Public Act 098-0784

HB5342 Enrolled LRB098 19293 ZMM 55277 b

AN ACT concerning regulation.

Be it enacted by the People of the State of Illinois,

represented in the General Assembly:

Section 3. The Illinois Banking Act is amended by changing

Section 48 as follows:

(205 ILCS 5/48)

Sec. 48. Secretary's powers; duties. The Secretary shall

have the powers and authority, and is charged with the duties

and responsibilities designated in this Act, and a State bank

shall not be subject to any other visitorial power other than

as authorized by this Act, except those vested in the courts,

or upon prior consultation with the Secretary, a foreign bank

regulator with an appropriate supervisory interest in the

parent or affiliate of a state bank. In the performance of the

Secretary's duties:

(1) The Commissioner shall call for statements from all

State banks as provided in Section 47 at least one time during

each calendar quarter.

(2) (a) The Commissioner, as often as the Commissioner

shall deem necessary or proper, and no less frequently than 18

months following the preceding examination, shall appoint a

suitable person or persons to make an examination of the

affairs of every State bank, except that for every eligible

State bank, as defined by regulation, the Commissioner in lieu

of the examination may accept on an alternating basis the

examination made by the eligible State bank's appropriate

federal banking agency pursuant to Section 111 of the Federal

Deposit Insurance Corporation Improvement Act of 1991,

provided the appropriate federal banking agency has made such

an examination. A person so appointed shall not be a

stockholder or officer or employee of any bank which that

person may be directed to examine, and shall have powers to

make a thorough examination into all the affairs of the bank

and in so doing to examine any of the officers or agents or

employees thereof on oath and shall make a full and detailed

report of the condition of the bank to the Commissioner. In

making the examination the examiners shall include an

examination of the affairs of all the affiliates of the bank,

as defined in subsection (b) of Section 35.2 of this Act, or

subsidiaries of the bank as shall be necessary to disclose

fully the conditions of the subsidiaries or affiliates, the

relations between the bank and the subsidiaries or affiliates

and the effect of those relations upon the affairs of the bank,

and in connection therewith shall have power to examine any of

the officers, directors, agents, or employees of the

subsidiaries or affiliates on oath. After May 31, 1997, the

Commissioner may enter into cooperative agreements with state

regulatory authorities of other states to provide for

examination of State bank branches in those states, and the

Commissioner may accept reports of examinations of State bank

branches from those state regulatory authorities. These

cooperative agreements may set forth the manner in which the

other state regulatory authorities may be compensated for

examinations prepared for and submitted to the Commissioner.

(b) After May 31, 1997, the Commissioner is authorized to

examine, as often as the Commissioner shall deem necessary or

proper, branches of out-of-state banks. The Commissioner may

establish and may assess fees to be paid to the Commissioner

for examinations under this subsection (b). The fees shall be

borne by the out-of-state bank, unless the fees are borne by

the state regulatory authority that chartered the out-of-state

bank, as determined by a cooperative agreement between the

Commissioner and the state regulatory authority that chartered

the out-of-state bank.

(2.1) Pursuant to paragraph (a) of subsection (6) of this

Section, the Secretary shall adopt rules that ensure

consistency and due process in the examination process. The

Secretary may also establish guidelines that (i) define the

scope of the examination process and (ii) clarify examination

items to be resolved. The rules, formal guidance, interpretive

letters, or opinions furnished to State banks by the Secretary

may be relied upon by the State banks.

(2.5) Whenever any State bank, any subsidiary or affiliate

of a State bank, or after May 31, 1997, any branch of an

out-of-state bank causes to be performed, by contract or

otherwise, any bank services for itself, whether on or off its

premises:

(a) that performance shall be subject to examination by

the Commissioner to the same extent as if services were

being performed by the bank or, after May 31, 1997, branch

of the out-of-state bank itself on its own premises; and

(b) the bank or, after May 31, 1997, branch of the

out-of-state bank shall notify the Commissioner of the

existence of a service relationship. The notification

shall be submitted with the first statement of condition

(as required by Section 47 of this Act) due after the

making of the service contract or the performance of the

service, whichever occurs first. The Commissioner shall be

notified of each subsequent contract in the same manner.

For purposes of this subsection (2.5), the term "bank

services" means services such as sorting and posting of checks

and deposits, computation and posting of interest and other

credits and charges, preparation and mailing of checks,

statements, notices, and similar items, or any other clerical,

bookkeeping, accounting, statistical, or similar functions

performed for a State bank, including but not limited to

electronic data processing related to those bank services.

(3) The expense of administering this Act, including the

expense of the examinations of State banks as provided in this

Act, shall to the extent of the amounts resulting from the fees

provided for in paragraphs (a), (a-2), and (b) of this

subsection (3) be assessed against and borne by the State

banks:

(a) Each bank shall pay to the Secretary a Call Report

Fee which shall be paid in quarterly installments equal to

one-fourth of the sum of the annual fixed fee of $800, plus

a variable fee based on the assets shown on the quarterly

statement of condition delivered to the Secretary in

accordance with Section 47 for the preceding quarter

according to the following schedule: 16¢ per $1,000 of the

first $5,000,000 of total assets, 15¢ per $1,000 of the

next $20,000,000 of total assets, 13¢ per $1,000 of the

next $75,000,000 of total assets, 9¢ per $1,000 of the next

$400,000,000 of total assets, 7¢ per $1,000 of the next

$500,000,000 of total assets, and 5¢ per $1,000 of all

assets in excess of $1,000,000,000, of the State bank. The

Call Report Fee shall be calculated by the Secretary and

billed to the banks for remittance at the time of the

quarterly statements of condition provided for in Section

47. The Secretary may require payment of the fees provided

in this Section by an electronic transfer of funds or an

automatic debit of an account of each of the State banks.

