Bill Text: IL HB2043 | 2023-2024 | 103rd General Assembly | Enrolled

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Reinserts the provisions of the introduced bill with the following changes. Provides that any members, partners, or shareholders who are ineligible for membership in the credit union shall not become eligible by virtue of the eligibility of the entity in which they hold an ownership interest. Provides that a credit union that has appointed a registered agent shall post on its website the name of its registered agent, the address of its principal place of business, and that the appointment was authorized by action of the board of directors. Provides that a registered agent may resign at any time by submitting written notice to the credit union at its principal place of business (rather than by submitting written notice to the Department). Provides that meetings, minutes of meetings, and reports of the board of directors shall be subject to the confidentiality and redaction standards set forth in the provisions. Removes language providing that the Department of Financial and Professional Regulation shall maintain a registry of credit unions that have appointed a registered agent. Removes provisions concerning privileged information. Removes provisions concerning investment of funds. Effective immediately.

Spectrum: Bipartisan Bill

Status: (Passed) 2023-07-28 - Public Act . . . . . . . . . 103-0289 [HB2043 Detail]

Download: Illinois-2023-HB2043-Enrolled.html

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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 16, 20, 29, and 48 as follows:
(205 ILCS 305/16) (from Ch. 17, par. 4417)
Sec. 16. Societies and associations. Societies,
associations, clubs, partnerships, corporations, and limited
liability companies in which one or more the majority of the
members, partners, or shareholders are individuals who are
eligible for credit union membership may be admitted to
membership in a credit union in the same manner and under the
same conditions as individuals, subject to such rules as the
Secretary and the Director may promulgate hereunder. Any
members, partners, or shareholders who are ineligible for
membership in the credit union shall not become eligible by
virtue of the eligibility of the entity in which they hold an
ownership interest.
(Source: P.A. 97-133, eff. 1-1-12.)
(205 ILCS 305/20) (from Ch. 17, par. 4421)
Sec. 20. Election or appointment of officials.
(1) The credit union shall be directed by a board of

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directors consisting of no less than 7 in number, to be elected
at the annual meeting by and from the members. Directors shall
hold office until the next annual meeting, unless their terms
are staggered. Upon amendment of its bylaws, a credit union
may divide the directors into 2 or 3 classes with each class as
nearly equal in number as possible. The term of office of the
directors of the first class shall expire at the first annual
meeting after their election, that of the second class shall
expire at the second annual meeting after their election, and
that of the third class, if any, shall expire at the third
annual meeting after their election. At each annual meeting
after the classification, the number of directors equal to the
number of directors whose terms expire at the time of the
meeting shall be elected to hold office until the second
succeeding annual meeting if there are 2 classes or until the
third succeeding annual meeting if there are 3 classes. A
director shall hold office for the term for which he or she is
elected and until his or her successor is elected and
qualified.
(1.5) Except as provided in subsection (1.10), in all
elections for directors, every member has the right to vote,
in person, by proxy, or by electronic record if approved by the
board of directors, the number of shares owned by him, or in
the case of a member other than a natural person, the member's
one vote, for as many persons as there are directors to be
elected, or to cumulate such shares, and give one candidate as

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many votes as the number of directors multiplied by the number
of his shares equals, or to distribute them on the same
principle among as many candidates as he may desire and the
directors shall not be elected in any other manner. Shares
held in a joint account owned by more than one member may be
voted by any one of the members, however, the number of
cumulative votes cast may not exceed a total equal to the
number of shares multiplied by the number of directors to be
elected. A majority of the shares entitled to vote shall be
represented either in person or by proxy for the election of
directors. Each director shall wholly take and subscribe to an
oath that he will diligently and honestly perform his duties
in administering the affairs of the credit union, that while
he may delegate to another the performance of those
administrative duties he is not thereby relieved from his
responsibility for their performance, that he will not
knowingly violate or permit to be violated any law applicable
to the credit union, and that he is the owner of at least one
share of the credit union.
(1.10) Upon amendment of a credit union's bylaws, in all
elections for directors, every member who is a natural person
shall have the right to cast one vote, regardless of the number
of his or her shares, in person, by proxy, or by electronic
record if approved by the board of directors, for as many
persons as there are directors to be elected.
(1.15) If the board of directors has adopted a policy

