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
 
HB2785LRB104 07806 BAB 17852 b


1    AN ACT concerning regulation.

2    Be it enacted by the People of the State of Illinois, 
3represented in the General Assembly:

4    Section 5. The Illinois Credit Union Act is amended by 
5changing Sections 10, 29, 34, and 63 as follows:

6    (205 ILCS 305/10)    (from Ch. 17, par. 4411)
7    Sec. 10. Credit union records; member financial records. 
8    (1) A credit union shall establish and maintain books, 
9records, accounting systems and procedures which accurately 
10reflect its operations and which enable the Department to 
11readily ascertain the true financial condition of the credit 
12union and whether it is complying with this Act.
13    (2) A photostatic or photographic reproduction of any 
14credit union records shall be admissible as evidence of 
15transactions with the credit union.    
16    (3)(a) For the purpose of this Section, the term 
17"financial records" means any original, any copy, or any 
18summary of (1) a document granting signature authority over an 
19account, (2) a statement, ledger card or other record on any 
20account which shows each transaction in or with respect to 
21that account, (3) a check, draft or money order drawn on a 
22financial institution or other entity or issued and payable by 
23or through a financial institution or other entity, or (4) any 
 
 
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1other item containing information pertaining to any 
2relationship established in the ordinary course of business 
3between a credit union and its member, including financial 
4statements or other financial information provided by the 
5member.    
6    (b) This Section does not prohibit:
7        (1) The preparation, examination, handling or 
8 maintenance of any financial records by any officer, 
9 employee or agent of a credit union having custody of such 
10 records, or the examination of such records by a certified 
11 public accountant engaged by the credit union to perform 
12 an independent audit.
13        (2) The examination of any financial records by or the 
14 furnishing of financial records by a credit union to any 
15 officer, employee or agent of the Department, the National 
16 Credit Union Administration, Federal Reserve board or any 
17 insurer of share accounts for use solely in the exercise 
18 of his duties as an officer, employee or agent.
19        (3) The publication of data furnished from financial 
20 records relating to members where the data cannot be 
21 identified to any particular customer of account.
22        (4) The making of reports or returns required under 
23 Chapter 61 of the Internal Revenue Code of 1954.
24        (5) Furnishing information concerning the dishonor of 
25 any negotiable instrument permitted to be disclosed under 
26 the Uniform Commercial Code.
 
 
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1        (6) The exchange in the regular course of business of 
2 (i) credit information between a credit union and other 
3 credit unions or financial institutions or commercial 
4 enterprises, directly or through a consumer reporting 
5 agency or (ii) financial records or information derived 
6 from financial records between a credit union and other 
7 credit unions or financial institutions or commercial 
8 enterprises for the purpose of conducting due diligence 
9 pursuant to a merger or a purchase or sale of assets or 
10 liabilities of the credit union.
11        (7) The furnishing of information to the appropriate 
12 law enforcement authorities where the credit union 
13 reasonably believes it has been the victim of a crime.
14        (8) The furnishing of information pursuant to the 
15 Revised Uniform Unclaimed Property Act.
16        (9) The furnishing of information pursuant to the 
17 Illinois Income Tax Act and the Illinois Estate and 
18 Generation-Skipping Transfer Tax Act.
19        (10) The furnishing of information pursuant to the 
20 federal Currency and Foreign Transactions Reporting Act, 
21 Title 31, United States Code, Section 1051 et sequentia.
22        (11) The furnishing of information pursuant to any 
23 other statute which by its terms or by regulations 
24 promulgated thereunder requires the disclosure of 
25 financial records other than by subpoena, summons, warrant 
26 or court order.
 
 
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1        (12) The furnishing of information in accordance with 
2 the federal Personal Responsibility and Work Opportunity 
3 Reconciliation Act of 1996. Any credit union governed by 
4 this Act shall enter into an agreement for data exchanges 
5 with a State agency provided the State agency pays to the 
6 credit union a reasonable fee not to exceed its actual 
7 cost incurred. A credit union providing information in 
8 accordance with this item shall not be liable to any 
9 account holder or other person for any disclosure of 
10 information to a State agency, for encumbering or 
11 surrendering any assets held by the credit union in 
12 response to a lien or order to withhold and deliver issued 
13 by a State agency, or for any other action taken pursuant 
14 to this item, including individual or mechanical errors, 
15 provided the action does not constitute gross negligence 
16 or willful misconduct. A credit union shall have no 
17 obligation to hold, encumber, or surrender assets until it 
18 has been served with a subpoena, summons, warrant, court 
19 or administrative order, lien, or levy.
20        (13) The furnishing of information to law enforcement 
21 authorities, the Illinois Department on Aging and its 
22 regional administrative and provider agencies, the 
23 Department of Human Services Office of Inspector General, 
24 or public guardians: (i) upon subpoena by the 
25 investigatory entity or the guardian, or (ii) if there is 
26 suspicion by the credit union that a member who is an 
 
