Bill Text: IL HB2785 | 2025-2026 | 104th General Assembly | Introduced

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Bill Title: Amends the Illinois Credit Union Act. Authorizes a credit union to furnish information to any person on a list submitted and periodically updated by a member who is an elderly person or person with a disability or to specified other persons, if there is suspicion by the credit union that the member has been or may become a victim of financial exploitation. Provides that 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 and a management rating under such composite rating of either 1 or 2 may meet not less than 4 (instead of 6) times annually. Provides that the supervisory committee of a credit union with assets of less than $10,000,000 may, at its option, engage (instead of a credit union with assets of $5,000,000 or more, but less than $10,000,000 shall engage) a licensed certified public accountant or licensed certified public accounting firm to perform specified auditing and other services. Permits the merger of credit unions, without meeting certain voting and notice requirements, where supervisory concerns exist and upon agreement of the boards of directors of the merging and continuing credit unions, as confirmed by a majority vote of the directors present at a meeting of each board at which a quorum is present. Makes other changes.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced) 2025-02-06 - Referred to Rules Committee [HB2785 Detail]

Download: Illinois-2025-HB2785-Introduced.html

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104TH GENERAL ASSEMBLY State of Illinois 2025 and 2026 HB2785 Introduced , by Rep. Jay Hoffman SYNOPSIS AS INTRODUCED:
205 ILCS 305/10 from Ch. 17, par. 4411
205 ILCS 305/29 from Ch. 17, par. 4430
205 ILCS 305/34 from Ch. 17, par. 4435
205 ILCS 305/63 from Ch. 17, par. 4464
Amends the Illinois Credit Union Act. Authorizes a credit union to furnish information to any person on a list submitted and periodically updated by a member who is an elderly person or person with a disability or to specified other persons, if there is suspicion by the credit union that the member has been or may become a victim of financial exploitation. Provides that 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 and a management rating under such composite rating of either 1 or 2 may meet not less than 4 (instead of 6) times annually. Provides that the supervisory committee of a credit union with assets of less than $10,000,000 may, at its option, engage (instead of a credit union with assets of $5,000,000 or more, but less than $10,000,000 shall engage) a licensed certified public accountant or licensed certified public accounting firm to perform specified auditing and other services. Permits the merger of credit unions, without meeting certain voting and notice requirements, where supervisory concerns exist and upon agreement of the boards of directors of the merging and continuing credit unions, as confirmed by a majority vote of the directors present at a meeting of each board at which a quorum is present. Makes other changes.
LRB104 07806 BAB 17852 b
A BILL FOR
HB2785 LRB104 07806 BAB 17852 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 10, 29, 34, and 63 as follows:
(205 ILCS 305/10) (from Ch. 17, par. 4411)
Sec. 10. Credit union records; member financial records.
(1) A credit union shall establish and maintain books,
records, accounting systems and procedures which accurately
reflect its operations and which enable the Department to
readily ascertain the true financial condition of the credit
union and whether it is complying with this Act.
(2) A photostatic or photographic reproduction of any
credit union records shall be admissible as evidence of
transactions with the credit union.
(3)(a) For the purpose of this Section, the term
"financial records" means any original, any copy, or any
summary of (1) a document granting signature authority over an
account, (2) a statement, ledger card or other record on any
account which shows each transaction in or with respect to
that account, (3) a check, draft or money order drawn on a
financial institution or other entity or issued and payable by
or through a financial institution or other entity, or (4) any

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other item containing information pertaining to any
relationship established in the ordinary course of business
between a credit union and its member, including financial
statements or other financial information provided by the
member.
(b) This Section does not prohibit:
(1) The preparation, examination, handling or
maintenance of any financial records by any officer,
employee or agent of a credit union having custody of such
records, or the examination of such records by a certified
public accountant engaged by the credit union to perform
an independent audit.
(2) The examination of any financial records by or the
furnishing of financial records by a credit union to any
officer, employee or agent of the Department, the National
Credit Union Administration, Federal Reserve board or any
insurer of share accounts for use solely in the exercise
of his duties as an officer, employee or agent.
(3) The publication of data furnished from financial
records relating to members where the data cannot be
identified to any particular customer of account.
(4) The making of reports or returns required under
Chapter 61 of the Internal Revenue Code of 1954.
(5) Furnishing information concerning the dishonor of
any negotiable instrument permitted to be disclosed under
the Uniform Commercial Code.