In case more than one examination of any bank is deemed by

the Secretary to be necessary in any examination frequency

cycle specified in subsection 2(a) of this Section, and is

performed at his direction, the Secretary may assess a

reasonable additional fee to recover the cost of the

additional examination; provided, however, that an

examination conducted at the request of the State Treasurer

pursuant to the Uniform Disposition of Unclaimed Property

Act shall not be deemed to be an additional examination

under this Section. In lieu of the method and amounts set

forth in this paragraph (a) for the calculation of the Call

Report Fee, the Secretary may specify by rule that the Call

Report Fees provided by this Section may be assessed

semiannually or some other period and may provide in the

rule the formula to be used for calculating and assessing

the periodic Call Report Fees to be paid by State banks.

(a-1) If in the opinion of the Commissioner an

emergency exists or appears likely, the Commissioner may

assign an examiner or examiners to monitor the affairs of a

State bank with whatever frequency he deems appropriate,

including but not limited to a daily basis. The reasonable

and necessary expenses of the Commissioner during the

period of the monitoring shall be borne by the subject

bank. The Commissioner shall furnish the State bank a

statement of time and expenses if requested to do so within

30 days of the conclusion of the monitoring period.

(a-2) On and after January 1, 1990, the reasonable and

necessary expenses of the Commissioner during examination

of the performance of electronic data processing services

under subsection (2.5) shall be borne by the banks for

which the services are provided. An amount, based upon a

fee structure prescribed by the Commissioner, shall be paid

by the banks or, after May 31, 1997, branches of

out-of-state banks receiving the electronic data

processing services along with the Call Report Fee assessed

under paragraph (a) of this subsection (3).

(a-3) After May 31, 1997, the reasonable and necessary

expenses of the Commissioner during examination of the

performance of electronic data processing services under

subsection (2.5) at or on behalf of branches of

out-of-state banks shall be borne by the out-of-state

banks, unless those expenses are borne by the state

regulatory authorities that chartered the out-of-state

banks, as determined by cooperative agreements between the

Commissioner and the state regulatory authorities that

chartered the out-of-state banks.

(b) "Fiscal year" for purposes of this Section 48 is

defined as a period beginning July 1 of any year and ending

June 30 of the next year. The Commissioner shall receive

for each fiscal year, commencing with the fiscal year

ending June 30, 1987, a contingent fee equal to the lesser

of the aggregate of the fees paid by all State banks under

paragraph (a) of subsection (3) for that year, or the

amount, if any, whereby the aggregate of the administration

expenses, as defined in paragraph (c), for that fiscal year

exceeds the sum of the aggregate of the fees payable by all

State banks for that year under paragraph (a) of subsection

(3), plus any amounts transferred into the Bank and Trust

Company Fund from the State Pensions Fund for that year,

plus all other amounts collected by the Commissioner for

that year under any other provision of this Act, plus the

aggregate of all fees collected for that year by the

Commissioner under the Corporate Fiduciary Act, excluding

the receivership fees provided for in Section 5-10 of the

Corporate Fiduciary Act, and the Foreign Banking Office

Act. The aggregate amount of the contingent fee thus

arrived at for any fiscal year shall be apportioned

amongst, assessed upon, and paid by the State banks and

foreign banking corporations, respectively, in the same

proportion that the fee of each under paragraph (a) of

subsection (3), respectively, for that year bears to the

aggregate for that year of the fees collected under

paragraph (a) of subsection (3). The aggregate amount of

the contingent fee, and the portion thereof to be assessed

upon each State bank and foreign banking corporation,

respectively, shall be determined by the Commissioner and

shall be paid by each, respectively, within 120 days of the

close of the period for which the contingent fee is

computed and is payable, and the Commissioner shall give 20

days advance notice of the amount of the contingent fee

payable by the State bank and of the date fixed by the

Commissioner for payment of the fee.

(c) The "administration expenses" for any fiscal year

shall mean the ordinary and contingent expenses for that

year incident to making the examinations provided for by,

and for otherwise administering, this Act, the Corporate

Fiduciary Act, excluding the expenses paid from the

Corporate Fiduciary Receivership account in the Bank and

Trust Company Fund, the Foreign Banking Office Act, the

Electronic Fund Transfer Act, and the Illinois Bank

Examiners' Education Foundation Act, including all

salaries and other compensation paid for personal services

rendered for the State by officers or employees of the

State, including the Commissioner and the Deputy

Commissioners, communication equipment and services,

office furnishings, surety bond premiums, and travel

expenses of those officers and employees, employees,

expenditures or charges for the acquisition, enlargement

or improvement of, or for the use of, any office space,

building, or structure, or expenditures for the

maintenance thereof or for furnishing heat, light, or power

with respect thereto, all to the extent that those

expenditures are directly incidental to such examinations

or administration. The Commissioner shall not be required

by paragraphs (c) or (d-1) of this subsection (3) to

maintain in any fiscal year's budget appropriated reserves

for accrued vacation and accrued sick leave that is

required to be paid to employees of the Commissioner upon

termination of their service with the Commissioner in an

amount that is more than is reasonably anticipated to be

necessary for any anticipated turnover in employees,

whether due to normal attrition or due to layoffs,

terminations, or resignations.

(d) The aggregate of all fees collected by the

Secretary under this Act, the Corporate Fiduciary Act, or

the Foreign Banking Office Act on and after July 1, 1979,

shall be paid promptly after receipt of the same,

accompanied by a detailed statement thereof, into the State

treasury and shall be set apart in a special fund to be

known as the "Bank and Trust Company Fund", except as

provided in paragraph (c) of subsection (11) of this

Section. All earnings received from investments of funds in

the Bank and Trust Company Fund shall be deposited in the

Bank and Trust Company Fund and may be used for the same

purposes as fees deposited in that Fund. The amount from

time to time deposited into the Bank and Trust Company Fund

shall be used: (i) to offset the ordinary administrative

expenses of the Secretary as defined in this Section or

(ii) as a credit against fees under paragraph (d-1) of this

subsection (3). Nothing in this amendatory Act of 1979

shall prevent continuing the practice of paying expenses

involving salaries, retirement, social security, and

State-paid insurance premiums of State officers by

appropriations from the General Revenue Fund. However, the

General Revenue Fund shall be reimbursed for those payments

made on and after July 1, 1979, by an annual transfer of

funds from the Bank and Trust Company Fund. Moneys in the

Bank and Trust Company Fund may be transferred to the

Professions Indirect Cost Fund, as authorized under

Section 2105-300 of the Department of Professional

Regulation Law of the Civil Administrative Code of

Illinois.