 
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1 elderly person or person with a disability has been or may 
2 become the victim of financial exploitation. For the 
3 purposes of this item (13), the term: (i) "elderly person" 
4 means a person who is 60 or more years of age, (ii) "person 
5 with a disability" means a person who has or reasonably 
6 appears to the credit union to have a physical or mental 
7 disability that impairs his or her ability to seek or 
8 obtain protection from or prevent financial exploitation, 
9 and (iii) "financial exploitation" means tortious or 
10 illegal use of the assets or resources of an elderly 
11 person or person with a disability, and includes, without 
12 limitation, misappropriation of the elderly or disabled 
13 person's assets or resources by undue influence, breach of 
14 fiduciary relationship, intimidation, fraud, deception, 
15 extortion, or the use of assets or resources in any manner 
16 contrary to law. A credit union or person furnishing 
17 information pursuant to this item (13) shall be entitled 
18 to the same rights and protections as a person furnishing 
19 information under the Adult Protective Services Act and 
20 the Illinois Domestic Violence Act of 1986.
21        (13.5) The furnishing of information to any person on 
22 a list submitted and periodically updated by a member who 
23 is an elderly person or person with a disability, if there 
24 is suspicion by the credit union that the member has been 
25 or may become a victim of financial exploitation. For 
26 purposes of this item (13.5), the terms "elderly person", 
 
 
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1 "person with a disability", and "financial exploitation" 
2 have the meanings given to those terms in item (13). The 
3 credit union may convey the suspicion to any of the 
4 following persons, if the person is not the suspected 
5 perpetrator: (i) any person on the list; (ii) any 
6 co-owner, additional authorized signatory, or beneficiary 
7 on the account of the member; or (iii) any person known by 
8 the credit union to be a family member, including a 
9 parent, spouse, adult child, or sibling. When providing 
10 information under this item (13.5), the credit union may 
11 limit the information and only disclose that the credit 
12 union has cause to suspect that the member may be a victim 
13 or target of financial exploitation, without disclosing 
14 any other details or confidential information regarding 
15 the financial affairs of the member. The credit union may 
16 rely on information provided by the member in compiling 
17 the list of contact persons. The credit union and any 
18 employee of the credit union acting in good faith is 
19 immune from all criminal, civil, and administrative 
20 liability for contacting a person or electing not to 
21 contact a person under this item (13.5) and for actions 
22 taken in furtherance of that determination, if the 
23 determination was made based on a reasonable suspicion.    
24        (14) The disclosure of financial records or 
25 information as necessary to effect, administer, or enforce 
26 a transaction requested or authorized by the member, or in 
 
 
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1 connection with:
2            (A) servicing or processing a financial product or 
3 service requested or authorized by the member;
4            (B) maintaining or servicing a member's account 
5 with the credit union; or
6            (C) a proposed or actual securitization or 
7 secondary market sale (including sales of servicing 
8 rights) related to a transaction of a member.
9        Nothing in this item (14), however, authorizes the 
10 sale of the financial records or information of a member 
11 without the consent of the member.
12        (15) The disclosure of financial records or 
13 information as necessary to protect against or prevent 
14 actual or potential fraud, unauthorized transactions, 
15 claims, or other liability.
16        (16)(a) The disclosure of financial records or 
17 information related to a private label credit program 
18 between a financial institution and a private label party 
19 in connection with that private label credit program. Such 
20 information is limited to outstanding balance, available 
21 credit, payment and performance and account history, 
22 product references, purchase information, and information 
23 related to the identity of the customer.
24        (b)(1) For purposes of this item (16), "private label 
25 credit program" means a credit program involving a 
26 financial institution and a private label party that is 
 