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(6) The exchange in the regular course of business of
(i) credit information between a credit union and other
credit unions or financial institutions or commercial
enterprises, directly or through a consumer reporting
agency or (ii) financial records or information derived
from financial records between a credit union and other
credit unions or financial institutions or commercial
enterprises for the purpose of conducting due diligence
pursuant to a merger or a purchase or sale of assets or
liabilities of the credit union.
(7) The furnishing of information to the appropriate
law enforcement authorities where the credit union
reasonably believes it has been the victim of a crime.
(8) The furnishing of information pursuant to the
Revised Uniform Unclaimed Property Act.
(9) The furnishing of information pursuant to the
Illinois Income Tax Act and the Illinois Estate and
Generation-Skipping Transfer Tax Act.
(10) The furnishing of information pursuant to the
federal Currency and Foreign Transactions Reporting Act,
Title 31, United States Code, Section 1051 et sequentia.
(11) The furnishing of information pursuant to any
other statute which by its terms or by regulations
promulgated thereunder requires the disclosure of
financial records other than by subpoena, summons, warrant
or court order.

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(12) The furnishing of information in accordance with
the federal Personal Responsibility and Work Opportunity
Reconciliation Act of 1996. Any credit union governed by
this Act shall enter into an agreement for data exchanges
with a State agency provided the State agency pays to the
credit union a reasonable fee not to exceed its actual
cost incurred. A credit union providing information in
accordance with this item shall not be liable to any
account holder or other person for any disclosure of
information to a State agency, for encumbering or
surrendering any assets held by the credit union in
response to a lien or order to withhold and deliver issued
by a State agency, or for any other action taken pursuant
to this item, including individual or mechanical errors,
provided the action does not constitute gross negligence
or willful misconduct. A credit union shall have no
obligation to hold, encumber, or surrender assets until it
has been served with a subpoena, summons, warrant, court
or administrative order, lien, or levy.
(13) The furnishing of information to law enforcement
authorities, the Illinois Department on Aging and its
regional administrative and provider agencies, the
Department of Human Services Office of Inspector General,
or public guardians: (i) upon subpoena by the
investigatory entity or the guardian, or (ii) if there is
suspicion by the credit union that a member who is an

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elderly person or person with a disability has been or may
become the victim of financial exploitation. For the
purposes of this item (13), the term: (i) "elderly person"
means a person who is 60 or more years of age, (ii) "person
with a disability" means a person who has or reasonably
appears to the credit union to have a physical or mental
disability that impairs his or her ability to seek or
obtain protection from or prevent financial exploitation,
and (iii) "financial exploitation" means tortious or
illegal use of the assets or resources of an elderly
person or person with a disability, and includes, without
limitation, misappropriation of the elderly or disabled
person's assets or resources by undue influence, breach of
fiduciary relationship, intimidation, fraud, deception,
extortion, or the use of assets or resources in any manner
contrary to law. A credit union or person furnishing
information pursuant to this item (13) shall be entitled
to the same rights and protections as a person furnishing
information under the Adult Protective Services Act and
the Illinois Domestic Violence Act of 1986.
(13.5) The furnishing of information to any person on
a list submitted and periodically updated by a member who
is an elderly person or person with a disability, if there
is suspicion by the credit union that the member has been
or may become a victim of financial exploitation. For
purposes of this item (13.5), the terms "elderly person",

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"person with a disability", and "financial exploitation"
have the meanings given to those terms in item (13). The
credit union may convey the suspicion to any of the
following persons, if the person is not the suspected
perpetrator: (i) any person on the list; (ii) any
co-owner, additional authorized signatory, or beneficiary
on the account of the member; or (iii) any person known by
the credit union to be a family member, including a
parent, spouse, adult child, or sibling. When providing
information under this item (13.5), the credit union may
limit the information and only disclose that the credit
union has cause to suspect that the member may be a victim
or target of financial exploitation, without disclosing
any other details or confidential information regarding
the financial affairs of the member. The credit union may
rely on information provided by the member in compiling
the list of contact persons. The credit union and any
employee of the credit union acting in good faith is
immune from all criminal, civil, and administrative
liability for contacting a person or electing not to
contact a person under this item (13.5) and for actions
taken in furtherance of that determination, if the
determination was made based on a reasonable suspicion.
(14) The disclosure of financial records or
information as necessary to effect, administer, or enforce
a transaction requested or authorized by the member, or in

