Public Act 099-0614
 
HB5755 EnrolledLRB099 20532 SMS 45074 b


  
    AN ACT concerning regulation.
  
 
    Be it enacted by the People of the State of Illinois,
 
represented in the General Assembly:
  
 
 
    Section 5. The Illinois Credit Union Act is amended  by 
changing Sections 4, 22, 33, 46, and 52 and  by adding Section 
64.7 as follows:
 



    (205 ILCS 305/4)  (from Ch. 17, par. 4405)



    Sec. 4. Amendments to articles of incorporation and bylaws. 
Amendments
to the articles of incorporation or may be made by 
the members at any regular
or special meeting, if the proposed 
amendment is set forth in the call of
the meeting and is 
approved by at least two thirds of the members present
at a 
meeting at
which a quorum is present. Amendments to the bylaws 
may be made by the members
at any regular or special meeting, 
if the proposed amendment is set forth
in the call for the 
meeting and is approved by a majority of the members
present at 
a meeting at which a quorum is present. Amendments to the 
articles of incorporation or bylaws
may also be made by the 
board of directors at any regular or special meeting,
if the 
proposed amendment is set forth in the call of the meeting and 
approved
by at least two thirds of the directors present at a 
meeting at which a
quorum is present. A report shall be made to 
the members at the next annual
meeting of any amendments to the 
articles of incorporation or bylaws adopted by the board of 
directors.
Any amendment to the articles of incorporation or 
bylaws of a credit union
shall be approved by the Secretary 
before the amendment is effective. The Secretary
 shall approve 
or disapprove of any amendments within 60 days after
submission 
to him or her.

(Source: P.A. 97-133, eff. 1-1-12.)

 



    (205 ILCS 305/22)  (from Ch. 17, par. 4423)



    Sec. 22. Vacancies. 
    (a) The board of directors shall, by appointment from
among 
the credit union members, fill any vacancies occurring on the 
board
for the remainder of the director's unexpired term or 
until a successor
is elected and qualified following completion 
of the term filled by the board. In the event the vacancy 
reduces the number of directors serving on the board to less 
than the statutory minimum set forth in subsection (1) of 
Section 20, then the board shall fill the vacancy no later than 
the next annual meeting of members or 90 days after the vacancy 
occurred, whichever occurs first.  Upon written application to 
the Secretary, the board may request additional time in which 
to fill the vacancy.  The application may be approved by the 
Secretary in his or her discretion.  The board shall, by 
appointment from among the
credit union members, fill vacancies 
in the membership committee, credit
committee, or credit 
manager if no credit
committee has been appointed, and

supervisory
committees.
    (b) An office may be declared vacant by the board when a 
director or a committee member dies, resigns from the board or 
committee, is removed from the board or committee, is no longer 
a member of the credit union, is the owner of less than one 
share of the credit union, or fails to attend three consecutive 
regular meetings of the board without good cause.


(Source: P.A. 97-133, eff. 1-1-12.)

 



    (205 ILCS 305/33)  (from Ch. 17, par. 4434)



    Sec. 33. Credit manager. 

    (1) The credit committee, board of directors, or chief 
management official may or, if no credit committee has been 
appointed, the board of directors or chief management official 
shall appoint a credit
manager who shall be empowered to 
approve or disapprove loans and lines
of credit under 
conditions prescribed by the board of directors.  The credit 
committee or credit manager may appoint one or more loan 
officers with the
power to approve loans and lines of credit, 
subject to such limitations
or conditions as may be prescribed 
by the board of directors.  The credit
manager and any loan 
officers appointed by the credit committee or the credit

manager shall keep written records of all transactions and 
shall report,
in writing, to the credit committee if a credit 
committee has been appointed,
otherwise
to the directors at 
each board meeting.

    (2) Applications for loans or lines of credit not approved 
by a loan officer
shall be reviewed and acted upon by the 
credit committee or credit manager.

    (3) The loan officers must keep written records of all 
loans or lines
of credit granted or refused and any other 
transactions and submit a report
to the credit committee or 
credit manager at least once each month.

(Source: P.A. 97-133, eff. 1-1-12.)

 
    (205 ILCS 305/46)  (from Ch. 17, par. 4447)

    Sec. 46. Loans and interest rate.