 
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1 used by a customer of the financial institution and the 
2 private label party primarily for payment for goods or 
3 services sold, manufactured, or distributed by a private 
4 label party.
5        (2) For purposes of this item (16), "private label 
6 party" means, with respect to a private label credit 
7 program, any of the following: a retailer, a merchant, a 
8 manufacturer, a trade group, or any such person's 
9 affiliate, subsidiary, member, agent, or service provider.
10        (17)(a) The furnishing of financial records of a 
11 member to the Department to aid the Department's initial 
12 determination or subsequent re-determination of the 
13 member's eligibility for Medicaid and Medicaid long-term 
14 care benefits for long-term care services, provided that 
15 the credit union receives the written consent and 
16 authorization of the member, which shall:
17            (1) have the member's signature notarized;
18            (2) be signed by at least one witness who 
19 certifies that he or she believes the member to be of 
20 sound mind and memory;
21            (3) be tendered to the credit union at the 
22 earliest practicable time following its execution, 
23 certification, and notarization;
24            (4) specifically limit the disclosure of the 
25 member's financial records to the Department; and
26            (5) be in substantially the following form: 

 
 
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1
CUSTOMER CONSENT AND AUTHORIZATION 
2
FOR RELEASE OF FINANCIAL RECORDS 


3I, ......................................., hereby authorize 
4 (Name of Customer) 

5.............................................................    
6(Name of Financial Institution)

7.............................................................    
8(Address of Financial Institution)

9to disclose the following financial records:

10any and all information concerning my deposit, savings, money 
11market, certificate of deposit, individual retirement, 
12retirement plan, 401(k) plan, incentive plan, employee benefit 
13plan, mutual fund and loan accounts (including, but not 
14limited to, any indebtedness or obligation for which I am a 
15co-borrower, co-obligor, guarantor, or surety), and any and 
16all other accounts in which I have an interest and any other 
17information regarding me in the possession of the Financial 
18Institution,

19to the Illinois Department of Human Services or the Illinois 
 
 
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1Department of Healthcare and Family Services, or both ("the 
2Department"), for the following purpose(s):

3to aid in the initial determination or re-determination by the 
4State of Illinois of my eligibility for Medicaid long-term 
5care benefits, pursuant to applicable law. 

6I understand that this Consent and Authorization may be 
7revoked by me in writing at any time before my financial 
8records, as described above, are disclosed, and that this 
9Consent and Authorization is valid until the Financial 
10Institution receives my written revocation. This Consent and 
11Authorization shall constitute valid authorization for the 
12Department identified above to inspect all such financial 
13records set forth above, and to request and receive copies of 
14such financial records from the Financial Institution (subject 
15to such records search and reproduction reimbursement policies 
16as the Financial Institution may have in place). An executed 
17copy of this Consent and Authorization shall be sufficient and 
18as good as the original and permission is hereby granted to 
19honor a photostatic or electronic copy of this Consent and 
20Authorization. Disclosure is strictly limited to the 
21Department identified above and no other person or entity 
22shall receive my financial records pursuant to this Consent 
23and Authorization. By signing this form, I agree to indemnify 
24and hold the Financial Institution harmless from any and all 
 
 
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1claims, demands, and losses, including reasonable attorneys 
2fees and expenses, arising from or incurred in its reliance on 
3this Consent and Authorization. As used herein, "Customer" 
4shall mean "Member" if the Financial Institution is a credit 
5union.

6....................... ...................... 
7(Date) (Signature of Customer) 

8 ...................... 
9 ...................... 
10 (Address of Customer) 

11 ...................... 
12 (Customer's birth date) 
13 (month/day/year) 

14The undersigned witness certifies that ................., 
15known to me to be the same person whose name is subscribed as 
16the customer to the foregoing Consent and Authorization, 
17appeared before me and the notary public and acknowledged 
18signing and delivering the instrument as his or her free and 
19voluntary act for the uses and purposes therein set forth. I 
20believe him or her to be of sound mind and memory. The 
21undersigned witness also certifies that the witness is not an 
22owner, operator, or relative of an owner or operator of a 
 
 
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1long-term care facility in which the customer is a patient or 
2resident. 

3Dated: ................. ...................... 
4 (Signature of Witness) 

5 ...................... 
6 (Print Name of Witness) 

7 ...................... 
8 ...................... 
9 (Address of Witness) 

10State of Illinois)
11 ) ss.
12County of .......)

13The undersigned, a notary public in and for the above county 
14and state, certifies that .........., known to me to be the 
15same person whose name is subscribed as the customer to the 
16foregoing Consent and Authorization, appeared before me 
17together with the witness, .........., in person and 
18acknowledged signing and delivering the instrument as the free 
19and voluntary act of the customer for the uses and purposes 
20therein set forth. 

 
 
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1Dated:.......................................................    
2Notary Public:...............................................    
3My commission expires:.......................................    