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addressing age eligibility standards on voting, holding
office, or petitioning the board, then a credit union may
require (i) that members be at least 18 years of age by the
date of the meeting in order to vote at meetings of the
members, sign nominating petitions, or sign petitions
requesting special meetings, and (ii) that members be at least
18 years of age by the date of election or appointment in order
to hold elective or appointive office.
(2) The board of directors shall appoint from among the
members of the credit union, a supervisory committee of not
less than 3 members at the organization meeting and within 30
days following each annual meeting of the members for such
terms as the bylaws provide. Members of the supervisory
committee may, but need not be, on the board of directors, but
shall not be officers of the credit union, members of the
credit committee, or the credit manager if no credit committee
has been appointed.
(3) The board of directors may appoint, from among the
members of the credit union, a credit committee consisting of
an odd number, not less than 3 for such terms as the bylaws
provide. Members of the credit committee may, but need not be,
directors or officers of the credit union, but shall not be
members of the supervisory committee.
(4) The board of directors may appoint from among the
members of the credit union a membership committee of one or
more persons. If appointed, the committee shall act upon all

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applications for membership and submit a report of its actions
to the board of directors at the next regular meeting for
review. If no membership committee is appointed, credit union
management shall act upon all applications for membership and
submit a report of its actions to the board of directors at the
next regular meeting for review.
(5) The board of directors may appoint, from among the
members of the credit union, a nominating committee of 3 or
more persons. Members of the nominating committee may, but
need not, be directors or officers of the credit union, but may
not be members of the supervisory committee. The appointment,
if made, shall be made in a timely manner to permit the
nominating committee to recruit, evaluate, and nominate
eligible candidates for each position to be filled in the
election of directors or, in the event of a vacancy in office,
to be filled by appointment of the board of directors for the
remainder of the unexpired term of the director creating the
vacancy. Factors the nominating committee may consider in
evaluating prospective candidates include whether a candidate
possesses or is willing to acquire through training the
requisite skills and qualifications to carry out the statutory
duties of a director. The board of directors may delegate to
the nominating committee the recruitment, evaluation, and
nomination of eligible candidates to serve on committees and
in executive officer positions.
(6) The board of directors may create one or more other

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committees in addition to the committees identified in this
Section and appoint directors or such other persons as the
board designates to serve on the committee or committees. Any
such committee shall serve at the pleasure of the board of
directors and it shall not act on behalf of the credit union or
bind it to any action, but it may make recommendations to the
board of directors.
(7)(a) The board of directors may appoint an individual as
a registered agent for the credit union. The name of the
registered agent appointed by the board of directors shall be
identified in the annual report filed by the credit union on
the annual report form supplied by the Department. The
business office of the registered agent shall be the same as
the principal place of business of the credit union. Any
process, notice, or demand required or permitted by law to be
served upon the credit union may be served upon the registered
agent appointed by the credit union.
(b) A credit union that has appointed a registered
agent shall post on its website the name of its registered
agent, the address of its principal place of business, and
that the appointment was authorized by action of the board
of directors.
(c) A credit union that has appointed a registered
agent may change its registered agent at any time by
posting on its website a statement setting forth the
following:

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(i) the address of its principal place of
business,
(ii) the name of its existing registered agent,
(iii) the name of its successor registered agent,
and
(iv) that the change was authorized by action of
the board of directors.
(d) A registered agent may resign at any time by
submitting written notice thereof to the credit union at
its principal place of business. The notice shall set
forth the following:
(i) the name of the credit union for which the
registered agent is acting,
(ii) the address of the principal place of
business of the credit union,
(iii) the name of the registered agent,
(iv) that the registered agent is resigning, and
(v) the effective date of the resignation, which
shall not be less than 30 days after the date of filing
of the notice.
(8) (6) The use of electronic records for member voting
pursuant to this Section shall employ a security procedure
that meets the attribution criteria set forth in Section 9 of
the Uniform Electronic Transactions Act.
(9) (7) As used in this Section, "electronic", "electronic
record", and "security procedure" have the meanings ascribed