    (1) A credit union may make loans
to its members for such 
purpose and upon such security and terms, including
rates of 
interest, as the credit committee, credit manager, or loan 
officer
approves.
Notwithstanding the provisions of any other 
law in connection with extensions
of credit, a credit union may 
elect to
contract for and receive interest and fees and other 
charges for extensions of
credit subject only to the provisions 
of this Act and rules promulgated under
this Act, except that 
extensions of credit secured by residential real estate
shall 
be subject to the laws applicable thereto.
The rates of 
interest to be charged on loans to members shall be
set by the 
board of directors of each individual credit union in 
accordance with Section 30 of this Act and such
rates may be 
less than, but may not exceed, the maximum rate set forth in

this Section.  A borrower may repay his loan prior to maturity, 
in whole or
in part, without penalty. A prepayment penalty does 
not include a waived, bona fide third-party charge that the 
credit union imposes if the borrower prepays all of the 
transaction's principal sooner than 36 months after 
consummation of a closed-end credit transaction, a waived, bona 
fide third-party charge that the credit union imposes if the 
borrower terminates an open-end credit plan sooner than 36 
months after account opening, or a yield maintenance fee 
imposed on a business loan transaction. The credit contract may 
provide for the payment
by the member and receipt by the credit 
union of all costs and
disbursements, including reasonable 
attorney's fees and collection agency
charges, incurred by the 
credit union to collect or enforce the debt in the
event of a 
delinquency by the member, or in the event of a breach of any

obligation of the member under the credit contract.  A 
contingency or
hourly arrangement established under an 
agreement entered into by a credit
union with an attorney or 
collection agency to collect a loan of a member
in default 
shall be presumed prima facie reasonable.


    (2) Credit unions may make loans based upon the security of 
any
interest or equity in real estate, subject to rules and 
regulations
promulgated by the Secretary. In any contract or 
loan which
is secured by a mortgage, deed of
trust, or 
conveyance in the nature of a mortgage, on residential real

estate, the interest which is computed, calculated, charged, or 
collected
pursuant to such contract or loan, or pursuant to any 
regulation or rule
promulgated pursuant to this Act, may not be 
computed, calculated, charged
or collected for any period of 
time occurring after the date on which the
total indebtedness, 
with the exception of late payment penalties, is paid
in full.


    For purposes of this subsection (2) of this Section 46, a 
prepayment
shall mean the payment of the total indebtedness, 
with the exception of
late payment penalties if incurred or 
charged, on any date before the date
specified in the contract 
or loan agreement on which the total indebtedness
shall be paid 
in full, or before the date on which all payments, if timely

made, shall have been made.  In the event of a prepayment of the

indebtedness which is made on a date
after the date on which 
interest on the indebtedness was last computed,
calculated, 
charged, or collected but before the next date on which 
interest
on the indebtedness was to be calculated, computed, 
charged, or collected,
the lender may calculate, charge and 
collect interest on the indebtedness
for the period which 
elapsed between the date on which the prepayment is
made and 
the date on which interest on the indebtedness was last 
computed,
calculated, charged or collected at a rate equal to 
1/360 of the annual
rate for each day which so elapsed, which 
rate shall be applied to the
indebtedness outstanding as of the 
date of prepayment.  The lender shall
refund to the borrower any 
interest charged or collected which exceeds that
which the 
lender may charge or collect pursuant to the preceding 
sentence.
The provisions of this amendatory Act of 1985 shall 
apply only to contracts
or loans entered into on or after the 
effective date of this amendatory
Act.


    (3) (Blank).


    (4) Notwithstanding any other provisions of this Act, a 
credit union
authorized under this Act to make loans secured by 
an interest or equity
in real property may engage in making 
revolving credit loans secured by
mortgages or deeds of trust 
on such real property or by security
assignments of  beneficial 
interests in land trusts.


    For purposes of this Section, "revolving credit" has the 
meaning defined
in Section 4.1 of the Interest Act.


    Any mortgage or deed of trust given to secure a revolving 
credit loan may,
and when so expressed therein shall, secure 
not only the existing indebtedness
but also such future 
advances, whether such advances are obligatory or to
be made at 
the option of the lender, or otherwise, as are made within 
twenty
years from the date thereof, to the same extent as if 
such future advances
were made on the date of the execution of 
such mortgage or deed of trust,
although there may be no 
advance made at the time of execution of such mortgage
or other 
instrument, and although there may be no indebtedness 
outstanding
at the time any advance is made.  The lien of such 
mortgage or deed of trust,
as to third persons
without actual 
notice thereof, shall be valid as to all such indebtedness
and 
future advances form the time said mortgage or deed of trust is 
filed
for record in the office of the recorder of deeds or the 
registrar of titles
of the county where the real property 
described therein is located.  The
total amount of indebtedness 
that may be so secured may increase or decrease
from time to 
time, but the total unpaid balance so secured at any one time

shall not exceed a maximum principal amount which must be 
specified in such
mortgage or deed of trust, plus interest 
thereon, and any disbursements
made for the payment of taxes, 
special assessments, or insurance on said
real property, with 
interest on such disbursements.


