Public Act 103-0289

HB2043 Enrolled LRB103 05826 BMS 50846 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 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

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

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

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

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

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:

(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

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

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

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.

(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

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.