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to those terms in the Uniform Electronic Transactions Act. the
(Source: P.A. 102-38, eff. 6-25-21; 102-687, eff. 12-17-21;
102-774, eff. 5-13-22; 102-858, eff. 5-13-22; revised 8-3-22.)
(205 ILCS 305/29) (from Ch. 17, par. 4430)
Sec. 29. Meetings of directors.
(1) The board of directors and the executive committee
shall meet as often as necessary, but one body must meet at
least monthly and the other at least quarterly, as prescribed
in the bylaws. Unless a greater number is required by the
bylaws, a majority of the whole board of directors shall
constitute a quorum. The act of a majority of the directors
present at a meeting at which a quorum is present shall be the
act of the board of directors unless the act of a greater
number is required by this Act, the credit union's articles of
incorporation or the bylaws.
(1.5) Notwithstanding anything to the contrary in
subsection (1), the board of directors of a credit union with a
composite rating of either 1 or 2 under the Uniform Financial
Institutions Rating System known as the CAMELS supervisory
rating system (or an equivalent rating under a comparable
rating system) and a management rating under such composite
rating of either 1 or 2 may meet not less than 6 times
annually, with at least one meeting held during each fiscal
quarter. This meeting frequency schedule shall be available to
an eligible credit union irrespective of whether it has

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appointed an executive committee pursuant to Section 28.
(2) Unless specifically prohibited by the articles of
incorporation or bylaws, directors and committee members may
participate in and act at any meeting of the board or committee
through the use of a conference telephone or other
communications equipment by means of which all persons
participating in the meeting can communicate with each other.
Participation in the meeting shall constitute attendance and
presence in person at the meeting of the person or persons so
participating.
(3) Unless specifically prohibited by the articles of
incorporation or bylaws, any action required by this Act to be
taken at a meeting of the board of directors or a committee and
any other action that may be taken at a meeting of the board of
directors or a committee may be taken without a meeting if a
consent in writing setting forth the action taken is signed by
all the directors entitled to vote with respect to the subject
matter thereof, or by all members of the committee, as the case
may be. The consent shall be evidenced by one or more written
approvals, each of which sets forth the action taken and bears
the signatures of one or more directors or committee members.
All the approvals evidencing the consent shall be delivered to
the secretary to be filed in the corporate records of the
credit union. The action taken shall be effective when all the
directors or committee members have approved the consent
unless the consent specifies a different effective date. A

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consent signed by all the directors or all the members of a
committee shall have the same effect as a unanimous vote, and
may be stated as such in any document filed with the director
under this Act.
(4)(a) As used in this subsection:
"Affiliate" means an organization established to serve
the needs of credit unions, the business of which relates
to the daily operations of credit unions.
"Compliance review documents" means reports, meeting
minutes, and other documents prepared in connection with a
review or evaluation conducted by or for the board of
directors.
(b) This subsection applies to the board of directors
in relation to its functions to evaluate and seek to
improve any of the following:
(i) loan policies or underwriting standards;
(ii) asset quality;
(iii) financial reporting to federal or State
governmental or regulatory agencies; or
(iv) compliance with federal or State statutory or
regulatory requirements, including, without
limitation, the manner in which it performs its duties
under Section 30.
(c) Meetings, minutes of meetings, and reports of the
board of directors shall be subject to the confidentiality
and redaction standards set forth in this subsection.

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(d) Except as provided in paragraph (e), compliance
review documents and the deliberations of the board of
directors are confidential. An affiliate of a credit
union, a credit union regulatory agency, and the insurer
of credit union share accounts shall have access to
compliance review documents; however, (i) the documents
remain confidential and (ii) delivery of compliance review
documents to an affiliate or pursuant to the requirements
of a credit union regulatory agency or an insurer of
credit union share accounts do not constitute a waiver of
the confidentiality granted in this Section.
(e) This Section does not apply to any civil or
administrative action initiated by a credit union
regulatory agency or an insurer of credit union share
accounts.
(f) This Section shall not be construed to limit the
discovery or admissibility in any civil action of any
documents, including compliance review documents.
(g) Any report required under this Act to be furnished
to the board of directors by the membership committee,
credit committee, or any other committee may be submitted
in a summary format that redacts personally identifiable
information as defined under applicable State and federal
law.
(h) Compliance review documents may be disclosed by
the Secretary or a credit union to any person or entity to

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whom confidential supervisory information may be disclosed
pursuant to subsection (3) of Section 9.1.
(Source: P.A. 89-603, eff. 8-2-96.)
(205 ILCS 305/48) (from Ch. 17, par. 4449)
Sec. 48. Loan limit. Within any limitations set forth in a
policy adopted by the board of directors, a credit union may
place a limit upon the aggregate amount to be loaned to or
cosigned for by any one member provided that no loan shall be
made to any member in an aggregate amount in excess of 10% of
the credit union's unimpaired capital and surplus. Such loan
limits shall not be subject to reduction by rules adopted by
the Secretary.
(Source: P.A. 100-361, eff. 8-25-17.)
Section 99. Effective date. This Act takes effect upon
becoming law.