Notwithstanding provisions in the State Finance Act,

as now or hereafter amended, or any other law to the

contrary, the sum of $18,788,847 shall be transferred from

the Bank and Trust Company Fund to the Financial

Institutions Settlement of 2008 Fund on the effective date

of this amendatory Act of the 95th General Assembly, or as

soon thereafter as practical.

Notwithstanding provisions in the State Finance Act,

as now or hereafter amended, or any other law to the

contrary, the Governor may, during any fiscal year through

January 10, 2011, from time to time direct the State

Treasurer and Comptroller to transfer a specified sum not

exceeding 10% of the revenues to be deposited into the Bank

and Trust Company Fund during that fiscal year from that

Fund to the General Revenue Fund in order to help defray

the State's operating costs for the fiscal year.

Notwithstanding provisions in the State Finance Act, as now

or hereafter amended, or any other law to the contrary, the

total sum transferred during any fiscal year through

January 10, 2011, from the Bank and Trust Company Fund to

the General Revenue Fund pursuant to this provision shall

not exceed during any fiscal year 10% of the revenues to be

deposited into the Bank and Trust Company Fund during that

fiscal year. The State Treasurer and Comptroller shall

transfer the amounts designated under this Section as soon

as may be practicable after receiving the direction to

transfer from the Governor.

(d-1) Adequate funds shall be available in the Bank and

Trust Company Fund to permit the timely payment of

administration expenses. In each fiscal year the total

administration expenses shall be deducted from the total

fees collected by the Commissioner and the remainder

transferred into the Cash Flow Reserve Account, unless the

balance of the Cash Flow Reserve Account prior to the

transfer equals or exceeds one-fourth of the total initial

appropriations from the Bank and Trust Company Fund for the

subsequent year, in which case the remainder shall be

credited to State banks and foreign banking corporations

and applied against their fees for the subsequent year. The

amount credited to each State bank and foreign banking

corporation shall be in the same proportion as the Call

Report Fees paid by each for the year bear to the total

Call Report Fees collected for the year. If, after a

transfer to the Cash Flow Reserve Account is made or if no

remainder is available for transfer, the balance of the

Cash Flow Reserve Account is less than one-fourth of the

total initial appropriations for the subsequent year and

the amount transferred is less than 5% of the total Call

Report Fees for the year, additional amounts needed to make

the transfer equal to 5% of the total Call Report Fees for

the year shall be apportioned amongst, assessed upon, and

paid by the State banks and foreign banking corporations in

the same proportion that the Call Report Fees of each,

respectively, for the year bear to the total Call Report

Fees collected for the year. The additional amounts

assessed shall be transferred into the Cash Flow Reserve

Account. For purposes of this paragraph (d-1), the

calculation of the fees collected by the Commissioner shall

exclude the receivership fees provided for in Section 5-10

of the Corporate Fiduciary Act.

(e) The Commissioner may upon request certify to any

public record in his keeping and shall have authority to

levy a reasonable charge for issuing certifications of any

public record in his keeping.

(f) In addition to fees authorized elsewhere in this

Act, the Commissioner may, in connection with a review,

approval, or provision of a service, levy a reasonable

charge to recover the cost of the review, approval, or

service.

(4) Nothing contained in this Act shall be construed to

limit the obligation relative to examinations and reports of

any State bank, deposits in which are to any extent insured by

the United States or any agency thereof, nor to limit in any

way the powers of the Commissioner with reference to

examinations and reports of that bank.

(5) The nature and condition of the assets in or investment

of any bonus, pension, or profit sharing plan for officers or

employees of every State bank or, after May 31, 1997, branch of

an out-of-state bank shall be deemed to be included in the

affairs of that State bank or branch of an out-of-state bank

subject to examination by the Commissioner under the provisions

of subsection (2) of this Section, and if the Commissioner

shall find from an examination that the condition of or

operation of the investments or assets of the plan is unlawful,

fraudulent, or unsafe, or that any trustee has abused his

trust, the Commissioner shall, if the situation so found by the

Commissioner shall not be corrected to his satisfaction within

60 days after the Commissioner has given notice to the board of

directors of the State bank or out-of-state bank of his

findings, report the facts to the Attorney General who shall

thereupon institute proceedings against the State bank or

out-of-state bank, the board of directors thereof, or the

trustees under such plan as the nature of the case may require.

(6) The Commissioner shall have the power:

(a) To promulgate reasonable rules for the purpose of

administering the provisions of this Act.

(a-5) To impose conditions on any approval issued by

the Commissioner if he determines that the conditions are

necessary or appropriate. These conditions shall be

imposed in writing and shall continue in effect for the

period prescribed by the Commissioner.

(b) To issue orders against any person, if the

Commissioner has reasonable cause to believe that an unsafe

or unsound banking practice has occurred, is occurring, or

is about to occur, if any person has violated, is

violating, or is about to violate any law, rule, or written

agreement with the Commissioner, or for the purpose of

administering the provisions of this Act and any rule

promulgated in accordance with this Act.

(b-1) To enter into agreements with a bank establishing

a program to correct the condition of the bank or its

practices.

(c) To appoint hearing officers to execute any of the

powers granted to the Commissioner under this Section for

the purpose of administering this Act and any rule

promulgated in accordance with this Act and otherwise to

authorize, in writing, an officer or employee of the Office

of Banks and Real Estate to exercise his powers under this

Act.

(d) To subpoena witnesses, to compel their attendance,

to administer an oath, to examine any person under oath,

and to require the production of any relevant books,

papers, accounts, and documents in the course of and

pursuant to any investigation being conducted, or any

action being taken, by the Commissioner in respect of any

matter relating to the duties imposed upon, or the powers

vested in, the Commissioner under the provisions of this

Act or any rule promulgated in accordance with this Act.

(e) To conduct hearings.