4        (b) In no event shall the credit union distribute the 
5 member's financial records to the long-term care facility 
6 from which the member seeks initial or continuing 
7 residency or long-term care services.
8        (c) A credit union providing financial records of a 
9 member in good faith relying on a consent and 
10 authorization executed and tendered in accordance with 
11 this item (17) shall not be liable to the member or any 
12 other person in relation to the credit union's disclosure 
13 of the member's financial records to the Department. The 
14 member signing the consent and authorization shall 
15 indemnify and hold the credit union harmless that relies 
16 in good faith upon the consent and authorization and 
17 incurs a loss because of such reliance. The credit union 
18 recovering under this indemnification provision shall also 
19 be entitled to reasonable attorney's fees and the expenses 
20 of recovery.
21        (d) A credit union shall be reimbursed by the member 
22 for all costs reasonably necessary and directly incurred 
23 in searching for, reproducing, and disclosing a member's 
24 financial records required or requested to be produced 
25 pursuant to any consent and authorization executed under 
 
 
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1 this item (17). The requested financial records shall be 
2 delivered to the Department within 10 days after receiving 
3 a properly executed consent and authorization or at the 
4 earliest practicable time thereafter if the requested 
5 records cannot be delivered within 10 days, but delivery 
6 may be delayed until the final reimbursement of all costs 
7 is received by the credit union. The credit union may 
8 honor a photostatic or electronic copy of a properly 
9 executed consent and authorization.
10        (e) Nothing in this item (17) shall impair, abridge, 
11 or abrogate the right of a member to:
12            (1) directly disclose his or her financial records 
13 to the Department or any other person; or
14            (2) authorize his or her attorney or duly 
15 appointed agent to request and obtain the member's 
16 financial records and disclose those financial records 
17 to the Department.
18        (f) For purposes of this item (17), "Department" means 
19 the Department of Human Services and the Department of 
20 Healthcare and Family Services or any successor 
21 administrative agency of either agency. 
22        (18) The furnishing of the financial records of a 
23 member to an appropriate law enforcement authority, 
24 without prior notice to or consent of the member, upon 
25 written request of the law enforcement authority, when 
26 reasonable suspicion of an imminent threat to the personal 
 
 
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1 security and safety of the member exists that necessitates 
2 an expedited release of the member's financial records, as 
3 determined by the law enforcement authority. The law 
4 enforcement authority shall include a brief explanation of 
5 the imminent threat to the member in its written request 
6 to the credit union. The written request shall reflect 
7 that it has been authorized by a supervisory or managerial 
8 official of the law enforcement authority. The decision to 
9 furnish the financial records of a member to a law 
10 enforcement authority shall be made by a supervisory or 
11 managerial official of the credit union. A credit union 
12 providing information in accordance with this item (18) 
13 shall not be liable to the member or any other person for 
14 the disclosure of the information to the law enforcement 
15 authority.     
16    (c) Except as otherwise provided by this Act, a credit 
17union may not disclose to any person, except to the member or 
18his duly authorized agent, any financial records relating to 
19that member of the credit union unless:
20        (1) the member has authorized disclosure to the 
21 person;
22        (2) the financial records are disclosed in response to 
23 a lawful subpoena, summons, warrant, citation to discover 
24 assets, or court order that meets the requirements of 
25 subparagraph (3)(d) of this Section; or
26        (3) the credit union is attempting to collect an 
 
 
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1 obligation owed to the credit union and the credit union 
2 complies with the provisions of Section 2I of the Consumer 
3 Fraud and Deceptive Business Practices Act.    
4    (d) A credit union shall disclose financial records under 
5item (3)(c)(2) of this Section pursuant to a lawful subpoena, 
6summons, warrant, citation to discover assets, or court order 
7only after the credit union sends a copy of the subpoena, 
8summons, warrant, citation to discover assets, or court order 
9to the person establishing the relationship with the credit 
10union, if living, and otherwise the person's personal 
11representative, if known, at the person's last known address 
12by first class mail, postage prepaid, through a third-party 
13commercial carrier or courier with delivery charge fully 
14prepaid, by hand delivery, or by electronic delivery at an 
15email address on file with the credit union (if the person 
16establishing the relationship with the credit union has 
17consented to receive electronic delivery and, if the person 
18establishing the relationship with the credit union is a 
19consumer, the person has consented under the consumer consent 
20provisions set forth in Section 7001 of Title 15 of the United 
21States Code), unless the credit union is specifically 
22prohibited from notifying the person by order of court or by 
23applicable State or federal law. In the case of a grand jury 
24subpoena, a credit union shall not mail a copy of a subpoena to 
25any person pursuant to this subsection if the subpoena was 
26issued by a grand jury under the Statewide Grand Jury Act or 
 
