 b HB5372 - 34 - LRB103 39216 RTM 69366 b
1233	1233	HB5372 - 34 - LRB103 39216 RTM 69366 b
1234	1234	1 political subdivisions, whether now or hereafter created and
1235	1235	2 whether herein specifically mentioned or not.
1236	1236	3 "Financial institution" includes any bank, savings bank,
1237	1237	4 savings and loan association, or credit union established
1238	1238	5 under the laws of the United States, this State, or any other
1239	1239	6 state.
1240	1240	7 "Financial technology company" includes any corporation,
1241	1241	8 partnership, limited liability company, or other entity
1242	1242	9 organized under the laws of Illinois, another state, or the
1243	1243	10 United States of America:
1244	1244	11 (1) that the principal business of which is the
1245	1245	12 provision of financial products or financial services, or
1246	1246	13 both, that:
1247	1247	14 (i) currently relate or may prospectively relate
1248	1248	15 to the daily operations of credit unions;
1249	1249	16 (ii) are of current or prospective benefit to the
1250	1250	17 members of credit unions; or
1251	1251	18 (iii) are of current or prospective benefit to
1252	1252	19 consumers eligible for membership in credit unions;
1253	1253	20 and
1254	1254	21 (2) that applies technological interventions,
1255	1255	22 including, without limitation, specialized software or
1256	1256	23 algorithm processes, products, or solutions, to improve
1257	1257	24 and automate the delivery and use of those financial
1258	1258	25 products or financial services.
1259	1259	26 (c) A credit union investing to fund an employee benefit
1260	1260
1261	1261
1262	1262
1263	1263
1264	1264
1265	1265	HB5372 - 34 - LRB103 39216 RTM 69366 b
1266	1266
1267	1267
1268	1268	HB5372- 35 -LRB103 39216 RTM 69366 b HB5372 - 35 - LRB103 39216 RTM 69366 b
1269	1269	HB5372 - 35 - LRB103 39216 RTM 69366 b
1270	1270	1 plan obligation is not subject to the investment limitations
1271	1271	2 of this Act and this Section and may purchase an investment
1272	1272	3 that would otherwise be impermissible if the investment is
1273	1273	4 directly related to the credit union's obligation under the
1274	1274	5 employee benefit plan and the credit union holds the
1275	1275	6 investment only for so long as it has an actual or potential
1276	1276	7 obligation under the employee benefit plan.
1277	1277	8 (d) If a credit union acquires loans from another
1278	1278	9 financial institution or financial-type institution pursuant
1279	1279	10 to this Section, the credit union shall be authorized to
1280	1280	11 provide loan servicing and collection services in connection
1281	1281	12 with those loans.
1282	1282	13 (Source: P.A. 102-496, eff. 8-20-21; 102-774, eff. 5-13-22;
1283	1283	14 102-858, eff. 5-13-22; 103-154, eff. 6-30-23.)
1284	1284
1285	1285
1286	1286
1287	1287
1288	1288
1289	1289	HB5372 - 35 - LRB103 39216 RTM 69366 b