(7) Whenever, in the opinion of the Secretary, any

director, officer, employee, or agent of a State bank or any

subsidiary or bank holding company of the bank or, after May

31, 1997, of any branch of an out-of-state bank or any

subsidiary or bank holding company of the bank shall have

violated any law, rule, or order relating to that bank or any

subsidiary or bank holding company of the bank, shall have

obstructed or impeded any examination or investigation by the

Secretary, shall have engaged in an unsafe or unsound practice

in conducting the business of that bank or any subsidiary or

bank holding company of the bank, or shall have violated any

law or engaged or participated in any unsafe or unsound

practice in connection with any financial institution or other

business entity such that the character and fitness of the

director, officer, employee, or agent does not assure

reasonable promise of safe and sound operation of the State

bank, the Secretary may issue an order of removal. If, in the

opinion of the Secretary, any former director, officer,

employee, or agent of a State bank or any subsidiary or bank

holding company of the bank, prior to the termination of his or

her service with that bank or any subsidiary or bank holding

company of the bank, violated any law, rule, or order relating

to that State bank or any subsidiary or bank holding company of

the bank, obstructed or impeded any examination or

investigation by the Secretary, engaged in an unsafe or unsound

practice in conducting the business of that bank or any

subsidiary or bank holding company of the bank, or violated any

law or engaged or participated in any unsafe or unsound

practice in connection with any financial institution or other

business entity such that the character and fitness of the

director, officer, employee, or agent would not have assured

reasonable promise of safe and sound operation of the State

bank, the Secretary may issue an order prohibiting that person

from further service with a bank or any subsidiary or bank

holding company of the bank as a director, officer, employee,

or agent. An order issued pursuant to this subsection shall be

served upon the director, officer, employee, or agent. A copy

of the order shall be sent to each director of the bank

affected by registered mail. A copy of the order shall also be

served upon the bank of which he is a director, officer,

employee, or agent, whereupon he shall cease to be a director,

officer, employee, or agent of that bank. The Secretary may

institute a civil action against the director, officer, or

agent of the State bank or, after May 31, 1997, of the branch

of the out-of-state bank against whom any order provided for by

this subsection (7) of this Section 48 has been issued, and

against the State bank or, after May 31, 1997, out-of-state

bank, to enforce compliance with or to enjoin any violation of

the terms of the order. Any person who has been the subject of

an order of removal or an order of prohibition issued by the

Secretary under this subsection or Section 5-6 of the Corporate

Fiduciary Act may not thereafter serve as director, officer,

employee, or agent of any State bank or of any branch of any

out-of-state bank, or of any corporate fiduciary, as defined in

Section 1-5.05 of the Corporate Fiduciary Act, or of any other

entity that is subject to licensure or regulation by the

Division of Banking unless the Secretary has granted prior

approval in writing.

For purposes of this paragraph (7), "bank holding company"

has the meaning prescribed in Section 2 of the Illinois Bank

Holding Company Act of 1957.

(8) The Commissioner may impose civil penalties of up to

$100,000 against any person for each violation of any provision

of this Act, any rule promulgated in accordance with this Act,

any order of the Commissioner, or any other action which in the

Commissioner's discretion is an unsafe or unsound banking

practice.

(9) The Commissioner may impose civil penalties of up to

$100 against any person for the first failure to comply with

reporting requirements set forth in the report of examination

of the bank and up to $200 for the second and subsequent

failures to comply with those reporting requirements.

(10) All final administrative decisions of the

Commissioner hereunder shall be subject to judicial review

pursuant to the provisions of the Administrative Review Law.

For matters involving administrative review, venue shall be in

either Sangamon County or Cook County.

(11) The endowment fund for the Illinois Bank Examiners'

Education Foundation shall be administered as follows:

(a) (Blank).

(b) The Foundation is empowered to receive voluntary

contributions, gifts, grants, bequests, and donations on

behalf of the Illinois Bank Examiners' Education

Foundation from national banks and other persons for the

purpose of funding the endowment of the Illinois Bank

Examiners' Education Foundation.

(c) The aggregate of all special educational fees

collected by the Secretary and property received by the

Secretary on behalf of the Illinois Bank Examiners'

Education Foundation under this subsection (11) on or after

June 30, 1986, shall be either (i) promptly paid after

receipt of the same, accompanied by a detailed statement

thereof, into the State Treasury and shall be set apart in

a special fund to be known as "The Illinois Bank Examiners'

Education Fund" to be invested by either the Treasurer of

the State of Illinois in the Public Treasurers' Investment

Pool or in any other investment he is authorized to make or

by the Illinois State Board of Investment as the State

Banking Board of Illinois may direct or (ii) deposited into

an account maintained in a commercial bank or corporate

fiduciary in the name of the Illinois Bank Examiners'

Education Foundation pursuant to the order and direction of

the Board of Trustees of the Illinois Bank Examiners'

Education Foundation.

(12) (Blank).

(13) The Secretary may borrow funds from the General

Revenue Fund on behalf of the Bank and Trust Company Fund if

the Director of Banking certifies to the Governor that there is

an economic emergency affecting banking that requires a

borrowing to provide additional funds to the Bank and Trust

Company Fund. The borrowed funds shall be paid back within 3

years and shall not exceed the total funding appropriated to

the Agency in the previous year.

(Source: P.A. 96-1163, eff. 1-1-11; 96-1365, eff. 7-28-10;

97-333, eff. 8-12-11.)

Section 4. The Savings Bank Act is amended by changing

Section 9004 as follows:

(205 ILCS 205/9004) (from Ch. 17, par. 7309-4)

Sec. 9004. Examination.