 
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1notifying the person would constitute a violation of the 
2federal Right to Financial Privacy Act of 1978.    
3    (e)(1) Any officer or employee of a credit union who 
4knowingly and willfully furnishes financial records in 
5violation of this Section is guilty of a business offense and 
6upon conviction thereof shall be fined not more than $1,000.    
7    (2) Any person who knowingly and willfully induces or 
8attempts to induce any officer or employee of a credit union to 
9disclose financial records in violation of this Section is 
10guilty of a business offense and upon conviction thereof shall 
11be fined not more than $1,000.    
12    (f) A credit union shall be reimbursed for costs which are 
13reasonably necessary and which have been directly incurred in 
14searching for, reproducing or transporting books, papers, 
15records or other data of a member required or requested to be 
16produced pursuant to a lawful subpoena, summons, warrant, 
17citation to discover assets, or court order. The Secretary and 
18the Director may determine, by rule, the rates and conditions 
19under which payment shall be made. Delivery of requested 
20documents may be delayed until final reimbursement of all 
21costs is received.
22(Source: P.A. 101-81, eff. 7-12-19; 102-873, eff. 5-13-22.)

23    (205 ILCS 305/29)    (from Ch. 17, par. 4430)
24    Sec. 29. Meetings of directors. 
25    (1) The board of directors and the executive committee 
 
 
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1shall meet as often as necessary, but one body must meet at 
2least monthly and the other at least quarterly, as prescribed 
3in the bylaws. Unless a greater number is required by the 
4bylaws, a majority of the whole board of directors shall 
5constitute a quorum. The act of a majority of the directors 
6present at a meeting at which a quorum is present shall be the 
7act of the board of directors unless the act of a greater 
8number is required by this Act, the credit union's articles of 
9incorporation or the bylaws.
10    (1.5) Notwithstanding anything to the contrary in 
11subsection (1), the board of directors of a credit union with a 
12composite rating of either 1 or 2 under the Uniform Financial 
13Institutions Rating System known as the CAMELS supervisory 
14rating system (or an equivalent rating under a comparable 
15rating system) and a management rating under such composite 
16rating of either 1 or 2 may meet not less than 4 6 times 
17annually, with at least one meeting held during each fiscal 
18quarter. This meeting frequency schedule shall be available to 
19an eligible credit union irrespective of whether it has 
20appointed an executive committee pursuant to Section 28. 
21    (2) Unless specifically prohibited by the articles of 
22incorporation or bylaws, directors and committee members may 
23participate in and act at any meeting of the board or committee 
24through the use of a conference telephone or other 
25communications equipment by means of which all persons 
26participating in the meeting can communicate with each other. 
 
 
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1Participation in the meeting shall constitute attendance and 
2presence in person at the meeting of the person or persons so 
3participating.
4    (3) Unless specifically prohibited by the articles of 
5incorporation or bylaws, any action required by this Act to be 
6taken at a meeting of the board of directors or a committee and 
7any other action that may be taken at a meeting of the board of 
8directors or a committee may be taken without a meeting if a 
9consent in writing setting forth the action taken is signed by 
10all the directors entitled to vote with respect to the subject 
11matter thereof, or by all members of the committee, as the case 
12may be. The consent shall be evidenced by one or more written 
13approvals, each of which sets forth the action taken and bears 
14the signatures of one or more directors or committee members. 
15All the approvals evidencing the consent shall be delivered to 
16the secretary to be filed in the corporate records of the 
17credit union. The action taken shall be effective when all the 
18directors or committee members have approved the consent 
19unless the consent specifies a different effective date. A 
20consent signed by all the directors or all the members of a 
21committee shall have the same effect as a unanimous vote, and 
22may be stated as such in any document filed with the director 
23under this Act.
24    (4)(a) As used in this subsection:
25    "Affiliate" means an organization established to serve the 
26needs of credit unions, the business of which relates to the 
 