    Any such mortgage or deed of trust shall be valid and have 
priority over
all subsequent liens and encumbrances, including 
statutory liens, except
taxes and assessments levied on said 
real property.


    (4-5)  For purposes of this  Section, "real estate" and "real 
property" include a manufactured home as defined in subdivision 
(53) of Section 9-102 of the Uniform Commercial Code which is 
real property as defined in Section 5-35 of the Conveyance and 
Encumbrance of Manufactured Homes as Real Property and 
Severance Act. 
    (5) Compliance with federal or Illinois preemptive laws or 
regulations
governing loans made by a credit union chartered 
under this Act shall
constitute compliance with this Act.


    (6) Credit unions may make residential real estate mortgage 
loans on terms and conditions established by the United States 
Department of Agriculture through its Rural Development 
Housing and Community Facilities Program. The portion of any 
loan in excess of the appraised value of the real estate shall 
be allocable only to the guarantee fee required under the 
program. 
    (7) For a renewal, refinancing, or restructuring of an 
existing loan at the credit union that is secured by an 
interest or equity in real estate, a new appraisal of the 
collateral shall not be required when (i) no new moneys are 
advanced other than funds necessary to cover reasonable closing 
costs, or (ii) there has been no obvious or material change in 
market conditions or physical aspects of the real estate that 
threatens the adequacy of the credit union's real estate 
collateral protection after the transaction, even with the 
advancement of new moneys. The Department reserves the right to 
require an appraisal under this subsection (7) whenever the 
Department believes it is necessary to address safety and 
soundness concerns.
(Source: P.A. 98-749, eff. 7-16-14; 98-784, eff. 7-24-14; 
99-78, eff. 7-20-15; 99-149, eff. 1-1-16; 99-331, eff. 1-1-16; 
revised 10-16-15.)

 



    (205 ILCS 305/52)  (from Ch. 17, par. 4453)



    Sec. 52. Loans to directors, officers, credit committee, 
credit manager,
and supervisory
committee members.    A credit 
union may make loans to its directors,
officers, credit 
committee members, credit manager, and supervisory
committee 
members, provided
that the loan complies with all lawful 
requirements under this Act with
respect to loans to other 
borrowers.  No loan may be made to or cosigned
by any director, 
officer, credit committee member, credit manager if no credit 
committee
 has been appointed, or supervisory
committee
member 
which would cause the aggregate amount of all loans then 
outstanding
to or cosigned by all directors, officers, credit 
committee members, credit
manager if no credit committee has 
been appointed, or supervisory
committee
 members to exceed 20% 
of the unimpaired capital and
surplus of the credit union.

(Source: P.A. 97-133, eff. 1-1-12.)

 
    (205 ILCS 305/64.7 new)
    Sec. 64.7. Network credit unions.
    (a) Two or more credit unions merging pursuant to Section 
63 of this Act may elect to request a network credit union 
designation for the surviving credit union from the Secretary. 
The request shall be set forth in the plan of merger and 
certificate of merger executed by the credit unions and 
submitted to the Secretary pursuant to subsection (4) of 
Section 63. The Secretary's approval of a certificate of merger 
containing a network credit union designation request shall 
constitute approval of the use of the network designation as a 
brand or other identifier of the surviving credit union. If the 
surviving credit union desires to include the network 
designation in its legal name, make any other change to its 
legal name, or both, it shall proceed with an amendment to the 
articles of incorporation and bylaws of the surviving credit 
union pursuant to Section 4 of this Act. 
    (b) A network credit union is a cooperative business 
structure comprised of 2 or more merging credit unions with a 
collective goal of efficiently serving their combined 
membership and gaining economies of scale through common 
vision, strategy and initiative. The merging credit unions 
shall be identified as divisional credit unions,  branches, or 
units of the network credit union or by other descriptive 
references that ensure the members understand they are dealing 
with one credit union rather than multiple credit unions.  Each 
divisional credit union shall have its own advisory board of 
directors and chief management official to assist in 
maintaining and leveraging its respective local identity for 
the benefit of the surviving credit union. The divisional 
credit union advisory boards shall be appointed by the network 
credit union board of directors. Each divisional credit union's 
board of directors shall appoint its divisional credit union 
chief management official and may also appoint one of its 
directors to serve on the network credit union's nominating 
committee. 
    (c) The network credit union is the surviving legal entity 
in the merger and supervision, examination, audit, reporting, 
governance, and management shall be conducted or performed at 
the network credit union level. All share insurance, safety and 
soundness, and statutory and regulatory requirements and 
limitations shall be evaluated at the network credit union 
level. 
 
 
    Section 99. Effective date. This Act takes effect upon 
becoming law.