(a) At least once every 18 months or more often if it is

deemed necessary or expedient, the Secretary shall examine the

books, records, operations, and affairs of each savings bank

operating under this Act. In the course of the examination, the

Secretary may also examine in the same manner all entities,

companies, and individuals which or whom the Secretary

determines may have a relationship with the savings bank or any

subsidiary or entity affiliated with it, if the relationship

may adversely affect the affairs, activities, and safety and

soundness of the savings bank, including: (i) companies

controlled by the savings bank; (ii) entities, including

companies controlled by the company, individual, or

individuals that control the savings bank; and (iii) the

company or other entity which controls or owns the savings

bank. Notwithstanding any other provision of this Act, every

savings bank, as defined by rule, or, if not defined, to the

same extent as would be permitted in the case of a State bank,

the Secretary, in lieu of the examination, may accept on an

alternating basis the examination made by the eligible savings

bank's appropriate federal banking agency pursuant to Section

111 of the Federal Deposit Insurance Corporation Improvement

Act of 1991, provided the appropriate federal banking agency

has made an examination.

(b) The Secretary shall examine to determine:

(1) Quality of financial condition, including safety

and soundness and investment and loan quality.

(2) Compliance with this Act and other applicable

statutes and regulations.

(3) Quality of management policies.

(4) Overall safety and soundness of the savings bank,

its parent, subsidiaries, and affiliates.

(5) Remedial actions required to correct and to restore

compliance with applicable statutes, regulations, and

proper business policies.

(c) The Secretary may promulgate regulations to implement

and administer this Section.

(d) If a savings bank, its holding company, or any of its

corporate subsidiaries has not been audited at least once in

the 12 months prior to the Secretary's examination, the

Secretary may cause an audit of the savings bank's books and

records to be made by an independent licensed public

accountant. The cost of the audit shall be paid for by the

entity being audited.

(e) The Secretary or his or her examiners or other formally

designated agents are authorized to administer oaths and to

examine and to take and preserve testimony under oath as to

anything in the affairs or ownership of any savings bank or

institution or affiliate thereof.

(f) Pursuant to subsection (c) of this Section, the

Secretary shall adopt rules that ensure consistency and due

process in the examination process. The Secretary may also

establish guidelines that (i) define the scope of the

examination process and (ii) clarify examination items to be

resolved. The rules, formal guidance, interpretive letters, or

opinions furnished to savings banks by the Secretary may be

relied upon by the savings banks.

(Source: P.A. 96-1365, eff. 7-28-10; 97-492, eff. 1-1-12.)

Section 5. The Illinois Credit Union Act is amended by

changing Sections 1.1, 9, 30, 34, 39, and 46 and by adding

Section 57.1 as follows:

(205 ILCS 305/1.1) (from Ch. 17, par. 4402)

Sec. 1.1. Definitions.

Credit Union - The term "credit union" means a cooperative,

non-profit association, incorporated under this Act, under the

laws of the United States of America or under the laws of

another state, for the purposes of encouraging thrift among its

members, creating a source of credit at a reasonable rate of

interest, and providing an opportunity for its members to use

and control their own money in order to improve their economic

and social conditions. The membership of a credit union shall

consist of a group or groups each having a common bond as set

forth in this Act.

Common Bond - The term "common bond" refers to groups of

people who meet one of the following qualifications:

(1) Persons belonging to a specific association, group

or organization, such as a church, labor union, club or

society and members of their immediate families which shall

include any relative by blood or marriage or foster and

adopted children.

(2) Persons who reside in a reasonably compact and well

defined neighborhood or community, and members of their

immediate families which shall include any relative by

blood or marriage or foster and adopted children.

(3) Persons who have a common employer or who are

members of an organized labor union or an organized

occupational or professional group within a defined

geographical area, and members of their immediate families

which shall include any relative by blood or marriage or

foster and adopted children.

Shares - The term "shares" or "share accounts" means any

form of shares issued by a credit union and established by a

member in accordance with standards specified by a credit

union, including but not limited to common shares, share draft

accounts, classes of shares, share certificates, special

purpose share accounts, shares issued in trust, custodial

accounts, and individual retirement accounts or other plans

established pursuant to Section 401(d) or (f) or Section 408(a)

of the Internal Revenue Code, as now or hereafter amended, or

similar provisions of any tax laws of the United States that

may hereafter exist.

Credit Union Organization - The term "credit union

organization" means any organization established to serve the

needs of credit unions, the business of which relates to the

daily operations of credit unions.

Department - The term "Department" means the Illinois

Department of Financial and Professional Regulation.

Secretary - The term "Secretary" means the Secretary of

Financial and Professional Regulation or a person authorized by

the Secretary or this Act to act in the Secretary's stead.

Division of Financial Institutions - The term "Division of

Financial Institutions" means the Division of Financial

Institutions of the Department of Financial and Professional

Regulation.

Director - The term "Director of Financial Institutions"

means the Director of the Division of Financial Institutions of

the Department of Financial and Professional Regulation.

Office - The term "office" means the Division of Financial

Institutions of the Department of Financial and Professional

Regulation.

NCUA - The term "NCUA" means the National Credit Union

Administration, an agency of the United States Government

charged with the supervision of credit unions chartered under

the laws of the United States of America.

Central Credit Union - The term "central credit union"

means a credit union incorporated primarily to receive shares

from and make loans to credit unions and directors, officers,

committee members and employees of credit unions. A central

credit union may also accept as members persons who were

members of credit unions which were liquidated and persons from

occupational groups not otherwise served by another credit

union.

Corporate Credit Union - The term "corporate credit union"

means a credit union which is a cooperative, non-profit

association, the membership of which is limited primarily to

other credit unions.

Insolvent - "Insolvent" means the condition that results

when the total of all liabilities and shares exceeds net assets

of the credit union.

Danger of insolvency - For purposes of Section 61, a credit

union is in "danger of insolvency" if its net worth to asset

ratio falls below 2%. In calculating the danger of insolvency

ratio, secondary capital shall be excluded. For purposes of

Section 61, a credit union is also in "danger of insolvency" if

the Department is unable to ascertain, upon examination, the

true financial condition of the credit union.

Net Worth - "Net worth" means the retained earnings balance

of the credit union, as determined under generally accepted

accounting principles, and forms of secondary capital approved

by the Secretary and the Director pursuant to rulemaking.