 
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1daily operations of credit unions.
2    "Compliance review documents" means reports, meeting 
3minutes, and other documents prepared in connection with a 
4review or evaluation conducted by or for the board of 
5directors.
6    (b) This subsection applies to the board of directors in 
7relation to its functions to evaluate and seek to improve any 
8of the following:
9        (i) loan policies or underwriting standards;
10        (ii) asset quality;
11        (iii) financial reporting to federal or State 
12 governmental or regulatory agencies; or
13        (iv) compliance with federal or State statutory or 
14 regulatory requirements, including, without limitation, 
15 the manner in which it performs its duties under Section 
16 30.
17    (c) Meetings, minutes of meetings, and reports of the 
18board of directors shall be subject to the confidentiality and 
19redaction standards set forth in this subsection.
20    (d) Except as provided in paragraph (e), compliance review 
21documents and the deliberations of the board of directors are 
22confidential. An affiliate of a credit union, a credit union 
23regulatory agency, and the insurer of credit union share 
24accounts shall have access to compliance review documents; 
25however, (i) the documents remain confidential and (ii) 
26delivery of compliance review documents to an affiliate or 
 
 
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1pursuant to the requirements of a credit union regulatory 
2agency or an insurer of credit union share accounts do not 
3constitute a waiver of the confidentiality granted in this 
4Section.
5    (e) This Section does not apply to any civil or 
6administrative action initiated by a credit union regulatory 
7agency or an insurer of credit union share accounts.
8    (f) This Section shall not be construed to limit the 
9discovery or admissibility in any civil action of any 
10documents, including compliance review documents.
11    (g) Any report required under this Act to be furnished to 
12the board of directors by the membership committee, credit 
13committee, or any other committee may be submitted in a 
14summary format that redacts personally identifiable 
15information as defined under applicable State and federal law. 
16    (h) Compliance review documents may be disclosed by the 
17Secretary or a credit union to any person or entity to whom 
18confidential supervisory information may be disclosed pursuant 
19to subsection (3) of Section 9.1. 
20(Source: P.A. 103-289, eff. 7-28-23.)

21    (205 ILCS 305/34)    (from Ch. 17, par. 4435)
22    Sec. 34. Duties of supervisory committee. 
23    (1) The supervisory committee shall make or cause to be 
24made an annual internal audit of the books and affairs of the 
25credit union to determine that the credit union's accounting 
 
 
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1records and reports are prepared promptly and accurately 
2reflect operations and results, that internal controls are 
3established and effectively maintained to safeguard the assets 
4of the credit union, and that the policies, procedures and 
5practices established by the board of directors and management 
6of the credit union are being properly administered. The 
7supervisory committee shall submit a report of that audit to 
8the board of directors and a summary of that report to the 
9members at the next annual meeting of the credit union. It 
10shall make or cause to be made such supplementary audits as it 
11deems necessary or as are required by the Secretary or by the 
12board of directors, and submit reports of these supplementary 
13audits to the Secretary or board of directors as applicable. 
14If the supervisory committee has not engaged a licensed 
15certified public accountant or licensed certified public 
16accounting firm to make the internal audit, the supervisory 
17committee or other officials of the credit union shall not 
18indicate or in any manner imply that such audit has been 
19performed by a licensed certified public accountant or 
20licensed certified public accounting firm or that the audit 
21represents the independent opinion of a licensed certified 
22public accountant or licensed certified public accounting 
23firm. The supervisory committee must retain its tapes and 
24working papers of each internal audit for inspection by the 
25Department. The report of this audit must be made on a form 
26approved by the Secretary. A copy of the report must be 
 
 
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1promptly delivered to the Secretary as set forth in paragraph 
2(C) of subsection (3).
3    (2) The supervisory committee shall make or cause to be 
4made at least once each year a reasonable percentage 
5verification of members' share and loan accounts, consistent 
6with rules promulgated by the Secretary.
7    (3) (A) The supervisory committee of a credit union with 
8assets of $10,000,000 or more shall engage a licensed 
9certified public accountant or licensed certified public 
10accounting firm to perform an annual external independent 
11audit of the credit union's financial statements in accordance 
12with generally accepted auditing standards and the financial 
13statements shall be issued in accordance with accounting 
14principles generally accepted in the United States of America. 
15    (B) The supervisory committee of a credit union with 
16assets of $5,000,000 or more, but less than $10,000,000 may, 
17at its option, shall engage a licensed certified public 
18accountant or licensed certified public accounting firm to 
19perform on an annual basis: (i) an agreed-upon procedures 
20engagement under attestation standards established by the 
21American Institute of Certified Public Accountants to 
22minimally satisfy the supervisory committee internal audit 
23standards set forth in subsection (1); (ii) an external 
24independent audit of the credit union's financial statements 
25pursuant to the standards set forth in paragraph (A) of 
26subsection (3); or (iii) an external independent audit of the 
 