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connection with:
(A) servicing or processing a financial product or
service requested or authorized by the member;
(B) maintaining or servicing a member's account
with the credit union; or
(C) a proposed or actual securitization or
secondary market sale (including sales of servicing
rights) related to a transaction of a member.
Nothing in this item (14), however, authorizes the
sale of the financial records or information of a member
without the consent of the member.
(15) The disclosure of financial records or
information as necessary to protect against or prevent
actual or potential fraud, unauthorized transactions,
claims, or other liability.
(16)(a) The disclosure of financial records or
information related to a private label credit program
between a financial institution and a private label party
in connection with that private label credit program. Such
information is limited to outstanding balance, available
credit, payment and performance and account history,
product references, purchase information, and information
related to the identity of the customer.
(b)(1) For purposes of this item (16), "private label
credit program" means a credit program involving a
financial institution and a private label party that is

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used by a customer of the financial institution and the
private label party primarily for payment for goods or
services sold, manufactured, or distributed by a private
label party.
(2) For purposes of this item (16), "private label
party" means, with respect to a private label credit
program, any of the following: a retailer, a merchant, a
manufacturer, a trade group, or any such person's
affiliate, subsidiary, member, agent, or service provider.
(17)(a) The furnishing of financial records of a
member to the Department to aid the Department's initial
determination or subsequent re-determination of the
member's eligibility for Medicaid and Medicaid long-term
care benefits for long-term care services, provided that
the credit union receives the written consent and
authorization of the member, which shall:
(1) have the member's signature notarized;
(2) be signed by at least one witness who
certifies that he or she believes the member to be of
sound mind and memory;
(3) be tendered to the credit union at the
earliest practicable time following its execution,
certification, and notarization;
(4) specifically limit the disclosure of the
member's financial records to the Department; and
(5) be in substantially the following form:

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CUSTOMER CONSENT AND AUTHORIZATION
FOR RELEASE OF FINANCIAL RECORDS
I, ......................................., hereby authorize
(Name of Customer)
.............................................................
(Name of Financial Institution)
.............................................................
(Address of Financial Institution)
to disclose the following financial records:
any and all information concerning my deposit, savings, money
market, certificate of deposit, individual retirement,
retirement plan, 401(k) plan, incentive plan, employee benefit
plan, mutual fund and loan accounts (including, but not
limited to, any indebtedness or obligation for which I am a
co-borrower, co-obligor, guarantor, or surety), and any and
all other accounts in which I have an interest and any other
information regarding me in the possession of the Financial
Institution,
to the Illinois Department of Human Services or the Illinois

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Department of Healthcare and Family Services, or both ("the
Department"), for the following purpose(s):
to aid in the initial determination or re-determination by the
State of Illinois of my eligibility for Medicaid long-term
care benefits, pursuant to applicable law.
I understand that this Consent and Authorization may be
revoked by me in writing at any time before my financial
records, as described above, are disclosed, and that this
Consent and Authorization is valid until the Financial
Institution receives my written revocation. This Consent and
Authorization shall constitute valid authorization for the
Department identified above to inspect all such financial
records set forth above, and to request and receive copies of
such financial records from the Financial Institution (subject
to such records search and reproduction reimbursement policies
as the Financial Institution may have in place). An executed
copy of this Consent and Authorization shall be sufficient and
as good as the original and permission is hereby granted to
honor a photostatic or electronic copy of this Consent and
Authorization. Disclosure is strictly limited to the
Department identified above and no other person or entity
shall receive my financial records pursuant to this Consent
and Authorization. By signing this form, I agree to indemnify
and hold the Financial Institution harmless from any and all