Charitable Donation Account – The term "charitable

donation account" means an account owned by a credit union that

is held in a segregated custodial account or special purpose

entity and specifically identified as a charitable donation

account whereby, no less frequently than every 5 years and upon

termination of the account, at least 51% of the total return on

assets in the account is distributed to one or more charitable

organizations or non-profit entities.

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

(205 ILCS 305/9) (from Ch. 17, par. 4410)

Sec. 9. Reports and examinations.

(1) Credit unions shall report to the Department on forms

supplied by the Department, in accordance with a schedule

published by the Department. A recapitulation of the annual

reports shall be compiled and published annually by the

Department, for the use of the General Assembly, credit unions,

various educational institutions and other interested parties.

A credit union which fails to file any report when due shall

pay to the Department a late filing fee for each day the report

is overdue as prescribed by rule. The Secretary may extend the

time for filing a report.

(2) The Secretary may require special examinations of and

special financial reports from a credit union or a credit union

organization in which a credit union loans, invests, or

delegates substantially all managerial duties and

responsibilities when he determines that such examinations and

reports are necessary to enable the Department to determine the

safety of a credit union's operation or its solvency. The cost

to the Department of the aforesaid special examinations shall

be borne by the credit union being examined as prescribed by

rule.

(3) All credit unions incorporated under this Act shall be

examined at least biennially by the Department or, at the

discretion of the Secretary, by a public accountant registered

by the Department of Financial and Professional Regulation. The

costs of an examination shall be paid by the credit union. The

scope of all examinations by a public accountant shall be at

least equal to the examinations made by the Department. The

examiners shall have full access to, and may compel the

production of, all the books, papers, securities and accounts

of any credit union. A special examination shall be made by the

Department or by a public accountant approved by the Department

upon written request of 5 or more members, who guarantee the

expense of the same. Any credit union refusing to submit to an

examination when ordered by the Department shall be reported to

the Attorney General, who shall institute proceedings to have

its charter revoked. If the Secretary determines that the

examination of a credit union is to be conducted by a public

accountant registered by the Department of Financial and

Professional Regulation and the examination is done in

conjunction with the credit union's external independent audit

of financial statements, the requirements of this Section and

subsection (3) of Section 34 shall be deemed met.

(3.5) Pursuant to Section 8, the Secretary shall adopt

rules that ensure consistency and due process in the

examination process. The Secretary may also establish

guidelines that (i) define the scope of the examination process

and (ii) clarify examination items to be resolved. The rules,

formal guidance, interpretative letters, or opinions furnished

to credit unions by the Secretary may be relied upon by the

credit unions.

(4) A copy of the completed report of examination and a

review comment letter, if any, citing exceptions revealed

during the examination, shall be submitted to the credit union

by the Department. A detailed report stating the corrective

actions taken by the board of directors on each exception set

forth in the review comment letter shall be filed with the

Department within 40 days after the date of the review comment

letter, or as otherwise directed by the Department. Any credit

union through its officers, directors, committee members or

employees, which willfully provides fraudulent or misleading

information regarding the corrective actions taken on

exceptions appearing in a review comment letter may have its

operations restricted to the collection of principal and

interest on loans outstanding and the payment of normal

expenses and salaries until all exceptions are corrected and

accepted by the Department.

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

(205 ILCS 305/30) (from Ch. 17, par. 4431)

Sec. 30. Duties of directors.

(a) It shall be the duty of the directors to:

(1) Review actions on applications for membership. A

record of the membership committee's approval or denial of

membership or management's approval or denial of

membership if no membership committee has been appointed

shall be available to the board of directors for

inspection. A person denied membership by the membership

committee or credit union management may appeal the denial

to the board;

(2) Provide adequate fidelity bond coverage for

officers, employees, directors and committee members, and

for losses caused by persons outside of the credit union,

subject to rules and regulations promulgated by the

Secretary;

(3) Determine from time to time the interest rates, not

in excess of that allowed under this Act, which shall be

charged on loans to members and to authorize interest

refunds, if any, to members from income earned and received

in proportion to the interest paid by them on such classes

of loans and under such conditions as the board prescribes.

The directors may establish different interest rates to be

charged on different classes of loans;

(4) Within any limitations set forth in the credit

union's bylaws, fix the maximum amount which may be loaned

with and without security to a member;

(5) Declare dividends on various classes of shares in

the manner and form as provided in the bylaws;

(6) Limit the number of shares which may be owned by a

member; such limitations to apply alike to all members;

(7) Have charge of the investment of funds, except that

the board of directors may designate an investment

committee or any qualified individual or entity to have

charge of making investments under policies established by

the board of directors;

(8) Authorize the employment of or contracting with

such persons or organizations as may be necessary to carry

on the operations of the credit union, provided that prior

approval is received from the Department before delegating

substantially all managerial duties and responsibilities

to a credit union organization, and fix the compensation,

if any, of the officers and provide for compensation for

other employees within policies established by the board of

directors;

(9) Authorize the conveyance of property;

(10) Borrow or lend money consistent with the

provisions of this Act;

(11) Designate a depository or depositories for the

funds of the credit union and supervise the investment of

funds;

(12) Suspend or remove, or both, any or all officers or

any or all members of the membership, credit, or other

committees whenever, in the judgment of the board of

directors, the best interests of the credit union will be

served thereby; provided that members of the supervisory

committee may not be suspended or removed except for

failure to perform their duties; and provided that removal

of any officer shall be without prejudice to the contract

rights, if any, of the person so removed;

(13) Appoint any special committees deemed necessary;

and

(14) Perform such other duties as the members may

direct, and perform or authorize any action not

inconsistent with this Act and not specifically reserved by

the bylaws to the members.

(b) The board of directors may delegate to the chief

management official, according to guidelines established by

the board that may include the authority to further delegate

one or more duties, all of the following duties:

(1) determining the interest rates on loans;

(2) determining the dividend rates on share accounts;

and

(3) hiring employees other than the chief management

official and fixing their compensation.