 
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1credit union's financial statements in accordance with 
2subsection (5).
3    (C) Notwithstanding anything to the contrary in Section 6, 
4each credit union organized under this Act shall select the 
5annual period it desires to use for purposes of performing the 
6external independent audit, agreed-upon procedures engagement, 
7or internal audit described in this Section. The annual period 
8may end on the final day of any month and shall be construed to 
9mean once every calendar year and not once every 12-month 
10period. Irrespective of the annual period selected, the credit 
11union shall complete its external independent audit report, 
12agreed-upon procedures report, or internal audit report and 
13deliver a copy to the Secretary no later than 120 days after 
14the effective date of the audit or engagement, which shall 
15mean the last day of the selected annual period. A credit union 
16or group of credit unions may obtain an extension of the due 
17date upon application to and receipt of written approval from 
18the Secretary. 
19    (D) If the credit union engages a licensed certified 
20public accountant or licensed certified public accounting firm 
21to perform an annual (i) external independent audit of the 
22credit union's financial statements pursuant to the standards 
23in paragraph (A) of subsection (3); (ii) regulatory basis 
24financial statement audit pursuant to the standards in 
25subsection (5); or (iii) or an annual agreed-upon procedures 
26engagement pursuant to the standards in paragraph (B) of 
 
 
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1subsection (3), then the annual internal audit requirements of 
2subsection (1) shall be deemed satisfied and met in all 
3respects. 
4    (4) In determining the appropriate balance in the 
5allowance for loan losses account, a credit union may 
6determine its historical loss rate using a defined period of 
7time of less than 5 years, provided that:
8        (A) the methodology used to determine the defined 
9 period of time is formally documented in the credit 
10 union's policies and procedures and is appropriate to the 
11 credit union's size, business strategy, and loan portfolio 
12 characteristics and the economic environment of the areas 
13 and employers served by the credit union;
14        (B) supporting documentation is maintained for the 
15 technique used to develop the credit union loss rates, 
16 including the period of time used to accumulate historical 
17 loss data and the factors considered in establishing the 
18 time frames; and
19        (C) the external auditor conducting the credit union's 
20 financial statement audit has analyzed the methodology 
21 employed by the credit union and concludes that the 
22 financial statements, including the allowance for loan 
23 losses, are fairly stated in all material respects in 
24 accordance with U.S. Generally Accepted Accounting 
25 Principles, as promulgated by the Financial Accounting 
26 Standards Board, or the regulatory basis of accounting 
 
 
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1 identified in subsection (5).
2    (5) A credit union with total assets of less than 
3$10,000,000 that does not engage a licensed certified public 
4accountant or licensed certified public accounting firm to 
5perform an annual external independent audit of the credit 
6union's financial statements pursuant to the standards in 
7paragraph (A) of subsection (3) is not required to determine 
8its allowance for loan losses in accordance with generally 
9accepted accounting principles. Any such credit union may 
10instead use any reasonable reserve methodology, including 
11incurred loss, if it adequately covers known and probable loan 
12losses and complies with the Department's rule addressing loan 
13loss accounting procedures in 38 Ill. Adm. Code 190.70. Any 
14such credit union shall also have the option of engaging a 
15licensed certified public accountant or licensed certified 
16public accounting firm to perform a financial statement audit 
17in accordance with this regulatory basis of accounting rather 
18than the standards in paragraph (A) of subsection (3). 
19    (6) A majority of the members of the supervisory committee 
20shall constitute a quorum.
21    (7) On an annual basis commencing January 1, 2015, the 
22members of the supervisory committee shall receive training 
23related to their statutory duties. Supervisory committee 
24members may receive the training through internal credit union 
25training, external training offered by the credit union's 
26retained auditors, trade associations, vendors, regulatory 
 
 
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1agencies, or any other sources or on-the-job experience, or a 
2combination of those activities. The training may be received 
3through any medium, including, but not limited to, 
4conferences, workshops, audit closing meetings, seminars, 
5teleconferences, webinars, and other Internet-based delivery 
6channels. 
7(Source: P.A. 101-81, eff. 7-12-19; 102-496, eff. 8-20-21; 
8102-774, eff. 5-13-22.)