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claims, demands, and losses, including reasonable attorneys
fees and expenses, arising from or incurred in its reliance on
this Consent and Authorization. As used herein, "Customer"
shall mean "Member" if the Financial Institution is a credit
union.
....................... ......................
(Date) (Signature of Customer)
......................
......................
(Address of Customer)
......................
(Customer's birth date)
(month/day/year)
The undersigned witness certifies that .................,
known to me to be the same person whose name is subscribed as
the customer to the foregoing Consent and Authorization,
appeared before me and the notary public and acknowledged
signing and delivering the instrument as his or her free and
voluntary act for the uses and purposes therein set forth. I
believe him or her to be of sound mind and memory. The
undersigned witness also certifies that the witness is not an
owner, operator, or relative of an owner or operator of a

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long-term care facility in which the customer is a patient or
resident.
Dated: ................. ......................
(Signature of Witness)
......................
(Print Name of Witness)
......................
......................
(Address of Witness)
State of Illinois)
) ss.
County of .......)
The undersigned, a notary public in and for the above county
and state, certifies that .........., known to me to be the
same person whose name is subscribed as the customer to the
foregoing Consent and Authorization, appeared before me
together with the witness, .........., in person and
acknowledged signing and delivering the instrument as the free
and voluntary act of the customer for the uses and purposes
therein set forth.

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Dated:.......................................................
Notary Public:...............................................
My commission expires:.......................................
(b) In no event shall the credit union distribute the
member's financial records to the long-term care facility
from which the member seeks initial or continuing
residency or long-term care services.
(c) A credit union providing financial records of a
member in good faith relying on a consent and
authorization executed and tendered in accordance with
this item (17) shall not be liable to the member or any
other person in relation to the credit union's disclosure
of the member's financial records to the Department. The
member signing the consent and authorization shall
indemnify and hold the credit union harmless that relies
in good faith upon the consent and authorization and
incurs a loss because of such reliance. The credit union
recovering under this indemnification provision shall also
be entitled to reasonable attorney's fees and the expenses
of recovery.
(d) A credit union shall be reimbursed by the member
for all costs reasonably necessary and directly incurred
in searching for, reproducing, and disclosing a member's
financial records required or requested to be produced
pursuant to any consent and authorization executed under

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this item (17). The requested financial records shall be
delivered to the Department within 10 days after receiving
a properly executed consent and authorization or at the
earliest practicable time thereafter if the requested
records cannot be delivered within 10 days, but delivery
may be delayed until the final reimbursement of all costs
is received by the credit union. The credit union may
honor a photostatic or electronic copy of a properly
executed consent and authorization.
(e) Nothing in this item (17) shall impair, abridge,
or abrogate the right of a member to:
(1) directly disclose his or her financial records
to the Department or any other person; or
(2) authorize his or her attorney or duly
appointed agent to request and obtain the member's
financial records and disclose those financial records
to the Department.
(f) For purposes of this item (17), "Department" means
the Department of Human Services and the Department of
Healthcare and Family Services or any successor
administrative agency of either agency.
(18) The furnishing of the financial records of a
member to an appropriate law enforcement authority,
without prior notice to or consent of the member, upon
written request of the law enforcement authority, when
reasonable suspicion of an imminent threat to the personal

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security and safety of the member exists that necessitates
an expedited release of the member's financial records, as
determined by the law enforcement authority. The law
enforcement authority shall include a brief explanation of
the imminent threat to the member in its written request
to the credit union. The written request shall reflect
that it has been authorized by a supervisory or managerial
official of the law enforcement authority. The decision to
furnish the financial records of a member to a law
enforcement authority shall be made by a supervisory or
managerial official of the credit union. A credit union
providing information in accordance with this item (18)
shall not be liable to the member or any other person for
the disclosure of the information to the law enforcement
authority.
(c) Except as otherwise provided by this Act, a credit
union may not disclose to any person, except to the member or
his duly authorized agent, any financial records relating to
that member of the credit union unless:
(1) the member has authorized disclosure to the
person;
(2) the financial records are disclosed in response to
a lawful subpoena, summons, warrant, citation to discover
assets, or court order that meets the requirements of
subparagraph (3)(d) of this Section; or
(3) the credit union is attempting to collect an