(c) Each director shall have a working familiarity with

basic finance and accounting practices consistent with the size

and complexity of the credit union operation they serve,

including the ability to read and understand the credit union's

balance sheet and income and expense statements and the ability

to ask, when appropriate, substantive questions of management

and auditors. For the purposes of this subsection (c),

substantive questions include queries concerning financial

services and products offered to the membership; how those

activities generate revenue for the credit union; the credit,

liquidity, interest rate, compliance, strategic, transaction,

and reputation risks associated with those activities; and the

internal control structures maintained by the credit union that

limit and manage those risks.

A director who was elected or appointed on or after January

1, 2015 and who comes to the position without the requisite

financial skills shall have until 6 months after the date of

election or appointment to acquire the enumerated skills.

An incumbent director who was elected or appointed before

January 1, 2015 and does not possess the requisite financial

skills shall have until July 1, 2015 to acquire the enumerated

skills.

An incumbent director or a director who is elected or

appointed on or after January 1, 2015 who already understands

his or her credit union's financial statements shall not be

required to do anything further to satisfy the financial skills

requirement set forth in subsection (c).

It is the intent of the Department that all credit union

directors possess a basic understanding of their credit union's

financial condition. It is not the intent of the Department to

subject credit union directors to examiner scrutiny of their

financial skills. Rather, the Department shall evaluate

whether the credit union has in place a policy to make

available to their directors appropriate training to enhance

their financial knowledge of the credit union. Directors may

receive the training through internal credit union training,

external training offered by the credit union's retained

auditors, trade associations, vendors, regulatory 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. 97-133, eff. 1-1-12.)

(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

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 public accountant

registered by the Department of Financial and Professional

Regulation 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 public accountant or that the audit represents

the independent opinion of a public accountant. 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 promptly mailed to the Secretary.

(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) The supervisory committee of a credit union with assets

of $5,000,000 or more shall engage a public accountant

registered by the Department of Financial and Professional

Regulation to perform an annual external independent audit of

the credit union's financial statements in accordance with

generally accepted auditing standards. The supervisory

committee of a credit union with assets of $3,000,000 or more,

but less than $5,000,000, shall engage a public accountant

registered by the Department of Financial and Professional

Regulation to perform an external independent audit of the

credit union's financial statements in accordance with

generally accepted auditing standards at least once every 3

years. A copy of an external independent audit shall be

completed and mailed to the Secretary no later than 90 days

after December 31 of each year; provided that 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. If the annual internal audit of such a credit union

is conducted by a public accountant registered by the

Department of Financial and Professional Regulation and the

annual internal audit is done in conjunction with the credit

union's annual external audit, the requirements of subsection

(1) of this Section shall be deemed met.

(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.

(5) A majority of the members of the supervisory committee

shall constitute a quorum.

(6) 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

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. 96-141, eff. 8-7-09; 96-963, eff. 7-2-10; 97-133,

eff. 1-1-12.)

(205 ILCS 305/39) (from Ch. 17, par. 4440)

Sec. 39. Special purpose share accounts; charitable

donation accounts.

(1) If provided for in and consistent with the bylaws,

Christmas clubs, vacation clubs and other special purpose share

accounts may be established and offered under conditions and

restrictions established by the board of directors.

(2) Pursuant to a policy adopted by the board of directors,

which may be amended from time to time, a credit union may

establish one or more charitable donation accounts. The

investments and purchases to fund a charitable donation account

are not subject to the investment limitations of this Act,

provided the charitable donation account is structured in

accordance with this Act. At their time of purchase, the book

value of the investments in all charitable donation accounts,

in the aggregate, shall not exceed 5% of the credit union's net

worth.

(a) If a credit union chooses to establish a charitable

donation account using a trust vehicle, the trustee must be

an entity regulated by the Office of the Comptroller of the

Currency, the U.S. Securities and Exchange Commission,

another federal regulatory agency, or a State financial

regulatory agency. A regulated trustee or other person who

is authorized to make investment decisions for a charitable

donation account, other than the credit union itself, shall

either be registered with the U.S. Securities and Exchange

Commission as an investment advisor or regulated by the

Office of the Comptroller of the Currency.

(b) The parties to the charitable donation account must

document the terms and conditions controlling the account

in a written operating agreement, trust agreement, or

similar instrument. The terms of the agreement shall be

consistent with the requirements and conditions set forth

in this Section. The agreement, if applicable, and policies

must document the investment strategies of the charitable

donation account trustee or other manager in administering

the charitable donation account and provide for the

accounting of all aspects of the account, including its

distributions and liquidation, in accordance with

generally accepted accounting principles.

(c) A credit union's charitable donation account

agreement, if applicable, and policies shall provide that

the charitable organization or non-profit entity

recipients of any charitable donation account funds must be

identified in the policy and be exempt from taxation under

Section 501(c)(3) of the Internal Revenue Code.

(d) Upon termination of a charitable donation account,

the credit union may receive a distribution of the

remaining assets in cash, or a distribution in kind of the

remaining assets, but only if those assets are permissible

investments for credit unions pursuant to this Act.

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

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

Sec. 46. Loans and interest rate.

(1) A credit union may make loans to its members for such

purpose and upon such security and terms, including rates of

interest, as the credit committee, credit manager, or loan

officer approves. Notwithstanding the provisions of any other

law in connection with extensions of credit, a credit union may

elect to contract for and receive interest and fees and other

charges for extensions of credit subject only to the provisions

of this Act and rules promulgated under this Act, except that

extensions of credit secured by residential real estate shall

be subject to the laws applicable thereto. The rates of

interest to be charged on loans to members shall be set by the

board of directors of each individual credit union in

accordance with Section 30 of this Act and such rates may be

less than, but may not exceed, the maximum rate set forth in

this Section. A borrower may repay his loan prior to maturity,

in whole or in part, without penalty. The credit contract may

provide for the payment by the member and receipt by the credit

union of all costs and disbursements, including reasonable

attorney's fees and collection agency charges, incurred by the

credit union to collect or enforce the debt in the event of a

delinquency by the member, or in the event of a breach of any

obligation of the member under the credit contract. A

contingency or hourly arrangement established under an

agreement entered into by a credit union with an attorney or

collection agency to collect a loan of a member in default

shall be presumed prima facie reasonable.