9    (205 ILCS 305/63)    (from Ch. 17, par. 4464)
10    Sec. 63. Merger and consolidation. 
11    (1) Any two or more credit unions, regardless of whether 
12or not they have the same common bond, may merge or consolidate 
13into a single credit union. A merger or consolidation may be 
14with a credit union organized under the laws of this State or 
15of another state or of the United States and is subject to the 
16approval of the Secretary. It must be made on such terms as 
17have been agreed upon by a vote of a majority of the directors 
18present at a meeting of the board of directors of each credit 
19union at which a quorum is present, and approved by an 
20affirmative vote of a majority of the members of the merging 
21credit union being absorbed present at a meeting, either in 
22person or by proxy, duly called for that purpose, except as 
23hereinafter specified. Notice of the meeting stating the 
24purpose must be sent by the secretary Secretary of each 
25merging credit union being absorbed to each member by mail or 
 
 
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1electronic record as authorized by Section 10.2 of this Act at 
2least 45 but no more than 90 days before the date of the 
3meeting, except as specified in this Act.
4    (1.5) If the Secretary determines the merging credit union 
5is not yet in danger of insolvency but supervisory concerns 
6exist as described in this paragraph (1.5), and upon agreement 
7of the boards of directors of the merging and continuing 
8credit unions as confirmed by a majority vote of the directors 
9present at a meeting of each board at which a quorum is 
10present, the Secretary may permit the merger to become 
11effective without (i) an affirmative vote of the membership of 
12the merging credit union otherwise required by paragraph (1) 
13of Section 63, (ii) adherence to the merging credit union 
14membership meeting notice requirement set forth in subsection 
15(1) of Section 63, or (iii) both. For the avoidance of doubt, 
16if supervisory concerns exist, the Secretary and both credit 
17unions may agree to conduct the merging credit union 
18membership meeting, but on a timeline shorter than that 
19prescribed in subsection (1) of Section 63. Supervisory 
20concerns supporting such a waiver or adjustment of the merging 
21credit union membership notice and voting process include 
22without limitation, abandonment of management or officials, or 
23both, of the merging credit union and the inability to find 
24suitable replacements; material loss of sponsor support; 
25serious and persistent recordkeeping problems or deficiencies; 
26or sustained material decline in financial condition supported 
 
 
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1by at least 12 months of historical data that reflects the 
2merging credit union's net worth is declining at a rate that 
3will take it under 2% net worth within 18 months.    
4    (2) One of the merging credit unions may continue after 
5the merger or consolidation either as a surviving credit union 
6retaining its identity or as a new credit union as has been 
7agreed upon under the terms of the merger. At least 9 members 
8of the new proposed credit union must apply to the Department 
9for permission to organize the new credit union. The same 
10procedure shall be followed as provided for the organization 
11of a new credit union.
12    (3) After approval by the members of the credit union 
13which is to be absorbed by the merger or consolidation, the 
14chairman or president and the secretary of each credit union 
15shall execute a certificate of merger or consolidation, which 
16shall set forth all of the following:
17        (a) The time and place of the meeting of each board of 
18 directors at which the plan was agreed upon;
19        (b) The vote in favor of the adoption of the plan;
20        (c) A copy of each resolution or other action by which 
21 the plan was agreed upon;
22        (d) The time and place of the meeting of the members of 
23 the absorbed credit union at which the plan agreed upon 
24 was approved; and,
25        (e) The vote by which the plan was approved by the 
26 members of the absorbed credit union.
 
 
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1    (4) Such certificate and a copy of the plan of merger or 
2consolidation agreed upon shall be mailed to the Secretary for 
3review. If the provisions of this Act have been complied with, 
4the certificate shall be approved by him, and returned to the 
5credit unions which are parties to the merger or consolidation 
6within 30 days. When so approved by the Secretary the 
7certificate shall constitute the Department's certificate of 
8approval of the merger or consolidation.
9    (5) Upon issuance of the certificate of approval, each 
10merging credit union which was absorbed shall cease operation. 
11Each party to the merger shall file the certificate of 
12approval with the Recorder or County Clerk of the county in 
13which the credit union has or had its principal office.
14    (6) Each credit union absorbed by the merger or 
15consolidation shall return to the Secretary the original 
16statement of incorporation, certificate of approval of 
17incorporation, and the bylaws of the credit union. The 
18surviving credit union shall continue its operation under its 
19existing certificate of approval, articles of incorporation, 
20and the bylaws or if a new credit union has been formed, under 
21the new certificate of approval, articles of incorporation, 
22and bylaws.
23    (7) All rights of membership in and any obligation or 
24liability of any member to any credit union which is party to a 
25consolidation or merger are continued in the surviving or new 
26credit union without reservation or diminution.
 
 
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1    (8) A pending action or other judicial proceeding to which 
2any of the consolidating or merging credit unions is a party 
3does not abate by reason of the consolidation or merger.
4(Source: P.A. 101-567, eff. 8-23-19.)