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obligation owed to the credit union and the credit union
complies with the provisions of Section 2I of the Consumer
Fraud and Deceptive Business Practices Act.
(d) A credit union shall disclose financial records under
item (3)(c)(2) of this Section pursuant to a lawful subpoena,
summons, warrant, citation to discover assets, or court order
only after the credit union sends a copy of the subpoena,
summons, warrant, citation to discover assets, or court order
to the person establishing the relationship with the credit
union, if living, and otherwise the person's personal
representative, if known, at the person's last known address
by first class mail, postage prepaid, through a third-party
commercial carrier or courier with delivery charge fully
prepaid, by hand delivery, or by electronic delivery at an
email address on file with the credit union (if the person
establishing the relationship with the credit union has
consented to receive electronic delivery and, if the person
establishing the relationship with the credit union is a
consumer, the person has consented under the consumer consent
provisions set forth in Section 7001 of Title 15 of the United
States Code), unless the credit union is specifically
prohibited from notifying the person by order of court or by
applicable State or federal law. In the case of a grand jury
subpoena, a credit union shall not mail a copy of a subpoena to
any person pursuant to this subsection if the subpoena was
issued by a grand jury under the Statewide Grand Jury Act or

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notifying the person would constitute a violation of the
federal Right to Financial Privacy Act of 1978.
(e)(1) Any officer or employee of a credit union who
knowingly and willfully furnishes financial records in
violation of this Section is guilty of a business offense and
upon conviction thereof shall be fined not more than $1,000.
(2) Any person who knowingly and willfully induces or
attempts to induce any officer or employee of a credit union to
disclose financial records in violation of this Section is
guilty of a business offense and upon conviction thereof shall
be fined not more than $1,000.
(f) A credit union shall be reimbursed for costs which are
reasonably necessary and which have been directly incurred in
searching for, reproducing or transporting books, papers,
records or other data of a member required or requested to be
produced pursuant to a lawful subpoena, summons, warrant,
citation to discover assets, or court order. The Secretary and
the Director may determine, by rule, the rates and conditions
under which payment shall be made. Delivery of requested
documents may be delayed until final reimbursement of all
costs is received.
(Source: P.A. 101-81, eff. 7-12-19; 102-873, eff. 5-13-22.)
(205 ILCS 305/29) (from Ch. 17, par. 4430)
Sec. 29. Meetings of directors.
(1) The board of directors and the executive committee

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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 4 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.

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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

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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

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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. 103-289, eff. 7-28-23.)
(205 ILCS 305/34) (from Ch. 17, par. 4435)
Sec. 34. Duties of supervisory committee.
(1) The supervisory committee shall make or cause to be
made an annual internal audit of the books and affairs of the
credit union to determine that the credit union's accounting

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records and reports are prepared promptly and accurately
reflect operations and results, that internal controls are
established and effectively maintained to safeguard the assets
of the credit union, and that the policies, procedures and
practices established by the board of directors and management
of the credit union are being properly administered. The
supervisory committee shall submit a report of that audit to
the board of directors and a summary of that report to the
members at the next annual meeting of the credit union. It
shall make or cause to be made such supplementary audits as it
deems necessary or as are required by the Secretary or by the
board of directors, and submit reports of these supplementary
audits to the Secretary or board of directors as applicable.
If the supervisory committee has not engaged a licensed
certified public accountant or licensed certified public
accounting firm to make the internal audit, the supervisory
committee or other officials of the credit union shall not
indicate or in any manner imply that such audit has been
performed by a licensed certified public accountant or
licensed certified public accounting firm or that the audit
represents the independent opinion of a licensed certified
public accountant or licensed certified public accounting
firm. The supervisory committee must retain its tapes and
working papers of each internal audit for inspection by the
Department. The report of this audit must be made on a form
approved by the Secretary. A copy of the report must be

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promptly delivered to the Secretary as set forth in paragraph
(C) of subsection (3).
(2) The supervisory committee shall make or cause to be
made at least once each year a reasonable percentage
verification of members' share and loan accounts, consistent
with rules promulgated by the Secretary.
(3) (A) The supervisory committee of a credit union with
assets of $10,000,000 or more shall engage a licensed
certified public accountant or licensed certified public
accounting firm to perform an annual external independent
audit of the credit union's financial statements in accordance
with generally accepted auditing standards and the financial
statements shall be issued in accordance with accounting
principles generally accepted in the United States of America.
(B) The supervisory committee of a credit union with
assets of $5,000,000 or more, but less than $10,000,000 may,
at its option, shall engage a licensed certified public
accountant or licensed certified public accounting firm to
perform on an annual basis: (i) an agreed-upon procedures
engagement under attestation standards established by the
American Institute of Certified Public Accountants to
minimally satisfy the supervisory committee internal audit
standards set forth in subsection (1); (ii) an external
independent audit of the credit union's financial statements
pursuant to the standards set forth in paragraph (A) of
subsection (3); or (iii) an external independent audit of the