(2) Credit unions may make loans based upon the security of

any interest or equity in real estate, subject to rules and

regulations promulgated by the Secretary. In any contract or

loan which is secured by a mortgage, deed of trust, or

conveyance in the nature of a mortgage, on residential real

estate, the interest which is computed, calculated, charged, or

collected pursuant to such contract or loan, or pursuant to any

regulation or rule promulgated pursuant to this Act, may not be

computed, calculated, charged or collected for any period of

time occurring after the date on which the total indebtedness,

with the exception of late payment penalties, is paid in full.

For purposes of this subsection (2) of this Section 46, a

prepayment shall mean the payment of the total indebtedness,

with the exception of late payment penalties if incurred or

charged, on any date before the date specified in the contract

or loan agreement on which the total indebtedness shall be paid

in full, or before the date on which all payments, if timely

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

indebtedness which is made on a date after the date on which

interest on the indebtedness was last computed, calculated,

charged, or collected but before the next date on which

interest on the indebtedness was to be calculated, computed,

charged, or collected, the lender may calculate, charge and

collect interest on the indebtedness for the period which

elapsed between the date on which the prepayment is made and

the date on which interest on the indebtedness was last

computed, calculated, charged or collected at a rate equal to

1/360 of the annual rate for each day which so elapsed, which

rate shall be applied to the indebtedness outstanding as of the

date of prepayment. The lender shall refund to the borrower any

interest charged or collected which exceeds that which the

lender may charge or collect pursuant to the preceding

sentence. The provisions of this amendatory Act of 1985 shall

apply only to contracts or loans entered into on or after the

effective date of this amendatory Act.

(3) Notwithstanding any other provision of this Act, a

credit union authorized under this Act to make loans secured by

an interest or equity in real estate may engage in making

"reverse mortgage" loans to persons for the purpose of making

home improvements or repairs, paying insurance premiums or

paying real estate taxes on the homestead properties of such

persons. If made, such loans shall be made on such terms and

conditions as the credit union shall determine and as shall be

consistent with the provisions of this Section and such rules

and regulations as the Secretary shall promulgate hereunder.

For purposes of this Section, a "reverse mortgage" loan shall

be a loan extended on the basis of existing equity in homestead

property and secured by a mortgage on such property. Such loans

shall be repaid upon the sale of the property or upon the death

of the owner or, if the property is in joint tenancy, upon the

death of the last surviving joint tenant who had such an

interest in the property at the time the loan was initiated,

provided, however, that the credit union and its member may by

mutual agreement, establish other repayment terms. A credit

union, in making a "reverse mortgage" loan, may add deferred

interest to principal or otherwise provide for the charging of

interest or premiums on such deferred interest. "Homestead"

property, for purposes of this Section, means the domicile and

contiguous real estate owned and occupied by the mortgagor.

(4) Notwithstanding any other provisions of this Act, a

credit union authorized under this Act to make loans secured by

an interest or equity in real property may engage in making

revolving credit loans secured by mortgages or deeds of trust

on such real property or by security assignments of beneficial

interests in land trusts.

For purposes of this Section, "revolving credit" has the

meaning defined in Section 4.1 of the Interest Act.

Any mortgage or deed of trust given to secure a revolving

credit loan may, and when so expressed therein shall, secure

not only the existing indebtedness but also such future

advances, whether such advances are obligatory or to be made at

the option of the lender, or otherwise, as are made within

twenty years from the date thereof, to the same extent as if

such future advances were made on the date of the execution of

such mortgage or deed of trust, although there may be no

advance made at the time of execution of such mortgage or other

instrument, and although there may be no indebtedness

outstanding at the time any advance is made. The lien of such

mortgage or deed of trust, as to third persons without actual

notice thereof, shall be valid as to all such indebtedness and

future advances form the time said mortgage or deed of trust is

filed for record in the office of the recorder of deeds or the

registrar of titles of the county where the real property

described therein is located. The total amount of indebtedness

that may be so secured may increase or decrease from time to

time, but the total unpaid balance so secured at any one time

shall not exceed a maximum principal amount which must be

specified in such mortgage or deed of trust, plus interest

thereon, and any disbursements made for the payment of taxes,

special assessments, or insurance on said real property, with

interest on such disbursements.

Any such mortgage or deed of trust shall be valid and have

priority over all subsequent liens and encumbrances, including

statutory liens, except taxes and assessments levied on said

real property.

(5) Compliance with federal or Illinois preemptive laws or

regulations governing loans made by a credit union chartered

under this Act shall constitute compliance with this Act.

(6) Credit unions may make residential real estate mortgage

loans on terms and conditions established by the United States

Department of Agriculture through its Rural Development

Housing and Community Facilities Program. The portion of any

loan in excess of the appraised value of the real estate shall

be allocable only to the guarantee fee required under the

program.

(7) For a renewal, refinancing, or restructuring of an

existing loan that is secured by an interest or equity in real

estate, a new appraisal of the collateral shall not be required

when the transaction involves an existing extension of credit

at the credit union, no new moneys are advanced other than

funds necessary to cover reasonable closing costs, and there

has been no obvious or material change in market conditions or

physical aspects of the real estate that threatens the adequacy

of the credit union's real estate collateral protection after

the transaction.

(Source: P.A. 96-141, eff. 8-7-09; 97-133, eff. 1-1-12.)

(205 ILCS 305/57.1 new)

Sec. 57.1. Services to other credit unions.

(a) A credit union may act as a representative of and enter

into an agreement with credit unions or other organizations for

the purpose of:

(1) sharing, utilizing, renting, leasing, purchasing,

selling, and joint ownership of fixed assets or engaging in

activities and services that relate to the daily operations

of credit unions; and

(2) providing correspondent services to other credit

unions that the service provider credit union is authorized

to perform for its own members or as part of its

operations, including, but not limited to, loan

processing, loan servicing, member check cashing services,

disbursing share withdrawals and loan proceeds, cashing

and selling money orders, ACH and wire transfer services,

coin and currency services, performing internal audits,

and automated teller machine deposit services.