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credit union's financial statements in accordance with
subsection (5).
(C) Notwithstanding anything to the contrary in Section 6,
each credit union organized under this Act shall select the
annual period it desires to use for purposes of performing the
external independent audit, agreed-upon procedures engagement,
or internal audit described in this Section. The annual period
may end on the final day of any month and shall be construed to
mean once every calendar year and not once every 12-month
period. Irrespective of the annual period selected, the credit
union shall complete its external independent audit report,
agreed-upon procedures report, or internal audit report and
deliver a copy to the Secretary no later than 120 days after
the effective date of the audit or engagement, which shall
mean the last day of the selected annual period. A credit union
or group of credit unions may obtain an extension of the due
date upon application to and receipt of written approval from
the Secretary.
(D) If the credit union engages a licensed certified
public accountant or licensed certified public accounting firm
to perform an annual (i) external independent audit of the
credit union's financial statements pursuant to the standards
in paragraph (A) of subsection (3); (ii) regulatory basis
financial statement audit pursuant to the standards in
subsection (5); or (iii) or an annual agreed-upon procedures
engagement pursuant to the standards in paragraph (B) of

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subsection (3), then the annual internal audit requirements of
subsection (1) shall be deemed satisfied and met in all
respects.
(4) In determining the appropriate balance in the
allowance for loan losses account, a credit union may
determine its historical loss rate using a defined period of
time of less than 5 years, provided that:
(A) the methodology used to determine the defined
period of time is formally documented in the credit
union's policies and procedures and is appropriate to the
credit union's size, business strategy, and loan portfolio
characteristics and the economic environment of the areas
and employers served by the credit union;
(B) supporting documentation is maintained for the
technique used to develop the credit union loss rates,
including the period of time used to accumulate historical
loss data and the factors considered in establishing the
time frames; and
(C) the external auditor conducting the credit union's
financial statement audit has analyzed the methodology
employed by the credit union and concludes that the
financial statements, including the allowance for loan
losses, are fairly stated in all material respects in
accordance with U.S. Generally Accepted Accounting
Principles, as promulgated by the Financial Accounting
Standards Board, or the regulatory basis of accounting

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identified in subsection (5).
(5) A credit union with total assets of less than
$10,000,000 that does not engage a licensed certified public
accountant or licensed certified public accounting firm to
perform an annual external independent audit of the credit
union's financial statements pursuant to the standards in
paragraph (A) of subsection (3) is not required to determine
its allowance for loan losses in accordance with generally
accepted accounting principles. Any such credit union may
instead use any reasonable reserve methodology, including
incurred loss, if it adequately covers known and probable loan
losses and complies with the Department's rule addressing loan
loss accounting procedures in 38 Ill. Adm. Code 190.70. Any
such credit union shall also have the option of engaging a
licensed certified public accountant or licensed certified
public accounting firm to perform a financial statement audit
in accordance with this regulatory basis of accounting rather
than the standards in paragraph (A) of subsection (3).
(6) A majority of the members of the supervisory committee
shall constitute a quorum.
(7) On an annual basis commencing January 1, 2015, the
members of the supervisory committee shall receive training
related to their statutory duties. Supervisory committee
members may receive the training through internal credit union
training, external training offered by the credit union's
retained auditors, trade associations, vendors, regulatory

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agencies, or any other sources or on-the-job experience, or a
combination of those activities. The training may be received
through any medium, including, but not limited to,
conferences, workshops, audit closing meetings, seminars,
teleconferences, webinars, and other Internet-based delivery
channels.
(Source: P.A. 101-81, eff. 7-12-19; 102-496, eff. 8-20-21;
102-774, eff. 5-13-22.)
(205 ILCS 305/63) (from Ch. 17, par. 4464)
Sec. 63. Merger and consolidation.
(1) Any two or more credit unions, regardless of whether
or not they have the same common bond, may merge or consolidate
into a single credit union. A merger or consolidation may be
with a credit union organized under the laws of this State or
of another state or of the United States and is subject to the
approval of the Secretary. It must be made on such terms as
have been agreed upon by a vote of a majority of the directors
present at a meeting of the board of directors of each credit
union at which a quorum is present, and approved by an
affirmative vote of a majority of the members of the merging
credit union being absorbed present at a meeting, either in
person or by proxy, duly called for that purpose, except as
hereinafter specified. Notice of the meeting stating the
purpose must be sent by the secretary Secretary of each
merging credit union being absorbed to each member by mail or

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electronic record as authorized by Section 10.2 of this Act at
least 45 but no more than 90 days before the date of the
meeting, except as specified in this Act.
(1.5) If the Secretary determines the merging credit union
is not yet in danger of insolvency but supervisory concerns
exist as described in this paragraph (1.5), and upon agreement
of the boards of directors of the merging and continuing
credit unions as confirmed by a majority vote of the directors
present at a meeting of each board at which a quorum is
present, the Secretary may permit the merger to become
effective without (i) an affirmative vote of the membership of
the merging credit union otherwise required by paragraph (1)
of Section 63, (ii) adherence to the merging credit union
membership meeting notice requirement set forth in subsection
(1) of Section 63, or (iii) both. For the avoidance of doubt,
if supervisory concerns exist, the Secretary and both credit
unions may agree to conduct the merging credit union
membership meeting, but on a timeline shorter than that
prescribed in subsection (1) of Section 63. Supervisory
concerns supporting such a waiver or adjustment of the merging
credit union membership notice and voting process include
without limitation, abandonment of management or officials, or
both, of the merging credit union and the inability to find
suitable replacements; material loss of sponsor support;
serious and persistent recordkeeping problems or deficiencies;
or sustained material decline in financial condition supported

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by at least 12 months of historical data that reflects the
merging credit union's net worth is declining at a rate that
will take it under 2% net worth within 18 months.
(2) One of the merging credit unions may continue after
the merger or consolidation either as a surviving credit union
retaining its identity or as a new credit union as has been
agreed upon under the terms of the merger. At least 9 members
of the new proposed credit union must apply to the Department
for permission to organize the new credit union. The same
procedure shall be followed as provided for the organization
of a new credit union.
(3) After approval by the members of the credit union
which is to be absorbed by the merger or consolidation, the
chairman or president and the secretary of each credit union
shall execute a certificate of merger or consolidation, which
shall set forth all of the following:
(a) The time and place of the meeting of each board of
directors at which the plan was agreed upon;
(b) The vote in favor of the adoption of the plan;
(c) A copy of each resolution or other action by which
the plan was agreed upon;
(d) The time and place of the meeting of the members of
the absorbed credit union at which the plan agreed upon
was approved; and,
(e) The vote by which the plan was approved by the
members of the absorbed credit union.

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(4) Such certificate and a copy of the plan of merger or
consolidation agreed upon shall be mailed to the Secretary for
review. If the provisions of this Act have been complied with,
the certificate shall be approved by him, and returned to the
credit unions which are parties to the merger or consolidation
within 30 days. When so approved by the Secretary the
certificate shall constitute the Department's certificate of
approval of the merger or consolidation.
(5) Upon issuance of the certificate of approval, each
merging credit union which was absorbed shall cease operation.
Each party to the merger shall file the certificate of
approval with the Recorder or County Clerk of the county in
which the credit union has or had its principal office.
(6) Each credit union absorbed by the merger or
consolidation shall return to the Secretary the original
statement of incorporation, certificate of approval of
incorporation, and the bylaws of the credit union. The
surviving credit union shall continue its operation under its
existing certificate of approval, articles of incorporation,
and the bylaws or if a new credit union has been formed, under
the new certificate of approval, articles of incorporation,
and bylaws.
(7) All rights of membership in and any obligation or
liability of any member to any credit union which is party to a
consolidation or merger are continued in the surviving or new
credit union without reservation or diminution.

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(8) A pending action or other judicial proceeding to which
any of the consolidating or merging credit unions is a party
does not abate by reason of the consolidation or merger.
(Source: P.A. 101-567, eff. 8-23-19.)